TCREUR_Public/121114.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

                           E U R O P E

          Wednesday, November 14, 2012, Vol. 13, No. 227

                            Headlines


C R O A T I A

HRVATSKA ELEKTROPRIVREDA: Moody's Rates Sr. Unsecured Notes 'Ba2'


D E N M A R K

VESTAS WIND: Faces Cash Squeeze; to Lay Off 30% of Workforce


F R A N C E

VALLAURIS II: S&P Affirms 'BB+' Rating on Class III Notes


G E R M A N Y

BAYERNLB CAPITAL: Moody's Cuts Preferred Securities Rating to Ca


G R E E C E

* GREECE: Has Two Years to Trim Budget Deficit; Avert Default


I R E L A N D

CAVENDISH SQUARE: Fitch Lowers Rating on Class B Notes to 'Bsf'


L U X E M B O U R G

AK BARS: Fitch Assigns 'BB-' Rating to USD Senior Loan Notes
PACIFIC DRILLING: Moody's Assigns 'B3' Corp. Family Rating
PACIFIC DRILLING: S&P Assigns 'B' Long-Term Corp. Credit Rating


N E T H E R L A N D S

FUGU CLO: S&P Says Proportion of 'CCC'-Rated Assets Increased
JUBILEE CDO IX: S&P Says Percentage of Defaulted Assets Increased


P O L A N D

CENTRAL EUROPEAN: Signs Employment Agreement with CFO


P O R T U G A L

* PORTUGAL: Fitch Affirms 'BB+' Long-Term Issuer Default Ratings


R U S S I A

BYSTROBANK JSC: Fitch Affirms 'B-' LT Issuer Default Ratings
PROMSVYAZBANK: Fitch Affirms 'BB-' Issuer Default Rating


S P A I N

AYT COLATERALES I: S&P Raises Rating on Class D Notes From 'BB-'
BANCO POPULAR: To Sell Discounted Shares to Plug Capital Gap
* SPAIN: No Need to Tap on Emergency Funds, ESM Head Says
* SPAIN: Cannata Says ESM Creditor Status Needs Clarity


S W E D E N

SAS AB: Future Hinges on New Restructuring Plan


S W I T Z E R L A N D

SCHMOLZ + BICKENBACH: S&P Puts B Corp. Credit Rating on Watch Neg


T U R K E Y

TOPLU KONUT: Fitch Raises Local Currency Rating From 'BB+'


U N I T E D   K I N G D O M

COMET: Administrators Launches Liquidation Sale
FALCON INTERIORS: Set to be Liquidated; 38 Workers Lose Jobs
HIBU PLC: Extends Creditor Deadline to Agree on Waive Repayments
PORTSMOUTH FOOTBALL: Portpin Suspends Bid to Buy Club
* UK: Number of Insolvent Travel Firms Doubles in 2012


X X X X X X X X

* Moody's Says Weak Pace of Global Macro Recovery to Persist
* Moody's Changes Outlook on EMEA Chemicals Sector to Negative
* EUROPE: Fitch Says General Market Conditions Still Challenging


                            *********


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C R O A T I A
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HRVATSKA ELEKTROPRIVREDA: Moody's Rates Sr. Unsecured Notes 'Ba2'
-----------------------------------------------------------------
Moody's Investors Service has assigned a Ba2 rating with a loss
given default (LGD) assessment of LGD4 to the US$500 million 6%
senior unsecured bond due 2017 issued by Hrvatska Elektroprivreda
d.d. (HEP). The outlook on the assigned rating is negative.

Ratings Rationale

"The assigned Ba2 rating reflects the pari passu ranking with the
other senior unsecured debt of HEP and is in line with the
company's Ba2 corporate family rating," says Richard Miratsky, a
Moody's Vice President - Senior Analyst and lead analyst for HEP.
The net proceeds of the issue will be used by the company to
repay or prepay up to EUR260 million (approximately HRK1,947
million) of existing debt. HEP intends to use the balance of the
proceeds to finance capital expenditures and for other general
corporate purposes.

The notes are subject to restrictions on the creation and
incurrence of certain liens and include put options for
noteholders in the event that there is a change of control of HEP
or ownership unbundling. The noteholders have the option to
require HEP to redeem the notes should the Republic of Croatia
cease to control the company or cease to own, directly or
indirectly, at least 75% of the entire issued share capital of
the company. The ownership unbundling put option entitles the
noteholders to require HEP to redeem the notes in the event that
regulated assets relating to the transmission of electricity
cease to be owned by the company as a result of the
implementation of EU Directive 2009/72/EC.

Based on June 30, 2012 financial results, HEP was not in
compliance with certain covenants under agreements on loans
amounting to approximately 20% of the company's total debt. One
half of those loans with breached covenants are secured by
government guarantee. HEP obtained waivers for the 30 June 2012
covenant breaches from each of the respective loan providers
until the next covenant test on 31 December 2012. The company
plans to repay all loans at risk of a covenant breach by year-
end.

The weaker financial performance up to June 2012 was ultimately
caused by drought conditions which resulted in significantly
lower profitability and cash flow given that the half of HEP's
installed capacity is hydro power plants. Nevertheless, given
expected improved precipitation and the greater covenant headroom
in other debt documentation, Moody's expects that HEP will be in
compliance with financial covenants in remaining debt
documentation as at December 31, 2012 following the anticipated
loan repayments. Furthermore, we perceive the successful issuance
of the bond to have a positive impact on HEP's stretched
liquidity and consider it a solid first step in addressing the
company's demanding upcoming debt maturities.

Given its 100% ownership by the Government of Croatia, HEP falls
within the scope of Moody's rating methodology for government-
related issuers (GRIs). In accordance with the methodology, HEP's
Ba2 corporate family rating incorporates a two-notch uplift for
potential government support to its standalone credit quality,
which is expressed as a baseline credit assessment (BCA) of b1.

Moody's downgraded HEP's ratings to Ba2 on 21 September 2012 and
maintained the negative outlook. This reflected the significant
pressure on HEP's liquidity as a result of (1) a high proportion
of the company's total debt burden being short term in nature;
(2) the demanding maturity profile of its long-term debt; (3) its
need for significant new financing to cover its sizeable
investment program; and (4) the negative outlook on the
Government of Croatia's Baa3 rating.

The b1 BCA (downgraded from ba3 on 21 September 2012) reflects
the fact that HEP has utilized all of the headroom under its
committed credit lines during 2012. HEP's cash flow generation
has been weakened by the drought in Croatia, which has
significantly limited the company's utilization of its hydro-
based generation facilities. In order to cover the domestic
demand for electricity, HEP had to increase its production from
thermal power sources and increase imports of electricity, which
significantly increased its costs in the first half of 2012 and
stretched its liquidity. However, hydrological conditions have
been improving since the beginning of September.

What Could Change The Rating Up/Down

The negative outlook on HEP's Ba2 ratings reflects the company's
limited visibility with regard to the funding of ongoing business
needs and exposure to short-term debt funding. Furthermore, any
downgrade in the rating of Croatia would likely result in a
downgrade in the rating of HEP. Given the negative outlook on the
ratings, Moody's sees limited potential for a rating upgrade over
the next 12-18 months. HEP's ratings could be downgraded if the
company fails to refinance those loans with waived covenant
breaches. In addition, the rating could come under downward
pressure if HEP's credit profile weakens through either (1)
continued overreliance on short-term debt, or a weaker financial
profile such that the company's funds from operations (FFO)
interest coverage ratio falls below 4.0x; and its FFO/debt ratio
declines below 20%.

Principal Methodologies

The methodologies used in this rating were Regulated Electric and
Gas Utilities published in August 2009, Government-Related
Issuers: Methodology Update published in July 2010 and Loss Given
Default for Speculative-Grade Non-Financial Companies in the
U.S., Canada and EMEA published in June 2009.

Headquartered in Zagreb, Croatia, Hrvatska Elektroprivreda d.d.
(HEP) generated 12.7 terawatt hours (TWh) of electricity and
EUR1.8 billion in revenues in the year ended December 2011.



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D E N M A R K
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VESTAS WIND: Faces Cash Squeeze; to Lay Off 30% of Workforce
------------------------------------------------------------
Richard Milne at The Financial Times reports that Vestas Wind
revealed that it was cutting 30% of workers and facing a cash
squeeze as it posted its weakest quarter for orders in six years.

According to the FT, the Danish group, whose shares have plunged
93% in the past three years, is attempting to cut costs and jobs
as well as close factories and research and development
facilities as it faces a lean future.

The company's third-quarter orders were the worst since 2006 with
just 401MW booked, and analysts fear its financial woes are
deterring customers, the FT notes.

Vestas also downgraded cash flow estimates for the year amid a
third consecutive quarter of outflows, and ahead of bank
negotiations over credit facilities, the FT relates.

As reported by the Troubled Company Reporter-Europe on Nov. 9,
2012, The Financial Times related that Vestas will need to raise
capital, and quickly.  "You can see that the cash flow has been
quite negative for 2012.  I believe that sooner or later they
will have to do something," the FT quoted Klaus Kehl, analyst at
Nykredit, as saying pointing to the need for a possible share
issue or convertible bond issue.  The need could be high,
according to the FT.  Vestas has a market capitalization of about
EUR740 million, and the company could need EUR300 million to
EUR600 million in fresh capital, according to the FT.  The
company reported its lowest quarterly order intake since 2006,
worse than at the height of the financial crisis, the FT noted.
Analysts, according to the FT, say the Danish group is suffering
from more than merely a poor market for wind turbines as
governments slash subsidies and cash-strapped utilities defer
orders.  Moreover, the FT disclosed, the company is attempting
what many analysts see as a long overdue restructuring at the
same time as it is facing a cash squeeze and struggling to meet
its financial covenants.

Vestas Wind Systems A/S is the world's biggest maker of wind
turbines.  The company is based in Aarhus, Denmark.



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F R A N C E
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VALLAURIS II: S&P Affirms 'BB+' Rating on Class III Notes
---------------------------------------------------------
Standard & Poor's Ratings Services raised its credit ratings on
Vallauris II CLO PLC's class I and II notes. At the same time,
the ratings agency has affirmed its ratings on the class III and
class IV notes, and the class V combination notes.

"The rating actions follow our assessment of the transaction's
performance using data from the latest available trustee report,
dated Sept. 17, 2012, in addition to our credit and cash flow
analysis.  We have also taken into account recent developments in
the transaction," S&P said.

"According to the trustee report, the outstanding balance of the
class I notes decreased to EUR119.995 million on the September
2012 payment date, a decline of EUR23.22 million. Our analysis
indicates that the reduction in the class I notes' principal
balance on the September 2012 payment date has helped increase
credit enhancement available to the class I notes since our last
review of the transaction on Dec. 5, 2011. As a result, we have
raised to 'AAA (sf)' from 'AA+ (sf)' our rating on the class I
notes," S&P said.

