TCREUR_Public/121207.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, December 7, 2012, Vol. 13, No. 244

                            Headlines



B E L G I U M

DEXIA SA: GSC Capital Eyes Asset-Management Unit


C R O A T I A

SPACVA: To Seek Pre-Bankruptcy Settlement Procedure


F R A N C E

ALCATEL-LUCENT: In Financing Talks; Mulls Patent Portfolio Sale
ALCATEL-LUCENT: Moody's Cuts CFR/PDR to 'B3'; Outlook Negative


G E R M A N Y

KM GERMANY: Moody's Assigns 'B2' CFR/PDR; Outlook Stable
KRAUSSMAFFEI GMBH: S&P Assigns 'B' Long-Term Corp. Credit Rating
P+S WERFTEN: German State Inks EUR43.5-Mil. Guarantee
* GERMANY: Has Significant Exposure to Global Shipping Industry


G R E E C E

* GREECE: S&P Downgrades Sovereign Credit Ratings to 'SD'


H U N G A R Y

MAGYAR TELECOM: Moody's Cuts CFR/PDR to 'Caa3'; Outlook Negative


I T A L Y

BANCA PADOVANA: Moody's Reviews 'Ba2/D-' Ratings for Downgrade
CASA D'ESTE: Moody's Reviews 'Ba3' Ratings on 2 Note Classes
GE CAPITAL: Moody's Reviews 'D' BFSR for Downgrade
ICCREA BANCAIMPRESA: Moody's Reviews 'Ba1' Rating for Downgrade


K A Z A K H S T A N

BTA BANK: Investors File Suit Against Samruk-Kazyna in New York
KASPI BANK: S&P Gives 'BB-/B' Counterparty Credit Ratings


L U X E M B O U R G

BREEZE TWO: S&P Affirms 'B-' Rating on EUR300MM Class A Bonds
BREEZE THREE: S&P Cuts Rating on EUR287MM Class A Bonds to 'B'


N E T H E R L A N D S

EUROSAIL-NL 2007-1: S&P Puts 'BB' Rating on Class E1 on Watch Neg
GRESHAM CAPITAL V: S&P Lowers Rating on Class D Notes to 'CCC-'


P O R T U G A L

* PORTUGAL: Moody's Lowers Covered Bond Ratings to 'Ba1'


R O M A N I A

RAPID BUCHAREST: Files for Insolvency Over Debt Pile


R U S S I A

MECHEL OAO: Inks Debt Restructuring Deal with Banks
MOBILE TELESYSTEMS: Fitch Affirms 'BB+' LT Issuer Default Rating


S P A I N

AYT CAJA MURCIA: Fitch Cuts Ratings on Two Tranches to 'BB+sf'
BANCO DE VALENCIA: Moody's Reviews 'Caa1/E' Ratings for Upgrade
BBVA HIPOTECARIO: Moody's Cuts Rating on Class C Notes to 'B3'
TDA 31: S&P Lowers Rating on Class C Spanish RMBS Notes to 'BB-'


U K R A I N E

* UKRAINE: Moody's Lowers Government Bond Rating to 'B3'


U N I T E D   K I N G D O M

AERTE GROUP: Goes Into Administration
ATH RESOURCES: Enters Into Administration
GALA CORAL: S&P Affirms 'B' Long-Term Corporate Credit Rating
MCMULLEN ARCHITECTURAL: Lakesmere Buys Business; 129 Jobs Secured
MORPHEUS PLC: S&P Affirms 'D' Rating on Class E Subordinate Loan

ODEON & UCI: Moody's Lowers Corp. Family Rating to 'B3'
PICKFORDS: Bought Out of Administration; 900 Jobs Secured


X X X X X X X X

* Fitch Affirms Rating on EFSF's Debt Issues
* EUROPE: Moody's Says Outlook for Steel Companies Negative
* BOOK REVIEW: The Health Care Marketplace


                            *********


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B E L G I U M
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DEXIA SA: GSC Capital Eyes Asset-Management Unit
------------------------------------------------
Isabell Steger at Dow Jones Newswires reports that Hong Kong-
based private-equity firm GCS Capital is in exclusive talks to
buy the asset-management arm of troubled Franco-Belgian bank
Dexia SA.

According to Dow Jones, Dexia is in the process of selling off
assets to pay back EUR5.5 billion (US$7.18 billion) in bailout
money from the French and Belgian governments.  Its asset-
management arm manages some EUR80 billion and has 550 employees,
Dow Jones discloses.  No further details of the deal were
provided, Dow Jones notes.

"Dexia Asset Management presents a rare opportunity to acquire a
well-capitalized, standalone asset management business with the
potential to transition into a global franchise," Dow Jones
quotes GCS Capital Chief Executive Huan Guocang as saying in the
statement.

Dexia received EUR5.5 billion from the French and Belgian
governments in November, the bank's third bailout in four years,
Dow Jones recounts.  The lender, the world's biggest lender to
local government before 2008, has been selling assets such as its
Turkish and Luxembourg units as part of its restructuring, Dow
Jones says.

Dexia SA is a Belgium-based banking group with activities
principally in Belgium, Luxembourg, France and Turkey in the
fields of retail and commercial banking, public and wholesale
banking, asset management and investor services.  In France,
Dexia Bank focuses on funding public sector bodies and providing
financial services to local government.  In Luxembourg, Dexia
operates in two main areas: commercial banking (for personal and
professional customers) and private banking (for international
investors).  In Turkey, Dexia is involved in retail and
commercial banking and offers services to ordinary account
holders, business and local public sector customers and
institutional clients. The Company operates through its
subsidiaries, such as Dexia Credit Local, DenizBank, Dexia
Credicop, Dexia Sabadell, Dexia Kommunalbank Deutschland, Dexia
Asset Management, among others.



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C R O A T I A
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SPACVA: To Seek Pre-Bankruptcy Settlement Procedure
---------------------------------------------------
SeeNews reports that Spacva said in a bourse filing on Wednesday
that the company will request the launch of a pre-bankruptcy
settlement procedure later this month.

Spacva -- http://www.spacva.hr/-- is a Croatian wood processing
company based in Vinkovci, eastern Croatia.



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F R A N C E
===========


ALCATEL-LUCENT: In Financing Talks; Mulls Patent Portfolio Sale
---------------------------------------------------------------
Matthew Campbell, Marie Mawad and Beth Jinks at Bloomberg News
report that Alcatel-Lucent SA is closer to obtaining financing of
at least EUR1 billion (US$1.3 billion) from banks led by Goldman
Sachs Group Inc. and Credit Suisse Group AG amid a wide-ranging
overhaul that will probably require deeper job cuts and major
asset sales.

According to Bloomberg, people familiar with the talks said that
with discussions still under way, Alcatel-Lucent will need to
come up with restructuring plans sufficient to end a six-year
streak of mounting losses to reach a deal.

Bloomberg relates that people said faced with more than EUR2
billion of debt repayments over three years, the company is
weighing how to use as collateral its patent portfolio, in part
inherited from the Nobel Prize-winning researchers of Bell Labs.

This isn't Chief Executive Officer Ben Verwaayen's first attempt
at transforming the former French industrial giant, Bloomberg
notes.  Headed into his sixth year as CEO, Mr. Verwaayen has so
far sold smaller assets, cut positions and costs and signed a
patent-licensing agreement, Bloomberg says.  These measures have
failed to stem an annual cash consumption of EUR700 million on
average since the 2006 merger of Alcatel SA and Lucent
Technologies, Bloomberg discloses.

The people, as cited by Bloomberg, said in the two-tier financing
structure under negotiation, Goldman and Credit Suisse would
likely be lenders for the first tier, while Citigroup Inc. is set
to be part of a second group that may include JPMorgan Chase &
Co. and European banks such as Barclays Plc.

A loan would give Alcatel-Lucent some balance-sheet relief in the
face of its debt repayments over the next three years, Bloomberg
says.  The company also is in the midst of cutting about 5,500
jobs globally in sales, marketing and administration to reduce
expenses, Bloomberg states.

According to Bloomberg, people familiar with the matter said last
month that Alcatel-Lucent is weighing the sale of assets such as
the unit that produces undersea fiber-optic cables and the
division that provides equipment to businesses.  The people said
then that talks on both assets, which may fetch less than EUR1
billion, are at an early stage, Bloomberg notes.

Sam Schechner and Dana Cimilluca at The Wall Street Journal
report that Alcatel-Lucent is considering mortgaging parts of its
past and future as it looks to buy time for a restructuring.  The
company, the Journal says, is exploring offering one of its
fastest-growing units -- its Internet-routing business -- as
backing for the badly needed loans.

According to the Journal, one of the people familiar with matter
said also under consideration is pledging the company's valuable
portfolio of patents from Bell Labs, the storied New Jersey
research center.

The Journal notes that while the company has ample cash on hand,
analysts say, it needs a bigger cushion to help ease investors'
concerns -- and to avoid spooking potential clients from entering
long-term deals.  Only then will it have enough time to implement
EUR1.25 billion in cost cuts the company says it needs, the
Journal states.

Another significant possibility, if Alcatel-Lucent can't come up
with new loans, is a rights issue, in which the company would
raise cash by issuing new stock, the Journal says, citing a
person familiar with the refinancing talks.  Such a move would
dilute Alcatel's shares, already down by more than half since
March, the Journal states.

Alcatel-Lucent's Internet-routing business could be worth EUR4.53
billion in liquidation, according to estimates from Bernstein
Research, far more than the entire company's current market
capitalization, the Journal notes.  According to the Journal,
bankers and executives say Alcatel's patent portfolio, which
could also be used to back debt, is another one of the company's
most valuable assets.  Alcatel says it has more than 27,900
patents and regularly touts Bell Labs' history of research, which
stretches back to the dawn of telecommunications, the Journal
discloses.

There are risks for Alcatel in mortgaging some of its best assets
to pay the bills, the Journal notes.  In the long term, if it
should ever sink into bankruptcy or default on the debt, those
assets would belong to its banks, the Journal says.   According
to the Journal, Pierre Ferragu, an analyst at Bernstein Research
said "Clients may not like buying from businesses that could end
up in the hands of a bank."

Alcatel Lucent SA is a France based company that proposes
solutions used by service providers, businesses, and governments
worldwide to offer voice, data, and video services to their own
customers.  It is also engaged in mobile, fixed, Internet
Protocol (IP) and optics technologies, applications and services.
The Company operates in three business segments: Networks;
Software, Services and Solutions and Enterprise.  The Networks
segment focuses on the Internet Protocol (IP) intelligent router
market, manufacture and market optical networking equipment to
transport information, wireless product offerings, among other
activities.  The Software segment focuses on supplying offerings
for networks' cycle: consultation, integration, transformation,
outsourcing and maintenance, among others.  The Enterprise
segment supply products, solutions and services for companies to
improve collaborations across employees, customers and partners.
It has over 25 wholly owned subsidiaries.


ALCATEL-LUCENT: Moody's Cuts CFR/PDR to 'B3'; Outlook Negative
--------------------------------------------------------------
Moody's Investors Service has downgraded Alcatel-Lucent's
corporate family rating (CFR) and probability of default rating
(PDR) to B3 from B2. Concurrently, Moody's has downgraded
Alcatel-Lucent's senior debt ratings to Caa1, with a loss given
default assessment of LGD5 (75%), from B3, LGD5 (75%). In
addition, the rating agency has downgraded to Caa2, LGD5 (79%),
from Caa1, LGD5 (77%), the ratings on two convertible bonds
issued by Lucent Technologies, Inc., before its 2006 merger with
Alcatel, and guaranteed by Alcatel-Lucent on a subordinated
basis. The outlook on all ratings remains negative.

Ratings Rationale

"The one-notch downgrade of Alcatel-Lucent's CFR was driven by
our expectation that in 2012 the company will not be able to cut
its cash burn materially below the 2011 level of approximately
EUR620 million as adjusted by Moody's," says Roberto Pozzi, a
Moody's Vice President -- Senior Analyst and lead analyst for
Alcatel-Lucent. Alcatel-Lucent's previous B2 rating had been
partly based on Moody's assumption that the company's cash burn
would be no more than EUR300 million for 2012, as adjusted by
Moody's. "This inability to reduce cash burn reflects (1) a
contraction in Alcatel-Lucent's revenues of around 7% year-on-
year in the first nine months of 2012, and (2) continued weakness
in the company's gross profit margins, which necessitates renewed
restructuring efforts," adds Mr. Pozzi.

Moody's also considers that significant uncertainty remains about
Alcatel-Lucent's ability to significantly reduce its free cash
outflows in 2013 and move towards break-even thereafter. The
rating agency notes that the company has been consuming cash from
operations since the 2006 merger between Alcatel and Lucent
Technologies, Inc. and that its cash burn increased to EUR885
million in the 12 months to September 2012 from approximately
EUR620 million as of FY2011 on a Moody's adjusted basis.

Usually Alcatel-Lucent's cash flow is back-ended, so that the
only cash-generative quarter of any one year is Q4. In 2012,
Moody's expects that Alcatel-Lucent's fourth-quarter cash flows
will only partly offset the company's cash consumption in the
third quarter (EUR360 million as reported by the company) and
that the company's cash consumption during the second half of
2012 will remain negative. Moreover, Alcatel-Lucent has
implemented new cost-saving measures, which are aimed at
generating additional cost savings of EUR750 million in 2013.
However, although these may eventually strengthen the company's
operating cash flows, Moody's cautions that its past efforts have
been absorbed by deteriorating macro environment and price
pressure in the market, which continues unabated given similar
cost-cutting measures by competitors. Also, despite increasing
communication traffic flows, there is currently no visibility
with regard to a recovery in demand for telecommunication
equipment. Because of this and telecom operators' currently
restrained investment strategies (except for some operators in
the Americas), Moody's believes that revenue contraction in the
industry could continue for several quarters.

Alcatel-Lucent's liquidity profile is good based on the
availability of around EUR4.7 billion in cash and marketable
securities at end of September 2012. After consideration of cash
needs for operations (typically estimated by Moody's at 3% of
sales, or around EUR500 million) and about EUR1.2 billion cash
and marketable securities held in countries subject to exchange
controls, the liquidity well covers upcoming debt maturities of
around EUR860 million in the next 12 months to June 2013
including the US$765 million (EUR619 million as reported in the
company's third-quarter 2012 results) 2.875% Series B convertible
bonds due in 2025, with a June 15, 2013 put option and leaves
headroom for potential cash consumption in operations. The EUR837
million revolving credit facility matures in April 2013 and is
currently undrawn. The facility has a financial leverage covenant
related to cash flow/net debt with reasonable headroom as a
result of the net cash position currently reported.

Alcatel-Lucent's next large debt maturities are its 6.375% bonds
due in April 2014, with EUR462 million currently outstanding and
the EUR1.0 billion 5% Oceane due in January 2015. Given the scale
of Alcatel-Lucent's cash consumption and the company's upcoming
debt maturities, Moody's considers that cash and short-term
securities balances are not as comfortable as they appear at
first glance. Alcatel-Lucent's liquidity could be bolstered by
increased royalty collections, such as those resulting from the
company's agreement with RPX or from own efforts, or proceeds
from potential business exits, but overall its options for
further asset monetization appear to be decreasing.

