TCREUR_Public/121123.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

           Friday, November 23, 2012, Vol. 13, No. 234



* BULGARIA: Around 40,000 of SMEs to Face Bankruptcy by Year-End


* CYPRUS: Fitch Cuts Long-Term IDRs to 'BB-'; Outlook Negative


* ICELAND: On Road to Recovery; Legacy Issues Remain


OPERA FINANCE: Fitch Affirms 'Csf' Rating on Class D Notes
PROVENTUS EUROPEAN: Fitch Affirms 'CC' Ratings on 2 Note Classes


* ITALY: Moody's Says RMBS Defaults Deteriorate in August 2012


KAZAGROFINANCE: Fitch Hikes LT Issuer Default Rating to 'BB+'


TELE2: Riga Court to Review Insolvency Bid on November 27


GUALA CLOSURES: Moody's Assigns 'B1' Rating to EUR275MM Notes


SNS BANK: Moody's Downgrades Standalone BFSR to 'E+'
THERMPHOS: Declared Bankrupt by Breda Court


NORSKE SKOGINDUSTRIER: S&P Cuts Corp. Credit Ratings to 'CCC+/C'
NORWEGIAN LIFE: Fitch Affirms 'BB+' Subordinated Debt Rating


CIECH SA: S&P Assigns Prelim. 'B' Long-Term Corp. Credit Rating
PBG SA: KNF Keeps Watch on Rafaka Stake Sale


FIRST MORTGAGE: Moody's Raises Ratings on B Notes From 'Ba3'
RENAISSANCE FINANCIAL: Fitch Says Planned Ownership Changes Pos.
* CITY OF DZERZHINSK: S&P Raises LT Issuer Credit Rating to 'B+'


FONCAIXA CONSUMO 1: Fitch Affirms 'BB+' Rating on Class B Notes
IM FTGENCAT: Fitch Affirms 'CCsf' Rating on Class C Notes
OTKRITIE BANK: S&P Raises Counterparty Credit Rating to 'B'
* SPAIN: Moody's Says RMBS Market Performance Dip in July-Sept.
* SPAIN: Moody's Says SME ABS Performance Dipped in September


DNIPROSHYNA OJSC: Court Declares Tire Plant Bankrupt
* UKRAINE: Fitch Assigns 'B' Rating to US$1.25-Bil Eurobond

U N I T E D   K I N G D O M

ASSETCO MANAGED: In Liquidation; No Redundancy Pay for 30 Workers
LLANELI AFC: High Court Judge Dismisses Winding-Up Petition
PATTON GROUP: Subcontractors Seek Government Help
SOUTH LONDON: Lewisham Hospital's A&E Dept. at Risk of Closure


* BOOK REVIEW: Ralph H. Kilmann's Beyond the Quick Fix



* BULGARIA: Around 40,000 of SMEs to Face Bankruptcy by Year-End
FOCUS News Agency reports that Eleonora Negulova, Chairperson of
the National Association of Small and Medium Business, said that
around 10% or 400,000 of the registered small and medium
enterprises in Bulgaria will go bankrupt by the end of the year.

According to FOCUS News, Ms. Negulova said there was a need of a
change, as the old working methods could not continue.

"Another problem, which is looming larger and larger very fast,
is the inter-company debts, which according to latest data amount
to BGN 100 billion. Apart from the construction sector, the other
sectors facing serious difficulties are the tailoring industry,
and the sectors, which did not manage to make technological
changes," FOCUS News quotes Ms. Negulova as saying.


* CYPRUS: Fitch Cuts Long-Term IDRs to 'BB-'; Outlook Negative
Fitch Ratings has downgraded the Republic of Cyprus's Long-term
foreign and local currency Issuer Default Rating (IDRs) to 'BB-'
from 'BB+'.  The Short-term IDR has been affirmed at 'B'.  The
Outlook on the Long-term IDRs is Negative.  Fitch has
simultaneously affirmed the Country Ceiling for Cyprus at 'AAA'.

Rating Rationale

The downgrade of Cyprus's sovereign ratings reflects the
materially weaker macroeconomic outlook, a fiscal budget that has
significantly underperformed expectations and the continued high
level of uncertainty over the costs associated with bank
recapitalization.  The delay in negotiating official support has
contributed to the deteriorating economic conditions and raised
uncertainties about public sector reform and the correction of
macroeconomic imbalances.  The government's short-term financing
flexibility has also been materially reduced with the its current
dependence on bank financing to meet its funding needs.


The Cypriot economy slipped into its second recession in less
than two years in summer 2011 with the weakness intensifying more
than expected into the current year.  With the exception of
tourism, all sectors contracted in the third quarter to September
2012.  The economy is on course to shrink by more than 2% this
year after growing by 0.5% in 2011.  The contraction is deeper
than forecast in Fitch's review of the rating in June 2012 and
Cyprus will remain in recession into 2014.

A period of adjustment in the public and private sector, which is
also highly indebted, will put significant pressure on domestic
demand.  Support from the external sector will be limited by
reduced competitiveness and weak prospects for key trading
partners.  Greece is the country's biggest export market,
accounting for almost a quarter of total exports in 2011.
Persistent macro imbalances also mean medium-term growth
prospects are anaemic.  Material downside risks to the outlook

Cyprus's fiscal position has deteriorated significantly during
2012.  In the April Stability Programme, the government's stated
goal was to reduce the fiscal deficit to 2.6% of GDP for this
year from 6.3% in 2011.  Data from the Cyprus Ministry of Finance
show that for the nine months to September the fiscal shortfall
already exceeded the level for the same period last year.  Fitch
expects the deficit to be over 5% for 2012.  This is despite
austerity measures, including wage freezes and an increase in VAT
by 2 percentage points to 17%.  The depressed macroeconomic
environment dampened receipts, while any expenditure savings have
been offset by an increase in interest and pension expenditure.
The weaker growth outlook will increase the challenge of reducing
the fiscal deficit and the public debt ratio, which is set to
remain substantially higher than before the recession.

In Fitch's baseline scenario, general government debt to GDP will
peak around 120% in 2014, up from 71.1% in 2011.  The bulk of the
projected increase reflects Fitch's assessment that the Cypriot
banks will require further significant capital injections.  The
three main Cypriot banks will need at least around a further EUR4
billion (22% of GDP) in addition to the EUR1.8 billion already
injected into Cyprus Popular Bank in 2012.  There are
uncertainties over the capital shortfall of Cypriot cooperative
banks and the overall banking system's recapitalization costs
could be substantially higher under more stressed scenarios.  The
capital backstop facility that will be set under a potential
Troika adjustment program will likely include a buffer to cover
any risk of excess capital requirements over expectations with
the intent to secure confidence and stability in the banking


Negotiations with the Troika have lasted longer than expected
despite recent progress on setting key capital ratios for banks
and the system's supervision.  A request for official aid by
Cyprus was made in late June. February's presidential election
risks further delays.  However, the agency's ratings are
predicated on Fitch's expectation that the Cypriot authorities
will reach agreement with the Troika on an official financing

The lack of a clear and credible program to tackle the fiscal and
macroeconomic challenges has negatively impacted business and
investor confidence.  The continuation of an unstable environment
could translate into greater fiscal and banking costs for the
government.  The delays have also raised concerns about the
prospects for fiscal and economic reform.  The government's
disagreements with the Troika, also mostly supported by the main
opposition parties, extend to the size of the capital requirement
for the banking sector, the size of cuts in public spending,
privatization of state-owned enterprises and reforms of the wage
indexation system.  Resistance to reforms is a key downside risk
to the medium-term fiscal and economic outlook.

The government is possibly able to fund itself for several months
until a EUR1.4 billion bond redemption is due in June 2013.
Refinancing requirements are low into the first quarter of next
year and are currently being met through T-bills issued to banks.
However, recourse to such funding reduces the government's
ability to respond to adverse shocks and materially increases
rollover risks.  This is despite cash deposits and government
reserves in state-owned enterprises.  At the end of 2011 Cyprus
received liquidity support from the government of Russia, which
financed most of the funding requirements for the current year.
Public statements suggest that a decision by Russia on Cyprus's
request for further support is unlikely in the near term.


The Negative Outlook primarily reflects the risks associated with
bank recapitalization costs, the short-term financing situation,
progress towards a deficit and debt reduction program and
intensification of the eurozone crisis, notably further contagion
from Greece.  A further downgrade could be triggered if the
capital shortfall in the banking sector is materially larger than
current Fitch estimates, government's access to short-term
funding becomes restricted or a lack of progress in negotiations
with Troika puts at risk a timely adjustment program to address
the fiscal and macroeconomic challenges of Cyprus.

Progress on deficit reduction, recapitalization of the banking
sector and reform to address medium-term challenges arising from
an aging population and low productivity growth would support a
stabilization of the rating.  An agreement with the Troika on a
bailout program that delineates the burden-sharing arrangements
for the Cypriot banks, which is not Fitch's baseline assumption,
would be a further stabilizing factor for the rating.


* ICELAND: On Road to Recovery; Legacy Issues Remain
Moderate growth and fiscal consolidation show Iceland is on track
to recovery but a number of legacy issues remain to be addressed
before the process is complete, says Fitch Ratings.

Most importantly, capital controls still trap the equivalent of
approximately 50% of GDP in the country; 23% of that is offshore
kronas with a further 30%-40% of potential net foreign claims
arising from the winding up of Iceland's failed banks, according
to a recent IMF report.

If capital controls are unwound in line with the current
legislative deadline of the end of 2013, it would probably expose
Iceland to damaging capital flight (resident and non-resident), a
collapse of the exchange rate, soaring inflation and renewed
financial sector instability.  However, the longer controls
remain in place, the more detrimental they will become to
investor sentiment and broader economic recovery.

We agree with the IMF that the 2013 deadline is likely to be
extended.  The slow progress so far shows that the authorities
have a particularly cautious interpretation of their three
conditions of: restoration of macroeconomic stability; an
adequate level of international reserves and; a sound financial
system, although considerable progress has been made on all three
counts.  This highlights the intractability of capital controls.

The macroeconomic position is good compared with other program
countries.  Iceland will post 2.6% growth in 2012, unchanged from
last year, while gross public debt appears to have peaked at
almost 100% of GDP in 2011.  We expect debt to fall to 75%-80% of
GDP by 2017 as Iceland continues its fiscal consolidation.

Monetary and exchange rate policy are more problematic. Inflation
is still running some way above the Central Bank of Iceland's
target of 2.5%, while the slow pace of capital account
liberalization means that the exchange rate has yet to attain a
sustainable equilibrium.

The stability of the financial sector is dependent on how capital
controls are removed. The banks are well capitalized and liquid
at the moment, but are likely to see funding difficulties if
controls were lifted too quickly.