"We subjected the capital structure to a cash flow analysis to
determine the break-even default rate for each rated class at
each rating level. In our analysis, we used the reported
portfolio balance that we consider to be performing, the
weighted-average spread, and the weighted-average recovery rates
that we considered appropriate. We incorporated various cash flow
stress scenarios using our standard default patterns and timings
for each rating
scenario, in conjunction with different interest stress
scenarios," S&P said.

"Our analysis also indicates that the portfolio's credit quality
has improved since our December 2011 review. For example, the
proportion of assets rated in the 'CCC' category (rated 'CCC+',
'CCC', or 'CCC-') has decreased to 7.70% of the remaining pool,
from 12.15% previously. Overall, this has resulted in a fall in
expected default rates for notes at all rating levels," S&P said.

"We have also reviewed the transaction using our nonsovereign
ratings criteria. Under these criteria, the highest rating we
would assign to a structured finance transaction is six notches
above the investment-grade sovereign rating on the country in
which the securitized assets are located. 's rating actions are
unaffected following the application of these criteria," S&P
said.

"In our opinion, the improvement we have seen in the
transaction's performance since our last transaction update has
also benefited the class II notes. We believe the credit
enhancement available to this class of notes is now commensurate
with a higher rating. We have therefore raised our rating on the
class II notes to 'A+ (sf)' from 'BBB+ (sf)'," S&P said.

"Our assessment indicates that the level of credit support
available to the class III and IV notes remains commensurate with
the current ratings. We have therefore affirmed our 'BB+ (sf)'
and 'B+ (sf)' ratings on the class III and IV notes,
respectively," S&P said.

"The class V combination notes currently comprise EUR10.71
million of French 'obligation assimilable du tresor' (OAT)
strips, with an aggregate nominal face amount (at maturity) of
EUR18.05 million, and EUR6.30 million of subordinated notes," S&P
said.

"The rating on the class V combination notes is linked to our
rating on the Republic of France (AA+/Negative/A-1+). We have
therefore affirmed our 'AA+ (sf)' rating on the class V
combination notes," S&P said.

Vallauris II CLO is a cash flow collateralized loan obligation
(CLO) transaction that securitizes loans to primarily
speculative-grade corporate firms.

           STANDARD & POOR'S 17G-7 DISCLOSURE REPORT

SEC Rule 17g-7 requires an NRSRO, for any report accompanying a
credit rating relating to an asset-backed security as defined in
the Rule, to include a description of the representations,
warranties and enforcement mechanisms available to investors and
a description of how they differ from the representations,
warranties and enforcement mechanisms in issuances of similar
securities. The Rule applies to in-scope securities initially
rated (including preliminary ratings) on or after Sept. 26, 2011.

If applicable, the Standard & Poor's 17g-7 Disclosure Report
included in this credit rating report is available at:

        http://standardandpoorsdisclosure-17g7.com

RATINGS LIST

Vallauris II CLO PLC
EUR324.6 Million Floating-Rate and Subordinated Notes

Class            Rating
            To              From

Ratings Raised

I           AAA (sf)        AA+ (sf)
II          A+ (sf)         BBB+ (sf)

Ratings Affirmed

III         BB+ (sf)
IV          B+ (sf)
V Combo     AA+ (sf)

Combo - Combination.



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G E R M A N Y
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BAYERNLB CAPITAL: Moody's Cuts Preferred Securities Rating to Ca
----------------------------------------------------------------
Moody's Investors Service has downgraded the rating on the
6.2032% perpetual non-cumulative preferred securities issued by
BayernLB Capital Trust I to Ca(hyb) from Caa2(hyb). This action
follows the voluntary public-tender offer by Bayerische
Landesbank (BayernLB: deposits Baa1, stable; BFSR D-/BCA ba3,
stable) for the preferred securities, announced on 11 October
2012.

Moody's considers the tender offer to be a distressed exchange
related to the ongoing impairment of the securities associated
with coupon suspension, and has adjusted the rating accordingly.
The rating carries a stable outlook.

Ratings Rationale

The downgrade of the rating on BayernLB Capital Trust I's
preferred securities was driven by Moody's view that the October
tender offer represents a continuing impairment to the position
of the holders of the respective securities, which did not
receive coupons in 2011 and 2012 (for the financial years 2010
and 2011). The tender offer implies a principal loss of 53% on
the securities, consistent with a rating of Ca.

What Could Move The Ratings Up/Down

BayernLB Capital Trust I securities could be upgraded if (1)
Moody's reduces its expected loss assumption for the securities;
(2) coupon payments are resumed; and/or (3) a stronger
performance outlook for BayernLB suggests sustained positive
results in its local GAAP accounts. These developments could
result in Moody's applying a ratings approach for the securities
based on standard notching from the standalone adjusted credit
assessment, rather than an approach based on an expected loss
analysis.

A further downgrade of these instruments would result from (1)
deterioration of BayernLB's credit profile; and/or (2) the
prospect of these securities continuing to underperform.

Principal Methodologies

The principal methodology used in this rating was Moody's
Consolidated Global Bank Rating Methodology published in June
2012.



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G R E E C E
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* GREECE: Has Two Years to Trim Budget Deficit; Avert Default
-------------------------------------------------------------
James G. Neuger and Jonathan Stearns at Bloomberg News report
that
euro finance chiefs left unanswered how they'll fill a fresh hole
in Greece's balance sheet without tapping their own bailout-weary
taxpayers for money after giving the country two extra years to
trim its budget deficit.

In the latest compromise in three years of crisis fighting,
creditors led by Germany opted late on Monday to keep money
flowing to Greece instead of risking a default that could lead to
the nation's exit from the euro and stir more turmoil for the
countries that remain in the single-currency bloc, Bloomberg
relates.

Greece has made "far-reaching decisions that go in the right
direction," Bloomberg quotes German Finance Minister Wolfgang
Schaeuble as saying in Brussels on Monday.  According to
Bloomberg, he said Greece's aid program can be re-engineered to
plug a financing gap of as much as EUR32.6 billion (US$41
billion) without costing creditors a cent.

For now, Mr. Schaeuble, as cited by Bloomberg, said the terms of
the Greek package can be rejiggered by cutting the rates on
bailout loans or giving Greece extra time to pay them back,
without requiring creditors to put up more loans or write off
parts of Greece's official debt.

In the meantime, Greece will escape a default on Nov. 16 when
EUR5 billion in treasury bills come due, Bloomberg notes.  Greek
banks will be able to roll over their bill holdings, saving the
country from the "financing cliff," Bloomberg quotes European
Union Economic and Monetary Commissioner Olli Rehn as saying.



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I R E L A N D
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CAVENDISH SQUARE: Fitch Lowers Rating on Class B Notes to 'Bsf'
---------------------------------------------------------------
Fitch Ratings has downgraded and affirmed Cavendish Square
Funding plc's notes as follows:

  -- Class A1 (XS0241540763): downgraded to 'BBBsf' from 'A-sf';
     Outlook Negative

  -- Class A2 (XS0241541571): downgraded to 'BBsf' from 'BB+sf' ;
     Outlook Negative

  -- Class B (XS0241542033): downgraded to 'Bsf' from 'B+sf';
     Outlook Negative

  -- Class C (XS0241543353): affirmed at 'B-sf'; Outlook Negative

The downgrades of the class A1 to B notes reflect the
deteriorated portfolio performance which has not been offset by
the increase in credit enhancement levels due to the
transaction's deleveraging.

The revolving credit facility has been paid in full and the class
A1 balance has been reduced by EUR23.8m since the last review in
November 2011.  The pay downs were mostly due to some underlying
transactions being called, largely Dutch RMBS and ABS;
however,other amortizations of the mainly RMBS and ABS assets has
taken place as well.  While the manager can reinvest unscheduled
proceeds, no assets have been bought or sold during the period.

Since the last review, the 'CCCsf' and below bucket has increased
to 13% from 7%.  The cumulative defaults are almost unchanged but
there have been five defaults during the past year bringing the
total to EUR25.7m.  In addition, the portfolio has considerable
exposure to peripheral countries which currently stands at 42%.
The pool is also concentrated at sector level with RMBS assets
representing 70% of the outstanding balance.  All over-
collateralization (OC) and interest coverage (IC) tests are
passing. However, the class C OC test did fail since the last
review and its current cushion is tight.

Fitch believes that a material risk for the transaction is that
the portfolio assets' maturity may extend beyond their reported
weighted-average expected life.  The Negative Outlooks on the
notes reflect the extension risk of the portfolio assets as well
as the notes vulnerability to further portfolio deterioration.

The affirmation of Class C notes reflects the notes' level of
credit enhancement relative to the portfolio's credit quality.



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L U X E M B O U R G
===================


AK BARS: Fitch Assigns 'BB-' Rating to USD Senior Loan Notes
------------------------------------------------------------
Fitch Ratings has assigned AK BARS Luxembourg S.A.'s Series 5
USD-denominated senior loan participation notes a Long-term 'BB-'
rating.  The notes bear an 8.75% coupon rate payable semi-
annually and mature in November 2015.  The proceeds from the
issue are to be used solely for financing a loan to Russia's AK
BARS Bank (ABB).

ABB's ratings are as following: Long-term foreign-currency Issuer
Default Rating (IDR) 'BB-' with a Negative Outlook, Short-term
IDR 'B', Viability Rating 'b', Support Rating '3' and National
Long-term Rating 'A+(rus)' with a Negative Outlook.

The notes are issued under the amended terms of the US$1.5
billion loan participation program (rated Long-term 'BB-' and
Short-term 'B').  The amended terms, in particular, restrict
transactions with affiliates other than those performed on an
arm's length basis and oblige the bank to maintain a Basel Total
Capital ratio of at least at 11% (as long as ABB's rating remains
below 'BB').


PACIFIC DRILLING: Moody's Assigns 'B3' Corp. Family Rating
----------------------------------------------------------
Moody's Investors Service assigned a B3 Corporate Family Rating
(CFR) to Pacific Drilling V Limited (PDC5), a wholly-owned
subsidiary of Pacific Drilling S.A. (PacDrilling). Moody's also
rated PDC5's planned offering of US$500 million of senior secured
notes B3. PDC5 will use approximately US$350 million of the net
proceeds from the offering to fund the remaining construction
payments for a deepwater drillship, the Pacific Khamsin, which is
scheduled for delivery in April 2013. The remaining proceeds will
be available for general corporate purposes of PacDrilling. The
outlook is positive given Moody's expectation that the Pacific
Khamsin will be delivered and operating under a contract with a
large, international oil company within the next twelve months.