The negative outlook on Alcatel-Lucent's rating reflects the
company's ongoing cash burn relative to its substantial, but
finite, liquidity. With an outlook for declining sales in 2012,
Moody's considers that Alcatel-Lucent's management will be
challenged to cut costs fast enough to curb cash consumption and
to realise opportunities for asset monetization.

WHAT COULD CHANGE THE RATINGS DOWN/UP

Negative pressure on the B3 rating would increase if (1) the
company's operating margin, as adjusted by Alcatel-Lucent, fails
to trend towards the mid-single-digits in percentage terms in
2013, with further tangible improvements thereafter; (2) Alcatel-
Lucent fails to maintain its negative free cash flow below EUR500
million on a last 12 month basis throughout 2013, as adjusted by
Moody's; (3) the company's debt/EBITDA fails to improve towards
6.0x as adjusted by Moody's; or (4) the company fails to improve
its liquidity position through asset disposals and/or refinancing
well ahead of its debt maturities in 2013-14. Rating pressure
could ease and the outlook on the rating stabilize if all the
above conditions are met, with particular regard to an
improvement in free cash flow generation.

Although currently unlikely, upward rating pressure would require
Alcatel-Lucent to (1) generate significant positive free cash
flow on a last-12-months basis, as adjusted by Moody's; (2)
sustain sales growth; and (3) achieve an operating margin, as
adjusted by Alcatel-Lucent, in the mid-single digits in
percentage terms.

Principal Methodology

The principal methodology used in rating Alcatel-Lucent was
Global Communications Equipment Industry rating methodology
published in June 2008. Other methodologies used include Loss
Given Default for Speculative-Grade Non-Financial Companies in
the US, Canada and EMEA published in June 2009.

Headquartered in Paris, France, Alcatel-Lucent is one of the
world leaders in providing advanced solutions for
telecommunications systems and equipment to service providers,
enterprises and governments. The company reported sales of EUR6.8
billion in H1 2012.



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G E R M A N Y
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KM GERMANY: Moody's Assigns 'B2' CFR/PDR; Outlook Stable
--------------------------------------------------------
Moody's Investors Service assigned a B2 Corporate Family Rating
and a B2 Probability of Default Rating to KM Germany Holdings
GmbH ("Notes GmbH"), the new holding company of the KraussMaffei
Group ("KraussMaffei"). At the same time the rating agency
assigned a provisional (P)B2 rating to the EUR325 million senior
secured notes due in 2020. The notes are being issued in
connection with the acquisition of KraussMaffei by Onex
Corporation ("Onex"). Issuers are Notes GmbH and its indirectly
wholly-owned subsidiary, KM US Holdings II, Inc. ("NotesCo"). The
outlook for all ratings is stable. This is a first time rating
for Notes GmbH.

Moody's issues provisional ratings for debt instruments in
advance of the final sale of securities or conclusion of credit
agreements. Upon a conclusive review of the final documentation,
Moody's will endeavor to assign a definitive rating to the rated
capital instruments. A definitive rating may differ from a
provisional rating.

Assignments:

  Issuer: KM Germany Holdings GmbH

     Probability of Default Rating, Assigned B2

     Corporate Family Rating, Assigned B2

     EUR325M Senior Secured Regular Bond/Debenture, Assigned
     (P)B2

     EUR325M Senior Secured Regular Bond/Debenture, Assigned a
     range of LGD3, 44 %

Ratings Rationale

The assigned B2 corporate family rating is supported by
KraussMaffei's strengths with regard to (i) its strong market
position, (ii) a unique combination of technologies and (iii)
favorable long-term growth drivers. On a more negative note, the
rating is constrained by (i) the highly cyclical nature of its
main end markets, (ii) a weak level of profitability compared to
its direct peers in the industry despite its strong market
position, mainly driven by low efficiency in operations, (iii) a
relatively low share of service revenues, (iv) a high initial
leverage, as well as (v) indications that fiscal year 2012
(ending September 2012) might mark a cyclical peak in order
intake and cash flow generation, amid the expectation of a
slowdown in growth momentum of the global economy.

Although being a rather mid-sized player with about EUR1.06
billion sales generated in its fiscal year 2012, KraussMaffei is
the global leader for plastic system solutions. With its products
covering the full range of technologies including (i) injection
molding, (ii) extrusion technology as well as (iii) reaction
process technology, the company has the broadest product offering
in its industry which provides a competitive edge in terms of the
ability to provide sophisticated system solutions and access to a
wider and more diversified customer base. The company holds top 3
market position in all key plastic processing technologies.

However, KraussMaffei is operating in a highly cyclical market
which some competitors try to mitigate by increasing their
activities in the more stable and generally more profitable
aftermarket. Despite a large installed base and operating one of
the largest sales and service network in the industry,
KraussMaffei reports only a revenue share of around 20% related
to aftermarket business for the fiscal year 2012, which appears
to be low compared to industry peers. Husky International Ltd.
(B2 stable) for instance generates 50% of its revenues from
aftermarket and tooling.

The company's sales split by application shows the
diversification of the customer base across several end markets,
including but not limited to automotive (30% of 2012 sales),
packaging (21%), infrastructure (13%), rubber (9%), and chemicals
(8%). The geographical split is well balanced between Western
Europe (40% of 2012 sales), North America (13% excluding Mexico)
and Emerging markets (47%), which should assist to mitigate the
notable exposure to the highly cyclical automotive and related
rubber end market (together close to 40% of sales).

The largest near-term challenge for the company is to
successfully implement the newly identified extensive
restructuring measures as contemplated. Moody's understands that
this requires high expenses and cash outflows at the beginning
and efficiency gains will gradually phase in over two to three
years. Accordingly, Moody's expects EBITA margin as adjusted by
Moody's to temporarily decline to around 5% in FY 2013 driven by
low cost savings and high restructuring expenses in the first
year after closing of the transaction, which will swiftly improve
from FY 2014 onwards when efficiency gains accelerate over time.

The rating is supported by Moody's expectation that KraussMaffei
will be able to continuously generate positive, albeit modest,
free cash flows throughout the next three years despite high
interest payments, resulting in a gradual improvement of the
company's net debt. However, due to the constant gross debt load
and the temporary negative impact of restructuring measures on
EBITDA in the first year after closing, leverage ratio as
adjusted by Moody's is likely to deteriorate to 5.8x debt /
EBITDA per end of FY 2013. However, Moody's expects EBITDA to
strengthen with efficiency gains accelerating over time, which
should allow KraussMaffei to swiftly reduce its leverage to well
below 5.5x from FY 2014 onwards, more in line with the B2 rating
assigned. As described above, Moody's would expect gradual
performance improvements on the back of benefits from implemented
restructuring measures. These improvements are expected to be
largely sustained with a financial policy focused on de-
leveraging and with a cautious investment and M&A policy.

Moody's liquidity analysis concluded that KraussMaffei's
liquidity needs for the next twelve months will be fully covered
by EUR50 million available cash at closing (excluding EUR27
million restricted cash to secure letters of credit), funds from
operations expected to exceed EUR45 million and EUR15 million
availability under the EUR75 million revolving credit facility
maturing after 5 years from closing. Moody's takes some comfort
from the fact that the financial covenant under this multi-
currency facility, a maximum senior secured net leverage ratio of
3.75x, is expected to be set with ample headroom. However,
Moody's notes that around EUR60 million of the revolver is
expected to be utilized in form of letters of credit upon
closing, which will likely remain at this level going forward, if
not to be increased with rising business volume. Moody's cautions
that the availability under the revolver, combined with internal
cash generation, seems to be relatively low compared with the
over EUR1 billion group revenues and does not leave much cushion
in case of a cyclical downturn.

Structural Considerations

In Moody's loss given default assessment, Moody's has assigned
the first rank to the company's EUR75 million revolving credit
facility, given the preferred access to collateral. Due to the
weaker collateral position of the EUR325 million bond, Moody's
views this instrument one level lower on second rank. Trade
payables rank second together with the bond, which is considered
to be the senior most significant financial debt. Finally,
pension liabilities and future minimum lease payments (due within
1 year) rank in third place reflecting the unsecured status of
these liabilities. Given the small amount of debt on rank 1 and a
sizeable layer of debt on rank 2, Moody's has assigned a (P)B2
instrument rating to the bond issuance (LGD3, 44%), in line with
the Corporate Family Rating.

The outlook on the ratings is stable. This mirrors Moody's
expectation that KraussMaffei will largely withstand pressure
from weakening European demand due to its global reach. This,
together with cost cutting measures feeding through, should
enable KraussMaffei to gradually improve operating profitability
from 2014 onwards. The stable outlook also assumes that
KraussMaffei preserves a solid liquidity cushion including
sufficient headroom under financial covenants going forward, also
supported by positive free cash flow generation. Moody's expects
any further increase in requirements on letters of credit to be
covered by the company's cash generation.

Upside rating pressure could arise if Notes GmbH would be able to
show a sustainable increase in profitability, as reflected in
EBITA margins above 7.5%. In addition, a B1 Corporate Family
Rating would require a reduction of leverage to below 4.5x debt /
EBITDA, and interest cover to exceed 2.0x EBIT / Interest
Expense, all on a sustainable basis.

Likewise, downward pressure would build if the company is not
able to achieve operational improvement from restructuring
measures as Moody's expects, resulting in EBITA margin remaining
below 5% after 2013, leverage deteriorating to above 6.0x debt /
EBITDA, or EBIT / Interest Expense falling below 1.5x. Any
deterioration of short-term liquidity would also add negative
pressure.

The principal methodology used in rating KM Germany Holdings GmbH
and KM US Holdings II, Inc. was the Global Heavy Manufacturing
Rating Methodology published in November 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.

Headquartered in Munich/Germany, KraussMaffei is the global
leader for plastic system solutions. With a product range
covering the full range of technologies including (i) injection
molding, (ii) extrusion technology as well as (iii) reaction
process technology the company has the broadest product offering
in its industry. The company holds top 3 market position in all
key plastic processing technologies. During the fiscal year ended
September 30, 2012, KraussMaffei generated sales of EUR1,064
million with around 3,900 employees.


KRAUSSMAFFEI GMBH: S&P Assigns 'B' Long-Term Corp. Credit Rating
----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B' long-term
corporate credit rating to KraussMaffei GmbH, a German plastics-
processing machinery manufacturer, and to Munich Holdings
Corporation II S.a.r.l, the indirect parent of KraussMaffei. The
outlook is stable.

"At the same time, we assigned a 'B-' issue rating to
KraussMaffei's EUR325 million proposed eight-year bond. The
recovery rating of '5' indicates our expectation of modest (10%
to 30%) recovery for the bondholders in the event of a payment
default," S&P said.

"The ratings on KraussMaffei reflect our view of the company's
weak business risk profile and highly leveraged financial risk
profile," S&P said.

"The business risk profile is restricted by KraussMaffei's
operations in the highly competitive and cyclical plastics-
processing machinery industry, as well as the company's weak and
volatile, although improving, operating profitability. The
business risk assessment is also restricted by KraussMaffei's
relatively low share of aftermarket operations compared with
industry peers'. A higher share of such operations could offset
some of the cyclicality in new machinery sales, in our view," S&P
said.

"On the positive side, we see that the company has well-
established market positions in Europe and a broad product
offering. Our assessment is also supported by the broad
geographic diversity of the company's revenue generation. This is
particularly because we expect growth prospects in emerging
markets to remain relatively better than in KraussMaffei's
domestic European market over the next two years. However, we
believe the group would find it difficult to achieve similar
diversification of its production operations, which are mainly in
Europe," S&P said.

"KraussMaffei was hit particularly hard by the financial and
economic crisis in 2009, when its revenues and order intake
levels declined by 30% and 41%, respectively. These declines were
high in comparison with peers' in the capital goods sector, but
somewhat better than those of direct competitor Milacron Holdings
Inc. (B+/Stable/--) in that year," S&P said.

"KraussMaffei's EBITDA turned to negative EUR55 million in 2009,
owing to fairly high operating leverage and significant
restructuring charges. Over the past few years, the company has
implemented several restructuring programs aimed at improving its
operating profitability, which coupled with volume growth allowed
the group to return to its precrisis EBITDA margin of about 8%.
We believe that the highly competitive nature of the industry
will likely limit the scope of significant further margin
expansion," S&P said.

"For our base case we assume flat revenue growth in 2013,
followed by single-digit-percentage growth in 2014. We also
assume steady improvements in the group's operating margin to an
adjusted EBITDA margin of about 9% in 2014 from 8.5% for the
fiscal year ended Sept. 30, 2012, despite a continuously
difficult economic environment in Europe. This is because we
assume that demand trends will be more favorable in other
regions, most notably emerging markets," S&P said.

"In 2012, KraussMaffei generated about 60% of its revenues
outside Western Europe. We note that KraussMaffei's operating
profitability is likely to be under pressure should the economic
environment became more difficult. Our economic stress case
assumes a decline in the eurozone (European Economic and Monetary
Union) of close to 2%, which could lead to pressure on the
rating. This compares with flat growth for 2013 as assumed under
our base case. We view KraussMaffei's management and governance
as fair," S&P said.

"Our financial risk profile assessment is based on the leveraged
buyout by Onex Capital Partner, the private-equity sponsor. We
assume that the current financial structure will be replaced by a
EUR325 million secured bond, a EUR75 million revolving credit
facility (RCF; which is drawn by about EUR60 million at closing)
to be used for guarantees, cash balances of about EUR77 million,
of which some EUR27 are expected to be restricted, and EUR281
million of common equity. This will translate into a debt-to-
EBITDA ratio at closing, after our adjustments, of about 5.9x,
which we assume will go down to 5.3x in 2013 and to 4.7x in 2014
under our base case. Funds from operations (FFO) to debt will
remain between 9% and 12% over the next two years, in line with
our assessment of the financial risk profile as highly
leveraged," S&P said.

"The stable outlook incorporates our expectation of flat revenue
growth in fiscal year ending Sept. 30, 2013, followed by growth
of about 2% in 2014. In addition, we also anticipate the company
posting an adjusted EBITDA margin of 8%-9%, minimally positive
FOCF, no dividend payments, and no acquisition payouts exceeding
FOCF generation. Our leverage parameter for the 'B' rating is
debt to EBITDA lower than 6x," S&P said.

"We could lower the ratings if weakening operating performance
were to lead to negative free cash flow, adversely affecting the
group's liquidity, or a significant deterioration of credit
measures, for example, if revenues declined by more than 10% and
margins deteriorated by more than 200 basis points. A severe
economic recession in Europe could significantly erode the
company's revenue and lead to a negative rating action. We could
likewise lower the ratings if KraussMaffei failed to refinance
its current financial structure by the end of the second quarter
of 2013, when part of the group's existing debt becomes short
term," S&P said.

"Rating upside could stem from KraussMaffei continuing to
deleverage and successfully improve its credit-protection
measures on a sustainable basis. We could raise the rating if
stronger-than-expected EBITDA generation led to leverage lower
than 4.0x and FFO to debt of about 20%," S&P said.