Fitch upgraded Iceland's sovereign ratings from 'BB+' to 'BBB-'
earlier this year in recognition of the progress that had been
made in restoring macroeconomic stability, restructuring the
financial sector and rebuilding sovereign creditworthiness.
Iceland regained market access in 2011 and has used the proceeds
from several sovereign bond issues to prepay near-term
obligations to the IMF and official bilateral creditors.


OPERA FINANCE: Fitch Affirms 'Csf' Rating on Class D Notes
Fitch Ratings has downgraded Opera Finance CMH plc's class A and
B notes and affirmed the class C and D notes as follows:

  -- EUR250m Class A (ISIN: XS0241931442): downgraded to 'Bsf'
     from 'BBBsf'; Outlook Negative

  -- EUR50m Class B (ISIN: XS0241934628): downgraded to 'CCsf'
     from 'CCCsf'; Recovery Estimate (RE) 40%

  -- EUR40m Class C (ISIN: XS0241935195): affirmed at 'CCsf';

  -- EUR35m Class D (ISIN: XS0241935609): affirmed at 'Csf'; RE0%

The downgrades reflect the continuing decline in the value of the
portfolio to just over half the EUR500 million reported at
closing. That rents in the Irish commercial real estate
(especially office) market are experiencing intense downward
pressure is visible from recent lease renewals across the
portfolio, which have seen rent slashed.  Besides the drag on
collateral value from this source, a two year tail period may be
insufficient to allow for an orderly sale of the 16 assets in the
portfolio.  Both concerns are reflected in the downgrade.

At the end of 2011, the Irish government scrapped plans to pass a
law that would have enabled commercial tenants to remove upward-
only rent review clauses from their leases.  The portfolio
backing this transaction may benefit from this ruling, as several
of the properties benefit from long upward-only leases to strong

It is widely viewed that the uncertainty surrounding these plans
contributed to the dearth of investment activity in Irish
commercial property.  In the Dublin market, the office sector has
reportedly picked up, with Cushman and Wakefield pointing to just
over EUR90 million of sales (from five transactions) in Q312,
approximately half the turnover reported by CBRE for the year.
There is less evidence of a rebound in the retail market, with
less than EUR10 million of sales in each of Q2 and Q3.  Moreover,
none of the activity in retail related to shopping centers like
the Stillorgan mall included in the CMH portfolio.

Although the investment market may be emerging from a very deep
nadir, it is unlikely that an appreciable upturn in value will be
achieved in the next two years.  With the distress in the Irish
market and the extent of overall borrower leverage, Fitch fully
expects the securitized loan to default at its maturity in
January 2013.

The property portfolio serving as collateral is generally good
quality, and benefits from a high occupancy rate of 98.5% as well
as a weighted average lease length to expiry of 14 years.
Besides the shopping center, there are a number of generally
well-tenanted, central Dublin office properties.  On the
downside, there is complexity stemming from an un-crystallized
capital gains tax liability, which Fitch is currently assuming
will be effectively subordinated below the claims of secured
creditors, as contemplated within the transaction documentation
entered into at closing.

Opera Finance (CMH) plc is a single-borrower securitization that
closed in February 2006.  The EUR375 million interest-only loan
is secured over 16 properties mainly located in Dublin, Ireland,
with an initial aggregate market value (MV) of EUR500 million
(currently EUR270.4 million).  Expected maturity is in January
2013, while legal final maturity of the notes is in January 2015.

PROVENTUS EUROPEAN: Fitch Affirms 'CC' Ratings on 2 Note Classes
Fitch Ratings has affirmed Proventus European ABS CDO P.L.C, as

  -- Class A (XS0283671716): affirmed at 'BBsf', Outlook Negative
  -- Class B (XS0283673415): affirmed at 'B-sf' Outlook Negative
  -- Class C (XS0283674223): affirmed at 'CCCsf'
  -- Class D (XS0283674819): affirmed at 'CCCsf'
  -- Class E (XS0283675626): affirmed at 'CCsf'
  -- Class F (XS0283676434): affirmed at 'CCsf'

The affirmations reflect the notes' level of credit enhancement
relative to the portfolio's credit quality.

The credit enhancement for the notes has increased since last
year due to the reference portfolio deleveraging.  The pay down
was mostly due to underlying reference asset amortization,
largely Dutch RMBS.  In addition, some Spanish assets have been
removed from the reference portfolio.

The reference portfolio has experienced a negative credit
migration during the past year with the weighted average rating
sliding to 'BBB-'/'BB+' from 'BBB'/'BBB' in 2011.  The negative
migration was mostly due to downgrades of reference assets from
peripheral countries.  However, there have been no credit events
to date as unlike other CDOs of ABS, the definition of default
incorporates migration of reference assets below 'CC' rather than
a higher rating.  The reference portfolio is concentrated at the
sector level with RMBS and CMBS collateral accounting for 59% and
23%, respectively.  The exposure to European peripheral countries
(Ireland, Italy, Portugal and Spain) stands at 22%.

The transaction is still in its replenishment period and as such
the manager may continue to reference new assets up until the
expiry of the replenishment period in March 2014.  However, no
new assets have been added to the reference portfolio during the
past year.

The Negative Outlooks on the notes reflect exposure to peripheral
countries as well as the notes vulnerability to further portfolio

The transaction is a synthetic securitization of primarily
mezzanine structured finance assets.


* ITALY: Moody's Says RMBS Defaults Deteriorate in August 2012
The Italian residential mortgage-backed securities (RMBS) market
saw delinquencies remain stable while defaults deteriorated in
the three-month period leading up to August 2012, according to
the latest indices published by Moody's Investors Service.

The overall cumulative default index rose quite significantly to
2.99% in August 2012 from 2.28% a year earlier, representing an
approximate 9% quarter-over-quarter increase. The 60+ day
delinquencies index increased slightly to 2.21% in August 2012
from 2.18% in August 2011 while a decrease can be seen in 90+ day
delinquencies, which currently stand at 1.58% in August 2012
compared to 1.64% a year earlier. The prepayment rate index
continued its decline, standing at 3.3% in August 2012, which
represents a 53% drop compared with the previous year.

The Italian RMBS indices report now includes exhibits showing the
trend lines of originators that have issued at least five
transactions and which have at least three transactions still
outstanding. Transactions issued by Meliorbanca S.p.A. and Banca
Delle Marche show a significant deterioration compared to the
overall Italian RMBS index trend. In April 2012, Moody's
downgraded 12 of the 17 outstanding classes in the Meliorbanca
transactions because of worse-than-expected performance. See
"Moody's downgrades several Italian RMBS notes issued by Sestante
Finance", 27 April 2012.

Moody's expects that the annual average unemployment rate in
Italy will be around 10.5% in 2012 and will increase by a further
0.5% in 2013, which will not help performance to improve in the
Italian RMBS indices.

Italian house prices will continue to fall in 2013 (see "European
ABS and RMBS Outlooks: June 2012 Update", June 2012), which will
increase losses on foreclosed properties (see "Sharp Fall in
Residential Housing Transactions Credit Negative for Italian
Residential Mortgage Loans", Special report published on 18 July

Between May 2012 and August 2012, four transactions have been
fully repaid following an early termination (Cordusio RMBS -
UCFin S.r.l. - Series 2009, IntesaBci Sec. 2 S.r.l., Adriano
Finance 2 S.r.l. and Adriano Finance S.r.l) with a total
portfolio outstanding amount of around EUR15 billion. This
explains the drop in the total outstanding portfolio balance to
EUR89.6 billion in August 2012 from EUR105.4 billion in May 2012,
despite three new transactions having also been issued during
this time for a total portfolio amount of EUR782 million.

Moody's indices are usually published mid-month and can be found
on in the Structured Finance sub-directory under
the Research & Ratings tab. In the left-hand side bar, under the
Research Type category heading, select Statistical Data. Finally,
on the Research tab in the middle of your screen, select the
third option, Indices & Data.


KAZAGROFINANCE: Fitch Hikes LT Issuer Default Rating to 'BB+'
Fitch Ratings has upgraded Development Bank of Kazakhstan's (DBK)
Long-term foreign currency Issuer Default Rating (IDR) to 'BBB'
from 'BBB-', and its Long and Short-term local currency IDRs to
'BBB+' and 'F2' from 'BBB' and 'F3', respectively.  At the same
time, Fitch has upgraded KazAgroFinance's (KAF) Long-term IDR to
'BB+' from 'BB'.

Rating Action Rationale

The rating actions follow Fitch's upgrade of Kazakhstan's Long-
term foreign currency IDR to 'BBB+' from 'BBB' and Long-term
local currency IDR to 'A-' from 'BBB+' on November 20, 2012.  The
Outlook on the ratings reflects that on the sovereign IDRs.


The IDRs reflect a high probability that support would be
forthcoming to the bank from the government of Kazakhstan, if
needed.  This view is based on DBK's ultimate sovereign
ownership, its important policy role as a development
institution, the close association between the authorities and
the bank, giving rise to significant reputational risk in case of
a bank default, and the currently still moderate cost of any
potential support relative to the sovereign's financial
resources.  The one-notch differential between the sovereign and
the bank's IDRs captures Fitch's concerns about the bank's
increased leverage funded by wholesale debt, and some risk that
the sovereign would cease to provide full support to DBK and
other quasi-sovereign entities before it defaulted on its own

The National Welfare Fund Samruk Kazyna, which is wholly owned by
the government, controls 100% of the bank's share capital. DBK's
board is chaired by deputy prime minister of Kazakhstan.  DBK's
close association with the government means, in the agency's
view, that the bank's default would have considerable adverse
consequences.  These could include reputation damage for the
national authorities with related risks of important project
disruption and a potentially wider negative spill-over effect in
terms of the economy's access to foreign capital.  The cost of
any potential support that might be required by DBK is moderate
given that its entire third-party (from non-government sources)
debt at end-9M12 equated to US$4.5 billion or 2.3% of Fitch's
forecast for Kazakhstan's 2012 GDP.

The likelihood that support could be required by DBK is high
given the bank's weak standalone profile. Non-performing loans
(NPLs, more than 90 days overdue) remained at a very high level
of 41% at end-9M12 after some reduction from 45% at end-2011
mainly due to one loan which has been restructured but is yet to
demonstrate an improved performance.  NPL coverage by loan
impairment reserves (LIRs) was also poor with unreserved NPLs
exceeding US$305 million or 20% of Fitch Core Capital (FCC) at
end-9M12.  Fitch expects continued slow recovery of problem
exposures, mainly through restructuring and additional financing,
but management has informed Fitch that some of the loans might
also be transferred to a related-party fund with a mostly neutral
effect on the bank's capitalization.