Rating Rationale

The B3 CFR for PDC5 reflects its early stage of development with
a single drillship under construction, the lack of current cash
flow, the lack of an executed work contract for the drillship,
and the relatively weak credit protection provided under its bond
indenture. The CFR also considers the unsecured guarantee of
PacDrilling as well as the expectation that PDC5 will enter into
a multi-year work contract with a major international oil company
at market rates before the end of 2012. The financial support
provided by the PacDrilling guarantee is limited as the company's
only cash flow generating assets are four drillships that are
burdened by US$1.7 billion of project finance debt that has a
balloon maturity in 2015, two years prior to the maturity date of
PDC5's senior secured notes. There is significant residual value
after debt service associated with PacDrilling's drillships, but
until the project finance debt is retired, new financing
commitments or a sale of assets would be necessary to realize
this value. PacDrilling is majority-owned by Quantum Pacific
Group (Quantum), an investment firm with substantial financial
resources. To date, Quantum has invested approximately $1.6
billion of equity into PacDrilling and could provide additional
credit support although it is under no contractual obligation to
do so.

Because the capital structure at PDC5 includes only one class of
debt, the senior secured note rating is the same as the B3 CFR.
Moody's assigned a Caa1 Probability of Default Rating to reflect
the higher risk of default given the lack of cash flow generation
by the borrower. The collateral for the notes is a modern sixth
generation drillship that is approximately 85% constructed. In
light of this security, a 65% recovery factor is assumed under
Moody's Loss Given Default methodology.

Moody's assigned a SGL-4 Speculative Grade Liquidity Rating to
PDC5 reflecting weak liquidity through the end of 2013 and its
reliance on PacDrilling. Internal sources of liquidity are
limited to the US$350 million of cash proceeds set aside, but not
escrowed, to make the final construction payments on the Pacific
Khamsin. Moody's does not expect the drillship to generate cash
flow before the fourth quarter of 2013 assuming an on-time
delivery and a timely completion of sea trials and mobilization.
External liquidity is also limited with a high reliance on
liquidity support from the parent company. In the next twelve
months, PacDrilling's should receive approximately US$45 million
of distributions from the project finance waterfall on its four
operating drillships that will supplement its estimated $500
million of unrestricted cash pro forma for the note offering.
However, PacDrilling has two additional drillships under
construction which will require about US$450 million of
construction payments in 2013 and US$330 million in 2014. Moody's
expects PacDrilling to pursue additional financing to fund the
shortfall and provide additional liquidity to the parent, however
no funding commitments are currently in place. Secondary
liquidity is limited as all physical assets are pledged as
collateral.

The outlook is positive as Moody's expects the credit quality of
PDC5 to improve once a contract is signed, the drillship is
delivered, and operations commence. All of these factors are
expected within the next 12 months. The rating could be upgraded
once the PDC5 begins to generate cash flow and there is better
visibility to de-leveraging at PDC5 and at PacDrilling.
Alternatively, the outlook could be stabilized or the rating
could be downgraded if there is a delay in contracting, delivery,
and operation of the Pacific Khamsin drillship beyond what is
currently projected by the company. In addition, operational
issues at the four operating drillships could impact the ability
for PacDrilling to perform under its guarantee should it be
necessary. Therefore, if there is an operational issue at any of
the operating drillships, it would be credit negative for PDC5 as
well.

Applying Moody's Global Oilfield Services rating methodology,
PacDrilling maps to a B1 rating over the next 12 to 18 months,
which is two notches higher than the assigned rating of B3 for
PDC5. The two notch difference reflects the company's very short
corporate and operating history, the lack of cash flow at the
PDC5 issuer level, and the high leverage of over 7.0x on a run-
rate basis pro forma for the new notes.

Pacific Drilling S.A., a Luxembourg based company, is a provider
of ultra-deepwater drilling services to the oil and gas industry.
Its modern fleet consists of four operating drillships, all
constructed since October 2010, along with three drillships in
various stages of construction. Pacific Drilling is majority
owned and controlled by the Quantum Pacific Group, an investment
holdings group with investments in fertilizers and specialty
chemicals, energy, shipping and transportation.

The principal methodology used in rating Pacific Drilling V
Limited was the Global Oilfield Services Rating Methodology
published in December 2009. Other methodologies used include Loss
Given Default for Speculative-Grade Non-Financial Companies in
the U.S., Canada and EMEA published in June 2009.


PACIFIC DRILLING: S&P Assigns 'B' Long-Term Corp. Credit Rating
---------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B' long-term
corporate credit rating to Luxembourg-based Pacific Drilling S.A.
The outlook is stable.

S&P also assigned its 'B+' issue-level rating to subsidiary PD5's
planned US$500 million senior secured notes due 2017. The
recovery rating on the senior secured notes is '2', which
indicates S&P's expectations of substantial (70%-90%) recovery in
the event of a payment default. Pacific Drilling will use
proceeds of the senior secured notes to fund the construction of
ultra-deepwater drillships.

The 'B' rating on Pacific Drilling reflects the company's "weak"
business risk profile as a start-up oil and gas contract driller,
and its "highly leveraged" financial risk profile.

"We believe a stable rating outlook is warranted, given our
expectation that there is less than a one in three chance of
either an upgrade or downgrade occurring within the one-year time
frame -- the period our outlook considers. Still, if we come to
expect that Pacific Drilling will achieve and maintain debt-to-
EBITDA of less than 4x -- possibly through a combination of
successfully starting up its new drillships and demonstrating
moderation in its growth trajectory -- we could consider an
upgrade. Conversely, if we come to expect that debt-to-EBITDA
would remain at more than 5x beyond the next two years, we could
consider a downgrade," S&P said.



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N E T H E R L A N D S
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FUGU CLO: S&P Says Proportion of 'CCC'-Rated Assets Increased
-------------------------------------------------------------
Standard & Poor's Ratings Services raised to 'AA+ (sf)' from 'AA-
(sf)' its credit rating on Fugu CLO B.V.'s class A notes.

"The upgrade follows our review of the transaction's performance
by applying our credit and cash flow analysis, together with our
relevant criteria for transactions of this type," S&P said.

"Our analysis shows that the transaction's credit enhancement has
materially improved since our last review. The transaction now
has a shorter weighted-average life and a higher weighted-average
spread," S&P said.

"However, our analysis also indicates that the overall credit
quality of the portfolio has decreased since our previous review.
The proportion of assets rated in the 'CCC' category (rated
'CCC+', 'CCC', or 'CCC-') has increased to 2.22% of the remaining
pool, from 1.50%, and the level of defaulted assets (assets from
obligors rated 'CC', 'SD' [selective default], or 'D') has
increased to 4.86% of the remaining pool, from 0.00%," S&P said.

"We have subjected the transaction's capital structure to a cash
flow analysis to determine the break-even default rate for the
class A notes. Our analysis incorporates a series of cash flow
stress scenarios using various default patterns and levels, in
conjunction with different interest stress scenarios," S&P said.

"We note that a significant proportion of the portfolio consists
of assets denominated in currencies other than the currency of
the transaction's liabilities. Bank of America N.A.
(A/Negative/A-1) acts as the only swap counterparty in the deal,
and it does not fully comply with our 2012 counterparty criteria.
We have therefore subjected the transaction to additional foreign
exchange stresses. Following this analysis, we have raised to
'AA+ (sf) from 'AA- (sf)' our rating on Fugu CLO B.V.'s class A
notes," S&P said.

Fugu CLO is a cash flow collateralized loan obligation (CLO)
transaction that closed in December 2008. The transaction
securitizes loans to primarily speculative-grade corporate firms.
The portfolio is managed by Babson Capital Europe Ltd.

            STANDARD & POOR'S 17G-7 DISCLOSURE REPORT

SEC Rule 17g-7 requires an NRSRO, for any report accompanying a
credit rating relating to an asset-backed security as defined in
the Rule, to include a description of the representations,
warranties and enforcement mechanisms available to investors and
a description of how they differ from the representations,
warranties and enforcement mechanisms in issuances of similar
securities. The Rule applies to in-scope securities initially
rated (including preliminary ratings) on or after Sept. 26, 2011.

If applicable, the Standard & Poor's 17g-7 Disclosure Report
included in this credit rating report is available at:

        http://standardandpoorsdisclosure-17g7.com


JUBILEE CDO IX: S&P Says Percentage of Defaulted Assets Increased
-----------------------------------------------------------------
Standard & Poor's Ratings Services raised its credit rating on
Jubilee CDO IX B.V.'s class B notes and affirmed its ratings on
all other classes of notes.

"The rating actions follow our analysis of the transaction's
credit and cash flow using data from the latest available trustee
report, dated Oct. 4, 2012. As part of our analysis, we have
taken into account recent developments in the transaction and
reviewed the transaction under our applicable corporate CDO and
counterparty criteria," S&P said.

The trustee report shows that the class C notes are not currently
passing the Class C par value test. It also shows that the
reported weighted-average spread earned on the collateral pool
has increased to 3.75% from 3.20% as of our last review of the
transaction.

"We observed from our analysis that the scenario default rate has
dropped since our last review because of the portfolio's shorter
weighted average life and positive rating migration," S&P said.

"At the same time, according to our analysis, the percentage of
assets that we consider to have defaulted (that is, debt
obligations of obligors rated 'CC', 'SD' [selective default], or
'D' [default]) has increased to 1.7%. In line with our criteria,
we include these assets in our cash flow analysis at their lowest
reported market value, and our recovery assumptions," S&P said.

"We have subjected the transaction's capital structure to a cash
flow analysis to determine the break-even default rate for each
rated class at each rating level. In our analysis, we used the
portfolio balance that we consider to be performing of EUR381
million, the reported weighted-average spread of 3.75%, and the
weighted-average recovery rates that we considered to be
appropriate. We incorporated various cash flow stress scenarios
using our standard default patterns for each class of notes at
each rating category, in conjunction with different interest rate
scenarios," S&P said.

"Approximately 24.4% of the assets in the transaction's portfolio
are non-euro-denominated. To mitigate the risk of foreign-
exchange-related losses, the issuer has entered into swap
agreements for all these assets. Under our 2012 counterparty
criteria, our analysis of the swap counterparties and the
associated documentation indicates that they cannot support a
rating higher than 'AA-(sf)'," S&P said.

"To assess the potential impact on our ratings, we have assumed
that the transaction does not benefit from the derivative
transactions and that all the non-euro assets are exposed to
foreign-exchange-related losses," S&P said.

"Based on our analysis, we consider that the credit enhancement
available to the class B notes is now commensurate with a higher
rating then we previously assigned and we have therefore raised
our rating on this class of notes accordingly. The credit
enhancement available to all other classes of notes in our
opinion remains commensurate with the ratings assigned and we
have therefore affirmed these ratings," S&P said.