P+S WERFTEN: German State Inks EUR43.5-Mil. Guarantee
-----------------------------------------------------
SeeNews reports that the finance and economy ministries of the
state of Mecklenburg-Western Pomerania signed the EUR43.5 million
(US$56.7 million) guarantee for insolvent German shipyard P+S
Werften.

According to SeeNews, insolvency administrator Berthold
Brinkmann, who requested the state aid on November 21, will also
sign the contract.

P+S Werften could ask for guarantees of up to EUR152.4 million
from the federal and state governments until Dec. 3, SeeNews
discloses.  The two ministries of Mecklenburg-Vorpommern said
that the shipyard has received some EUR70 million so far, SeeNews
relates.

The new state aid will be used to back up the construction of two
ferries for Danish shipping company DFDS A/S, SeeNews says.  The
parties agreed on Nov. 29 to secure the building of the vessels
through a state guarantee, SeeNews recounts.

The federal government and the state of Mecklenburg-Western
Pomerania will each provide half of the EUR43.5 million
guarantee, SeeNews discloses.


* GERMANY: Has Significant Exposure to Global Shipping Industry
---------------------------------------------------------------
The New York Times reports that for all the talk about Germany's
financial exposure to Greece, it turns out that some German banks
have a problem of more titanic proportions -- their vulnerability
to the global shipping trade.

According to NYT, Moody's Investors Service said that Germany's
10 largest banks have EUR98 billion, or US$128 billion, in
outstanding credit or other risks related to the global shipping
industry.  That is more than double the value of their holdings
of government debt from Greece, Ireland, Italy, Portugal and
Spain, NYT notes.  And it is more than any other country's
financial exposure to the shipping industry, which is in the
fifth year of a recession, NYT states.

Moreover, German banks bear a generous share of the blame for
spawning that recession, NYT says.  By helping to finance and
market funds used to build and buy ships, a popular tax shelter,
the banks helped create a glut in large container ships that has
led to a collapse in cargo hauling prices worldwide, NYT
discloses.

Exposure to shipping is one reason Moody's affirmed its negative
outlook for German banks last month, NYT recounts.  According to
NYT, in a report, the ratings agency warned that the global
shipping industry "faces weakened demand amid sluggish global
economic growth and evolving structural overcapacity."  It said
money that the 10 largest German banks had lent to the shipping
industry equaled 60% of their capital, the funds held in reserve
for potential losses, NYT relates.

From a financial point of view, Germany has been hit especially
hard by the shipping crisis because of the popularity of funds
used to finance ship construction, as well as a tradition of ship
finance by German banks, NYT notes.  Ship funds, usually
organized by specialized firms but often marketed and financed by
banks, benefited from a law that taxes ships according to size,
rather than revenue, NY discloses.



===========
G R E E C E
===========


* GREECE: S&P Downgrades Sovereign Credit Ratings to 'SD'
---------------------------------------------------------
Standard & Poor's Ratings Services lowered its 'CCC' long-term
and 'C' short-term sovereign credit ratings on the Hellenic
Republic (Greece) to 'SD' (selective default).

S&P lowered its sovereign credit ratings on Greece to 'SD'
following the Greek government's Dec. 3, 2012, invitation to
private sector bondholders to participate in a series of debt
buyback auctions. In its opinion, Greece's invitation constitutes
the launch of what S&P considers to be a distressed debt
restructuring. Under S&P's criteria, it considers consider an
exchange offer as tantamount to default under these two
conditions:

-- The offer, in S&P's view, implies the investor will receive
    less value than the promise of the original securities; and

-- S&P believes the offer is distressed, rather than purely
    opportunistic.

"We consider that Greece's invitation satisfies these conditions,
notwithstanding that investors may technically accept the offer
voluntarily, and irrespective of whether an event of default as
defined by the bond documentation occurs. In accordance with our
criteria, we have therefore lowered our sovereign credit rating
on Greece to 'SD' and our ratings on the affected debt issues to
'D'," S&P said.

"Under our criteria, we define a restructuring to include
buybacks as an alternative to a potential conventional default,
in which the investor or counterparty stands to fare even worse,
and which motivates (at least partially) the investor's
acceptance of such an offer. Standard & Poor's treats such offers
and buybacks analytically as de facto restructuring and,
accordingly, as equivalent to a default on the part of the
issuer" S&P said.

"When Greece's buyback is consummated (which we understand is
scheduled to occur on or about Dec. 17, 2012), we will likely
consider the selective default to be cured and raise the
sovereign credit rating on Greece to the 'CCC' category,
reflecting our forward-looking assessment of Greece's
creditworthiness. In this context, any potential upgrade to the
'CCC' category rating would reflect, among other factors, our
view of the debt relief that is being delivered through the buy
back and its contribution to putting the sovereign's public
finances on a sustainable footing," S&P said.

Ratings List
Downgraded
                                   To            From
Greece (Hellenic Republic)
Senior Unsecured (20 issues)       D             CCC
Downgraded; CreditWatch/Outlook Action
                                   To            From
Greece (Hellenic Republic)
Sovereign Credit Rating            SD/SD         CCC/Negative/C

Ratings Affirmed
Greece (Hellenic Republic)
Transfer & Convertibility Assessment AAA
Recovery Rating 4



=============
H U N G A R Y
=============


MAGYAR TELECOM: Moody's Cuts CFR/PDR to 'Caa3'; Outlook Negative
----------------------------------------------------------------
Moody's Investors Service has downgraded the corporate family
rating (CFR) and probability of default rating (PDR) of Magyar
Telecom B.V. ("Invitel") to Caa3 from Caa1. Moody's also
downgraded the rating on the senior secured notes due 2016 to
Caa3 from Caa1. The outlook remains negative.

Ratings Rationale

The downgrade of Invitel's ratings mainly reflects Moody's
expectation that the newly announced infrastructure tax, to be
introduced from January 2013, will negatively impact Invitel's
already weak liquidity profile. Absent any shareholder support --
of which there has been no indication to date -- Moody's expects
the company to face a liquidity shortfall during 2013.

The downgrade also reflects (i) Invitel's continued negative
operating performance, with revenues and reported EBITDA
declining in Q3 2012 by 8% and 20% respectively year-on-year (ii)
the weak macro-economic environment in Hungary, where Moody's
expects GDP in 2012 to fall by around 1.4% (iii) the
unpredictable policy-making environment, as evidenced by the
various taxes imposed by the government at short notice (iv)
Moody's concerns that the company's current capital structure
appears unsustainable.

Invitel's Caa3 CFR continues to recognize the company's (i)
leading position as the second-largest fixed-line
telecommunications service provider in Hungary; (ii) sound
profitability levels with EBITDA margin between 40%-45%; (iii)
long dated maturity profile, with no scheduled debt repayment
before 2016.

The government has in recent years imposed various taxes on the
telecommunication and other industries. These include from 2010 a
three year "crisis-tax" on operators which Moody's expects to
cost Invitel EUR8 million in 2012, and also a "Telecom Tax" based
on end-user traffic.

Moody's expects that the new infrastructure tax which the
Hungarian government recently announced will add approximately
EUR 9 to EUR 14 million to Invitel's recurring cost base. This
would accelerate Invitel's cash burn rate whereby the company
could become illiquid within the next two to four quarters.
Moody's notes that the next interest payment on the 2016 bonds is
due on December 15. The negative rating outlook also reflects
this liquidity risk.

Invitel's operating performance in the first nine months of 2012
shows no halting of the declining trends observed in voice
revenues with this segment recording a 23% drop in residential
voice revenues and a 6% drop in corporate revenues (both in
constant currency terms) in 9M 2012 vs. 9M 2011. In addition to
fixed-to-mobile substitution and the bundled telephone offers
from cable operators, the increasingly tough competitive
environment has also driven prices down as clients look for best-
value alternatives in a tough domestic economic climate.

What Could Change the Rating -- Up

Given the immediate liquidity pressures Invitel is facing, there
is no upwards ratings pressure absent significant shareholder
support that will address the company's near-term liquidity
issues.

What Could Change the Rating -- Down

Negative ratings pressure would arise following (i) no apparent
resolution over the inadequacy of Invitel's current liquidity
profile or explicit support from the sponsor; (ii) further
reduction in the company's free cash flow generation.

The principal methodology used in rating Magyar Telecom B.V. was
the Global Telecommunications Industry Methodology published in
December 2010. Other methodologies used include Loss Given
Default for Speculative-Grade Non-Financial Companies in the
U.S., Canada and EMEA published in June 2009.



=========
I T A L Y
=========


BANCA PADOVANA: Moody's Reviews 'Ba2/D-' Ratings for Downgrade
--------------------------------------------------------------
Moody's Investors Service has placed on review for downgrade the
Ba2 long-term deposit rating of Banca Padovana and its standalone
D- bank financial strength rating (BFSR), mapping to a ba3
standalone baseline credit assessment (BCA).

Ratings Rationale

The review of the bank's standalone credit assessment (BCA)
reflects Moody's concern that the bank could fail without group
support, given its very fragile financial profile. The review of
the bank's debt and deposit ratings follows the review of the
bank's BCA.

According to Moody's, the bank's asset quality is among the
weakest in Italy and likely to deteriorate well into 2013.
Adjusted problem loans were at a very high 19% of loans, while
coverage of these problem loans was also very weak, with problem
loans amounting to 113% of equity and loan loss reserves in 2011
(1). The challenges are exacerbated by a high concentration to
the real estate and construction sector. In view of Moody's weak
GDP growth outlook for Italy, the deteriorating trend of the
bank's asset quality is likely to continue well into 2013,
exerting further pressure on the bank's performance and capital.

Moody's notes the bank's very weak profitability, with net losses
incurred in the last three years (EUR55 million in 2011) owing to
high loan loss provisions and a small EUR2.7 million profit in
June 2012 owing to significantly lower loan loss provisions. Such
a tight margin exposes the bank to an increase of loan loss
provisions, which Moody's believes is likely until next year.

As a result of the losses, the Tier 1 capital ratio fell to 5.7%
and the total capital ratio declined to 7% in 2011, below the 8%
minimum requirement. Moody's understands that the capital ratio
has been restored above the minimum in 2012 by the co-operative
group of the Banche di Credito Cooperativo (BCC, unrated), of
which the bank is a member. Nevertheless, a stronger capital
cushion would be needed against the deteriorating asset quality
trend, highlighting the need of continuing co-operative support.

During the review period, Moody's will assess the bank's actions
to return a viable standalone entity, stabilizing asset quality
and strengthening profitability and capital.

WHAT COULD MOVE THE RATINGS UP/DOWN

Given the review for downgrade, there is currently no upwards
pressure on the ratings however a confirmation could come from
(i) a sustainable return to significant profitability; (ii) a
decrease in problem loans below 75% of equity and loan loss
reserves in the short term.

Conversely, a downgrade of Banca Padovana's ratings could result
from failure to restore capitalization and profitability at
stronger levels.

(1) Unless otherwise noted, data in this report are from Company
data or Moody's Financial Metrics.

List of affected ratings:

- Bank Deposits: Ba2/RuR down;

- Bank Financial Strength: D-/RuR down

Principal Methodology

The principal methodology used in this rating was Moody's
Consolidated Global Bank Rating Methodology published in
June2012.


CASA D'ESTE: Moody's Reviews 'Ba3' Ratings on 2 Note Classes
------------------------------------------------------------
Moody's Investors Service has placed under review for downgrade
the class B notes in two Italian RMBS transactions Casa D'este
Finance S.r.l. (CDE I) and Casa D'este Finance II S.r.l. (CDE II)
following the review placement for downgrade of Cassa di
Risparmio di Ferrara S.p.A. (Ba3/NP/review for downgrade):

Issuer: Casa D'este Finance S.r.l.

    EUR35.2M B Notes, Ba3 (sf) Placed Under Review for Possible
    Downgrade; previously on Dec 22, 2011 Downgraded to Ba3 (sf)

Issuer: Casa D'este Finance S.r.l. II

    EUR80.65M B Notes, Ba3 (sf) Placed Under Review for Possible
    Downgrade; previously on Dec 22, 2011 Downgraded to Ba3 (sf)

Ratings Rationale

The rating actions consider the linkage between the ratings of
the class B notes in CDE I and CDE II and the rating of Cassa di
Risparmio di Ferrara S.p.A. (CARIFE) in its role as financial
guarantor.

In both transactions, CARIFE guarantees payments on interest and
principal for all classes of notes. While the credit enhancement
of class A1 and A2 notes in both deals is sufficient to reach the
current ratings on a standalone basis, the ratings of the class B
notes are primarily based on the guarantee as their available
credit enhancement is limited.

The final outcome of this review will depend on the rating
conclusion of CARIFE.

OTHER DEVELOPMENTS MAY NEGATIVELY AFFECT THE NOTES FUTURE

As the euro area crisis continues, the ratings of structured
finance notes remain exposed to the uncertainties of credit
conditions in the general economy. The deteriorating
creditworthiness of euro area sovereigns as well as the weakening
credit profile of the global banking sector could negatively
affect the ratings of the notes.

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

No cash flow analysis or stress scenarios have been conducted as
the ratings are linked to CARIFE in its role as financial
guarantor.

On August 21, 2012, Moody's released a Request for Comment
seeking market feedback on proposed adjustments to its modelling
assumptions. These adjustments are designed to account for the
impact of rapid and significant country credit deterioration on
structured finance transactions. If the adjusted approach is
implemented as proposed, the rating of the notes affected by the
rating action may be negatively affected.


GE CAPITAL: Moody's Reviews 'D' BFSR for Downgrade
--------------------------------------------------
Moody's Investors Service has placed on review for downgrade the
Baa2/Prime-2 long- and short-term debt and deposit rating of GE
Capital Interbanca (GECI) and its standalone Bank Financial
Strength Rating (BFSR) of D, equivalent to a standalone baseline
credit assessment (BCA) of ba2.

Ratings Rationale

The review has been caused by Moody's growing concern about the
bank's need for renewed parental support, in view of its very
weak standalone financial strength, driven primarily by its poor
asset quality and profitability.

GECI's asset quality is poor and likely to deteriorate well into
2013, given the likely downturn of the Italian economy through
much of 2013. In June 2012, problem loans -- as adjusted by
Moody's - were equivalent to 18% of loans, significantly above
the Italian average, and up from 17% at year end 2011 (1).
Moody's concern about this asset quality deterioration is partly
mitigated by the 91% coverage, which is well above the Italian
banking system's average given the group's stricter provisioning
policy. As part of its review, Moody's will focus on the expected
trends in asset quality as well as any steps management can take
to address this development to improve the bank's standalone
strength in view of these challenges

In June 2012, the bank incurred a loss already at pre-provision
level, despite benefiting from low-cost funding from the group,
and an EUR107 million net loss owing to very high loan loss
provisions. This followed pre-tax losses in the previous three
years. Moody's expects profitability to remain under pressure
next year, against a continuing trend of deteriorating asset
quality and an interest rate environment which is likely to
remain low. During the review period Moody's will also assess
management actions to restore profitability

GECI remains reliant on the group for funding, given the
restricted and costly access to the wholesale market for Italian
issuers. The review will also focus on the parent's (General
Electric Capital Corporation, rated A1) longer-term commitment to
the Italian market in view of GECI's struggle to achieve
profitability, given the three notches of parental support uplift
provided to the bank's deposit rating.