DBK's single-name concentration risk stems primarily from its two
largest balance sheet and off-balance sheet exposures which, net
of LIRs, aggregately accounted for 110% of FCC at end-2011.
Fitch derives some comfort from the fact that the largest (79%)
of these related to a subsidiary of an investment-grade
corporate.  More broadly, given the pronounced scale of the
national industrial program, DBK will likely continue adding
lumpy credit exposures.  Fitch would be concerned about any rapid
business expansion should it be undertaken without considerably
sounder underwriting standards in view of the poor lending track
record and the high-risk nature of the investment projects

DBK has continued to build up third-party debt recently, but
liquid assets held against it have remained sizeable.  At end-
2011, the latter stood at US$2.5 billion, or 54% of total
liabilities, and comprised of cash and investment-grade debt
securities.  Fitch believes that DBK's long-term liquidity
position should benefit from the planned elimination of a US$0.8
billion wholesale redemption spike falling in 2015, as the bank
has offered holders of these bonds an exchange into longer-tenor

Capitalization is somewhat uncertain despite the reasonable
reported levels of the Basel I Tier I capital adequacy ratio
(CAR) at 16.2% and FCC/weighted risks at 15.4% at end-2011.  The
uncertainty is because of the single-name concentrations, high
level of unreserved NPLs, and material exposure to Kazakh
commercial banks (US$0.6 billion; mainly, 'B' rating category),
as well as other long-term loans with various signs of credit
weakness (Fitch estimates US$0.4 billion at end-2011).

Fitch understands that DBK may receive further equity injections
to support growth (the first since a US$1.1 billion contribution
in 2009). DBK's weak internal capital generation weakness is
evidenced by the significant interest accrued but not received in
cash (average 22% of total accrued interest in 2009-9M12; in
aggregate equal to about half of reported pre-impairment profit
for the period and the average Fitch comprehensive income /
average assets ratio of only 0.3% for the same period.  The
latter is due to significant loan impairment charges.
Furthermore, additional material profit and loss volatility has
arisen in recent years as a result of internal model-based
valuation of corporate bonds with an aggregate value of USD1.2bn
or 20% of total assets at end-2011.


DBK's Long and Short-term IDRs are likely to move in tandem with
the sovereign IDRs.  The ratings could come under downward
pressure if leverage increases further and asset quality
continues to deteriorate without capital support being provided.
A marked weakening of the bank's policy role or less close
association with the Kazakh authorities could also result in
negative rating action, although this is not expected by Fitch.


The IDRs reflect a moderate probability of support from the
Kazakh authorities.  The company's ratings also factor in the
company's small size (US$0.9 billion total balance sheet at end-
2011) and, hence, cost of support, the track record of
government-provided non-equity funding and capital, and the
historically low leverage the company operates with.  KAF is
fully owned by National Holding KazAgro, which in turn is fully
owned by the government.

KAF's sub-investment grade rating, and the current three notch
differential between the company's IDR and that of the Kazakh
sovereign, reflect KAF's less prominent policy role as a
development institution and lesser importance for the country's
economy and financial system relative to other development
institutions in Kazakhstan, in particular DBK.  It also takes
account of the company's indirect government ownership, which may
in some scenarios impact the timeliness of support.  In Fitch's
view, KAF's policy role in providing financing for the
agricultural sector could quite easily be performed by another of
the entities owned by KazAgro, if needed.

KAF's non-performing loans and leases stood at a significant 14%
of the portfolio at end-2011.  Restructured loans and leases made
up an additional 21%.  Total IFRS LIRs stood at only 8% of total
lending, meaning only very modest reserve coverage of problem
exposures. Asset quality and provisioning metrics remained
broadly flat in 9M12.

Notwithstanding its poor credit portfolio quality KAF's
capitalization is currently sufficient to withstand additional
significant impairment.  At end-2011 the company could create an
additional US$434 million of LIRs (equal to 64% of gross loans
and leases) before the Basel I Tier I CAR would have fallen to
10%.  Capitalization has been maintained at a high level with the
Basel I Tier I CAR at an average level of 60% during 2009-2011
due to solid equity injections typically provided for in
government regulations.  Fitch notes that KAF's leverage may
increase somewhat due to more active third-party borrowings,
which is in line with the authorities' recently outlined plans to
change the system of subsidies provision to the agriculture

The company's current third-party debt level was moderate at end-
2011 with US$106 million of borrowings from financial
institutions (35% of total funding).  Being wholesale funded and
having a strong capital buffer, KAF does not aim to maintain a
strong liquidity cushion at all times.  However at end-9M12 it
held a solid US$85 million reserves of liquid assets (about 24%
of total liabilities).


KAF's IDRs are unlikely to be upgraded to investment grade level
even if the sovereign is further upgraded, given its limited
policy role.  The ratings would likely be downgraded in case of a
sovereign downgrade.  In addition, the ratings could come under
downward pressure in case the company's financial profile
deteriorates considerably without support being forthcoming.

The rating actions are as follows:


  -- Long-term foreign currency IDR upgraded to 'BBB' from
     'BBB-'; Outlook Stable
  -- Short-term foreign currency IDR affirmed at 'F3'
  -- Long-term local currency IDR upgraded to 'BBB+' from 'BBB';
     Outlook Stable
  -- Short-term foreign currency IDR upgraded to 'F2' from 'F3'
  -- Support Rating affirmed at '2'
  -- Support Rating Floor revised to 'BBB' from 'BBB-'
  -- Long-term senior unsecured program and debt ratings
     upgraded to 'BBB' from 'BBB-'
  -- Short-term senior unsecured program rating affirmed at


  -- Long-term foreign and local currency IDRs upgraded to 'BB+'
     from 'BB'; Outlook Stable
  -- Short-term foreign currency IDR affirmed at 'B'
  -- National Long-term rating upgraded to 'AA-(kaz)' from
     'A(kaz)'; Outlook Stable
  -- Support Rating affirmed at '3'
  -- Support Rating Floor revised to 'BB+' from 'BB'


TELE2: Riga Court to Review Insolvency Bid on November 27
The Baltic Course reports that Riga Zemgale District Court will
review on Nov. 27 an insolvency claim against mobile phone
operator Tele2, filed by Telekomunkaciju skirejtiesa over a debt
of LVL45,000 that Tele2 allegedly owes it.

The report relates that Telekomunikaciju skirejtiesa Commercial
Director Kaspars Laurovs told LETA that the insolvency petition
was filed to the court on November 13.  Mr. Laurovs said Tele2
has been unable to repay its debt of about LVL45,000 for two
years already.

In 2009, the report recalls, Telekomunikaciju skirejtiesa signed
a contract with Tele2 on processing Tele2 documents, but Tele2
has not paid for Telekomunikaciju skirejtiesa services in full
and still owes it about LVL 45,000.  Mr. Laurovs believes it is
very odd that such a major international company cannot settle
its debts, the report relays.

"We had to turn to the court in order to turn the spotlight on
Tele2 business practices - the company may easily switch off a
client who owes it a couple of lats, and order debt collectors to
collect the debt, whereas the person is included on the list of
"bad debtors" for several years," the report quotes Mr. Laurovs
as saying.

According to the report, Tele2 Legal Affairs Department Aigars
Evertovskis said that Telekomunikaciju skirejtiesa lawsuit was
"shocking and unfounded".

Evertovskis said that Tele2 would consider suing Telekomunkaciju
skirejtiesa for extortion attempt, the report relays.


GUALA CLOSURES: Moody's Assigns 'B1' Rating to EUR275MM Notes
Moody's Investors Service has assigned a definitive B1 rating
with a loss given default (LGD) assessment of LGD 4 - 56%, to the
EUR275 million of senior secured notes issued by Guala Closures
S.p.A., a subsidiary of GCL Holdings S.C.A. (together "Guala" or
"the group"). Concurrently, Moody's has upgraded Guala's EUR200
million of existing senior unsecured notes issued in 2011 to B3
(LGD 6 - 93%) from Caa1, and the group's probability of default
rating (PDR) to B1 from B2. The B2 corporate family rating (CFR)
is unchanged. These upgrades conclude the review for upgrade
initiated on November 6, 2011. The outlook on all ratings is

Ratings Rationale


Moody's definitive rating assignment on the new EUR275 million of
senior secured notes issued by Guala Closure S.p.A. is in line
with the provisional rating assigned on 6 November 2012. The
final terms of the notes are in line with the drafts reviewed for
the provisional ratings assignments.

"The B1 rating on the new notes reflects the fact that they are
contractually subordinated to Guala's EUR75 million super
priority revolving credit facility, but structurally and
contractually senior to the group's existing B3-rated EUR200
million of senior unsecured notes," says Paolo Leschiutta, a
Moody's Vice President - Senior Credit Officer and lead analyst
for Guala. Like the existing notes, the new notes are secured
against pledged assets and shares of the group, although they
also benefit from a senior guarantee from operating companies (as
opposed to a subordinated guarantee, as is the case for the
existing notes).

The new capital structure does not contain any maintenance
financial covenants. Although this increases the reliability of
the new line, it also provides Guala with a higher degree of
freedom. Nonetheless, Moody's gains some comfort from the fact
that both the bond indentures and the new bank facility agreement
limit new debt and potential dividend payments through incurrence


Given the absence of financial covenants within Guala's new
capital structure, Moody's reviewed its corporate family recovery
rate assumption. In line with its standard approach with covenant
light structures, Moody's lowered its corporate family recovery
rate assumption to 35% (against the standard 50%). This triggered
the upgrade of the existing EUR200 million of senior unsecured
notes to B3 from Caa1 and that of Guala's PDR to B1 from B2.


Guala's B2 CFR reflects its relatively small size compared with
its much larger, consolidated customer base and credit metrics,
which are likely to remain in the mid-single B rating category
over the short term. However, key positives incorporated in the
rating include (1) the group's sound business profile thanks to
its market-leading position in safety closures for the spirits
industry; (2) the growing potential offered by the increasing
penetration of safety closures in emerging markets; and (3)
Guala's historical relatively stable operating performance,
despite exposure to raw material prices.


The stable outlook on Guala's ratings reflects Moody's
expectation that the group will (1) continue growing while
maintaining a conservative financial policy; and (2) gradually
improve key credit metrics, benefitting from the growing market
penetration of safety closures and wine caps.


A track record of sustained profitability and positive free cash
flow that leads to a gradual reduction in financial leverage
could result in positive rating pressure over the next 18-24
months. In addition, upward pressure on the CFR could result if
the group's operating profitability were to improve, leading to
financial leverage well below 5.0x, together with EBIT interest
coverage above 2.0x.

Conversely, a CFR downgrade could result from (1) deteriorating
operating profitability leading to financial leverage, measured
as debt/EBITDA, increasing towards 6.0x on an ongoing basis; or
(2) negative free cash flows. Moreover, immediate downward rating
pressure could result from a deterioration in the group's
liquidity profile. The rating incorporates Moody's assumption
that Guala will not make any large debt-financed acquisitions.


The principal methodology used in rating GCL Holdings S.C.A. was
the "Global Packaging Manufacturers: Metal, Glass, and Plastic
Containers" rating methodology, published in June 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.