Jubilee CDO IX B.V. is a cash flow collateralized loan obligation
(CLO) transaction that securitizes loans to speculative-grade
corporate firms. The transaction closed in June 2008 and is
managed by Alcentra Ltd.

             STANDARD & POOR'S 17G-7 DISCLOSURE REPORT

SEC Rule 17g-7 requires an NRSRO, for any report accompanying a
credit rating relating to an asset-backed security as defined in
the Rule, to include a description of the representations,
warranties and enforcement mechanisms available to investors and
a description of how they differ from the representations,
warranties and enforcement mechanisms in issuances of similar
securities. The Rule applies to in-scope securities initially
rated (including preliminary ratings) on or after Sept. 26, 2011.

If applicable, the Standard & Poor's 17g-7 Disclosure Report
included in this credit rating report is available at:

           http://standardandpoorsdisclosure-17g7.com

RATINGS LIST

Class          Rating
          To             From

Jubilee CDO IX B.V.
EUR372 Million Floating-Rate Notes and Sub Notes

Rating Raised

B         A+ (sf)        A- (sf)

Ratings Affirmed

A         AA (sf)
C         BBB+ (sf)



===========
P O L A N D
===========


CENTRAL EUROPEAN: Signs Employment Agreement with CFO
-----------------------------------------------------
Central European Distribution Corporation entered into an Interim
Employment Agreement with Bartosz Kolacinski.  The Employment
Agreement is effective as of Sept. 14, 2012, which is the day Mr.
Kolacinski was appointed interim chief financial officer.

The Employment Agreement provides for these terms:

     * Mr. Kolacinski's term of employment under the Employment
       Agreement will continue until the earlier of Jan. 14,
2013,
       or the 30th day following the date on which a permanent
       Chief Financial Officer commences employment with the
       Company.  The term may be extended by mutual agreement of
       the parties.

     * Mr. Kolacinski's base salary during the term will be PLN
       50,000 per month.

     * Mr. Kolacinski will be eligible to receive at the end of
       the term a bonus equal to PLN40,000.

     * Mr. Kolacinski will be granted an equity award of 4,000
       shares of the Company's common stock which will be
eligible
       to vest at the end of the term.

     * As additional benefits, Mr. Kolacinski will receive the
use
       of a company car and health plan coverage.

     * If the Company terminates Mr. Kolacinski's employment
other
       than for Cause, disability or death, prior to the date on
       which a permanent Chief Financial Officer commences
       employment with the Company, or if Mr. Kolacinski
       terminates his employment after certain events occur
       without his consent, Mr. Kolacinski will be eligible to
       receive (i) payment of all accrued obligations, (ii) a
lump
       sum payment equal to the base salary that would have been
       paid to Mr. Kolacinski had the term remained in effect,
       (iii) payment of the Bonus, and (iv) vesting of the Equity
       Award.

A full-text copy of the Employment Agreement is available for
free at http://is.gd/93bTvT

                             About CEDC

Mt. Laurel, New Jersey-based Central European Distribution
Corporation is one of the world's largest vodka producers and
Central and Eastern Europe's largest integrated spirit beverages
business with its primary operations in Poland, Russia and
Hungary.

Ernst & Young Audit sp. z o.o., in Warsaw, Poland, expressed
substantial doubt about Central European's ability to continue as
a going concern, following the Company's results for the fiscal
year ended Dec. 31, 2011.  The independent auditors noted that
certain of the Company's credit and factoring facilities are
coming due in 2012 and will need to be renewed to manage its
working capital needs.

The Company's balance sheet at June 30, 2012, showed US$1.86
billion in total assets, US$1.68 billion in total liabilities,
US$29.55 million in temporary equity, and US$158.10 million in
total stockholders' equity.

                             Liquidity

Certain credit and factoring facilities are coming due in 2012,
which the Company expects to renew.  Furthermore, the Company's
Convertible Senior Notes are due on March 15, 2013.  The
Company's
current cash on hand, estimated cash from operations and
available
credit facilities will not be sufficient to make the repayment of
principal on the Convertible Notes and, unless the transaction
with Russian Standard Corporation is completed the Company may
default on them.  The Company's cash flow forecasts include the
assumption that certain credit and factoring facilities that are
coming due in 2012 will be renewed to manage working capital
needs.  Moreover, the Company had a net loss and significant
impairment charges in 2011 and current liabilities exceed current
assets at June 30, 2012.  These conditions raise substantial
doubt
about the Company's ability to continue as a going concern.

The transaction with Russian Standard Corporation is subject to
certain risks, including shareholder approval which may not be
obtained.  The Company's 2012 Annual Meeting of Stockholders,
which was postponed due to the need to restate the Company's
financial statements, is expected to be held as soon as
practicable.  The Company believes that if the transaction is
completed as scheduled, the Convertible Notes will be repaid by
their maturity date, which would substantially reduce doubts
about
the Company's ability to continue as a going concern.

                           *     *     *

As reported by the TCR on Aug. 10, 2012, Standard & Poor's
Ratings
Services kept on CreditWatch with negative implications its
'CCC+'
long-term corporate credit rating on U.S.-based Central European
Distribution Corp. (CEDC), the parent company of Poland-based
vodka manufacturer CEDC International sp. z o.o.  The CreditWatch
status reflects S&P's view that uncertainties remain related to
CEDC's ongoing accounting review and that CEDC's liquidity could
further and substantially weaken if there was a breach of
covenants which could lead to the acceleration of the payment of
the 2016 notes, upon receipt of a written notice of 25% or more
of the noteholders.

In the Oct. 9, 2012, edition of the TCR, Moody's Investors
Service
has downgraded the corporate family rating (CFR) and probability
of default rating (PDR) of CEDC to Caa2 from Caa1.  "The
downgrade reflects delays in CEDC securing adequate financing to
repay its US$310 million of convertible notes due March 2013
which are increasing Moody's concerns that the definitive
agreement for a strategic alliance between CEDC and Russian
Standard Corporation (Russian Standard) might not conclude at the
current terms," says Paolo Leschiutta, a Moody's Vice President -
Senior Credit Officer and lead analyst for CEDC.



===============
P O R T U G A L
===============


* PORTUGAL: Fitch Affirms 'BB+' Long-Term Issuer Default Ratings
----------------------------------------------------------------
Fitch Ratings has affirmed Portugal's Long-Term foreign and local
currency Issuer Default Ratings (IDRs) at 'BB+'.  The Outlooks
are Negative. Fitch has simultaneously affirmed Portugal's
Country Ceiling at 'AAA' and Short-term foreign currency IDR at
'B'.

The affirmation reflects the progress made under the IMF-EU
program to date, but rising political, implementation and
macroeconomic risks warrant the maintenance of a Negative
Outlook.  Although the program remains on track, it is going
through a delicate phase.  Cross-party commitment to its
implementation and social cohesion are being tested by the 2013
budget, while institutional constraints could limit the
government's room for maneuver.  Institutional gridlock leading
to policy paralysis would be negative for the rating.

The current account has declined to 3.7% of GDP in 2012 from a
peak of 12.6% of GDP in 2008, according to Fitch's estimates.
External competitiveness measures are improving.  The flipside is
that domestic demand is contracting and the unemployment rate is
increasing at a faster pace than anticipated.  This "internal
devaluation" is a painful process but remains, in the agency's
view, necessary to restore Portugal's competitiveness within the
eurozone.

Fitch expects real GDP to contract by 1.5% in 2013 before
gradually recovering in the medium-term.  There are significant
downside risks to this forecast.  The recently adopted 2013
budget, which includes measures worth around EUR5.3bn (3.2% of
GDP), is strongly reliant on revenue-raising measures and thus
likely to exert further negative pressure on economic growth.
Moreover, difficult economic conditions in Spain, Portugal's main
trading partner, could also hamper GDP growth in 2013.

The weak economic outlook will continue to challenge the
government's deficit reduction plan.  Given the sharp revenue
shortfalls in 2012, the Troika has already agreed to revise the
fiscal deficit targets to 5% of GDP in 2012 and 4.5% of GDP in
2013, from 4.5% and 3% previously. The 2014 target remains
unchanged at 2.5% of GDP.

Fitch judges the government's commitment to the program to be
strong.  The agency's baseline is that the program targets will
be met.  Still, despite the strong commitment to the program,
fiscal adjustment still has some way to go and the risk of
slippage remains large.  In the event of slippage caused by a
deeper economic contraction, Fitch believes the Troika will allow
further target revisions as long as Portugal remains on track
with program implementation.

Portugal is still at an early stage of its adjustment.  A
sizeable effort is required to achieve sustainable public
finances in the medium-term.  Portugal will have to maintain
primary surpluses of 3% of GDP a year from 2013 to stabilize
public debt at 116% of GDP by 2020, with risks to the downside
should a reformed economy fail to outperform the long-term growth
rate of barely 2% in 1992-2008.

However, the social cohesion and political consensus that has
facilitated implementation of the government's austerity measures
has started to wane, raising concerns about reform fatigue.  The
IMF-EU program supports Portugal's sovereign rating.  While the
macroeconomic adjustment takes place, external funding support
remains crucial to underpin confidence.  Portugal's EUR78 billion
financial assistance program and government commitment to its
conditions alleviate short-term liquidity concerns.  It also
helps accelerate the pace of structural reforms which will
underpin productivity growth and competitiveness in the medium-
term.

The recent bond-exchange has improved Portugal's funding profile
as the operation cuts the EUR9.6 billion repayment due in
September 2013 to EUR5.8 billion.  However, Fitch's base case
remains that further official support will be needed and provided
over the medium term.  The weak economic outlook in Portugal, the
size of the fiscal adjustment and fragile nature of the eurozone
sovereign debt market means there would need to be a significant
improvement in sentiment for it to return to the market in full
next year.

Political uncertainty or material slippage in fiscal
consolidation could put negative pressure on the ratings.  Weaker
than expected GDP growth, leading to a significantly higher peak
in public debt would also be a trigger for negative rating
action.

Conversely, evidence that the adjustment is working as planned
(with the continued reduction of current account and fiscal
deficits) and the moderation of the eurozone crisis would
stabilize the rating Outlook.



===========
R U S S I A
===========


BYSTROBANK JSC: Fitch Affirms 'B-' LT Issuer Default Ratings
------------------------------------------------------------
Fitch Ratings has affirmed JSC Bystrobank's Long-term foreign
currency and local currency Issuer Default Ratings (IDRs) of 'B-'
and National Long-term rating of 'BB-(rus)'.  The Outlooks are
Stable.