WHAT COULD MOVE THE RATING -- UP/DOWN

At present, there is no upwards pressure on the ratings given the
review for downgrade. However GECI's ratings could be confirmed
as a result of a notable strengthening of profitability and asset
quality on a sustainable basis, together with evidence of the
parent's commitment to support its subsidiary.

Conversely, lack of improvement of profitability and asset
quality could negatively impact GECI's ratings. The bank's
deposit ratings could also be downgraded if Moody's believes that
the bank may have becomes less strategic for its parent.

(1) Unless otherwise noted, data in this report are from Company
    data or Moody's Financial Metrics.

List of affected ratings

- Senior unsecured debt and EMTN, and bank deposits: Baa2;
   (P)Baa2 / RuR down;

- Short-term debt and deposit: P-2 / RuR down;

- Subordinate debt EMTN: (P)Baa3 / RuR down;

- Bank Financial Strength: D / RuR down.

Principal Methodology

The principal methodology used in this rating was Moody's
Consolidated Global Bank Rating Methodology published in
June2012.


ICCREA BANCAIMPRESA: Moody's Reviews 'Ba1' Rating for Downgrade
---------------------------------------------------------------
Moody's Investors Service has placed on review for downgrade the
Ba1 long-term debt and deposit rating of Iccrea BancaImpresa
(Iccrea BI) and its standalone bank financial strength rating
(BFSR) of D, equivalent to a standalone credit assessment of ba2.

Ratings Rationale

The review for downgrade has been caused by Moody's concern about
(i) the deteriorating trend of the bank's already weak asset
quality and (ii) the bank's low profitability, against the
background of the current recession in Italy. These developments
could result in the need for further group support, beyond what
is already provided in terms of capital and liquidity.

Iccrea BI's asset quality is weak and likely to deteriorate well
into 2013, given that the Italian economy is expected to remain
in recession through much of 2013. In June 2012 the bank reported
high gross problem loans-- as adjusted by Moody's - amounting to
98% of equity and loan loss reserves, compared with 88% at 2011
year-end (1). During the review, Moody's will focus on the
expected trends in asset quality as well as any steps management
is taking to address this development and strengthen capital.

With regards to profitability and the bank's ability to generate
capital internally, Moody's notes the bank's EUR1.4 million net
loss in June 2012, following high loan loss provisions. As part
of its review, Moody's will analyze the bank's plans and ability
to restore profitability, including the carry trade on the EUR2
billion Italian government bond portfolio acquired this year.

As the bank is reliant on the Banche di Credito Cooperativo (BCC)
group for funding, the review will also assess the group's policy
towards the bank's liquidity and funding, including its
government bond portfolio and usage of European Central Bank.

WHAT COULD MOVE THE RATINGS UP/DOWN

At present, there is no upwards pressure on the ratings given the
review for downgrade, however the ratings could be confirmed if
the bank (1) improves its problem loans relative to equity and
loan loss reserves (below 75%) in the short term either by
divesting problem loans or increasing capital and/or reserves;
and (2) demonstrates a credible ability to return to sustainable
profitability, beyond the benefit of the carry trade.

Conversely, the ratings could be downgraded in the event of a
further deterioration in the bank's problem loans and net loss. A
lower deposit rating could also follow a material deterioration
in the financial position of the BCCs.

(1) Unless otherwise noted, data in this report are from Company
data or Moody's Financial Metrics.

List of affected ratings

- Senior unsecured debt and EMTN, and bank deposits: Ba1; (P)Ba1
   / RuR down;

- Subordinate debt and EMTN: Ba2; (P)Ba2 / RuR down;

- Tier III debt EMTN: (P)Ba2 / RuR down;

- Junior subordinate debt and EMTN: Ba3(hyb); (P)Ba3 / RuR down;

- Bank Financial Strength: D / RuR down.

Principal Methodology

The principal methodology used in this rating was Moody's
Consolidated Global Bank Rating Methodology published in
June2012.



===================
K A Z A K H S T A N
===================


BTA BANK: Investors File Suit Against Samruk-Kazyna in New York
---------------------------------------------------------------
David Glovin at Bloomberg News reports that investors in BTA
Bank, Kazakhstan's third largest bank by assets, alleged in a
lawsuit that they were defrauded by the institution's
controlling shareholder, the Central Asian nation's sovereign
wealth fund Samruk-Kazyna.

The investors claim in a lawsuit in Manhattan federal court that
BTA Bank, which isn't named as a defendant, defrauded them by
inducing them to buy debt securities as part of a 2010
restructuring, Bloomberg says.

According to Bloomberg, the bank did so, the investors claim, by
promising that virtually no dividends or distributions would be
paid to Samruk-Kazyna, which is a defendant.

"S-K Fund and BTA had devised a scheme to circumvent the express
restrictions on dividends," the complaint, as cited by Bloomberg,
said.  "The scheme was implemented by BTA Bank, paying S-K Funds
interest on its deposits at an exorbitant above-market rate of
approximately 10%."

The complaint said the sovereign wealth fund is owned entirely by
the Republic of Kazakhstan, Bloomberg notes.  The bank isn't
named as a defendant because it's now undergoing a second
restructuring in U.S. Bankruptcy Court in New York, Bloomberg
states.

Plaintiffs including Atlantica Holdings Inc., Baltica Investment
Holding Inc., Allan Kiblisky and Jacques Gliksberg say they
purchased tens of millions of dollars of subordinated debt
securities issued by BTA Bank, Bloomberg discloses.

Separately, Almaty-based BTA Bank said on Wednesday it won the
support of a majority of creditors for its US$11 billion
restructuring, cutting its debt by about 70%, Bloomberg relates.

                         About BTA Bank

BTA Bank AO (BTA Bank JSC), formerly Bank TuranAlem AO --
http://bta.kz/-- is a Kazakhstan-based financial institution,
which is involved in the provision of banking and financial
products for private and corporate clients.

The BTA Group is one of the leading banking groups in the
Commonwealth of Independent States and has affiliated banks in
Russia, Ukraine, Belarus, Georgia, Armenia, Kyrgyzstan and
Turkey.  In addition, the Bank maintains representative offices
in Russia, Ukraine, China, the United Arab Emirates and the
United Kingdom.  The Bank has no branch or agency in the United
States, and its primary assets in the United States consist of
balances in accounts with correspondent banks in New York City.

As of November 30, 2009, the Bank employed 5,043 people inside
and 4 people outside Kazakhstan.  It has no employees in the
United States.  Most of the Bank's assets, and nearly all its
tangible assets, are located in Kazakhstan.

JSC BTA Bank, also known as BTA Bank of Kazakhstan, commenced
insolvency proceedings in the Specialized Financial Court of
Almaty City, Republic of Kazakhstan.  Anvar Galimullaevich
Saidenov, the Chairman of the Management Board of BTA Bank, then
filed a Chapter 15 petition (Bankr. S.D.N.Y. Case No. 10-10638)
on Feb. 4, 2010, estimating more than US$1 billion in assets and
debts.

On March 9, 2010, the Troubled Company Reporter-Europe reported
that JSC BTA Bank was granted relief in the U.S. under Chapter 15
when the bankruptcy judge in New York recognized the Kazakh
proceeding as the "foreign main proceeding."  Consequently,
creditor actions in the U.S. were permanently halted, forcing
creditors to prosecute their claims and receive distributions
in Kazakhstan.

In the U.S., the Foreign Representative is represented by Evan C.
Hollander, Esq., Douglas P. Baumstein, Esq., and Richard A.
Graham, Esq. -- rgraham@whitecase.com -- at White & Case LLP in
New York City.

The Specialized Financial Court of Almaty approved BTA Bank's
debt restructuring on Aug. 31, 2010, trimming its obligations
from US$16.7 billion to US$4.2 billion, and extending its longest
maturity dates to 20 year from eight.  Creditors who hold 92
percent of BTA's debt approved the restructuring plan in May.
BTA reportedly distributed US$945 million in cash to creditors
and new debt securities including US$5.2 billion of recovery
units (representing an 18.5% equity stake) and US$2.3 billion of
senior notes on Sept. 1, 2010.  BTA forecasts profit of slightly
more than US$100 million in 2011, Chief Executive Officer Anvar
Saidenov told reporters in Almaty.


KASPI BANK: S&P Gives 'BB-/B' Counterparty Credit Ratings
---------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB-' long-term
and 'B' short-term counterparty credit ratings to Kazakhstan-
based Kaspi Bank JSC. The outlook is stable. "At the same time,
we assigned a 'kzA-' Kazakhstan national scale rating to the
bank," S&P said.

"The ratings reflect the 'bb-' anchor for a bank operating
primarily in Kazakhstan, as well as Kaspi Bank's 'adequate'
business position, 'moderate' capital and earnings, 'moderate'
risk position, 'average' funding, and 'adequate' liquidity, as
our criteria define these terms. The stand-alone credit profile
(SACP) is 'b+'. The long-term counterparty credit rating (issuer
credit rating; ICR) factors in one notch of uplift above the SACP
to reflect the bank's 'moderate' systemic importance in
Kazakhstan, reflecting the large size of its retail operations,"
S&P said.

"We assess Kazakhstan's government as 'supportive' and we
consider that there is a 'moderate' likelihood that Kaspi Bank
would receive extraordinary support from the government if
needed," S&P said.

"The stable outlook reflects Standard & Poor's view that Kaspi
Bank will continue its focused growth without changing its risk
appetite. We anticipate that the bank's capitalization and
liquidity will stay at the current levels, profitability will
further improve, and asset quality will deteriorate only
modestly, while its loan portfolio grows over the next 12-24
months," S&P said.

"We could lower the ratings if, contrary to our expectations, the
bank's capitalization weakened, with our projected RAC ratio
before adjustments for diversification falling to less than 5%
because of higher-than-expected loan expansion or poor earnings
generation capacity. We may also consider a negative rating
action if the bank departs from its focused growth strategy,
resulting in a material deterioration of asset quality or
increasing loan concentrations," S&P said.

"At this stage, we consider ratings upside to be limited. We
would consider a positive rating action if we were to notice a
significant strengthening of the bank's capitalization, mainly
due to shareholder capital injections, resulting in a RAC ratio
before adjustments of more than 10%, which is not our base-case
scenario, though. Improvement of asset quality measures, notably
capacity to stabilize growth in NPLs in absolute terms, would
benefit the ratings, but we believe this is unlikely in the
context of high loan growth and the given riskiness of consumer
finance lending," S&P said.



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


BREEZE TWO: S&P Affirms 'B-' Rating on EUR300MM Class A Bonds
-------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'B-' long-term
debt rating on the EUR300 million Class A secured bonds due in
2026 and its 'C' long-term debt rating on the EUR50 million Class
B secured subordinated bonds due 2016 issued by Luxembourg-based
special purpose entity CRC Breeze Finance S.A. (Breeze Two). "At
the same time, we revised the outlook on both ratings to stable
from negative," S&P said.

"Furthermore, we lowered the recovery rating on the Class A
secured bonds to '3' from '2', indicating our expectation of a
meaningful recovery of 50%-70% of outstanding principal (in the
absence of a bond insurance guarantee) in the event of payment
default," S&P said.

"The affirmation reflects our view that the insolvency risk
derived from Breeze Two's increasing negative equity position is
no longer a concern following the German Parliament's recent
approval of an indefinite extension of the German Financial
Stabilization Act (GMFSA), which was previously set to expire on
Jan. 1, 2014. It also reflects the operational improvement during
2011 and 2012 to date compared with the lows of 2010. Performance
is now in line with our base-case expectations for the 'B-'
rating," S&P said.

"The affirmation of the 'C' rating on the Class B bonds reflects
continued full deferral of the bonds' principal since the April
2009 payment date. The deferral of Class B bonds is authorized
under the bonds' documentation and does not constitute an event
of default of this bond class," S&P said.

CRC Breeze Finance S.A. is a Luxembourg-based special-purpose
vehicle which issued EUR300 million Class A notes due 2026, EUR50
million Class B notes due 2016, and EUR120 million Class C notes
due 2026 (not rated) in 2007. Breeze Two is owned by Luxembourg-
registered Monument Trust Ltd. (not rated).

"The proceeds of these debt issues financed loans to a portfolio
of 39 wind farms (35 in Germany and four in France, with a total
installed capacity of 337.4 megawatts), refinance existing debt
and fund a six-month debt service reserve for the Class A bonds
level (18% used to date) and a three-month debt service reserve
account for the Class B notes, which is currently fully depleted.
The wind farms have been fully operational since 2007. The wind
farms in the portfolio are fully cross-collateralized and benefit
from supportive regulatory regimes for renewable energy in
Germany and France," S&P said.

"Despite a marked improvement in wind conditions in 2011, wind
electricity generation in the Breeze Two portfolio remained weak
compared with the original P90 base case (the level that has a
90% probability of being exceeded, according to the historical
wind data series), to which the transaction was structured and
the debt sized. According to management, revenues from the sale
of electricity in full-year 2011 and the first half of 2012
(latest official data available) were 9% and 15% below what could
be expected in an average year," S&P said.

"The stable outlook on the Class A notes rating reflects our
expectation that Breeze Two will maintain an adequate cash
cushion after the Class-A debt service payment in May of each
year (following the high-wind winter season) and minimal, if any,
use of the A-notes SDSRA to fully meet the November debt service
payment dates, following the low-wind summer season. It also
reflects our belief that Breeze Two is very unlikely to replenish
the partly used amounts of the Class-A DSRA, which materially
impairs the Class A notes' liquidity position. The stable outlook
on the Class B notes reflects our expectations on continued
deferrals," S&P said.

"We could take a positive rating action if the prospects for
operating cash flow generation materially improve. Conversely, we
could revise the outlook back to negative or downgrade the rating
if there is significant tap of the SDSRA and/or if the project's
financial performance suffers additional deterioration, owing to
continued weak wind conditions or an increase in the likelihood
of Breeze Two shouldering material extra costs," S&P said.


BREEZE THREE: S&P Cuts Rating on EUR287MM Class A Bonds to 'B'
--------------------------------------------------------------
Standard & Poor's Ratings Services lowered its long-term debt
rating on the EUR287 million class A secured bonds due in 2027 to
'B' from 'B+' and affirmed its 'C' long-term debt rating on the
EUR84 million class B subordinated bonds due 2027 issued by
Luxembourg-based special purpose entity Breeze Finance S.A.
(Breeze Three). "At the same time, we revised the outlook on the
Class B notes to stable from negative. The outlook on the Class A
notes is also stable," S&P said.

"Furthermore, we lowered the recovery rating on the Class A
secured bonds to '3' from '2', indicating our expectation of a
meaningful recovery of 50%-80% of outstanding principal (in the
absence of a bond insurance guarantee) in the event of payment
default," S&P said.

"The downgrade of the Class A notes reflects our view that,
although Breeze Three's wind performance improved during 2011 and
2012 compared with the 2010 historical low, the portfolio's
operating performance and resulting debt coverage fall short of
our expectations for the 'B+' rating.