GCL Holdings, incorporated in Luxemburg, is the holding company
of Guala Closures, one of the world largest producers of closures
for the spirits and wine industries. The group holds a market-
leading position in safety closures, which are used to prevent
counterfeit spirits and offer evidence of tampering, and in the
wine screw caps segment. The group generated revenues of around
EUR418 million and an EBITDA (excluding non-recurring items) of
EUR88 million (21% margin) during financial year-ended (FYE)
December 2011 (EUR231 million and EUR42 million, respectively,
during the first six months of 2012).


SNS BANK: Moody's Downgrades Standalone BFSR to 'E+'
Moody's Investors Service has placed on review for downgrade the
ratings of all SNS REAAL Group's entities. The announcements and
actions were triggered by (1) the rapid deterioration of the
Dutch commercial real-estate (CRE) sector, which raises the
likelihood of future losses on SNS's CRE exposures booked under
the property finance (PF) legacy portfolio; and (2) the rating
agency's view of an increasing probability that the group might
need external support to immunize SNS Bank against potential CRE
losses and preserve its solvency.

The rating agency has taken the following actions on SNS Bank:

(1) Downgraded the standalone bank financial strength rating
(BFSR) to E+ (equivalent to a standalone credit assessment of b3)
from D+/ba1, and placed the BFSR under review for further

(2) Placed on review for downgrade the Baa2/Prime-2 long and
short-term debt and deposit ratings, prompted by the review of
the BFSR.

Because of the actions on SNS Bank, Moody's has also taken the
following actions on the other entities of the group:

(1) Placed on review for downgrade the Baa1 insurance financial
strength ratings (IFSRs) of SNS REAAL Group's main insurance
operations, REAAL Schadeverzekeringen N.V. and SRLEV N.V.

(2) Placed on review for downgrade the Baa3 senior debt rating
and (P) Prime-3 short-term debt rating of SNS REAAL N.V., the
holding company of the Group.

Moody's has also downgraded the ratings of several subordinated
securities issued by various entities of the group and these
ratings remain on review for further downgrade. These rating
actions reflect the group's weakened standalone credit profile,
and, for hybrid instruments (1) Moody's expectations of an
increased risk of omission of future coupon payments; and (2) the
potential for the European Commission (EC) to impose compensation
measures for previous (or potentially renewed) state-aid

Moody's review will consider the potential impact on SNS's
creditworthiness of the restructuring plan that the group intends
to announce either in late 2012, or in early 2013. Moody's will
assess the extent to which these measures will effectively (1)
restore the capital of the various group entities; and/or (2)
immunize the group against future losses in SNS Bank's legacy PF

Ratings Rationale


SNS Bank's BFSR was downgraded to E+/b3. This reflects Moody's
view that SNS Bank's credit risk has increased, absent any
extraordinary support. SNS Bank's higher credit-risk profile is
driven by (1) the rapid deterioration of the Dutch CRE sector,
and the resulting higher-than-previously anticipated levels of
impairments on the bank's legacy PF portfolio; and (2) the
increasing pressure on SNS Bank's solvency, with a Core Tier 1
ratio of 8.8% at end-September (end-June: 9.6%).

While the bank's capital has previously benefited from the
support of the rest of the group -- notably through asset
transfers and capital injections -- Moody's believes that future
impairments on the bank's PF portfolio may exceed the group's
support capacity.

In combination, these factors suggest a rising likelihood that
SNS Bank will require additional support from sources outside the
group. This is in turn reflected in the downgrade of the
standalone credit assessment to E+/b3.

The downgrade of the standalone credit assessment to E+/b3 was
limited by Moody's expectation that the plan the group intends to
present aims to restore capital and immunize the bank against
future impairments on the legacy PF portfolio, rather than to
remediate an immediate capital shortfall. Furthermore, Moody's
considers the bank's liquidity position to be adequate, which
mitigates the risks of a loss of investor confidence in the
short-term, in Moody's view.

The BFSR remains on review for downgrade, reflecting potential
further deterioration of the bank's standalone credit assessment,
if (1) the group's financial fundamentals deteriorate further;
and/or (2) the EC imposes compensation measures for previous or
potentially renewed state-aid.


Moody's review of SNS Bank's Baa2/Prime-2 senior unsecured debt
and deposit ratings follows the opening of the review of the
standalone BFSR. The review period will allow Moody's to re-
assess its assumptions of systemic support for the bank, in the
context of the weaker standalone credit profile and the
introduction of the Dutch Intervention Act introduced in June
2012. This Act gives the Dutch Ministry of Finance and the Dutch
central bank (De Nederlandsche Bank) more options for dealing
with troubled institutions, including the transfer of assets and
liabilities to "bridge" banks.

Nonetheless, Moody's continues to consider that there is a high
probability of systemic support available to the bank, in case of
need, which substantially mitigates the deterioration in its
standalone financial strength. This reflects the bank's domestic
retail-deposit market share of around 10%, indicative of its
systemic relevance in the Netherlands. Therefore, Moody's expects
the magnitude of a potential downgrade on the long-term ratings
to be more limited than for the action on the BFSR.


The review for downgrade on the Baa1 IFSRs of REAAL
Schadeverzekeringen and SRLEV reflects (1) the weakening credit
profile of SNS Bank; and (2) the significant contagion risks
between the insurance and the banking operations of the SNS REAAL
Group, notably because of capital, franchise and financial
flexibility inter-linkages.

Moody's says that its review of the IFSRs will focus on the risks
for the insurance operations' market position, profitability,
capitalization and access to capital markets, in the context of
the bank's standalone credit profile and the expected role of the
insurance operations within the SNS REAAL Group. Moody's says
that a potential decision by SNS REAAL to divest the insurance
operations may limit the risks of contagion from the bank, while
a decision to retain these operations could potentially lead to a
multi-notch downgrade of the IFSRs.


The rating action on SNS REAAL N.V.'s senior and short-term debt
ratings reflects the similar rating actions on SNS REAAL's
insurance operations and SNS Bank's senior debt rating.

The Baa3 senior debt rating of SNS REAAL continues to reflect the
combination of (1) the credit strengths of the banking and
insurance operations of SNS REAAL; (2) the specific benefit
derived from the diversification afforded by its banking and
insurance activities; (3) the systemic support that would be
available to the banking units and the resulting benefits
attributable to the holding operations; and (4) the structural
subordination of the revenues that the Group receives in the form
of dividends from operating companies.


The downgrade of the ratings of several subordinated securities
issued by various entities of the group reflects the weakened
credit profiles of these entities.

The downgrade of SNS Bank's dated subordinated debt ratings to
Caa1 from Ba2 reflects the similar action on the institution's
standalone BFSR. The subordinated debt rating is one notch below
SNS Bank's b3 standalone credit assessment and remains under
review for downgrade.

The downgrade of SNS REAAL's subordinated debt rating to Caa1
from Ba2 mirrors the rating action on SNS Bank's dated
subordinated debt rating. This reflects Moody's opinion that the
intrinsic financial strength of the holding company, which
excludes any benefit from potential systemic support and from
which the subordinated debt will be anchored, cannot be stronger
than the intrinsic financial strength of SNS Bank going forward.
Furthermore, if SNS REAAL sold or decided to sell its insurance
operations, the holding company's intrinsic financial strength
would ultimately be lower than that of the bank, due to its
structural subordination within the group. Given these
uncertainties, the debt rating remains on review for downgrade.


Moody's rating actions on the hybrid securities issued by several
of SNS REAAL's entities reflect the weakened credit profiles of
these entities, as well as (1) Moody's expectations for an
increased risk of omission of future coupon payments; and (2) the
potential for intervention by the EC that also increases the risk
of a principal write-down on some instruments.

Moody's notes that the terms and conditions of these hybrids
allow -- or in some cases oblige -- the entities to defer
coupons, subject to certain triggers. Given the weakening credit
profile of SNS Bank and the risk of contagion to the holding
company and to the insurance operations, the probability has
increased that SNS REAAL could skip the coupons on some of these

Moody's also says that there is an increased probability that SNS
REAAL will not be able to repay the State Aid it received in
2008, because of the overall weakening of the group's credit
profile. This could prompt the EC to impose restrictions on the
Group as a whole, including coupon deferrals on hybrid

The downgrade of SNS Bank's Junior Subordinated notes to
Caa3(hyb) from B1(hyb) reflects (1) the downgrade of SNS Bank's
standalone financial strength rating; (2) the existence of a
mandatory coupon suspension mechanism in the event that the bank
has no distributable items; and (3) the non-cumulative feature of
the instrument. The Junior Subordinated notes are rated three
notches below SNS Bank's baseline credit assessment of b3. The
rating is on review for downgrade, in line with the standalone
credit assessment of the bank.

The downgrade of SNS Bank's Tier 1 Notes to Ca(hyb) from B1(hyb)
reflects (1) the downgrade of SNS Bank's standalone financial
strength rating; (2) the existence of a mandatory coupon
suspension mechanism tied to a breach of minimum solvency ratios
or to regulatory intervention; (3) the optional coupon suspension
mechanism subject to a look-back period of 6 months; and (4) the
non-cumulative feature of the instrument. In addition, the
instruments contain a variation provision, which allows the
issuer to vary the terms of the securities so that they remain
compliant with Tier 1 requirements set by the Dutch regulator,
possibly posing additional credit risk for investors.

The Tier 1 notes are rated one notch below the Junior
Subordinated notes, as Moody's considers them to have terms which
lead to higher credit risk. This reflects notably the possibility
that part of the principal may be written down through the
variation of the terms of the documentation.

The downgrade of SNS REAAL's Capital Securities to Caa2(hyb) from
Ba3(hyb) reflects the similar action taken on SNS Bank's hybrid
debt ratings. The downgrade of the hybrid debt rating also
captures the higher risk of coupon deferral on this instrument
and the cumulative nature of the coupon skip.

The downgrade of the ratings on the hybrid debts issued by SRLEV
to Ba1(hyb) from Baa3(hyb) also reflects Moody's opinion of an
increased probability of deferral of coupons on these securities
and the cumulative nature of the coupon skip.


  --- SNS BANK

SNS Bank's standalone BFSR is on review for downgrade and as such
the probability of an upgrade is remote. Elements that could lead
to a confirmation include a material improvement in the capital
base or a reduction in the credit risk arising from the PF
portfolio in particular.

Conversely, SNS Bank's standalone BFSR could be downgraded
further if (1) asset quality and capital continue to deteriorate,
making the need for external support still more likely; (2)
funding and liquidity challenges intensify, for example as a
result of deposit outflows combined with increasingly restricted
capital market access; or (3) the EC imposes compensation
measures that are detrimental to the bank's overall franchise.