RATING ACTION RATIONALE AND DRIVERS - IDRs, VIABILITY RATING AND
NATIONAL RATING

The ratings reflect Bystrobank's small size, its concentrated
corporate loan book dominated by unsecured short-term loans to IT
trading companies, risks of planned rapid growth of unsecured
retail lending, where there is limited history of reasonable
performance, and weak capitalization.  The ratings also
acknowledge the bank's principal market position in the small
Udmurtia region, its adequate liquidity profile and the recently
announced entrance of IFC as a minority shareholder, which should
benefit the bank's corporate governance and money market access.

Retail lending (61% of gross end-H112 loans) is potentially risky
due to rapid growth (22% in H112 and 42% in 2011) and poor past
performance. Before the crisis, the bank applied rather loose
origination policies which, coupled with seasoning and
historically low write-offs, resulted in high non-performing
loans (NPLs) of 8.0% at end-H112 and a further 4.8% of
restructurings.  Retail loans were weakly reserved by only 4.1%
at end-H112. The revised issuance standards and more favorable
economic environment support the more recent vintages, with an
annualized NPL origination rate of only 2.4% in H112.  However,
given the limited history of such a decent performance and the
rapid past and planned (115% in 2013) retail lending growth, the
risks are still elevated, in Fitch's view.

Corporate lending (33% of gross end-H112 loans) practices are
also of concern to Fitch due to high exposure to IT companies
(45% of top-25 loans; the latter in turn made 81% of total
corporate loans) mainly being of a relationship-based nature,
reflecting the shareholders' connections and interests in this
business.  Within the overall IT exposure, loans to related
parties amounted to RUB0.5bn or 16% of Fitch Core Capital.  Also
most corporate loans (72% of top-25 loans) are unsecured,
exposing the bank to borrowers' business risks.  Currently there
are no corporate NPLs and the reserve rate is only 2.4%, which
does not provide much comfort.

The bank is planning to reduce the concentration by increasing
SME lending, including under EBRB funding, but has limited
expertise in that area.  This loan book is small (RUB0.7 billion
at end-Q312), but management plans to grow it to RUB2.8 billion
or 10% of the total loan book at end-2013.

Bystrobank is mainly customer funded, with retail deposits
contributing 61% of total funding and 18% coming from corporates
at end-Q312.  Retail deposits proved to be relatively stable
during the 2008-2009 crisis, with a maximum outflow of 5%,
followed by a quick recovery.  However, Fitch does not consider
Bystrobank to be immune to deposit outflow risk, which is
aggravated by regional concentration, with 87% of retail deposits
coming from the Udmurtia region.  Mitigating liquidity risk to an
extent, the bank had about RUB2.2 billion of liquid assets at
end-Q312 - sufficient to withstand a 19% outflow of customer
funding.

Profitability is moderate with annualized return on equity (ROE)
of 9% as per H112 IFRS accounts. According to management,
profitability should improve as the bank grows, but maintenance
of low credit risk would be crucial in achieving that.

Fitch considers Bystrobank's capitalization -- regulatory capital
adequacy ratio (CAR) of 12.1% and Basel CAR of 20% at end-Q312 --
as weak given the bank's relatively high credit risks and
ambitious growth plans.  Fitch estimates that after the upcoming
(should be completed in Q113) RUB550 million capital injection
from IFC, Basel and regulatory capital ratios should moderately
improve to, respectively, 25% and 15%, but the effect may be
temporary due to growth plans.

Bystrobank was acquired in 2007 by a group of Moscow-based former
shareholders of OJSC Orgresbank (sold to Nordea AB; 'AA-
'/Stable).  Fitch believes Bystrobank to be a mid-term financial
investment for them, implying that they would have limited
propensity to support the bank in case of need.  That stated,
they injected over RUB300 million (US$9.5 million) of new capital
into the bank during the Q308 downturn.

RATING SENSITIVITIES - LONG-TERM IDRs AND VIABILITY RATING

A sustained control of credit risks while growing rapidly and a
considerable diversification of corporate lending, especially
reduced concentration of IT industry and improved collateral
policy, should be positive for the bank's credit profile.

A significant deterioration in asset quality and/or a deposit
outflow would put pressure on the bank's ratings.

The rating actions are as follows:

  -- Long-term IDR: affirmed at 'B-'; Stable Outlook
  -- Short-term IDR: affirmed at 'B'
  -- National Rating: affirmed at 'BB-(rus)'; Stable Outlook
  -- Viability Rating: affirmed at 'b-'
  -- Support Rating: affirmed at '5'
  -- Support Rating Floor: affirmed at 'No floor'


PROMSVYAZBANK: Fitch Affirms 'BB-' Issuer Default Rating
--------------------------------------------------------
Fitch Ratings has affirmed Russia's Promsvyazbank's (PSB) Long-
term foreign currency Issuer Default Rating (IDR) at 'BB-' with a
Stable Outlook.  The agency has also assigned PSB Finance S.A.'s
US$400 million subordinated loan participation notes (LPN) a
Long-term rating of 'B+'.

RATING ACTION RATIONALE AND DRIVERS - IDRs, VR AND SENIOR DEBT
RATING

The ratings affirmation reflects limited recent changes in PSB's
credit profile and prospects.  The rating level reflects the
bank's weak capitalization, some higher-risk exposures in the
loan book and uncertainties arising from the rapid growth
strategy in more risky market segments.  However, the ratings
also take account of the reasonably diversified funding franchise
and the track record of comfortable liquidity management.

PSB's corporate loan quality remains average for its rating
category.  Corporate non-performing loans (NPLs) were a moderate
4% at end H112 after sizable loan sales and write-offs in 2010-
H112, while restructured exposures were, however, more
significant.  Accrued interest which has not been received in
cash was a sizable RUB12 billion, or 23% of equity, in the bank's
end-9M12 statutory accounts.  Accrued interest is generally
larger under IFRS, although IFRS accruals have been declining in
recent periods.

In Fitch's view, PSB's rather concentrated loan portfolio,
combined with the presence of some restructured and poorly
performing exposures among the top 20 loans, creates a risk of
lumpy losses and potential capital erosion.  Fitch believes that
some more risky exposures are weakly provisioned, however,
reported corporate NPLs were 129% covered by loan impairment
reserves at end-H112.

Reported related-party exposures have been stable relative to the
capital base in recent periods (2009-H112: around 20% of Fitch
core capital (FCC)).  Related parties' solid positions in their
respective markets (IT, real estate, and media), and their
association with PSB, have broadened financing options for them
and somewhat alleviated pressure on the bank's capital.  However,
in Fitch's view, the funding reliance on the bank of some related
parties (in particular in IT and real estate) may grow in future
considering their significant leverage and moderate net cash
flows.

PSB's real estate exposure, including loans and other on-balance
sheet investments, markedly declined in 2011 but was still a
material 2x Fitch Core Capital (FCC) at end-H112.  Among the key
non-core assets was part of an office building in the Moscow City
business district where construction was only 70% complete (this
asset is valued at 19% of FCC).  There is little certainty about
the completion timeline, although the agency believes the
building's current balance-sheet valuation is reasonable given
the premium location.

PSB aims to expand its retail and SME lending in the coming years
to improve its overall performance.  Retail lending at end-H112
comprised a moderate 9% of total loans.  In Fitch's view, this
strategy could be threatened by a lack of expertise in retail
lending, the bank's weak previous track record in the segment,
growing competition in the market and rising household leverage.
PSB's retail business performance continued to improve but
remained loss-generating in H112 due to a lack of scale.

PSB's liquidity position is comfortable, with a reasonable
cushion being held against the rather concentrated corporate
funding base.  Liquid assets were maintained in the range of 15%-
20% of total assets over the past two years, and stood at 16% at
end-9M12.  Some of the largest corporate clients, however, are
state-owned companies, whose balances could be less stable at
privately owned banks, especially in a stress scenario.
Wholesale debt is material (end-H112: 24% of liabilities), but
maturities are not concentrated.

Fitch views capital as weak given moderate reported ratios, weak
provisioning of some loan exposures, significant accrued
interest, some uncertainty in respect to how recent equity
injections/share purchases have been financed, and the moderate
ability of the bank's majority shareholders to inject new
capital, if needed.  The Basel I Tier I and total capital
adequacy ratios (CARs) were 9.9% and 13.2%, respectively, at end-
H112, and the regulatory CAR was 10.6% at end-9M12, only
marginally above the minimum 10% level.  Fitch estimates the
recent US$400 million subordinated debt issue should result in
the latter increasing to a still tight 11.1%.

Following the recently postponed IPO, PSB will continue to
examine the possibility of placing equity privately.  However, in
Fitch's view, internal capital generation is the most likely
source of equity.  Profitability was modest in 2009-2011 (5%
average return on average equity), but increased in H112 (14%),
mainly as a result of lower impairment charges.  Brothers Alexey
and Dmitriy Ananiev own an 88.25% stake and the EBRD 11.75%.

RATING SENSITIVITIES - IDRs, VR AND SENIOR DEBT RATING

The Long-term IDRs and Viability Rating (VR) could be downgraded
if weaker asset quality and/or rapid growth increase pressure on
capital.  An upgrade would require a strengthening of the bank's
capitalization.  Successful implementation of the bank's growth
strategy without significant credit impairment would also be
positive for PSB's profile.

RATING ACTION RATIONALE, DRIVERS AND SENSITIVITIES - SUBORDINATED
DEBT RATINGS

PSB's subordinated debt securities issued under the US$3 billion
loan participation notes (LPN) program via Luxemburg-domiciled
special-purpose vehicle PSB Finance S.A. are notched down once
from the Long-term IDR due to weaker recovery prospects.  The
rating would likely change in tandem with the Long-term IDR.

The US$400 million series 7 subordinated LPNs mature in November
2019 and pay a 10.2% semi-annual coupon.  There are no call or
put options.  PSB Finance S.A. will use the proceeds for the
purpose of financing a subordinated loan PSB.  Subsequently, the
SPV will receive and transfer to noteholders the principal and
interest accrued on the loan.

RATING ACTION RATIONALE, DRIVERS AND SENSITIVITIES - SUPPORT
RATING AND SUPPORT RATING FLOOR

The Support Rating Floor and Support Rating have been affirmed at
'B' and '4', respectively, reflecting PSB's notable role in the
Russian banking system as the third-largest privately owned
commercial bank with a significant deposit franchise.
Acquisition of the bank by a financially stronger institution
could lead to a positive rating action on Support Rating.