"The outlook revision on both debt classes reflects our view that
the insolvency risk derived from Breeze Three's increasing
negative equity position is no longer a concern following the
German Parliament's recent approval of an indefinite extension of
the German Financial Stabilization Act (GMFSA), which was
previously set to expire on Jan. 1, 2014," S&P said.

"The affirmation of the 'C' debt rating on the Class B bonds
reflects continued deferrals of the bonds' principal since the
April 2009 payment date. The deferral of Class B bonds is
authorized under the bonds' documentation and does not constitute
an event of default of this bond class," S&P said.

Breeze Finance S.A. is a Luxembourg-based special-purpose vehicle
which on-lent the proceeds of the Class A, B, and C (unrated)
bonds issued in 2007 to two intermediary companies located in
Germany and France. These entities subsequently used the proceeds
of the loans to build a total of 43 wind farms (39 in Germany and
four in France, with a total installed capacity of 347.4
megawatts), refinance existing debt and fund a six-month debt
service reserve for the Class A bonds level (still unused to
date) and a three-month debt service reserve account for the
Class B notes, which is currently fully depleted. The wind farms
have been fully operational since 2008. The wind farms in the
portfolio are fully cross-collateralized and benefit from
supportive regulatory regimes for renewable energy in Germany and
France.

Breeze Three portfolio's wind conditions remain relatively weak,
although improved compared with the 2010 historical lows:
According to management, revenues from the sale of electricity in
the full-year 2011 and in the first six months of 2012 (latest
official data available) were respectively around 15% and 11%
lower than could be expected in an average year. Reported turbine
availability remains around 96%, slightly below the initially
expected 97%.

Due to this operating underperformance, Class B and Class C bonds
principal payments were deferred in October 2012, although
operating cash was sufficient to cover Class A debt service in
full and on time to date, without needing the EUR14 million of
cash in the senior debt service reserve account (SDSRA).

"The stable outlook on the Class A notes reflects our expectation
that Breeze Three will continue to service this class' debt
without recourse to the SDSRA, even though we anticipate the
coverage ratio at the October debt service payment dates --
following the low-wind summer season -- to be extremely tight.
The stable outlook on the Class B notes reflects our expectation
of continued deferrals," S&P said.

"We could take a positive rating action if the prospects for
operating cash flow generation materially improve. Conversely, we
could revise the outlook back to negative or lower the rating if
the SDSRA is used or if the project's financial performance
suffers additional deterioration, owing to continued weak wind
conditions or an increase in the likelihood of Breeze Three
shouldering material extra costs," S&P said.



=====================
N E T H E R L A N D S
=====================


EUROSAIL-NL 2007-1: S&P Puts 'BB' Rating on Class E1 on Watch Neg
-----------------------------------------------------------------
Standard & Poor's Ratings Services placed on CreditWatch negative
its credit ratings on 17 classes of notes n Eurosail-NL 2007-1
B.V., Eurosail-NL 2007-2 B.V., EMF-NL 2008-1 B.V., and EMF-NL
2008-2 B.V.

"The CreditWatch negative placements follow the continued
deterioration in the performance of the underlying loans that
back these four transactions. We have observed a significant
increase in 90+ day delinquencies in these transactions over the
past 12 months. As well as this increase, the foreclosure process
has been limited in these transactions with many non-paying loans
remaining in the pools," S&P said.

"These transactions are also affected by a declining housing
market, with respect to our assumed loss severities, and the
borrowers are subjected to the struggling Dutch economy. The two
EMF transactions do not have liquidity facility providers because
there have been no replacements since the insolvency of Lehman
Brothers, and therefore external liquidity support for these two
transactions is limited to the reserve fund. All four of the
transactions have the same servicing costs, which increased in
January 2011. We believe that these transactions face liquidity
stress due to a combination of these factors, including non-
paying borrowers," S&P said.

"We have therefore placed on CreditWatch negative our ratings on
all classes of notes that we rate in Eurosail-NL 2007-1,
Eurosail-NL 2007-2, EMF-NL 2008-1, and EMF-NL 2008-2 to reflect
the deteriorating performance of these transactions," S&P said.

"We intend to complete our review of these transactions over the
next few weeks," S&P said.

             STANDARD & POOR'S 17G-7 DISCLOSURE REPORT

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

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

      http://standardandpoorsdisclosure-17g7.com

RATINGS LIST

Class                Rating
            To                      From

Ratings Placed on CreditWatch Negative

Eurosail-NL 2007-1 B.V.
EUR361.2 Million Mortgage-Backed Floating-Rate Notes and an
Overissuance of
Excess Spread Backed Floating-Rate Notes

A           A- (sf)/Watch Neg        A- (sf)
B           A- (sf)/Watch Neg        A- (sf)
C           A- (sf)/Watch Neg        A- (sf)
D           BBB (sf)/Watch Neg       BBB (sf)
E1          BB (sf)/Watch Neg        BB (sf)

Eurosail-NL 2007-2 B.V.
EUR353.675 Million Mortgage-Backed Floating-Rate Notes Including
An Overissuance Of EUR3.675 Million Excess Spread-Backed
Floating-Rate Notes

A           A- (sf)/Watch Neg         A- (sf)
M           A- (sf)/Watch Neg         A- (sf)
B           A- (sf)/Watch Neg         A- (sf)
C           A- (sf)/Watch Neg         A- (sf)
D1          BBB (sf)/Watch Neg        BBB (sf)

EMF-NL 2008-1 B.V.
EUR265.01 Million Mortgage-Backed Floating-Rate Notes

A2          AA+ (sf)/Watch Neg        AA+ (sf)
A3          AA (sf)/Watch Neg         AA (sf)

EMF-NL 2008-2 B.V.
EUR285.1 Million Mortgage-Backed Floating-Rate Notes

A1          A+ (sf)/Watch Neg         A+ (sf)
A2          A- (sf)/Watch Neg         A- (sf)
B           BBB (sf)/Watch Neg        BBB (sf)
C           BB (sf)/Watch Neg         BB (sf)
D           B- (sf)/Watch Neg         B- (sf)


GRESHAM CAPITAL V: S&P Lowers Rating on Class D Notes to 'CCC-'
---------------------------------------------------------------
Standard & Poor's Ratings Services took various credit rating
actions on all of Gresham Capital CLO V B.V.'s rated classes of
notes.

Specifically, S&P has:

  -- raised its rating on the class B notes;
  -- lowered its rating on the class D notes; and
  -- affirmed its ratings on the class A and C notes.

"The rating actions follow our assessment of the transaction's
performance using data from the latest available trustee report,
dated Oct. 18, 2012," S&P said.

"We subjected the capital structure to a cash flow analysis to
determine the break-even default rate for each rated class at
each rating level. In our analysis, we used the reported
portfolio balance that we consider to be performing
(EUR254,155,811), the current weighted-average spread (3.30%),
and the weighted-average recovery rates that we considered
appropriate. We incorporated various cash flow stress scenarios
using alternative default patterns, and levels, in conjunction
with different interest and currency stress scenarios," S&P said.

"From our analysis, we have observed that EUR140.6 million of the
class A notes have paid down since our last review in October
2011. In our view, this has increased the credit enhancement
available to the class A, B, and C notes. We have also observed
that the credit quality of the pool has worsened since our last
review," S&P said.

"During our review, we observed that non-euro-denominated assets
made up 27.58% of the aggregate collateral balance. These assets
are hedged under a cross-currency swap agreement. In our cash
flow analysis, we considered scenarios where the hedging
counterparty does not perform and where the transaction is
therefore exposed to changes in currency rates," S&P said.

"Our credit and cash flow analysis of the class B notes indicated
that the level of credit enhancement is commensurate with a
higher rating than previously assigned. We have therefore raised
to 'BBB+ (sf)' from 'BBB (sf)' our rating on the class B notes,"
S&P said.

"We have lowered to 'CCC- (sf)' from 'CCC+ (sf)' our rating on
the class D notes because our rating is constrained by the
application of the largest obligor default test. This is a
supplemental stress test that we introduced in our 2009 criteria
update for corporate collateralized debt obligations (CDOs). The
results of our stress test showed that the level of credit
enhancement available to the class D notes would be limited if
the largest obligor were to default, when we assumed a recovery
rate of 5%," S&P said.

"In our opinion, the credit enhancement available to the class A
notes is consistent with their current rating, taking into
account the results of our credit and cash flow analysis and the
application of our 2012 counterparty criteria. We have therefore
affirmed our 'AA- (sf)' rating on the class A notes," S&P said.

"Our rating on the class C notes is lower than the ratings on any
of the counterparties in the transaction. Therefore, applying our
2012 counterparty criteria would not constrain the rating on the
notes. We have affirmed our 'B+ (sf)' rating on the class C notes
because our analysis indicates that the credit enhancement
available to these notes is consistent with the rating currently
assigned and remains constrained by the largest obligor test,"
S&P said.

Gresham Capital CLO V is a cash flow collateralized loan
obligation (CLO) transaction that securitizes loans to primarily
speculative-grade corporate firms. The transaction closed in June
2008 and is managed by Investec Principal Finance.

             STANDARD & POOR'S 17G-7 DISCLOSURE REPORT

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

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

      http://standardandpoorsdisclosure-17g7.com

RATINGS LIST

Class              Rating
             To              From

Gresham Capital CLO V B.V.
EUR518.825 Million Floating-Rate and Subordinated Deferrable
Secured
Floating-Rate Notes

Rating Raised

B            BBB+ (sf)         BBB (sf)

Rating Lowered

D            CCC- (sf)         CCC+ (sf)

Ratings Affirmed

A            AA- (sf)
C            B+ (sf)



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


* PORTUGAL: Moody's Lowers Covered Bond Ratings to 'Ba1'
--------------------------------------------------------
Moody's Investors Service has taken the following rating actions
on Portuguese mortgage covered bonds, prompted by the downgrade
of the issuers' senior unsecured ratings:

- Downgraded to Ba1 from Baa3 the ratings of the mortgage
   covered bonds issued by Banco Comercial Portuguˆs, S.A. (BCP;
   B1 negative outlook; E/caa2, negative outlook).

- Downgraded to Ba1 from Baa3 the ratings of the mortgage
   covered bonds issued by Banco de Investimento Imobiliario,
   S.A. BCP is the underlying institution supporting these
   covered bonds.

- Placed on review with direction uncertain the Baa3 ratings of
   the mortgage covered bonds issued by BANIF - Banco
   Internacional do Funchal, S.A. (Banif; B2 on review with
   direction uncertain; E/caa2, on review with direction
   uncertain)

Ratings Rationale

The rating actions on the covered bonds follow Moody's downgrade
on December 4, 2012 of the relevant issuers' senior unsecured
ratings.

The TPIs assigned to BCP's and BII's mortgage covered bonds are
"Very Improbable", whilst the TPI assigned to Banif's covered
bonds is "Probable-High". These TPIs constrain the ratings of the
covered bonds at their current level.

Key Rating Assumptions/Factors

Covered bond ratings are determined after applying a two-step
process: an expected loss analysis and a TPI framework analysis.

EXPECTED LOSS: Moody's determines a rating based on the expected
loss on the bond. The primary model used is Moody's Covered Bond
Model (COBOL), which determines expected loss as (1) a function
of the issuer's probability of default (measured by the issuer's
rating); and (2) the stressed losses on the cover pool assets
following issuer default.

In each instance listed below for the relevant issuer, cover pool
losses are an estimate of the losses Moody's currently models if
the relevant issuer defaults. Cover pool losses can be split
between market risk and collateral risk. Market risk measures
losses as a result of refinancing risk and risks related to
interest-rate and currency mismatches (these losses may also
include certain legal risks). Collateral risk measures losses
resulting directly from the credit quality of the assets in the
cover pool. Collateral risk is derived from the collateral score.

--- BCP'S MORTGAGE COVERED BONDS

The cover pool losses of BCP's mortgage covered bonds are 45.9%,
with market risk of 39.1% and collateral risk of 6.7%. The
collateral score for this program is currently 10%. The over-
collateralization (OC) in this cover pool is 27%, of which the
issuer provides 5.3% on a "committed" basis. The minimum OC level
that is consistent with the Ba1 rating target is 14.5%, of which
5.3% should be provided in a "committed" form . These numbers
show that Moody's is relying on "uncommitted" OC in its expected
loss analysis.

--- BII'S MORTGAGE COVERED BONDS

The cover pool losses of BII's mortgage covered bonds are 45.5%,
with market risk of 38.8% and collateral risk of 6.7%. The
collateral score for this program is currently 10%. The OC in
this cover pool is 27.8%, of which the issuer provides 5.3% on a
"committed" basis. The minimum OC level that is consistent with
the Ba1 rating target is 14%, of which 5.3% should be provided in
a" committed" form . These numbers show that Moody's is relying
on "uncommitted" OC in its expected loss analysis.

--- BANIF'S MORTGAGE COVERED BONDS

The cover pool losses of Banif's mortgage covered bonds are
25.5%, with market risk of 18.8% and collateral risk of 6.7%. The
collateral score for this program is currently 10%. The OC in
this cover pool is 16%, of which the issuer provides 16% on a
"committed" basis. The minimum OC level that is consistent with
the Baa3 rating target is 12.5%. Therefore, Moody's is not
relying on "uncommitted" OC in its expected loss analysis.

For further details on cover pool losses, collateral risk, market
risk, collateral score and TPI Leeway across covered bond
programs rated by Moody's please refer to "Moody's EMEA Covered
Bonds Monitoring Overview", published quarterly. All numbers in
this section are based on Moody's most recent modelling (based on
data, as per 30 September 2012).

TPI FRAMEWORK: Moody's assigns a "timely payment indicator"
(TPI), which indicates the likelihood that timely payment will be
made to covered bondholders following issuer default. The effect
of the TPI framework is to limit the covered bond rating to a
certain number of notches above the issuer's rating.

SENSITIVITY ANALYSIS

The robustness of a covered bond rating largely depends on the
issuer's credit strength. The TPI Leeway measures the number of
notches by which the issuer's rating may be downgraded before the
covered bonds are downgraded under the TPI framework.

The TPI assigned to BCP's mortgage covered bonds and BII's
mortgage covered bonds is Very Improbable. The TPI Leeway for
these program is limited, and thus any downgrade of the issuer
ratings may lead to a downgrade of the covered bonds.

The TPI assigned to Banif's mortgage covered bonds is Probable-
High. The TPI Leeway for this program is limited, and thus any
downgrade of the issuer rating may lead to a downgrade of the
covered bonds

A multiple-notch downgrade of the covered bonds might occur in
certain limited circumstances, such as (1) a sovereign downgrade
negatively affecting both the issuer's senior unsecured rating
and the TPI; (2) a multiple-notch downgrade of the issuer; or (3)
a material reduction of the value of the cover pool.

On August 21, 2012, Moody's released a Request for Comment
seeking market feedback on proposed adjustments to its modelling
assumptions. These adjustments are designed to account for the
impact of rapid and significant country credit deterioration on
structured finance transactions. If the adjusted approach is
implemented as proposed, the rating of the notes affected by the
rating action may be negatively affected.

Rating Methodology

The principal methodology used in these rating was "Moody's
Approach to Rating Covered Bonds" published in July 2012.