SNS Bank's long-term ratings would likely be downgraded if
Moody's concludes that the deterioration in SNS Bank's
fundamentals are not fully offset by likely external support.
This may be the case in the event of (1) Moody's perception of an
increased willingness by the government to insulate its own
finances from the crisis affecting financial institutions; (2)
the imposition of burden-sharing with senior creditors, notably
by recourse to the Dutch Intervention Act of June 2012, or (3) a
deterioration of the financial position of the government of the


According to Moody's, the IFSRs of the insurance companies could
potentially be downgraded if the companies' operations remain
within the SNS REAAL Group. However, the IFSRs might also be
downgraded if SNS REAAL decided to sell these operations, but
Moody's believes that the sale process would not be executed in a
reasonable short period. In these scenarios, the ultimate IFSRs
of the insurance operations would be linked to SNS Bank's
standalone credit assessment, leading to a potential multi-notch
downgrade. Conversely, the ratings could be confirmed if the
group expedites a rapid divestment of its insurance operations.


The rating agency says that a downgrade of the bank's long-term
ratings or of the insurance entities' IFSRs would likely result
in a downgrade of the holding company's senior debt ratings.
Furthermore, a downgrade of SNS REAAL's senior debt rating would
result in a downgrade of the holding company's short-term debt
rating to Not-Prime from (P) Prime-3.


A downgrade of SNS Bank's BFSR would result in a downgrade of its
subordinated and hybrid debt instruments. Furthermore, the bank's
hybrid debt ratings could be downgraded if Moody's believes that
the probability of a coupon deferral has increased for those

A downgrade of SRLEV's IFSR would lead to a downgrade of hybrid
debts issued by this entity. Moreover, the hybrid debt ratings of
SRLEV could be downgraded if Moody's believes that the
probability of a coupon deferral has increased for those

A downgrade of SNS Bank's standalone BFSR would result in a
downgrade of SNS REAAL's subordinated and hybrid debt ratings.
Separately, a decision by SNS REAAL to sell its insurance
operations would likely also result in a downgrade of SNS REAAL's
subordinated and hybrid debt ratings.

List of Affected Ratings

The following ratings were placed on review for possible

- REAAL Schadeverzekeringen N.V. -- insurance financial strength
   rating at Baa1;

- SRLEV N.V. -- insurance financial strength rating at Baa1;

- SNS Bank N.V. -- senior unsecured debt rating and long term
   bank deposit rating at Baa2;

- SNS Bank N.V. -- short-term bank deposit rating and other
   short-term ratings at Prime-2;

- SNS REAAL N.V. -- senior unsecured debt rating at Baa3;

- SNS REAAL N.V. -- senior unsecured MTN rating at (P)Baa3;

- SNS REAAL N.V. -- short term issuer rating at (P)P-3.

The following ratings have been downgraded and placed on review
for further downgrade:

- SNS REAAL N.V. -- subordinated debt rating to Caa1 from Ba2;

- SNS REAAL N.V. -- subordinated MTN rating to (P)Caa1 from

- SNS REAAL N.V. -- preferred stock rating to Caa2(hyb) from

- SRLEV N.V. -- dated subordinated debt rating to Ba1(hyb) from

- SRLEV N.V. -- perpetual junior subordinated debt rating to
   Ba1(hyb) from Baa3(hyb);

- SNS Bank N.V. -- bank financial strength rating to E+ (mapping
   to b3) from D+ (mapping to ba1);

- SNS Bank N.V. -- subordinated debt rating to Caa1 from Ba2;

- SNS Bank N.V. -- subordinate MTN rating to (P)Caa1 from

- SNS Bank N.V. -- Tier 1 securities rating to Ca(hyb) from
   B1(hyb); (ISIN XS0172565482)

- SNS Bank N.V. -- Tier 1 securities rating to Ca(hyb) from
   B1(hyb); (ISIN XS0468954523)

SNS Bank backed senior unsecured rating at Aaa with a negative
outlook, and the backed other short term rating of (P)P-1, remain
unaffected by this rating action.

Principal Methodologies

The methodologies used in these ratings were Moody's Consolidated
Global Bank Rating Methodology published in June2012, Moody's
Global Rating Methodology for Property and Casualty Insurers
published in May 2010, Moody's Global Rating Methodology for Life
Insurers published in May 2010 and Moody's Guidelines for Rating
Insurance Hybrid Securities and Subordinated Debt published in
January 2010.

THERMPHOS: Declared Bankrupt by Breda Court
Xinhua News Agency reports that Thermphos was declared bankrupt
by a court in Breda on Wednesday.

The bankruptcy was requested last week after the company had been
in a phase of postponing payments for almost two months, Xinhua

According to Xinhua, majority of the company's employees have
been asked to continue working until an investor is found who can
restart the last phosphorus plant in Europe.

The curator, as cited by Xinhua, said that there is interest from
several investors.  He hopes the sale will be done by the end of
this year, Xinhua notes.

Late September, the company declared it was facing difficulties
partly due to "economically tough times, such as unfair
competition from Kazakhstan and unfavorable market conditions for
a number of our products", Xinhua recounts.

Thermphos is one of the world's largest producers of phosphorus,
phosphoric acid and phosphorus derivatives.  The company has 450
fixed and 450 temporary employees in Vlissingen.


NORSKE SKOGINDUSTRIER: S&P Cuts Corp. Credit Ratings to 'CCC+/C'
Standard & Poor's Ratings Services lowered to 'CCC+/C' from 'B-
/B' its long- and short-term corporate credit ratings on Norway-
based forest products group Norske Skogindustrier ASA (Norske
Skog). "At the same time, we placed the ratings on CreditWatch
with negative implications," S&P said.

"We also lowered our issue ratings on Norske Skog's senior
unsecured debt to 'CCC+' from 'B-' and placed them on CreditWatch
negative," S&P said.

"The downgrade and CreditWatch placement reflect our view that
Norske Skog will likely continue to buy back bonds at significant
discount rates. We base our view on the group's third-quarter
earnings report and public statements by management in the
media," S&P said.

"The cumulative amount of bonds repurchased is approaching a
critical level, in our view, whereby we would no longer view the
transactions as opportunistic buybacks but as a debt
restructuring. We see a risk that these transactions will
continue in the near-term, as management has publicly stated it
is looking to continue with these actions if the conditions are
right," S&P said.

"During 2012, Norske Skog bought back bonds through several
market transactions at an average discount of about 30%. We
estimate that the amount repurchased equals almost 6% of
outstanding nominal debt as of year-end 2011. We typically only
consider open-market purchases as opportunistic if they aren't
frequent. In addition, we consider that management is indirectly
advertising itself as a buyer through its statements in earnings
calls and media interviews that it will continue to buy back
bonds at discount rates. We believe this supports our assessment
of the group's financial policy as aggressive, because it shows
that the group is willing to deliver less than it originally
promised bondholders," S&P said.

"The CreditWatch placement reflects the near-term risk that we
could downgrade Norske Skog to 'SD' (Selective Default) if it
completes further bond buybacks at below par prices. We expect to
resolve the CreditWatch within the next three months. In addition
to trading prospects and liquidity, we shall monitor Norske
Skog's financial policy and bond buyback activity," S&P said.

NORWEGIAN LIFE: Fitch Affirms 'BB+' Subordinated Debt Rating
Fitch Ratings has affirmed Norwegian life insurer Storebrand
Livforsikring's (SL) Insurer Financial Strength (IFS) rating at
'BBB+' and Long-term Issuer Default Rating (IDR) at 'BBB'.  Fitch
has also affirmed Storebrand ASA's (SA) Long-term IDR at 'BBB-'.
SA is SL's ultimate parent company. The Outlook on the IFS rating
and IDRs is Stable.  Fitch has also affirmed SL's subordinated
debt issues at 'BB+' and SA's senior unsecured debt at 'BB+'.
The agency has simultaneously withdrawn all ratings.

The ratings have been withdrawn as they are no longer considered
by Fitch to be relevant to the agency's coverage.

The affirmation reflects the Storebrand group's improved
performance in the first nine months of 2012 to NOK943 million
(Q1-Q3 2011:NOK664 million).  Commensurate capitalization and the
soundness of the Norwegian economy also support the ratings.
Offsetting factors are the group's duration mismatch in a low
interest rate environment, relatively high financial leverage and
low fixed charge coverage.


CIECH SA: S&P Assigns Prelim. 'B' Long-Term Corp. Credit Rating
Standard & Poor's Ratings Services assigned its preliminary 'B'
long-term corporate credit rating to Poland-headquartered soda
ash producer Ciech S.A. The outlook is stable.

"At the same time, we assigned our preliminary 'B' issue rating
to Ciech's EUR225 million senior secured notes. We are not rating
the company's Polish zloty (PLN) 382.3 million domestic notes and
PLN100 million revolving credit facility (RCF) due 2015," S&P

"The issue rating on the EUR225 million notes is based on draft
documentation and is subject to our review of the final terms and
conditions. Any change to the final terms and conditions could
affect the ratings," S&P said.

The preliminary ratings on Ciech reflect the company's capital
structure pro forma for the placement of the proposed EUR225
million and PLN382.3 million senior secured notes. Ciech will use
the funds to repay its existing debt. The preliminary ratings
also reflect S&P's assessment of Ciech's business risk profile as
"weak" and its financial risk profile as "aggressive."

S&P's preliminary corporate credit rating on Ciech reflects its
stand-alone credit profile of 'b', without any uplift for
extraordinary support from the government of the Republic of
Poland (foreign currency A-/Stable/A-2, local currency
A/Stable/A-1). Although the Polish government owns 39% of Ciech,
S&P views the likelihood of it providing timely and sufficient
extraordinary support to Ciech in the event of financial distress
as 'low,' as per its criteria on government-related entities.
S&P bases its view of a 'low' likelihood of support on its
assessment of Ciech's:

-- 'Limited' role for the Polish government, reflecting S&P's
    view of Ciech's operations as non-strategic.  Its view is
    underpinned by the privatization plan that the Polish
    Ministry of Treasury published in March 2012, in which Ciech
    was not included in the state's portfolio of strategic

-- 'Limited' link with the government because S&P understands
    that the government may dispose of its stake in Ciech in the
    near term. In addition, there is a lack of a formal mechanism
    for the government to provide timely extraordinary support to
    Ciech. That said, the Polish government participated in
    Ciech's 2011 capital increase.

"In our view, Ciech's liquidity will remain 'adequate' post
refinancing and its soda ash business will continue to perform
satisfactorily in the fourth quarter of 2012 and in 2013,
notwithstanding the currently difficult economic climate in
Europe. We view an adjusted ratio of debt to EBITDA of up to 5x
as commensurate with the current rating," S&P said.

"Ratings upside could arise in 2013 if Ciech maintains
satisfactory profits in the soda ash business and achieves
adjusted debt to EBITDA of less than 4x on a sustainable basis.
Notably, an upgrade depends on Ciech effectively executing its
strategy of restructuring, disposing of non-core activities, and
reducing capex, which are key to our projection of the company
deleveraging in 2013," S&P said.