The rating actions are as follows:

  -- Long -term foreign currency IDR: affirmed at 'BB-'; Outlook
     Stable

  -- Short-term foreign currency IDR: affirmed at 'B'

  -- Long -term local currency IDR: assigned at 'BB-'; Outlook
     Stable

  -- Short-term local currency IDR: assigned at 'B'

  -- VR: affirmed at 'bb-'

  -- Support Rating: affirmed at '4'

  -- Support Rating Floor: affirmed at 'B'

  -- Senior debt rating: affirmed at 'BB-'

  -- Subordinated debt rating: affirmed at 'B+'



=========
S P A I N
=========


AYT COLATERALES I: S&P Raises Rating on Class D Notes From 'BB-'
----------------------------------------------------------------
Standard & Poor's Ratings Services raised its credit ratings on
all classes of notes in AyT Colaterales Global Empresas, Fondo de
Titulizacion de Activos series Banco Gallego I. "At the same
time, we removed our ratings on the class A and B notes from
CreditWatch negative," S&P said.

"The rating actions follow our assessment of the transaction's
performance since our previous full review of the underlying
portfolio's credit quality and capital structure in February
2011. We have also applied our 2012 counterparty criteria, our
criteria for rating European small and midsize enterprise (SME)
securitizations, and our nonsovereign ratings criteria," S&P
said.

"On Dec. 23, 2011, we placed on CreditWatch negative our ratings
on the class A and B notes following the downgrade of
Confederacion Espanola de Cajas de Ahorros (CECA; BBB- /Watch
Neg/A-3) to A-/Negative/A-2 from A/Negative/A-1. At that time,
CECA acted as bank account provider, guaranteed investment
contract (GIC) provider, paying agent, and swap counterparty for
the transaction. As a result of this downgrade, the minimum
ratings trigger for the swap counterparty, bank account provider,
and GIC provider under the transaction documents was breached,
and therefore remedy actions were required," S&P said.

"Subsequently, as a remedy action, CECA was replaced in its role
of bank account provider, GIC provider, and paying agent with the
Spanish branch of Barclays Bank PLC. However, CECA is still a
swap counterparty for the transaction. In July 2012, the
transaction documents were amended to comply with our 2012
counterparty criteria. The amendments lowered the rating triggers
for the swap counterparty documents. Based on these amendments
and following the application of our 2012 counterparty criteria,
the maximum
achievable rating in this transaction is now 'A- (sf)'," S&P
said.

"Therefore, we have conducted our cash flow analysis assuming
that the transaction does not benefit from the support of the
swap counterparty for any rating above the maximum achievable
rating of 'A- (sf)'," S&P said.

"We have performed our credit and cash flow analysis using data
from the October 2012 trustee report and have observed
significant amortization of the class A notes in accordance with
the transaction documents. This has resulted in higher
subordination for the class A, B, C, and D notes. We have also
observed an increase in cumulative defaults (defaults are defined
in the
transaction documents as loans in arrears for more than 12 months
or previously classified by the trustee as defaulted loans) in
the portfolio and higher regional, borrower/obligor, and sector
concentration risk," S&P said.

"The number of obligors has reduced to 385 (from 829 at closing
in 2009), with the top 20 obligors accounting for more than 27%
of the outstanding pool balance. Obligors are diversified among
15 regions of Spain, however Madrid now accounts for over 40% of
the outstanding balance. We concluded that these increased
concentrations in this static pool mainly relate to the pool's
amortization," S&P said.

The reserve fund now totals EUR19.9 million (45.74% of the
capital structure), which is 96.24% of the required levels.

"We subjected the capital structure to our cash flow analysis,
based on the methodology and assumptions outlined in our 2009
European SMEs criteria. We used the reported portfolio balance
that we considered to be performing, the reserve fund balance,
and the current weighted-average coupon. We also incorporated
default and recovery rates to the cash flow model that we
considered to be appropriate based on the transaction's past
performance, and considering Spain's current difficult market
conditions. We incorporated various cash flow stress scenarios
using various default patterns, interest rate scenarios, and
recovery timings," S&P said.

"In our view, given that credit enhancement levels have doubled
since 2011, which has mainly been due to deleveraging as well as
the available reserve fund, this has addressed the risk of higher
defaults in the transaction. Based on this, we have raised our
ratings on all classes of notes," S&P said.

"Although the results of our cash flow analysis suggest higher
ratings for the class A and B notes, we have raised to 'AA- (sf)'
and removed from CreditWatch negative our ratings on these notes
as a result of the application of our non-sovereign ratings
criteria. Under these criteria, the highest rating we would
assign to a structured finance transaction is six notches above
the
investment-grade rating on the country in which the securitized
assets are located. Since Spain's current rating is BBB-
/Negative/A-3, the maximum achievable rating level in the
transaction is 'AA- (sf)'," S&P said.

AyT Colaterales Global Empresas' series Banco Gallego I is
collateralized by loans granted to Spanish SMEs originated by
Banco Gallego.

           STANDARD & POOR'S 17G-7 DISCLOSURE REPORT

SEC Rule 17g-7 requires an NRSRO, for any report accompanying a
credit rating relating to an asset-backed security as defined in
the Rule, to include a description of the representations,
warranties and enforcement mechanisms available to investors and
a description of how they differ from the representations,
warranties and enforcement mechanisms in issuances of similar
securities.

The Standard & Poor's 17g-7 Disclosure Report included in this
credit rating report is available at:

        http://standardandpoorsdisclosure-17g7.com

RATINGS LIST

Class           Rating                  Rating
                To                      From

AyT Colaterales Global Empresas, Fondo de Titulizacion de Activos
EUR135 Million Asset-Backed Floating-Rate Notes Series Banco
Gallego I

Ratings Raised and Removed From CreditWatch Negative

A               AA- (sf)               A+ (sf)/Watch Neg
B               AA- (sf)               A (sf)/Watch Neg

Ratings Raised

C               A (sf)                 BBB (sf)
D               BBB (sf)               BB- (sf)


BANCO POPULAR: To Sell Discounted Shares to Plug Capital Gap
------------------------------------------------------------
Charles Penty and Ben Sills at Bloomberg News report that Banco
Popular Espanol SA plans to sell as much as EUR2.5 billion
(US$3.2 billion) of discounted shares as the Spanish lender bids
to close a capital shortfall.

According to Bloomberg, Popular Chief Financial Officer Jacobo
Gonzalez-Robatto told shareholders in Madrid on Nov. 10 that the
bank will issue new shares at EUR0.585 each, excluding the value
of subscription rights.

Bloomberg relates that Banco Popular said on Oct. 1 it would sell
shares and suspend its dividend as the lender seeks to avoid
tapping state aid to cover a EUR3.22 billion capital deficit
revealed in stress tests that accompanied a European bailout for
Spain's banking system.

As reported by the Troubled Company Reporter-Europe on Sept. 25,
2012, Fitch Ratings downgraded Banco Popular Espanol SA's Long-
term Issuer Default Rating (IDR) to 'BB+' from 'BBB-', Short-term
IDR to 'B' from 'F3', Viability Rating (VR) to 'bb+' from 'bbb-',
Support Rating to '3' from '2' and Support  Rating Floor (SRF) to
'BB+' from 'BBB-'.  The Outlook on Popular's Long-term IDR is
Stable and driven by its SRF.

Banco Popular Espanol SA is a Spain-based financial institution
principally engaged in the banking sector.


* SPAIN: No Need to Tap on Emergency Funds, ESM Head Says
---------------------------------------------------------
Rebecca Christie and Ben Sills at Bloomberg News report that
European Stability Mechanism head Klaus Regling said Spain no
longer needs the EUR30 billion (US$38 billion) set aside for
emergencies in the first months after its bank bailout was
approved as it is now on track for scheduled payments.

According to Bloomberg, Mr. Regling said on Nov. 12 that the ESM
will take over the EUR30 billion in bonds that were created in
July at the firewall fund's predecessor, the European Financial
Stability Facility, and never tapped by Spain.  He said that
going forward, Spain is on track to receive disbursements from
its
EUR100 billion bailout in the course of its agreed rescue
package, Bloomberg notes.

Mr. Regling, as cited by Bloomberg, said Spain is no longer
considered to be at risk of needing emergency funding.

Mr. Regling said the money that had been set aside for
emergencies immediately after the bailout package was approved
won't disappear, Bloomberg relates.  Instead, it will now be
folded into the aid package as it proceeds, Bloomberg states.


* SPAIN: Cannata Says ESM Creditor Status Needs Clarity
-------------------------------------------------------
Chiara Vasarri at Bloomberg News reports that Italy's debt agency
head Maria Cannata said Spain will not make a request for
European Union bond buying until it gets clarity on whether the
region's permanent rescue fund will be considered a preferred
creditor.

"There is some fear over this in the market," Bloomberg quotes
Ms. Cannata as saying in a speech in Rome on Tuesday.  "I fear
that until this issue is clarified, any expectations for Spain to
make a request won't be satisfied."

Bloomberg relates that Ms. Cannata said the issue of the creditor
status for the European Stability Mechanism (ESM), which has been
authorized to buy sovereign debt in conjunction with the European
Central Bank, must be cleared up or it will create a "segmented
market".

There will be "uncertainty on the part of investors over how they
will be treated in case the issuer runs into difficulty,"
Ms. Cannata, as cited by Bloomberg, said.



===========
S W E D E N
===========


SAS AB: Future Hinges on New Restructuring Plan
-----------------------------------------------
Gustav Sandstrom and Katarina Gustafsson at Dow Jones Newswires
report that SAS AB on Monday said it would cut salaries and more
jobs as part of a new restructuring plan that is dependent partly
on the support of labor unions, as the Scandinavian airline
carrier tries to convince investors of its long-term future.

According to the FT, the airline, partly owned by the Swedish,
Norwegian and Danish governments, said its new plan will include
cost savings of around SEK3 billion (US$445 million), outsourcing
parts of customer service and improvements to information
technology.

SAS, which is also planning asset sales of three billion kronor,
including a stake in Norwegian carrier Wideroe, said its major
shareholders and creditor banks have agreed to increase the size
of an existing credit facility of SEK3.1 billion to SEK3.5
billion and to extend the term until March 2015 so long as the
company implements the restructuring plan, Dow Jones notes.

The company will have to renegotiate the collective agreements
with its labor unions to carry out the plan, Dow Jones states.

"We are facing a very serious situation," Dow Jones quotes SAS
Chief Executive Rickard Gustafson as saying on Monday.  "Either
we do this, and then we have a bright future," Mr. Gustafson
said.  "If we don't, we are facing a very, very challenging
situation."

SAS, as cited by Dow Jones, said the cost-saving plan also
includes around 800 job cuts from the current workforce of around
15,000 and pay reductions of about 15%.  Through streamlining
measures as well as outsourcing and divestments of units
including Wideroe, SAS's head count would fall to around 9,000,
Dow Jones discloses.

The SAS restructuring plan will have to pass muster with the
European Commission, the European Union's executive arm, which
has taken a tough line recently with governments trying to keep
unprofitable former state-owned airlines operating, Dow Jones
notes.