=============
R O M A N I A
=============


RAPID BUCHAREST: Files for Insolvency Over Debt Pile
----------------------------------------------------
Angel Krasimirov at Reuters reports that Rapid Bucharest said on
Tuesday they had filed for insolvency after running up huge
debts.

"We opened insolvency proceedings to save the club," Reuters
quotes Rapid's majority shareholder George Copos as saying.
"We're doing everything in our power to save Rapid."

Rapid, who played in the Romanian Cup final in May, have spent
heavily in recent years but their players have not been paid for
several months, Reuters discloses.

"The difference between revenue and expenditure goes to EUR5
million (US$6.54 million) per year," Rapid president Constantin
Zotta, as cited by Reuters, said.  "It's terrible."

The move could mean the end of professional football for Rapid as
Romanian soccer regulations do not allow an insolvent club to
have a first-division license, Reuters notes.

According to Reuters, Romanian Football League president Dumitru
Dragomir said "If they enter into any form of insolvency, they
will not get a license for next season".

Rapid Bucharest is a Romanian soccer club.



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


MECHEL OAO: Inks Debt Restructuring Deal with Banks
---------------------------------------------------
Stephen Morris at Bloomberg News reports that OAO Mechel got a
year's breathing space on repayments to a US$1 billion loan by
signing a restructuring deal with banks.

Mechel, which reported an US$823 million loss for the second
quarter of the year because of falling coal prices, said in a
statement that it got banks to agree to an amendment and
restatement of the syndicated loan, Bloomberg relates.  The
company, as cited by Bloomberg, said that the facility, maturing
in 2015, would have repaid US$600 million next year in monthly
installments and these will be delayed for 12 months.

Mechel Chief Financial Officer Stanislav Ploschenko said in
October billionaire Igor Zyuzin's company wants to cut its short-
term debt to less than US$1 billion.  Mechel said Oct. 2 that
debt totaled US$8.8 billion at the end of June and the company is
seeking to reduce this by boosting cash flow and pushing forward
asset sales, Bloomberg recounts.

Mechel, as cited by Bloomberg, said that ING Groep NV, Societe
Generale SA, UniCredit SpA, OAO Rosbank and ABN Amro Bank NV
coordinated the amendment.

Separately, Bloomberg News' Halia Pavliva reports that
Mr. Ploschenko said Mechel will complete its restructuring within
the next 12 months and plans to prioritize price over timing when
it comes to selling assets.

Mechel, Bloomberg says, is the most indebted Russian mining
company after aluminum producer United Co. Rusal with net debt to
earnings before interest, tax, depreciation and amortization of
4.85.  The company has been challenged by falling commodity
prices and the slowdown in China, where growth decelerated for a
seventh quarter in the three months to Sept. 30, Bloomberg
discloses.

"The company is working with the banks non stop to refinance"
more debt, Mr. Ploschenko, as cited by Bloomberg, said.  Mechel
is aiming "to lower our short-term debt, improve the structure of
our credit portfolio and help boost Mechel's financial results,"
Bloomberg quotes Mr. Ploschenko as saying.

Mr. Ploschenko said on Oct. 2 that Mechel's debt may rise by
about US$200 million when the company consolidates a portion of
assets from Estar Group, Bloomberg notes.

Mechel OAO is a Russia-based integrated mining and steel
company. The Company focuses on the production of mining
products, such as coal, iron ore, nickel, and steel products.
Its operations are divided into two segments: Mining and Steel.
The Mining segment focuses on the production and sales of coking
coal concentrate, iron ore concentrate and coke with assets in
Russia and the United States.  The Steel segment comprises
production and sale of semi-finished steel products, carbon and
specialty long products, stainless flat products, and value-
added downstream metal products, including hardware and
stampings.  The Company has production facilities in 13 of
Russia's regions, as well as the United States, Kazakhstan,
Romania, Lithuania and Bulgaria. Additionally, Mechel OAO owns
two trade ports and a railway company. In 2011, the Company
completed the acquisition of a 100% stake in Rostvoskiy
elektrometallurgicheskiy zavod (REMZ).


MOBILE TELESYSTEMS: Fitch Affirms 'BB+' LT Issuer Default Rating
----------------------------------------------------------------
Fitch Ratings has affirmed OJSC Mobile Telesystems's Long-Term
Issuer Default Rating (IDR) at 'BB+'.  The Outlook is Stable.

On a stand-alone basis MTS's credit profile conforms to low
investment grade.  It is an established mobile operator with
strong margins and free cash flow (FCF) generation and modest
leverage.  However, MTS has limited geographic diversification
within CIS with high reliance on the Russian market.  MTS's
ratings are notched down for the negative influence of Joint
Stock Financial Corp. Sistema ('BB-'/Stable), MTS's majority
shareholder.

Stable Market Shares:

MTS holds strong and reasonably stable market shares in all its
key mobile markets -- including, and most importantly, Russia.
Fitch believes MTS will continue to successfully defend its
positions and maintain broad parity with peers in terms of
network coverage and technology solutions.

Mature Markets, Rising Competition:

However, key Russian and Ukrainian mobile markets are mature and
competitive pressures may intensify further in light of the
market-share ambitions of Tele2 and Rostelecom in the medium
term.

Robust FCF Generation: MTS sustainably generates positive FCF and
overall financial performance is robust. Capex as a percentage of
revenue has been high -- well above 20% -- inflated by 3G spend
in Russia.  Fitch expects this ratio to drop in the medium-to-
long term but stabilize at a higher level than at European peers,
due to lower average revenue per user (ARPU).

Margin Resilience Likely.

Reduced dealer commission fees and no handset subsidization in
Russia should be supporting margins.  MTS managed to successfully
change it relationships with dealers whereby the operator
switched from paying a fixed fee to a revenue sharing model.  The
latter incentivizes dealers to sign up quality subscribers with
positive implications for churn but also protects MTS from paying
excessive dealer commissions.

Sufficient LTE spectrum:

MTS has sufficient LTE spectrum to successfully compete in
Russia. The company was one of the four winners in the all-Russia
LTE spectrum auction in July 2012.  In addition, MTS has ready-
for-use 2.6GHz spectrum in the most lucrative Moscow market.

Modest Leverage:

MTS's leverage has been modest at below 1.5x net debt/EBITDA and
organic development, including LTE roll-out in Russia, can be
financed with internally generated cash flows.  Fitch estimates
that a recent decision to increase dividend payments will not
jeopardize leverage. However, the company is not committed to a
public leverage target.

Negative Sistema Influence:

Fitch regards MTS's exposure to the group-wide risks of Sistema,
and the holding company's flexibility to significantly increase
MTS's leverage, if need be, as significant credit constraints.
Under Fitch's parent-subsidiary methodology, the subsidiary's
rating may be a maximum of two notches higher than that of the
parent.

Sufficient Liquidity:

MTS's debt maturity profile is well spread, with single-year
refinancing exposure below US$800 million a year until 2015 (as
of end-Q312).  Currency risks are moderate, with the FX share of
the total debt portfolio reported at 24% at end-Q312.

RATING SENSITIVITY GUIDANCE:

Shareholder Influence: Positive rating changes at Sistema, or
higher ring-fence around MTS limiting Sistema's influence such as
corporate governance mechanisms or legal provisions will likely
lead to a positive rating action.

Leverage, FCF: A downgrade may arise from increased shareholder
remuneration, MTS's acquisition of Sistema group assets, or a
build-up in pressure to upstream cash due to funding needs at the
wider Sistema group -- and a consequent rise in funds from
operations adjusted net leverage to above 3x.  Competitive
weaknesses and market-share erosion, leading to significant
deterioration in pre-dividend FCF generation, may also become a
negative rating factor.

FULL LIST OF RATING ACTIONS

  -- Long Term IDR: Affirmed at 'BB+', Outlook Stable
  -- Short Term IDR: Affirmed at 'B'
  -- Local Currency Long Term IDR: Affirmed at 'BB+, Outlook
     Stable
  -- Local Currency Short Term IDR: Affirmed at 'B'
  -- National Long-Term Rating: Affirmed at 'AA(rus)', Outlook
     Stable
  -- Senior Unsecured Debt: Affirmed at 'BB+' foreign and local
     currency, 'AA(rus)'.
  -- Loan Participation Notes issued by MTS International Funding
     Ltd and guaranteed by MTS: Affirmed at 'BB+'



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


AYT CAJA MURCIA: Fitch Cuts Ratings on Two Tranches to 'BB+sf'
--------------------------------------------------------------
Fitch Ratings has affirmed four and downgraded two tranches of
AyT Caja Murcia (Murcia) I and II, a Spanish RMBS series.  The
agency has also removed six tranches from Rating Watch Negative
(RWN).

The downgrades reflect Fitch's concern with the thin levels of
credit enhancement available for the junior notes whilst the
removal of the RWN is due to Fitch receiving loan modification
data which has offset previous concerns over the credit profile
of the underlying assets in the portfolio.

The notes were placed on RWN in September 2012 due to the
concerns over the extent of possible originator support.  Despite
the tough macroeconomic environment within Spain, the assets
within these portfolios continued to perform well beyond Fitch's
expectations.  The agency had concerns that certain arrear
management servicing strategies were being implemented or that
the servicer had been resorting to loan modifications that would
have led to a reclassification of assets to performing.

As of October 2012, Murcia I had no reported defaults since close
in December 2005, while Murcia II reported a single default with
a subsequent 100% recovery since October 2006.

The agency was provided with loan by loan level information
involving borrowers that had been subject to loan modifications.
The information shows that less than 2% of borrowers as a
percentage of initial balance have been subject to initial
modifications of original terms and conditions, i.e. reduction of
margins and/or maturity extensions.  This percentage is well
below the limits allowed by the transaction documentation.

The agency still believes that the originator has been offering
financial support to borrowers via refinancing.  This view is
formed based on the fact that only one loan had been recognized
as defaulted to date across the two transactions.

Given the current macroeconomic environment and the tightening in
liquidity on the market, in its analysis of the two transactions,
Fitch did not give any credit to the originator continuing this
practice and has assumed its standard default and recovery
assumptions.

Performance over the past 12 months from an arrears perspective
has begun to deteriorate in both transactions in line with the
trend seen in other Spanish RMBS transactions rated by Fitch.
The portion of loans in arrears by more than three months is at
1.4% and 0.1% of the current outstanding balance in Murcia I and
II respectively compared to 0.8% and 0.03% 12 months ago.

With the continued adverse economic situation in Spain set to
continue, Fitch believes that the credit enhancement for the
junior notes is insufficient to withstand the agency's 'BBBsf'
stresses.  The downgrade of the class C notes for both Murcia I
and II and the Negative Outlook across the structure reflect
these concerns.

The rating actions are as follows:

AyT Caja Murcia Hipotecario I, FTA:

  -- Class A (ISIN ES0312282009): affirmed at 'AA-sf'; Outlook
     Negative: off RWN
  -- Class B (ISIN ES0312282017): affirmed at 'AA-sf'; Outlook
     Negative: off RWN
  -- Class C (ISIN ES0312282025): downgraded to 'BB+sf' from
     'BBBsf'; Outlook Negative; off RWN

AyT Caja Murcia Hipotecario II, FTA:

  -- Class A (ISIN ES0312272000): affirmed at 'AA-sf'; Outlook
     Negative: off RWN
  -- Class B (ISIN ES0312272018): affirmed at 'A+sf'; Outlook
     Negative: off RWN
  -- Class C (ISIN ES0312272026): downgraded to 'BB+sf' from
     'BBBsf'; Outlook Negative; off RWN


BANCO DE VALENCIA: Moody's Reviews 'Caa1/E' Ratings for Upgrade
---------------------------------------------------------------
Moody's Investors Service has placed on review for upgrade Banco
de Valencia's Caa1/Not-Prime long and short-term deposit ratings
and the E standalone bank financial strength rating (BFSR),
equivalent to a ca standalone assessment. The ratings and outlook
of the subordinated debt and preference shares remain unchanged.

The review for upgrade follows the announcement made by the
Spanish government's Fund for Orderly Bank Restructuring (FROB)
on November 27, 2012, whereby Caixabank has acquired Banco de
Valencia as part of the bank's competitive sale process. The
acquisition agreement contemplates the transfer to Caixabank of
all of Banco de Valencia's shares that the FROB holds, which will
grant Caixabank control of at least 90% of the bank's capital.

The acquisition has no impact on Caixabank's Baa3; D+/ba1
ratings.

RATINGS RATIONALE

The review for upgrade reflects the integration of Banco de
Valencia into a much larger banking group with significantly
stronger financial fundamentals relative to those exhibited by
Banco de Valencia. The difference in credit quality is
highlighted by the significant gap (nine notches) between Moody's
standalone credit assessments of both banks (Caixabank, D+/ba1;
Banco de Valencia, E/ca). In addition, the integration of Banco
de Valencia into Caixabank is to be carried out with the help of
a significant public support package, which will substantially
increase the risk-absorption capacity and capital adequacy of
Banco de Valencia. The support package includes: (i) a EUR4.5
billion capital injection (which is in excess of the
capitalization requirements estimated earlier this year in the
study lead by Oliver Wyman, which only amounted to EUR3.5
billion); and (ii) an asset-protection scheme (APS) covering
72.5% of the losses (on a pro-rata basis) arising from Banco de
Valencia's portfolio of loans granted to small and medium-sized
companies.

The ratings of Banco de Valencia's subordinated debt and
preference shares are not affected by the action. Moody's
downgraded the ratings of these instruments to C on October 5,
2012, in light of the restructuring framework for Spanish banks
approved on August 31, 2012 (Royal Decree 24/2012). This
framework contemplates the imposition of losses on these
instruments for banks that are deemed to require public-sector
capital. The C rating, which reflects an estimated recovery rate
of less than 35%, is commensurate with the announcement made by
the Bank of Spain on November 28, 2012, which indicated very low
recovery values for holders of Banco de Valencia's preference
shares and subordinated debt.

The ratings of Caixabank are not affected by this transaction
given the limited size of Banco de Valencia's loan book after the
transfer of its real estate exposure to the so-called "bad bank".
The impact is further reduced when accounting for the APS on
Banco de Valencia's corporate book. On a pro-forma basis,
Caixabank's core capital ratio increases to above 11% from 10.8%
reported at the end of September 2012.

Caixabank's good liquidity profile is also preserved primarily
via the EUR4.5 billion capital injection.

FOCUS OF THE REVIEW

Moody's rating review will focus on any changes to the current
integration plans, which remain subject to the corresponding
administrative approvals of national and European Union
authorities. The integration of the banks is expected to be
finalised by Q1 2013.

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

Headquartered in Valencia, Spain, Banco de Valencia had total
consolidated assets of EUR21 billion as of September 30, 2012.


BBVA HIPOTECARIO: Moody's Cuts Rating on Class C Notes to 'B3'
--------------------------------------------------------------
Moody's Investors Service has downgraded the ratings of two
classes of notes in BBVA Hipotecario 3, FTA, primarily due to
insufficient levels of credit enhancement given increased
uncertainties in the current negative economic environment of
Spain and expected performance deterioration. At the same time,
Moody's confirmed the ratings of one class of notes. The
transaction consists of Spanish small and medium-sized enterprise
asset-backed securities (SME ABS) originated by Banco Bilbao
Vizcaya Argentaria, S.A. (BBVA, rated Baa3/P-3). This rating
action concludes the downgrade review initiated by Moody's in
July 2012 on the various rated tranches. A detailed list of
affected ratings is available towards the end of this press
release.