"Rating downside could arise if Ciech was unable to deleverage,
leading to adjusted debt to EBITDA of more than 5x. We envisage
that this could occur if margins in Ciech's soda ash business
were to deteriorate unexpectedly as a result of new capacity
additions and/or its inability to dispose of underperforming
activities," S&P said.

PBG SA: KNF Keeps Watch on Rafaka Stake Sale
Polska Agencja Prasowa reports that KNF spokesman Lukasz
Dajnowicz said in a statement that Poland's financial watchdog
KNF expects "decisive actions" from creditor banks of insolvent
builder PBG in connection with the developments regarding PBG's
stake in unit Rafako, as that stake is PBG's "most important

According PAP, the statement said that KNF is closely watching
the situation surrounding Rafako.

On October 5, PBG announced it had pledged all of the
dematerialized Rafako shares controlled by Multaros Trading for
an advisory deal of up to EUR5 million with Cyprus's
Adaptorinvest, PAP relates.  However, on November 16, PBG claimed
that a contentious pledge on its full majority take in
engineering firm Rafako will be lifted, PAP notes.

PBG SA is Poland's third largest builder.


FIRST MORTGAGE: Moody's Raises Ratings on B Notes From 'Ba3'
Moody's Investors Service has upgraded credit ratings of Class B
notes issued by Closed Joint Stock Company First Mortgage Agent
of AHML, Closed Joint Stock Company Second Mortgage Agent of
AHML, and National Mortgage Agent VTB 001. The rating action
concludes the review for upgrade initiated by Moody's on
August 13, 2012. The following notes were affected:

Issuer: Closed Joint Stock Company "First Mortgage Agent of AHML"

    RUB264 million B Notes, Upgraded to Baa3 (sf); previously on
    Aug 13, 2012 Ba1 (sf) Placed Under Review for Possible

Issuer: Closed Joint Stock Company Second Mortgage Agent of AHML

    RUB590.3 million B Notes, Upgraded to Baa3 (sf); previously
    on Aug 13, 2012 Ba3 (sf) Placed Under Review for Possible

Issuer: National Mortgage Agent VTB 001

    RUB2027.098M B Notes, Upgraded to Baa2 (sf); previously on
    Aug 13, 2012 Ba1 (sf) Placed Under Review for Possible

Ratings Rationale

The rating action primarily reflects the build-up of the credit
enhancement under the affected notes since closing and the good
performance of the portfolios backing the transactions as
described below. As part of this review, the expected losses
assumed for the affected transactions were also updated to
reflect the current performance of the mortgage portfolios as
well as their characteristics, such as low current loan-to-value
(LTV) ratios, which is offset by the possibility of adverse
selection as higher quality borrowers prepay and exit the
portfolios. The expected losses in each of these transactions
were updated to equal 5% of the current portfolio balance. The
MILAN CE numbers for these transactions were not updated.

The lower rating achieved by the subordinated notes in First
Mortgage Agent of AHML and Second Mortgage Agent of AHML
transactions (together "AHML transactions") when compared to the
Mortgage Agent VTB 001 transaction reflects the fact that the
issuer account bank for the AHML transactions, ZAO Citibank, is
an unrated entity and all collections as well as the reserve
funds in the transactions are being held in this bank. Therefore,
if this entity were to default before funds are moved to a
different account bank, this would result in significant losses
to these transactions. This risk has resulted in a maximum rating
for the subordinated notes in AHML transactions being set at Baa3
(sf). On the other hand, Mortgage Agent VTB 001 transaction
benefits from a rated issuer account bank (JSC VTB Bank "VTB"
(Baa1/P-2)) and a rating trigger, which provides for a transfer
of all funds held by the issuer with VTB to another, sufficiently
rated account bank, if the long term senior unsecured rating of
VTB falls below Baa3.

Closed Joint Stock Company First Mortgage Agent of AHML

The credit enhancement under the Class B notes is currently
approximately 53.8%, out of which approximately 34.3% is
represented by a non-amortizing reserve fund. The performance of
the transaction has been within expectations, with 30+ day
delinquencies equal to 2.2% of the current balance and
outstanding defaults (defaults are defined as 90+ days in
arrears) equal to 1.09% of the current balance as of September
30, 2012. To date, approximately 1.2% of defaulted mortgages (as
percentage of original balance) have been repurchased out of the
transaction by the originator. There is approximately 22.6% of
the portfolio remaining in this transaction and the weighted
average LTV of the portfolio is approximately 43.2%.

Closed Joint Stock Company Second Mortgage Agent of AHML

The credit enhancement under the Class B notes is currently
approximately 43.2%, out of which approximately 23.8% is
represented by a non-amortizing reserve fund. The performance of
the transaction has been within expectations, with 30+ day
delinquencies equal to 2.8% of the current balance and
outstanding defaults (defaults are defined as 90+ days in
arrears) equal to 2.1% of the current balance as of September 30,
2012. To date, approximately 1.7% of defaulted mortgages (as
percentage of original balance) have been repurchased out of the
transaction by the originator. There is approximately 34.5% of
the portfolio remaining in this transaction and the weighted
average LTV of the portfolio is approximately 38.6%.

National Mortgage Agent VTB 001

The credit enhancement under the Class B notes is currently
approximately 44.5%, out of which approximately 4.7% is
represented by a non-amortizing reserve fund. The performance of
the transaction has been within expectations, with 30+ day
delinquencies equal to 0.26% of the current balance and
outstanding defaults (defaults are defined as 90+ days in
arrears) equal to 0.16% of the current balance as of October 26,
2012. To date, approximately 2.8% of defaulted mortgages (as
percentage of original balance) have been repurchased out of the
transaction by the originator. There is approximately 44% of the
portfolio remaining in this transaction and the weighted average
LTV of the portfolio is approximately 40.6%.

Expected loss assumptions are subject to uncertainty with regard
to general economic activity and house price development in the
Russian Federation. Worse-than-expected economic conditions and
lower-than-expected house prices would negatively affect the
ratings. In addition, the ratings are linked to the ratings of
Agency for Housing Mortgage Lending as originator and servicer in
the AHML transactions and VTB24 as originator and servicer in the
Mortgage Agent VTB 001 transaction. Please note that the ratings
of AHML currently carry a Stable outlook whereas the outlook for
the ratings of VTB24 is Negative. A significant downgrade of
these entities could result in the downgrade of the notes of
these transactions.

The principal methodology used in these ratings was Moody's
Approach to Rating RMBS in Europe, Middle East, and Africa
published in June 2012.

In reviewing the ratings of these transactions, Moody's used a
cash flow model to model the cash flows and determine the loss
for each tranche. The cash flow model evaluates all default
scenarios that are then weighted considering the probabilities of
the lognormal distribution assumed for the portfolio default
rate. In each default scenario, the corresponding loss for each
class of notes is calculated given the incoming cash flows from
the assets and the outgoing payments to third parties and
noteholders. Therefore, the expected loss or EL for each tranche
is the sum product of (i) the probability of occurrence of each
default scenario; and (ii) the loss derived from the cash flow
model in each default scenario for each tranche. Moody's also
considered scenarios where the Mortgage Agent has defaulted as a
result of nonpayment of senior fees or interest on the notes,
asset-liability mismatch, or insufficient mortgage coverage. In
this case, Moody's assumed that the liquidation of assets
occurred and the notes were repaid according to the post-
enforcement waterfall using the proceeds of the asset liquidation
assuming a recovery rate of 50%.

RENAISSANCE FINANCIAL: Fitch Says Planned Ownership Changes Pos.
Fitch Ratings says that the planned ownership changes in
Renaissance Capital investment banking group (RenCap,
consolidated under Renaissance Financial Holdings Limited, RFHL;
'B'/Negative) and Russian consumer finance bank CB Renaissance
Capital (Rencredit; 'B'/Stable) should be moderately positive for
the credit profiles of both issuers.

However, the extent of any benefit for the entities will depend
on whether and to what degree the companies or their new owner,
the Onexim group, increase exposure to, or assume liabilities of,
the broader Renaissance Group (RG) as part of the acquisition.
Uncertainty arises due to the so far limited official disclosures
regarding specific deal terms.  Nevertheless, Fitch does not
expect the ownership changes to result in any immediate positive
rating actions.

On 14 November 2012, Onexim and RG announced that Onexim will
become the sole shareholder of RenCap, increasing its stake from
50% minus one share, and will also consolidate an 89.5% share in
Rencredit (up from 32.2%), in each case as a result of a buyout
of RG.  The parties have signed binding agreements, but the
transactions remain subject to regulatory approvals.  Stephen
Jennings, the main shareholder of RG, has stepped down as
RenCap's CEO, although the rest of the team remains in place.

Fitch believes the ownership change should be moderately positive
for RenCap and Rencredit as it should significantly reduce
contingent risks resulting from RG's investments and liabilities,
unless some of these are transferred to/assumed by the companies,
the probability of which is currently uncertain.  A more clearly
positive factor is that both companies will have a single and
relatively strong controlling shareholder.  However, both
companies, and RenCap in particular, face significant operational
challenges which continue to drive their ratings, and it remains
to be seen how successful RenCap will be in returning to
profitability under full Onexim control.

Contingent risks for RenCap and Rencredit resulted in particular
from the significant short-term debt of Renaissance Capital
Holdings Limited (RCHL), RG's holding vehicle for its stake in
RenCap.  Fitch understands that no funding agreements of either
RenCap or Rencredit reference RCHL in cross-default clauses.
However, RCHL's creditors may also be among RenCap's creditors
and clients, which could result in reputational and business risk
for RenCap if RCHL were to default on debt soon after the change
in ownership.  Partly for this reason, and partly due to limited
disclosures to date, Fitch cannot rule out the possibility that
the assets and liabilities of RCHL and/or other RG entities may
have featured in negotiations on the terms and conditions of the

In addition, RenCap also retains significant direct exposure to
illiquid assets (65% of equity at end-H112), of which most were
previously transferred from RG in exchange for intercompany debt
cancellation.  These will not disappear as a result of the
transaction, although the company is expecting to sell some of
them in the near term.  Regarding loan exposures to/receivables
from RG entities (9% of equity, according to Fitch's estimates),
it is not clear at this point whether they will remain on
RenCap's balance sheet or be repaid.

The Negative Outlook on RFHL continues to primarily reflect its
weak recent performance (losses of US$14 million in H112 and
US$94 million in 2011 would have been even bigger if not for one-
off/non-core items) and increasing competitive challenges, which
will make it difficult to achieve a turnaround.  The illiquid
asset exposures, recurring funding pressures and uncertainty
created by the management changes also weigh on RFHL's ratings.
If the company remains loss-making and fails to make considerable
progress with sales of non-core assets, or assumes sizable
additional obligations and non-core assets from RG, then downward
pressure on RFHL's ratings will increase.  However, if
performance stabilizes and the quality of capital improves, the
Outlook could be revised to Stable.