SAS AB -- http://www.sasgroup.net/-- is a Sweden-based company,
engaged in the air transport services.  It is a parent company
within SAS Group, which operates within two business areas.  The
Core SAS segment encompasses airline services in the Nordic
countries, as well as intercontinental flights through SAS
Scandinavian Airlines, as well regional airlines in Norway
through Wideroe and in Finland through Blue1.  The SAS Individual
Holdings segment comprises operations of Estonian Air, bmi, All
Cargo, Skyways, Air Greenland, Spirit and Trust.  SAS AB's fleet
encompasses ten planes.  In addition, the Company offers ground
handling services and technical maintenance for the aircraft, as
well as air freight solutions and cargo capacity on passenger
aircraft, purely cargo aircraft and cargo handling.  The Group is
also involved in the trainings within the technical aviation
field.

                          *     *     *

As reported by the Troubled Company Reporter-Europe on Jan. 2,
2012, Moody's Investors Services maintained the Probability of
Default ratings and Long Term Corporate Family (foreign
currency) ratings of Caa1 on SAS AB at 'Caa1'.



=====================
S W I T Z E R L A N D
=====================


SCHMOLZ + BICKENBACH: S&P Puts B Corp. Credit Rating on Watch Neg
-----------------------------------------------------------------
Standard & Poor's Ratings Services placed on CreditWatch with
negative implications its 'B' long-term corporate credit rating
on Switzerland-headquartered specialty long steel producer
Schmolz + Bickenbach.  At the same time, S&P placed its issue
rating on the company's EUR258 million bond on CreditWatch
negative.

"The CreditWatch placement reflects the continuing decline in
2012 of the European automotive and machinery industries, which
represent 60% of Schmolz + Bickenbach's revenue. We expect car
sales in Europe to fall by 8% in 2012, with production likely to
slow significantly in the fourth quarter of the year, which will
substantially reduce demand for Schmolz + Bickenbach's specialty
long steel," S&P said.

"Because of the sharper decline in steel demand and the company's
high operating leverage, highlighted by its profit warning, we
might revise our 2012 EBITDA forecast down from EUR200 million,
and our 2013 expectation. This would increase the risk of a
breach of the company's maintenance financial covenants in 2013.
Current covenant thresholds include a 4.0x net-debt-to-EBITDA
ratio and a 3.0x net-interest-coverage ratio at the end of 2012,"
S&P said.

"We also see a risk that Schmolz + Bickenbach's leverage will be
above our previous expectation of 6x in 2012 and 2013, given its
lower EBITDA. The weaker market environment will also constrain
free-operating cash flow (FOCF) generation, although weaker funds
from operations (FFO) may be partly offset by working capital
inflow," S&P said.

"We view the absence of a permanent management team for the
company in an increasingly negative light, given the liquidity
pressure that could appear as a result of a breach of covenants,
and the difficult market environment. We understand though that
the recruitment process is ongoing, and remains a key priority
for the company," S&P said.

"On the positive side, we view the absence of large debt
maturities in the next couple of years as positive for the
rating. We also expect significant working capital inflow in the
second half of the year to support neutral or even positive
discretionary cash flow generation and restrain debt increase,"
S&P said.

"We intend to resolve the CreditWatch negative placement within
the next several weeks after we have analyzed the company's third
quarter financial results, expected to be published on Nov. 16.
We will focus on covenant compliance, free operating cash flow,
and liquidity," S&P said.

"We will also talk to management about the current order book,
cost cutting program, financial policy, and plans for appointing
the permanent management team," S&P said.

"In our analysis we will focus on whether the company will be
able to sustain leverage at or below 6x in 2012-2013, and
generate positive FOCF on and manage its covenant compliance
risk. A breach of covenants, if not waived by banks in advance,
would likely lead to a downgrade," S&P said.



===========
T U R K E Y
===========


TOPLU KONUT: Fitch Raises Local Currency Rating From 'BB+'
----------------------------------------------------------
Fitch Ratings has upgraded Turkey's Toplu Konut Idaresi
Baskanligi's (TOKI) Long-Term foreign currency Rating to 'BBB-'
from 'BB+' and Long-Term local currency to 'BBB' from 'BB+'.  At
the same time, the agency has upgraded TOKI's National Long-Term
Rating to 'AAA(tur)' from 'AA+(tur)'.  The Outlooks on all
ratings are Stable.  The upgrades follow Fitch's similar rating
actions on Turkey on November 5, 2012.

TOKI's ratings are linked to those of Turkey, reflecting its
quasi-sovereign status and extremely high probability of
government support.  Fitch uses its public-sector entities rating
criteria and applies a top-down approach in its analysis of TOKI.

The entity is a not-for-profit, quasi-governmental policy
institution with a duty to implement government policies and
programs to support the provision of low-cost housing and loan
facilities for the purchase of social housing.  In recent years
the entity has been at the forefront of government-led
initiatives for urban transformation and for the construction of
purpose-built facilities for state departments.

The provision of affordable housing is a high priority for the
national government in the light of strong demand driven by the
demographics and lack of financial resources available.  Under
its new mandate following the re-election of the government in
2011 TOKI aims to construct another 500,000 housing units by
2023, as it did in 2003-2011.

TOKI reports directly to the prime minister's office.  It has no
share capital and its reserves primarily consist of retained
earnings. Although it is not consolidated to the state budget, it
receives earmarked income appropriations from that source.  TOKI
requires authorization for borrowing and other strategic
decisions from the government while its accounts are audited by
the Court of Accounts, which is accountable to parliament.

An upgrade of Turkey, with continued strong implicit support,
would trigger a rating upgrade, as TOKI is credit linked to the
sovereign.  A downgrade of Turkey or negative changes to TOKI's
governance that would lead to a dilution of its legal status or
control by the sovereign would trigger a rating downgrade.



===========================
U N I T E D   K I N G D O M
===========================


COMET: Administrators Launches Liquidation Sale
-----------------------------------------------
The Belfast Telegraph reports that Comet has launched a
liquidation sale as administrators move to wind down the failed
retailer ahead of store closures as early as next week.

Comet, which is being run by administrators Deloitte, announced
the "massive stock liquidation" on its website, the report says.

According to the Belfast Telegraph, the sale appears to be
limited to physical stores with customers unable to buy goods
online.

The website, says Belfast Telegraph, currently only offers a
question and answer page, store locations and confirmation that
gift cards will be accepted during the sale. But it also warned
customers that it is no longer providing refunds, and any goods
ordered but not paid for prior to administration will not be
delivered.

Belfast Telegraph notes the sale follows suggestions that staff
at the collapsed chain could have the chance to join a rival
after Dixons outlined plans to take on seasonal staff.

                             About Comet

Headquartered in Rickmansworth, Comet is an electrical retailer.
Comet operates out of 236 stores across the UK, and employed
6,611 people - a full time equivalent workforce of 4,682
employees.

Neville Kahn, Nick Edwards and Chris Farrington of Deloitte were
appointed Joint Administrators to Comet on Nov. 2, 2012.
Deloitte said like many other retailers, Comet has been hit hard
by the uncertain economic environment, slow consumer spending and
lack of consumer confidence.  Despite significant investment in
the business and the efforts of the experienced management team,
Comet has struggled to compete with online retailers which have
far lower overhead costs and can offer cheaper products, Deloitte
added.


FALCON INTERIORS: Set to be Liquidated; 38 Workers Lose Jobs
------------------------------------------------------------
thisiswiltshire.co.uk reports that Melksham-based Falcon
Interiors has gone into liquidation, making its 38 staff
redundant after 30 years in town.

Employees at Falcon Interiors were told earlier this month the
company would cease trading immediately, leaving them all without
jobs, the report says.

"Steps have been started to place the company into liquidation
and notices have been sent out to the company's creditors to
inform them of this," thisiswiltshire.co.uk quotes Nick Clarke,
of accountancy firm Mazars, as saying.  "A creditors' meeting has
been convened for November 29, when it will be placed into
liquidation."

Falcon Interiors is an interior design company.  It installed
fitted kitchens, bathrooms and bedrooms, as well as designing
bespoke kitchen units.


HIBU PLC: Extends Creditor Deadline to Agree on Waive Repayments
----------------------------------------------------------------
Duncan Robinson at The Financial Times reports that Hibu plc, the
debt-ridden company formerly known as Yell, has extended the
deadline for its creditors to agree to waive repayments as the
group attempts to stave off threats of liquidation.

The original deadline of November 9 will be extended to
November 23 as the company attempts to cut a deal with creditors,
the FT says.  Hibu suspended all repayments to the group's
lenders in October, wiping out much of the remaining value in the
company's shares, the FT recounts.

According to the FT, Hibu also said it would create a scheme so
that only three-quarters of debtholders would have to agree to
forgo payment.  As it stands, all creditors have to unanimously
agree, the FT states.

The deadline only affects a small number of creditors who signed
up to the 2006 debt facility, the FT notes.  Together, these
creditors are owed a tranche of debt worth GBP65 million which
was due to be paid last month and have threatened the company
with liquidation, the FT discloses.

According to the FT, the group reiterated that the restructuring
was "likely to result in little or no value being attributed to
the group's ordinary shares".

Hibu Plc is a British Yellow Pages publisher.


PORTSMOUTH FOOTBALL: Portpin Suspends Bid to Buy Club
-----------------------------------------------------
Telegraph Sport reports that Portpin has suspended its bid to buy
Portsmouth Football Club (2010) and has warned there is a "very
real risk" of the League One club being liquidated unless there
is a resolution soon.

According the report, the largest creditor in the Portsmouth
Football Club (2010) administration have held discussions over a
sale and purchase agreement with administrators PKF which it
claims is "ready to complete within a matter of days".

Telegraph Sport relates that Trevor Birch, of administrators PKF,
withdrew preferred bidder status from Portpin three weeks ago and
named the Portsmouth Supporters' Trust (PST) as the preferred
bidders.

However, the PST has yet to finalize its business plan and bid
documentation to be reviewed by the Football League, with Portpin
subsequently feeling its attempts to pursue a bid are not now
worthwhile, the report relays.

Telegraph Sport says Portpin chairman and Hong Kong-based
businessman Balram Chainrai also feels the recent departure of
manager Michael Appleton to Blackpool was down to the club's
future still not being resolved.

"I believe there is a very real risk Portsmouth Football Club
will end up being liquidated despite our best efforts to proceed,
which are being knocked back at every turn by PKF," the report
quotes Mr. Chainrai as saying.  "Sadly we feel the administrators
are deliberately driving events in this direction so until there
is a clear resolution from the Football League regarding the PST
bid, we have no option other than to suspend our offer."