Ratings Rationale

"The rating action reflects the low levels of credit enhancement
for the mezzanine and junior tranche of this transaction, given
Moody's negative forecast and severe downside scenarios for
Spanish SME performance," says Gaston Wieder, a Moody's analyst
for the transaction.

-- PERFORMANCE

BBVA Hipotecario 3 has generally performed better than Moody's
Spanish SME index in terms of delinquency. However, arrear
performance shows a steady deterioration. Based on the latest
issuer report of 13 November, 90- to 360-day delinquencies in
BBVA Hipotecario 3 represent 3.3% of the outstanding pool balance
compared to a level of 1.3% one year earlier (see "Performance
overview of BBVA Hipotecario 3, FTA", 26 November 2012).

Meanwhile, as of September 2012, Moody's Spanish SME 90- to 360-
day delinquencies index stood at 4.6% (see "Spanish SME ABS
Indices -- September 2012 ", 21 November 2012), compared to 2.8%
a year earlier.

-- KEY REVISED ASSUMPTIONS: CUMULATIVE DEFAULT, VOLATILITY AND
RECOVERY

Given the recent deterioration of performance, the transaction
has now reached the level of defaults (using a proxy of 90-day
delinquencies) assumed for the life of the deal. At the end of
October 2012, cumulative 90+ day delinquencies stood at 3.6% of
the original balance, compared to a current default assumption of
3.5% over the life of the transaction. Meanwhile, the pool factor
of total securitized assets was 12% and the reserve fund was
drawn.

Moody's has increased the mean default assumption to 11% of the
current portfolio, corresponding to an average rating proxy of B1
for the portfolio quality with an estimation of remaining
weighted-average life (WAL) of 2.8 years. When converting this
number into a cumulative mean default rate of the original
balance, the revised expected cumulative default rate is 5%.

The pool, which consists entirely of mortgage loans granted to
corporates and individuals, has an effective number of 442
borrowers with the top 10 obligors representing 8.9%. The
recovery rate assumption is now 55% (fixed recovery rate),
compared to the currently assumed 60% stochastic recovery rate,
reflecting ongoing and increasing difficulty in liquidating the
real estate collateral of the loans. Moody's has also increased
its volatility assumption (coefficient of variation, CoV) to
101.5%, considering the increased uncertainties for further
performance deterioration in the current economic cycle. Despite
the revised assumptions, Moody's confirmed the ratings of the
Class A2 notes as their credit enhancement level of 43% (as of
latest payment date) was sufficient to off-set the lower recovery
rate and higher volatility assumptions, while the class B and C
notes were downgraded to Baa3(sf) and B3(sf) from A3(sf) and
Ba3(sf), respectively.

-- COUNTERPARTY RISK

Following the downgrade of Spanish banks, some remedies have been
put in place in order to mitigate the increased counterparty risk
in BBVA Hipotecario 3. The issuer account bank is held at BBVA
while a guarantee has been provided by the Spanish branch of
Societe Generale (SocGen, A2/P-1). Besides, BBVA acts as swap
counterparty of an interest rate hedging arrangement. Based on
the provided information, BBVA has been posting cash collateral
on a weekly basis and this cash is held at an account with SocGen
(Spanish branch). In addition, SocGen has taken over the role of
paying agent.

On August 21, 2012, Moody's released a Request for Comment
seeking market feedback on proposed adjustments to its modelling
assumptions. These adjustments are designed to account for the
impact of rapid and significant country credit deterioration on
structured finance transactions. If the adjusted approach is
implemented as proposed, the rating of the notes affected by the
rating action should not be negatively affected.

Principal Methodologies

The methodologies used in this rating were "Moody's Approach to
Rating CDOs of SMEs in Europe", published in February 2007,
"Refining the ABS SME Approach: Moody's Probability of Default
assumptions in the rating analysis of granular Small and Mid-
sized Enterprise portfolios in EMEA", published in March 2009,
and "Moody's Approach to Rating Granular SME Transactions in
Europe, Middle East and Africa", published in June 2007.

Moody's used its excel-based cash flow model, Moody's ABSROM(TM),
as part of its quantitative analysis of the transaction. Moody's
ABSROM(TM) model enables users to model various features of a
standard European ABS transaction including: (1) the specifics of
the default distribution of the assets, their portfolio
amortization profile, yield or recoveries; and (2) the specific
priority of payments, triggers, swaps and reserve funds on the
liability side of the ABS structure. Moody's ABSROM(TM) User
Guide is available on Moody's website and covers the model's
functionality, as well as providing a comprehensive index of the
user inputs and outputs.

-- SENSITIVITY ANALYSIS

Moody's analyzed various sensitivities of default rate, recovery
rates and volatility levels to test the robustness of its revised
ratings. In particular, if the revised levels of volatility were
to be increased further to 111.3%, the rating of the senior and
junior tranches would remain unchanged while the rating of the
Class B notes would fall by one notch. As such, Moody's analysis
encompasses the assessment of stressed scenarios.

LIST OF AFFECTED RATINGS

Issuer: BBVA Hipotecario 3, FTA

    EUR55.9M B Notes, Downgraded to Baa3 (sf); previously on
    Jul 2, 2012 A3 (sf) Placed Under Review for Possible
    Downgrade

    EUR18.9M C Notes, Downgraded to B3 (sf); previously on Jul 2,
    2012 Ba3 (sf) Placed Under Review for Possible Downgrade

    EUR925.7M A2 Notes, Confirmed at A3 (sf); previously on
    Jul 2, 2012 Downgraded to A3 (sf) and Placed Under Review for
    Possible Downgrade


TDA 31: S&P Lowers Rating on Class C Spanish RMBS Notes to 'BB-'
---------------------------------------------------------------
Standard & Poor's Ratings Services lowered its credit ratings on
the class B and C notes in TDA 31, Fondo de Titulizacion de
Activos (TDA 31) for credit reasons. "At the same time, we have
affirmed our 'AA- (sf)' rating on the class A notes due to the
application of our 2012 counterparty criteria and our
nonsovereign ratings criteria," S&P said.

"The rating actions follow what we consider to be deteriorating
performance of the residential mortgage pool backing this
transaction," S&P said.

                   CREDIT AND CASH FLOW ANALYSIS

"Based on the latest available trustee investor report (dated
October 2012), the transaction has a pool factor (the percentage
of the pool's outstanding aggregate principal balance) of 77.54%.
Of the outstanding pool balance, 9.84% is in arrears for more
than 30 days (compared with 3.58% in March 2011), which is above
our current expectations for delinquencies and defaults in this
Transaction," S&P said.

"As of the end of October 2012, the ratio of cumulative defaults
(defined in this transaction as loans delinquent for more than 12
months) over the original loan balance increased to 2.56% from
1.08% a year earlier," S&P said.

"We expect cumulative defaults to continue to increase due to the
high amount of delinquent loans, as long-term delinquencies
continue to turn into defaults. The interest-deferral trigger
levels for the class B and C notes are cumulative defaults of 10%
and 7% of the closing portfolio balance," S&P said.

A cash reserve and the excess spread left by the interest rate
swap provide credit enhancement available to the notes in this
transaction.

"When we first rated this transaction in March 2011, the issuer
had partially drawn on the reserve fund to cover for collateral
loans that had defaulted since closing in November 2008. Since
then, the reserve fund has been depleted further. As of the
November 2012 interest payment date, the reserve fund was at
17.19% of the level required by the transaction documents," S&P
said.

"Our cash flow analysis indicates that a 'BBB (sf)' rating is
commensurate with the level of credit enhancement available to
the class B notes, which has decreased due to the partial
depletion of the reserve fund since March 2011. Therefore, we
have lowered our rating on the class B notes to 'BBB (sf)' from
'A (sf)'," S&P said.

"The level of credit enhancement the performing balance provides
to the class C notes is almost zero. If defaults continue to
increase at the same rate for the next year, there would be
insufficient performing collateral available to fully repay the
principal amount outstanding for the class C notes, leaving them
undercollateralized," S&P said.

"Our cash flow analysis also indicates that a 'BBB (sf)' rating
is no longer commensurate with the level of credit enhancement
available to the class C notes, as the transaction experiences
interest and principal shortfalls under a 'BBB' stress scenario.
Taking these factors into consideration, we have lowered to 'BB-
(sf)' from 'BBB (sf)' our rating on the class C notes," S&P said.

"The performance of the transaction's underlying collateral and
structural features do not currently constrain our rating on the
class A notes. Rather, the application of our 2012 counterparty
criteria and our nonsovereign ratings criteria limit our rating
on these notes," S&P said.

                         COUNTERPARTY RISK

"The interest swap agreement in this transaction provides
protection against adverse interest-rate resetting and interest-
rate movements, and guarantees a margin of 55 basis points over
three-month EURIBOR. The notional amount of the swap (the balance
used to calculate the interest due) is based on the outstanding
balance of the class A, B, and C notes. The swap structure
provides substantial credit enhancement to the notes in this
transaction," S&P said.

"However, under the transaction documents, the derivative
downgrade language (concerning lower volatility buffers, external
marks, and additional termination events upon failure to obtain
an external mark or failure to replace a counterparty) does not
reflect our 2012 counterparty criteria," S&P said.

"Our 2012 counterparty criteria therefore cap the maximum
potential rating on the class A notes at a one-notch uplift on
the long-term issuer credit (ICR) rating on the interest swap
counterparty, HSBC Bank PLC (AA-/Negative/A-1+), in this case 'AA
(sf)'. However, our nonsovereign ratings criteria permit a
maximum rating differential of up to six notches between our
ratings in this ransaction and the related EMU sovereign (in this
case, Spain; BBB-/Negative/A-3). As a result, our nonsovereign
ratings criteria cap our rating on the class A notes at 'AA-
(sf)'. Therefore, we have affirmed our 'AA- (sf)' rating on the
class A notes," S&P said.

"On April 30, 2012, we lowered to 'A-/A-2' from 'A+/A-1' our
long- and short-term ratings on Banco Santander S.A.
(BBB/Negative/A-2), which acts as reinvestment account provider,
treasury account provider, and paying agent in this transaction.
Therefore, Banco Santander is no longer considered eligible as
transaction account provider under the transaction documents,"
S&P said.

"On Nov. 8, 2012, BNP Paribas Securities Services, Sucursal en
Espa¤a replaced Banco Santander as treasury account provider and
paying agent. BNP Paribas Securities Services (A+/Negative/A-1)
is considered an eligible counterparty under our 2012
counterparty criteria at the current rating level of the notes.
Therefore, our ICR on the treasury account provider does not
constrain our ratings in this transaction," S&P said.

"Additionally, on Dec. 3, 2012, Bank of Spain replaced Banco
Santander as reinvestment account provider. We assume Bank of
Spain to have the same rating as the European Central Bank (ECB;
unsolicited, AAA/Stable/A-1+). Therefore, our ICR on the
reinvestment account provider does not constrain our ratings in
this transaction," S&P said.

"TDA 31 securitizes a pool of Spanish mortgage loans originated
by Banco Guipuzcoano S.A., a small Spanish bank located in the
Basque Country. Banco Guipuzcoano (not rated) merged with Banco
de Sabadell S.A. (BB/Negative/B) in November 2010. The underlying
portfolio comprises mortgage loans granted to individuals for the
acquisition of a first or second home in Spain," S&P said.

             STANDARD & POOR'S 17G-7 DISCLOSURE REPORT

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

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

      http://standardandpoorsdisclosure-17g7.com

RATINGS LIST

Class             Rating
           To                From

TDA 31, Fondo de Titulizacion de Activos
EUR300 Million Mortgage-Backed Floating-Rate Notes

Ratings Lowered

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

Rating Affirmed

A          AA- (sf)



=============
U K R A I N E
=============


* UKRAINE: Moody's Lowers Government Bond Rating to 'B3'
--------------------------------------------------------
Moody's Investors Service has downgraded Ukraine's government
bond rating by one notch to B3 from B2. The outlook remains
negative.

Moody's decision to downgrade Ukraine's rating and to maintain
the negative outlook reflects the following key interrelated
factors:

1.) A downward revision of Moody's assessment of Ukraine's
institutional strength;

2.) A shortage of external liquidity, which has increased the
risk of a currency and wider financial and economic crisis;

3.) Ukraine's comparatively weak economic outlook.

Moody's has also downgraded the rating of the Ukrainian State
Enterprise "Financing of Infrastructural Projects" to B3 from B2,
in line with the sovereign action. The enterprise's debt is fully
and unconditionally guaranteed by the government of Ukraine.

RATINGS RATIONALE

RATIONALE FOR THE DOWNGRADE

The primary driver underlying Moody's one-notch downgrade of
Ukraine's government bond ratings is the rating agency's
assessment of a deterioration in the country's institutional
strength, against the backdrop of poor policy predictability as
well as reduced data transparency. In terms of Moody's sovereign
rating methodology, this is reflected in a changing in the second
rating factor "Institutional Strength" to "very low" from "low to
very low". Poor policy predictability mainly refers to Ukraine's
weak track record in carrying out reforms stipulated in the
current as well as past IMF programs, the inability to negotiate
a new gas import price with Russia for well over 12 months as
well as recent (and past) ad-hoc administrative measures, in
particular on the foreign-exchange market. Data transparency in
Ukraine was already low, but has worsened more recently in terms
of upcoming external debt redemptions for the economy as a whole,
on which the central bank stopped publishing quarterly updates in
January 2012. This lack of transparency is a particular concern
against the background of the country's precarious external
liquidity position.

Moody's concern about the external liquidity situation is the
second driver of the decision. The country's foreign-exchange
reserves fell by 23% year-on-year to around US$24.8 billion at
the end of October 2012, which implies an import coverage of just
three months. The decline is due to central bank interventions on
the foreign-exchange market in order to stabilize the currency
against the background of a deteriorating current account,
increased external debt service requirements and increased demand
for foreign currency by its domestic population. Notably, the
decline occurred despite the fact that the sovereign was able to
tap external markets several times in 2012. It is highly
uncertain if market access remains available in 2013 when
sovereign external debt redemptions and service rise to US$8.9
billion (including repayments of US$3.5 billion to the IMF by the
central bank) from US$7.5 billion in 2012. Those are large sums
compared with the government's cash balance, which comprises
deposits at the central bank as well as commercial banks of
around US$1.8 billion at the end of October. Domestic market
access is also impeded as indicated by the wide yield spread
between the primary and secondary government bond market.

The third rating driver of Moody's downgrade of Ukraine's
sovereign rating is the country's comparatively weak economic
outlook over the short and medium term. As a relatively open
economy, the deterioration of the global economic environment has
affected Ukraine's GDP growth, which turned negative in Q3 2012.
Overall, Moody's expects real GDP growth to slow to 0.5% in 2012
from 5.2% in 2011. The rating agency forecasts only a modest
growth recovery to 1.5% in 2013, in part due to constrained
credit growth related to the exchange-rate policy of the central
bank. In the medium term, growth prospects are clouded by the
slow resolution of the euro area sovereign debt crisis, fiscal
risks in the US and slower growth in China, all of which affect
commodity prices and demand. Unlike a year ago, Moody's now views
4% GDP growth in the coming five years as unlikely and instead
expects GDP growth of 2%-3% on average, which also has negative
consequences for Ukraine's fiscal metrics. Moreover, this
scenario assumes the successful implementation of a new IMF
program.