Rencredit's ratings reflect its healthy earnings generation,
comfortable liquidity and manageable refinancing schedule.
However, the ratings also consider high credit risks associated
with rapid loan book growth in the mass-market consumer finance
segment, significant dependence on retail funding, relatively
tight regulatory capitalization and some risk that the bank may
be used to support the financially weaker RenCap.  An upgrade of
Rencredit would require an improved track record of credit risk
management, robust performance and sustained solid
capitalization, as well as containment of remaining group risks.
Should the bank suffer material credit losses or large funding
outflows, the ratings could come under downward pressure.

RFHL's ratings are as follows:

  -- Long-Term Issuer Default Rating (IDR): 'B'; Outlook Negative
  -- Short-Term IDR: 'B'

Rencredit's ratings are as follows:

  -- Long-Term IDR: 'B'; Outlook Stable
  -- Short-Term IDR: 'B'
  -- Local currency Long-Term IDR: 'B'; Outlook Stable
  -- National Long-Term Rating: 'BBB(rus)'; Outlook Stable
  -- Viability Rating: 'b'
  -- Support Rating: '5'

* CITY OF DZERZHINSK: S&P Raises LT Issuer Credit Rating to 'B+'
Standard & Poor's Ratings Services raised its long-term issuer
credit rating on the Russian City of Dzerzhinsk to 'B+' from 'B'.
The outlook is stable. The Russia national scale rating was
raised to 'ruA' from 'ruA-'.

"We raised the ratings on Dzerzhinsk because of the city's
continued consolidation of its budgetary performance, which has
been supported by the stabilization of the currently high tax-
sharing rates, and the city management's proven track-record in
improving the city's debt profile," S&P said.

"The ratings on Dzerzhinsk reflect the city's limited revenue and
spending flexibility and predictability, weak but improving
fiscal performance and liquidity, and concentrated and volatile
economy. These constraints are mitigated by Dzerzhinsk's low debt
levels and low contingent liabilities," S&P said.

"The stable outlook reflects our belief that the recently
legislated high tax-sharing rates and the management's cautious
spending policies will buffer the possible weakening of the
economy and tax-base growth rates, as well as material spending
pressure in the medium term. These factors combined should
result in consistent operating surpluses in 2013-2015. The
outlook also factors in the management's commitment to medium-
term borrowing, which should help keep debt service at less than
5% of operating revenues," S&P said.

"Future positive rating actions within the next 12 months will
depend on the city's structurally stronger budgetary performance,
with operating surpluses of about 4% of operating revenues on
average in 2013-2015. Positive actions could also depend on the
the city's ability and willingness to improve its free cash
position," S&P said.

"Negative rating actions within the next 12 months could follow
if budgetary performance suffers from volatility due to revision
of tax-sharing polices or the management's inability to stick to
spending discipline. We could also take a negative action if
market sentiment or management policy changes were to lead to
rapid deterioration of the debt profile and weakening of the
city's liquidity position," S&P said.


FONCAIXA CONSUMO 1: Fitch Affirms 'BB+' Rating on Class B Notes
Fitch Ratings has downgraded Foncaixa Consumo 1, FTA's class A to
'Asf' from 'AA-sf' and removed it from Rating Watch Negative
(RWN), as follows:

  -- EUR2,153m class A notes: downgraded to 'Asf' from 'AA-sf';
     removed from RWN; Outlook Stable;

  -- EUR462m class B notes: affirmed at 'BB+sf'; Outlook Stable

The downgrade of the class A notes follows Fitch's review of
counterparty remedial actions implemented following the downgrade
of CaixaBank SA (CaixaBank, 'BBB'/Negative/'F2').  In particular,
while CaixaBank will continue acting as collateral servicer,
paying agent, SPV account bank and hedging counterparty in this
transaction, new counterparty triggers have been defined and
formalized within the transaction documents, which are judged by
Fitch to sufficiently isolate counterparty risk commensurate with
the ratings.

In particular, Fitch believes the new counterparty triggers of
'BBB'/'F2' are sufficiently robust to support the current rating
'Asf' of Class A, although these triggers are marginally outside
the 'BBB+'/'F2' definition as per the agency's counterparty

The transaction was closed in November 2011. There have not been
any material performance issues to date.  The 90+ day delinquency
ratio was a low 0.87% as of September 2012, while cumulative net
losses were 0.1%.  The overall performance has been in line with
Fitch's expectations.

IM FTGENCAT: Fitch Affirms 'CCsf' Rating on Class C Notes
Fitch Ratings has downgraded Class A(G) of IM FTGENCAT SABADELL 2
transactions and removed them from Rating Watch Negative (RWN),
as follows:


  -- EUR150.6m Class A(G) notes: downgraded to 'BBBsf' from
     'Asf'; off RWN; Stable Outlook
  -- EUR19.8m Class B notes: affirmed at 'CCCsf'; Recovery Rating
     (RR) 50%
  -- EUR5.7m Class C notes: affirmed at 'CCsf', RR 0%


  -- EUR81.8m Class A(G) notes: downgraded to 'Asf' from 'A+sf';
     off RWN; Stable Outlook
  -- Eur19.8m Class B notes: upgraded to 'BBsf' from 'Bsf';
     Stable Outlook
  -- EUR5.7m Class C notes: affirmed at 'CCCsf'; RR revised to
     60% from 50%

The downgrades of the Class A(G) notes reflect the agency's
assessment of the potential payment interruption and commingling
loss risk that noteholders could be exposed to if there was a
servicer disruption event, particularly as collections from the
collateral are swept to the SPV bank accounts on a monthly basis
and the sources of liquidity are below their target levels (the
reserve funds were partially funded at 37% of the required amount
for IM FTGENCAT and 58% for GC FTGENCAT as of October 2012).

Fitch believes that although the transactions have mitigated the
ineligible counterparty risk on the SPV bank accounts, which are
now held by Banco de Espana (unrated) for IM FTGENCAT and
Barclays Bank plc, Spanish Branch ('A'/Stable/'F1'/) for GC
FTGENCAT, the direct exposure to Sabadell as collateral servicer
has not been mitigated.

For IM FTGENCAT, Fitch believes there is a material obligor
concentration risk, which was the rationale for the downgrade of
the Class A(G) notes to the 'BBBsf' category.  The top 10
obligors in this transaction account for 14.5% of the aggregated
collateral balance as at end of October 2012, compared 16.5%
subordination available to this tranche.

Sabadell continues to be the interest rate swap provider in both
transactions.  While Fitch has been made aware that Sabadell is
implementing a weekly collateralization mechanism in GC FTGENCAT,
no such arrangement is in place for IM FTGENCAT.  Fitch has taken
into account this information and any impact of Sabadell as the
swap counterparty in line with its counterparty criteria for
structured finance transactions.

The upgrade of GC FTGENCAT's class B notes reflects the
collateral performance and continuing de-leveraging of the pool.
The 90+ day delinquency ratio was 1% and the cumulative loss was
2.3% of the outstanding portfolio as at September 2012. The
portfolio is currently 24% of its original size.

Both transactions are securitization of finance leases on real
estate and certain other assets originated in Spain by Sabadell.
Only the lease receivables portion of the lease contracts is
securitized (excluding any residual value component).  All
obligors are small and medium-sized enterprises located in the
region of Catalunya, the home region of the originator.

OTKRITIE BANK: S&P Raises Counterparty Credit Rating to 'B'
Standard & Poor's Ratings Services raised its long-term
counterparty credit rating on Russia-based OTKRITIE Bank to 'B'
from 'B-' and the short-term counterparty credit rating to 'B'
from 'C'. The outlook is stable.

"At the same time, we raised the Russia national scale rating to
'ruA-' from 'ruBBB+'," S&P said.

"The upgrade reflects our opinion that OTKRITIE Bank has managed
to complete its operational integration with banks it recently
acquired, and should benefit from the increased franchise, client
diversity, and network. We believe that risks related to the
merger are mostly over. At the same time, we expect that the bank
will further streamline and improve its control systems and risk
management over the network of newly merged banks. For these
reasons, we consider that OTKRITIE Bank's business diversity and
client access is improving. We are therefore revising our
assessment of OTKRITIE Bank's business position to 'moderate'
from 'weak', as defined by our criteria," S&P said.

"The bank's stand-alone credit profile (SACP) is at 'b', and our
assessment of other components of the SACP is unchanged. Our
ratings on OTKRITIE Bank reflect the 'bb' anchor we use for
commercial banks operating in Russia and the bank's 'moderate'
business position, 'weak' capital and earnings, 'moderate' risk
position, 'average' funding, and 'adequate' liquidity. OTKRITIE
Bank's SACP does not include any uplift for extraordinary
external support, either from the bank's shareholders or the
government," S&P said.

"The stable outlook reflects our view that, at least for the next
12 months, OTKRITIE Bank will focus on developing its new network
and franchise and streamlining its network management practices
and product lines. We expect that the bank will likely maintain a
positive financial performance, improve its margins, and generate
adequate revenues to maintain its capitalization," S&P said.

"We could take a positive rating action if the bank showed
conservative growth rates over time and improved underwriting
standards, leading to an improvement of its asset quality
metrics. If the strengthened business position substantially
helped the bank's earnings generation capacity to an extent that
the RAC ratio would sustainably exceed 5%, it would also likely
trigger an upgrade," S&P said.

"We could take a negative rating action if concentrations
increased in the loan book or if the bank experienced an
unexpected setback in executing its new strategy. This would
impair the bank's asset quality and likely put pressure on the
capital position. If such pressure lowered the RAC ratio to less
than 3%, it could result in a negative rating action," S&P said.

* SPAIN: Moody's Says RMBS Market Performance Dip in July-Sept.
The performance of the Spanish residential mortgage-backed
securities (RMBS) market worsened in the three-month period
leading up to September 2012, according to the latest indices
published by Moody's Investors Service.

Moody's index of cumulative defaults increased to 2.85% of the
original balance in September 2012, from 2.50% in June 2012. In
September 2012, 60+ day delinquencies increased to 3.13% of the
current balance, up from 2.58% in June 2012 while 90+ day
delinquencies rose to 2.04% of the current balance, from 1.60% in
the same period.

The reserve funds of 66 transactions are currently below their
target levels, of which 13 are fully drawn down. 11 deals have
breached their interest deferral triggers, affecting 17 tranches.
Moody's also notes that the annualized constant prepayment rate
(CPR) increased to 3.84% in September 2012, up from 3.42% in June
2012, but still notably lower than the CPRs recorded prior to
2008, which were over 10%.

Overall, Moody's currently rates 190 transactions in the Spanish
RMBS market, with a total outstanding pool balance of EUR106.77
billion as of September 2012.