                   About Portsmouth Football

Portsmouth Football Club Ltd. -- http://www.portsmouthfc.co.uk/
-- operated Portsmouth FC, a professional soccer team that plays
in the English Premier League.  Established in 1898, the club
boasted two FA Cups, its last in 2008, and two first division
championships.  Portsmouth FC's home ground is at Fratton Park;
the football team is known to supporters as Pompey.  Dubai
businessman Sulaiman Al-Fahim purchased the club from Alexandre
Gaydamak in 2009.  A French businessman of Russian decent,
Gaydamak had controlled Portsmouth Football Club since 2006.


* UK: Number of Insolvent Travel Firms Doubles in 2012
------------------------------------------------------
travelweekly.co.uk reports that the number of travel companies
entering insolvency has doubled in the last year, according to
accountancy firm Wilkins Kennedy.

travelweekly.co.uk discloses that between October 1 last year and
Sept. 30, 2012, about 86 agencies and tour operators became
insolvent, up from 40 in the 12 months before that. The figures
were mainly taken from court statistics, the report notes.

According to the report, the firm said that a mixture of the
Olympic Games and the Queen's Diamond Jubilee had hit the
outbound market, which needed a strong year.

"A lot of struggling travel agencies needed an exceptional 2012
to keep their heads above water, but the once-in-a-lifetime
combination of a home Olympics and Jubilee put paid to that," the
report quotes partner Anthony Cork as saying.  "There were
expectations of a spike in holiday bookings, but this wasn't as
large as expected or it failed to materialise."

travelweekly.co.uk relates that Mr. Cork also claimed that
political and economic instability in favorite destinations such
as Egypt and Greece had hit the sector, already suffering from
the double-dip recession.

"The added problem is the lack of certainty around how long Greek
or Egyptian instability will last. This makes it very tricky for
travel companies to make contingency plans or adjust offerings
with confidence," Mr. Cork, as cited by travelweekly.co.uk, said.



===============
X X X X X X X X
===============


* Moody's Says Weak Pace of Global Macro Recovery to Persist
------------------------------------------------------------
The weak pace of global recovery will persist until at least
2014, says Moody's Investors Service in its latest macro-risk
report, adding that the structural economic adjustments that need
to ensue will materialize only slowly.

The new report is entitled "Update to the Global Macro-Risk
Outlook 2012-2014: Slow Adjustment to Weigh on Growth". The
report updates Moody's baseline forecasts for 2012-14 and
discusses the downside risks to the forecasts. It supersedes the
rating agency's previous Global Macro Risk Scenarios report,
which was published in August.

Moody's says that risks to the global forecast remain to the
downside, and are broadly unchanged from those discussed in
August. The main risks to the global macro outlook stem from: (1)
a deeper than currently expected recession in the euro area
accompanied by deeper credit contraction, particularly if
triggered by a further intensification of the sovereign debt
crisis; (2) excessive fiscal tightening in the US in 2013, given
recent political gridlock; (3) an oil-price supply-side shock
resulting from resurfacing geopolitical risks; and (4) the
potential for a hard landing in major emerging markets, including
China, India and Brazil.

"We are revising down our forecasts due to the continued
adjustment to global imbalances and heightened uncertainty
weighing on growth around the world," says Colin Ellis, Moody's
Senior Vice President for Macro Financial Analysis. "We expect
sub-trend growth in most advanced economies over the near term,
alongside a softer pace of expansion in emerging markets as
well."

Moody's says that only a modest recovery is likely in the G-20
advanced economies. The rating agency maintains its forecasts for
relatively healthy growth in the US, whilst the euro area as a
whole is expected to stagnate during 2013. For the G-20 economies
overall, Moody's expects real growth of around 2.7% in 2012,
followed by 3.0% in 2013 and 3.3% in 2014.

"In our view, fiscal consolidation and volatility in financial
markets will continue to weigh on business and consumer
confidence in advanced economies, while heightened uncertainty
will continue to hamper spending, hiring and investment. At the
same time, growth prospects for emerging economies have
moderated, reflecting the further deceleration in world trade and
a lack of significant new impetus from domestic demand," explains
Mr. Ellis.


* Moody's Changes Outlook on EMEA Chemicals Sector to Negative
--------------------------------------------------------------
Moody's Investors Service has changed to negative its outlook on
the Europe, Middle East & Africa (EMEA) and North American
chemicals industry, as explained in an Industry Outlook report
published on Nov. 12. The outlook change reflects Moody's
expectation that profitability in the industry will decline in
the next 12-18 months because of deteriorating economic
conditions in Europe, combined with slowing growth in developing
countries and relatively weak US growth.

The new report is entitled "Slowing Global Growth Turns Outlook
Negative For EMEA, North America Chemicals Industry". Moody's
subscribers can access this report via the link provided at the
end of this press release.

"The decision to change the outlook was based on our revised
2012-14 GDP growth forecasts," says Elena Nadtotchi, Moody's Vice
President - Senior Credit Officer and co-author of the report.
"As a result, we forecast weaker domestic demand, particularly in
Europe, and that slowing exports will exert pressure on the
earnings of the region's chemicals companies."

Moody's would consider changing the outlook to stable if G-20 GDP
growth rises back towards 2.5% and European GDP stops declining.
A stable outlook would also imply that EBITDA growth for the
industry would likely be flat to modestly positive (less than
5%).

Weak demand and lower utilization rates may undermine the
industry's strong pricing discipline, which has supported margins
in 2012. Chemicals companies may find it increasingly hard to
raise prices without their volumes being adversely affected, as a
result of which they will be more sensitive to oil price
volatility in 2013.

Growth will continue in some segments, including agricultural,
nutritional and medical applications. This will support the
performance of selected specialty producers and balance the
results of diversified companies. Also, despite the weaker
economic environment, Moody's considers it likely that US
petrochemicals producers' margins will improve, reflecting its
expectation of lower feedstock prices in 2013. However, Moody's
expects slower growth in some sectors where demand remains weak,
including styrene and butyl rubbers.

Companies with stronger balance sheets will probably turn to M&A
in 2013 to compensate for a lack of organic growth while the cost
of capital remains relatively low, and there will likely be some
market consolidation. Disposals and restructurings to optimize
portfolios are also likely.


* EUROPE: Fitch Says General Market Conditions Still Challenging
----------------------------------------------------------------
Fitch Ratings says Q312 results reported by Fitch-rated EMEA
cement companies, Holcim Ltd ('BBB'/Stable), HeidelbergCement AG
('BB+'/Stable) and Lafarge SA ('BB+'/Stable) showed a number of
positives, but confirmed that general market conditions are still
challenging and the outlook remains uncertain.

The European markets represented a negative surprise, mainly due
to a weakening in volume sales.  This not only reflects some
peripheral countries (Spain and Greece) where a persisting
decline was well anticipated, but also other countries such as
France, Germany and UK, for which expectations were for relative
stability.  Eastern European countries' trend has also been
disappointing, with the exception of Russia, where demand
continues to be strong.  Modest improvements in prices were not
sufficient to avoid a profitability decline.

Conversely, the North America market revealed stronger than
expected trends, with both volume and price increases allowing
cement producers to post sound profitability improvements.  As
far as emerging markets are concerned, Latin America and Asia
continue to show solid growth in volumes and positive
developments in prices.  In particular, Fitch notes that in India
the price trend has so far been significantly better than the
agency expectations at the beginning of 2012, allowing producers
to fully recover cost inflation.  By contrast, new production
capacity is putting pressure in some African markets (namely
Morocco and Egypt).

In general, cement producers were able to improve profitability
thanks to a better price environment and to the effects of cost
cutting measures that are now delivering material savings.  The
reduction in maintenance capex (partly due to lower utilization
of plants in Europe) and the prudent approach to expansion capex
boosted cash generation and debt reduction.  Fitch's Stable
Outlook of all the main ratings in the sector reflects this
constant deleveraging process, despite challenging market
conditions.

Fitch believes the outlook will remain uncertain: European
markets should continue to remain weak, with volumes declining
even further, while the US market recovery could prove fragile.
Demand in emerging countries is expected to remain solid.
However, cost inflation will persist in 2013, although energy
price increases are likely to be lower compared to 2012, and
cement producers will need to further increase prices to defend
margins.  On the positive side, the effect of cost cutting
measure should become more and more visible. In such a scenario,
Fitch expects a modest improvement in operating performance in
2013.  The agency expects investment policies to remain prudent.
M&A activity is also like to remain modest, as deleverage remains
a top-priority for many issuers.  However, the agency believes
that non-cash deals, such as assets swaps or joint ventures (such
as Lafarge's deal with Tarmac in UK) could be possible in order
to optimize geographical footprints in those markets that are
most affected by the crisis.

                            *********

Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par.  Prices are
obtained by TCR editors from a variety of outside sources during
the prior week we think are reliable.  Those sources may not,
however, be complete or accurate.  The Monday Bond Pricing table
is compiled on the Friday prior to publication.  Prices reported
are not intended to reflect actual trades.  Prices for actual
trades are probably different.  Our objective is to share
information, not make markets in publicly traded securities.
Nothing in the TCR constitutes an offer or solicitation to buy or
sell any security of any kind.  It is likely that some entity
affiliated with a TCR editor holds some position in the issuers'
public debt and equity securities about which we report.

Each Tuesday edition of the TCR contains a list of companies with
insolvent balance sheets whose shares trade higher than US$3 per
share in public markets.  At first glance, this list may look
like the definitive compilation of stocks that are ideal to sell
short.  Don't be fooled.  Assets, for example, reported at
historical cost net of depreciation may understate the true value
of a firm's assets.  A company may establish reserves on its
balance sheet for liabilities that may never materialize.  The
prices at which equity securities trade in public market are
determined by more than a balance sheet solvency test.

A list of Meetings, Conferences and Seminars appears in each
Thursday's edition of the TCR. Submissions about insolvency-
related conferences are encouraged.  Send announcements to
conferences@bankrupt.com

Each Friday's edition of the TCR includes a review about a book
of interest to troubled company professionals.  All titles are
available at your local bookstore or through Amazon.com.  Go to
http://www.bankrupt.com/booksto order any title today.


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S U B S C R I P T I O N   I N F O R M A T I O N

Troubled Company Reporter-Europe is a daily newsletter co-
published by Bankruptcy Creditors' Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland
USA.  Valerie U. Pascual, Marites O. Claro, Rousel Elaine T.
Fernandez, Joy A. Agravante, Ivy B. Magdadaro, Frauline S.
Abangan and Peter A. Chapman, Editors.

Copyright 2012.  All rights reserved.  ISSN 1529-2754.

This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers.

Information contained herein is obtained from sources believed to
be reliable, but is not guaranteed.

The TCR Europe subscription rate is US$625 per half-year,
delivered via e-mail.  Additional e-mail subscriptions for
members of the same firm for the term of the initial subscription
or balance thereof are US$25 each.  For subscription information,
contact Peter Chapman at 240/629-3300.


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