The rating agency's outlook for Spanish RMBS remains negative
(see "European ABS and RMBS Outlooks: June 2012 Update", 20 June
2012). The Spanish economy is in recession and is expected to
contract 1.7% in 2012, after having grown only 0.7% in 2011 (see
"Credit Opinion: Spain, Government of", 30 April 2012). The
unemployment rate will rise to 24.3% in 2012, from 21.7% in 2011.
Mortgage delinquencies will rise as more borrowers are expected
to lose their jobs. House prices will continue to fall in 2012 as
the supply of housing outweighs demand, with falling house prices
increasing losses on foreclosed properties.

As noted in Moody's publication "Spanish Prime RMBS Indices --
July 2012", on July 2, 2012, Moody's placed or maintained on
review for downgrade the ratings of most Spanish RMBS after
lowering to A3 the Spanish country ceiling - the maximum rating
that Moody's will assign to a domestic issuer. The increased risk
of severe financial and economic dislocation implied by the
weakening of the Spanish government's creditworthiness prompted
the lowering of the country ceiling.

* SPAIN: Moody's Says SME ABS Performance Dipped in September
The performance of Spanish asset-backed securities (ABS) backed
by loans to small- and medium-sized enterprises (SME ABS)
deteriorated further and still shows no signs of improvement in
September 2012, according to the latest indices published by
Moody's Investors Service.

Overall performance continued to worsen across all vintages and
originators, with 90-360 day delinquencies rising to 4.55% from
4.17% in June 2012 and from 2.78% in September 2011 and
cumulative defaults going up to 2.29% from 1.57% in September

While older vintages continue to perform better than the overall
index, they have shown a sharper increase in arrears over the
past year. For example, 90-360 day delinquencies for the 2002-
2003 vintage rose to 2.32% in September from 1.17% a year before,
mostly due to the performance of one transaction (FTPYME BANCAJA
2, FTA), where delinquencies have risen to 9.35% in September.

Moody's outlook for Spanish SME ABS collateral performance
remains negative. The Spanish economy is in recession, and the
rating agency expects it to contract 1.7% in 2012, after having
grown only 0.7% in 2011. (see "Credit Opinion: Spain, Government
of", 17 October 2012).

As of September 2012, 90 Spanish ABS SME transactions were
outstanding, with a total portfolio balance of EUR38,310 billion
decreasing from EUR48,870 billion in June 2012. This decrease is
to a large extend explained by early redemptions. No new
transactions were issued in Q3 2012.


DNIPROSHYNA OJSC: Court Declares Tire Plant Bankrupt
Interfax-Ukraine reports that the economic court of
Dnipropetrovsk region on Nov. 6, 2012, ruled Ukraine's second
largest tire plant, OJSC Dniproshyna, bankrupt and launched the
liquidation procedure for the company.

A corresponding ruling was announced in the state register of
court rulings, the news agency says.

Interfax-Ukraine relates that arbitration manager Vasyl Kuzmenko,
who was previously in charge of the plant's financial
readjustment, was appointed liquidator of Dniproshyna.  The
deadline for the plant's liquidation is set until Nov. 6, 2013.

According to the report, the court rejected the proof by one of
Dniproshyna's creditors -- Ravilda Holdings Ltd., which claimed
that there were no sufficient grounds to liquidate the tire

Interfax-Ukraine previously reported that the economic court in
Dnipropetrovsk region started a readjustment procedure for
Dniproshyna.  The initiator of the procedure was a group of
creditors -- Ukreximbank, Ukrsotsbank, Bank Forum, FUIB,
Oschadbank, Raiffeisen Bank Avail, and companies Gaz Ukrainy and
Dniprooblenergo, the report notes.

* UKRAINE: Fitch Assigns 'B' Rating to US$1.25-Bil Eurobond
Fitch Ratings has assigned Ukraine's US$1.25 billion eurobond,
due November 28, 2022, a 'B' rating.  The eurobond has a coupon
rate of 7.8%.  The rating is in line with Ukraine's Long-term
foreign currency Issuer Default Rating (IDR), which has a Stable

Fitch affirmed Ukraine's ratings on July 10, 2012.

U N I T E D   K I N G D O M

ASSETCO MANAGED: In Liquidation; No Redundancy Pay for 30 Workers
Greg Harkin at reports that 30 workers who lost
their jobs at Assetco Managed Services have been told they won't
be paid redundancy because it has gone into liquidation. relates that administrators KPMG told staff at the
call centre last week their positions providing support services
to the London Fire Brigade have been done away with.

According to the report, London Fire Brigade failed to renew a
major contract for parent company Assetco London Ltd leading to
the closure of the business and its Irish subsidiary.

Most of the London-based employees will be taken on by the
company who won the new contract, Babcock.  However, the Irish
subsidiary is to close with the loss of all 30 positions.

KPMG, who are acting on behalf of London banks, broke the news to
staff, the report notes.

Buncrana-based Assetco Managed Services operates a call centre.

LLANELI AFC: High Court Judge Dismisses Winding-Up Petition
BBC News reports that a High Court judge has dismissed a winding-
up petition against Llanelli AFC.

According to BBC, Mr. Registrar Jones made the decision in favor
of the club at the request of lawyers for Her Majesty's Revenue
and Customs.

It was the second time the club had faced winding up proceedings
in three months, BBC notes.

During the London High Court hearing, counsel Matt Smith asked
for the petition to be dismissed with an order the club pay
HMRC's legal costs, BBC relates.

Although no other details were given during the hearing, the move
suggests the club has paid its tax debts, BBC states.

A previous winding up petition by HMRC was dismissed in
September, BBC recounts.

According to BBC, On Monday, Llanelli Town Council said it has
accepted an interim payment of GBP9,109.82 from the football club
in settlement of their social club rental arrears.

Llanelli AFC is a Welsh Premier football club.

PATTON GROUP: Subcontractors Seek Government Help
Construction Enquirer reports that subcontractors left holding
worthless bills for GBP17 million have appealed for government
help following the fall into administration of Patton Group.

But Invest Northern Ireland said they cannot offer any
compensation to suppliers owed an estimated GBP17 million by the
firm, Construction Enquirer relates.

Administrators have already laid off 190 staff as sites stopped
in Northern Ireland and across the UK, Construction Enquirer

Administrator Tom Keenan declined to be drawn on the future of
the remaining 140 employees at the firm, Construction Enquirer

Patton Group is a Northern Ireland-based construction firm.

SOUTH LONDON: Lewisham Hospital's A&E Dept. at Risk of Closure
Sophie Goodchild at London Evening Standard reports that
demonstrators will take to the streets this weekend over the
threatened closure of Lewisham Hospital's A&E department.

Hundreds are expected to protest on Saturday against proposals to
strip the hospital of its emergency department, London Evening
Standard discloses.  The plan has been recommended by
administrator Matthew Kershaw, London Evening Standard notes.

He was brought in to run South London Healthcare Trust, the first
NHS trust in the country to go into administration, London
Evening Standard relates.

A draft report by Mr. Kershaw says the trust's spiralling debt
crisis cannot be reversed without looking at other services
across all south-east London hospitals, according to London
Evening Standard.

This includes Lewisham, despite the fact its A&E department
underwent a GBP12 million refurbishment in April, London Evening
Standard states.  The hospital, London Evening Standard says,
could also face the closure of its high-risk maternity services.

Labour MP Heidi Alexander has set up a petition asking the
administrator to amend his final recommendations to the secretary
of state, London Evening Standard says.

South London Healthcare Trust is currently losing GBP65 million a
year -- or GBP1.3 million a week, discloses.

Mr. Kershaw has announced that GBP100 million will need to be
saved over the next five years, London Evening Standard relates.

He has emphasized that no firm decision has been taken yet
regarding Lewisham hospital's fate, London Evening Standard
notes.  According to London Evening Standard, if Lewisham's
emergency department does close then it would retain its urgent
care center.


* BOOK REVIEW: Ralph H. Kilmann's Beyond the Quick Fix
Author: Ralph H. Kilmann
Publisher: Beard Books
Hardcover: 320 pages
Listprice: $34.95
Review by Henry Berry

Every few years, a new approach is offered for unleashing the
full potential of organized efforts.  These are the quick fixes
to which the title of this book refers.  The jargon of the quick
fix is familiar to any businessperson: decentralization, human
resources, restructuring, mission statement, corporate strategy,
corporate culture, and so on.  These terms are all limited in
scope or objective, and some are even irrelevant or misconceived
with regard to the overall well-being and purpose of a

With his extensive experience as a corporate consultant, author
of numerous articles, and professor in business studies, Kilmann
recognizes that each new idea for optimum performance and results
is germane to some area of a corporation.  However, he also
recognizes that each new idea inevitably falls short in bringing
positive change -- that is, a change that is spread throughout
the corporation and is lasting.  At best, when a corporation
relies on an alluring, and sometimes little more than
fashionable, idea, it is a wasteful distraction.  At worst, it
can skew a corporate organization and its operations, thereby
allowing the corporation's true problems or weaknesses to grow
until they become ruinous.  As the author puts it, "Essentially,
it is not the single approach of culture, strategy, or
restructuring that is inherently ineffective.  Rather, each is
ineffective only if it is applied by itself -- as a "quick fix"."

Kilmann tells corporate leaders how to break the cycle of
embracing a quick fix, discarding it after it proves ineffective,
and then turning to a newer and ostensibly better quick fix that
soon proves to be equally ineffective.  For a corporation to
break this self-defeating cycle, the author offers a five-track
program. The five tracks, or elements, of this program are
corporate culture, management skills, team-building, strategy-
structure, and reward system.  These elements are interrelated.
The virtue of Kilmann's multidimensional five-track program is
that it addresses a corporation in its entirety, not simply parts
of it.

Kilmann's five tracks offer structural and operational aspects of
a corporation that executives and managers will find familiar in
their day-to-day leadership and strategic thinking.  Thus, the
author does not introduce any unfamiliar or radical perspectives
or ideas, but rather advises readers on how to get all parts of a
corporation involved in productive change by integrating the five
tracks into "a carefully designed sequence of action: one by one,
each track sets the stage for the next track."  Kilmann does
more, though, than bring all significant features of a modern
corporation together in a five-track program and demonstrate the
interrelation of its elements.  His singularly pertinent and
useful contribution is providing a sequence of steps to be
implemented with respect to each track so that a corporation
progresses toward its goals in an integrated way.

Beyond the Quick Fix is a manual for implementing and evaluating
the progress of a five-track program for corporate success.  The
book should be read by any corporate leader desiring to bring
change to his or her organization.

Ralph H. Kilmann has been connected with the University of
Pittsburgh for 30 years.  For a time, he was its George H. Love
Professor of Organization and Management at its Katz Graduate
School of Business.  Additionally, he is president of a firm
specializing in quantum transformations.


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

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  Go to order any title today.


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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