RATIONALE FOR CONTINUED NEGATIVE OUTLOOK

The ongoing negative outlook reflects downside risks to Moody's
central scenario, which importantly assumes a new agreement with
the IMF in the coming months.

WHAT COULD MOVE THE RATING UP/DOWN

The ratings could be downgraded if Moody's concerns over
Ukraine's external liquidity position are heightened, in
particular if the recently announced negotiations on a new IMF
program are not successful or if a new program were again to move
off-track. Downward ratings pressure could also emerge following
a further deterioration in Ukraine's balance-of-payments
situation, continued capital outflows, sustained liquidity
shortages in the banking system, serious asset quality or
financing problems, or a deterioration in public debt metrics.
Moreover, any regulatory interventions by the central bank to
impose long-term capital controls and/or undermine bond or
deposit contracts would also contribute to downward ratings
pressure.

Ukraine's rating outlook could be changed to stable if Ukraine
successfully carries out reforms as stipulated in a new IMF
program over an extended period of time. The rating could be
upgraded upon successful completion of a new IMF program. In
general, an upgrade would depend on a credible, more coherent and
consistent approach to economic policy, particularly if this were
successful in reducing the country's large fiscal and external
vulnerabilities, as well as the ambiguity concerning monetary and
exchange-rate policy.

COUNTRY CEILINGS

Moody's has also changed the local-currency country risk ceilings
to B2 from Ba1. This is the maximum credit rating achievable in
local currency for a debt issuer domiciled in the country. The
rating agency has also changed Ukraine's foreign-currency bond
country ceiling to B3 from B1 and its country ceiling for
foreign-currency bank deposits to Caa1 from B3. These ceilings
are lower than the local-currency ceiling as they also capture
foreign-currency transfer and convertibility risks.

The principal methodology used in these ratings was Sovereign
Bond Ratings Methodology published in September 2008.



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


AERTE GROUP: Goes Into Administration
-------------------------------------
Further to the announcement on November 26, 2012, Aerte Group PLC
disclosed that that it has been unable to secure additional
funding for the Group and as such, is unable to continue to trade
as a going concern.  Consequently, the Company has appointed
Chris Pillar and Stuart Maddison of PricewaterhouseCoopers LLP,
as joint administrators of the Aerte Group PLC, Aerte Limited
and A D  Science Limited.

The decision to appoint the administrators is taken after
careful consideration and having explored all options to raise
additional capital.  The Board would like to thank the Group's
employees and customers for their hard work and support
throughout the Company's history.

The Directors will be working with the administrators to protect
the interest of creditors and to try and ensure that the business
is saved in part or as a whole and the administrators ask any
interested parties to contact them as a matter of urgency.

As a result of the appointment of administrators, Panmure Gordon
(UK) Limited has resigned as Nominated Adviser to the Company
with immediate effect.  Pursuant to AIM Rule 1, if a replacement
Nominated Adviser is not appointed within one month, the
admission of the Company's securities will be cancelled.

The Company has no intention of appointing a replacement
Nominated Adviser.

Trading in the Company's Ordinary Shares on AIM remains
suspended.

Aerte Group PLC -- http://www.aertegroup.com/-- is an
environmental technology group listed on London's AIM market.


ATH RESOURCES: Enters Into Administration
-----------------------------------------
Dominic Jeff at The Scotsman reports that ATH Resources fell into
administration on Wednesday night after its lender, Jon Moulton's
Better Capital, called in its loans.

The firm has blamed falling coal prices for its woes, the
Scotsman discloses.

Brian Green, Allan Graham and William Wright from "big four"
accountancy firm KPMG were appointed as administrators of ATH
Resources, although its principal trading subsidiary -- Aardvark
TMC -- is not in administration and continues to trade, the
Scotsman relates.

Shares in Aim-quoted ATH -- which has debts of about GBP22
million -- were suspended on Tuesday afternoon but, just two
hours later, the firm announced it had entered administration,
the Scotsman recounts.

ATH Resources is a Doncaster-based coal miner.  The company
employs more than 300 people at its five Scottish open cast
mines.


GALA CORAL: S&P Affirms 'B' Long-Term Corporate Credit Rating
-------------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on U.K.-
based gaming operator Gala Coral Ltd. (Gala) to stable from
negative. "At the same time, we affirmed our 'B' long-term
corporate credit rating on Gala," S&P said.

"We also affirmed our 'B+' rating on Gala Coral Group Finance
PLC's GBP350 million secured notes, and our 'CCC+' rating on Gala
Electric Casino PLC's GBP275 million unsecured notes. Recovery
ratings on these instruments are unchanged at '2' and '6',
highlighting our expectations of substantial (70%-90%) and
negligible (0-10%) recovery in the case of payment default," S&P
said.

"The rating action follows what we see as a stabilization, and
some early signs of improvement, in Gala's operating performance.
In the financial year to Sept. 29, 2012, we forecast revenues of
about GBP1.19 billion and reported EBITDA (before exceptional
cash costs) of about GBP280 million, in line with management's
budget and ahead of the GBP261 million reported in 2011. Over the
next 12 months, we forecast that Gala's operating performance
will remain resilient. The rating action also reflects our
expectations that Gala's credit metrics will remain in line with
our guidance for the current rating (interest coverage of more
than 1.0x; 1.5x when considering cash interest) and that
liquidity will remain adequate over the next 12 months," S&P
said.

"We continue to assess Gala's financial risk profile as 'highly
leveraged' under our criteria. This is based on our view of the
group's aggressive capital structure, high leverage, weak debt-
service coverage measures, and tightening financial covenants.
Including the casino business, we estimate that Gala's Standard &
Poor's-adjusted debt-to-EBITDA ratio will be about 9.5x by year-
end 2012 (ending Sept. 29, 2012) and 2013," S&P said.

"Mitigating these weaknesses is our view of Gala's 'adequate'
liquidity after a refinancing in mid-2011. Liquidity is supported
by available cash and committed credit facilities, a lack of
material short-term debt amortization requirements, and our
projection of adequate (at least about 15%) headroom under its
financial covenants for financial 2013," S&P said.

"We continue to assess Gala's business profile as 'fair,' thanks
to the company's diversified portfolio of cash-generative gaming
businesses. These businesses include Coral, the third-largest
U.K. bookmaker; Gala Bingo, the market leader in U.K. bingo; and
a growing Italian retail betting business. Gala has recently
announced the disposal of its third-ranked U.K. casinos business
to The Rank Group PLC (not rated). The disposal is still subject
to approval by The Competition Commission," S&P said.

"In the coming quarters, we anticipate that Gala will maintain
resilient key performing indicators (KPI) and operating
performance. Despite recent investments, we conservatively
project that the contribution from the online business will
remain limited, as Gala continues to lag materially behind its
main peers in this sector. In the financial year to Sept. 30,
2013, we forecast that reported EBITDA (before exceptional cash
costs) will remain at about GBP280 million. This is despite the
lack of the positive contribution from international football
tournaments in the summer and the extra week's worth of
consolidated numbers -- as per U.K. Generally Accepted Accounting
Principles -- that Gala enjoyed in 2012. In view of the step up
in covenants, we believe that over the next 12-18 months a
material improvement in profitability of the online division will
be key to maintaining adequate (that is, at least 15%) headroom
on covenants in financial years 2014 and 2015," S&P said.

"The issue rating on Gala Coral Group Finance PLC's GBP350
million secured notes is 'B+', one notch above the corporate
credit rating. The recovery rating on these instruments is '2',
indicating our expectation of substantial (70%-90%) recovery in
the event of a payment default," S&P said.

"The issue rating on Gala Electric Casino PLC's GBP275 million
unsecured notes is 'CCC+'. The recovery rating on this debt is
'6', indicating our expectation of negligible (0%-10%) recovery
in the event of a payment default," S&P said.

"If the planned disposal of the casino business is finalized, use
of proceeds will be the key rating driver for recovery purposes.
Assuming that the bulk of proceeds will be used to repay senior
debt, we expect coverage to remain in the current range," S&P
said.

"The stable outlook reflects our view that Gala will continue to
demonstrate a resilient operating performance over the next 12
months, with some further improvements in KPI, and maintain
credit metrics consistent with our guidance for a 'B' rating.
Under our base-case scenario, we estimate that EBITDA (before
exceptional cash costs) will remain at about GBP280 million in
2013, enabling the group to maintain an adjusted EBITDA interest
coverage of more than 1.0x (corresponding to a reported EBITDA to
cash interest coverage of more than 1.5x). The stable outlook
also reflects our opinion that Gala will maintain what we
consider to be 'adequate' liquidity, despite tightening
covenants," S&P said.

"We could lower the ratings if Gala's liquidity becomes 'less
than adequate,' for example, if headroom on its weakest-
performing covenant test falls to meaningfully less than 15%. We
could also lower the ratings if adjusted EBITDA interest coverage
falls to materially less than 1.0x (equivalent to reported EBITDA
cash interest coverage of less than 1.5x)," S&P said.

"Rating upside, in our opinion, is limited at this stage, given
Gala's highly-leveraged capital structure," S&P said.


MCMULLEN ARCHITECTURAL: Lakesmere Buys Business; 129 Jobs Secured
-----------------------------------------------------------------
BBC News reports that McMullen Architectural Systems, which went
into administration on Wednesday, has been sold to Lakesmere
Limited.

According to BBC, all 129 posts at the company have been secured.

Stephen Cave from administrators PwC said they were called in at
the request of the firms directors, BBC relates.  He said that
the downturn in the construction industry had hit the firm hard,
BBC notes.

"Falling demand, increased pressure on margins, investments in
foreign markets and the general downturn in construction have
collectively led to the directors' decision to appoint
administrators," BBC quotes Mr. Cave as saying.

McMullen Architectural Systems is a construction firm in Moira,
County Down.  The company operates in the design, fabrication and
installation of aluminium curtain wall and window systems for
medium and large scale building projects across the UK.


MORPHEUS PLC: S&P Affirms 'D' Rating on Class E Subordinate Loan
----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its credit rating on
Morpheus (European Loan Conduit No. 19) PLC's class D subordinate
loan. "At the same time, we have affirmed our 'D (sf)' rating on
the class E subordinate loan. Our ratings on the class A, B, and
C notes are unaffected by the rating actions," S&P said.

"The rating actions reflect our opinion on cash flow disruptions
in the transaction. They have not resulted from a change in our
opinion on the default probability and likely recovery associated
with the remaining pool of loans backing the transaction," S&P
said.

"As reflected in the November 2012 cash manager report, the
issuer failed to meet its interest payment obligation under the
notes on the November 2012 interest payment date (IPD). This
follows a similar interest payment failure on the previous August
2012 IPD. As of November 2012, these two classes of notes accrued
a cumulative interest shortfall amount of GBP225,728 (compared
with GBP87,675 on the previous payment date). The existing
interest shortfall on the class D loan is still minor in our
view, and may reduce at future payment dates dependent upon
nonrecurring fees/expenses," S&P said.

"These interest shortfalls are primarily due to the paydown of
loans in the transaction. A further five loans have been paid
down between the August 2012 and November 2012 payment dates,
meaning that the transaction has now paid down by approximately
90.7%. The weighted-average margin on the remaining loans has
been reduced while the weighted-average cost of the notes and
prior ranking expenses have increased. The revenue receipts were
therefore not sufficient to cover issuer expenses and the margin
on the notes on the November 2012 payment date," S&P said.

"In this transaction, the class D and E loans are subject to an
available funds cap (AFC). The AFC reduces interest payable to
these two classes of loans to the amount of cash available (left
after servicing the senior ranked classes of notes) if the
mismatch results from loan repayments. The unpaid amounts,
however, are deferred instead of being extinguished, and
therefore don't meet our view of the AFC as a pass-through
mechanism. As our ratings address timely payment of interest, we
have not given credit to the AFC in our analysis. The transaction
parties have confirmed to us that the liquidity facility was not
available to cover the interest shortfalls on the class D or E
loans because the AFC was activated," S&P said.

"We do not expect these two loans to be able to pay full due and
overdue interest on future payment dates, given the absence of
adequate excess spread to mitigate the risk of interest
shortfalls. Any rise in transaction expenses would increase the
possibility of further interest shortfalls on future payment
dates. However, any subsequent rise in interest shortfall levels
are unlikely to affect our ratings on the class A, B, and C notes
due to the adequate protection received from the liquidity
facility to mitigate cash flow disruptions," S&P said.

Conversely, any reduction in transaction expenses, particularly
those nonrecurring expenses experienced in November 2012, may
result in interest shortfalls being reduced.

"Our ratings address timely payment of interest, payable
quarterly in arrears, and payment of principal not later than the
legal final maturity date (in November 2029)," S&P said.

"We have therefore affirmed our 'D (sf)' rating on the class E
loan and lowered to 'CCC (sf)' from 'B (sf)' our rating on the
class D loan because of the November 2012 interest shortfalls. We
have not lowered our rating on the class D loan to 'D (sf)'
because the existing interest shortfall, in our view, remains
minor and may be reduced in the future depending on nonrecurring
fees/expenses. We continue to monitor the situation. Further
rating actions would likely be warranted if the risk of interest
shortfalls were to increase," S&P said.

Morpheus (European Loan Conduit No. 19) is a commercial mortgage-
backed securities (CMBS) true sale transaction that at closing
was backed by 419 loans secured on mainly U.K. commercial real
estate properties. As of November 2012, the number of underlying
loans has reduced to 71 (from 76 in August 2012). The initial
note balance of GBP581.9 million has reduced to GBP54.3 million.
The legal maturity date of the notes is November 2029.

         POTENTIAL EFFECTS OF PROPOSED CRITERIA CHANGES

"On Nov. 7, 2012, we published our updated criteria for rating
European CMBS. The criteria update refines the approach to rating
European CMBS transactions, and provides a more transparent
framework for analyzing the commercial real estate assets and
transaction structures commonly associated with European CMBS. We
expect that the criteria update will have a moderate impact on
outstanding ratings on European CMBS, based on a sample of
transactions we tested. The impact on investment-grade ratings is
likely to be greater than that on speculative-grade ratings," S&P
said.

"These criteria will be effective for all in-scope ratings from
Dec. 6, 2012, at which time we expect to place all the ratings
likely to be affected on CreditWatch. We expect to resolve any
rating changes within six months of the effective date of the
criteria," S&P said.

             STANDARD & POOR'S 17G-7 DISCLOSURE REPORT

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

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

      http://standardandpoorsdisclosure-17g7.com

RATINGS LIST

Class                Rating
          To                       From

Morpheus (European Loan Conduit No. 19) PLC
GBP581.883 Million Commercial Mortgage-Backed Floating-Rate Notes
and
Subordinated Loans

Rating Lowered

D Loan   CCC (sf)                  B (sf)

Rating Affirmed

E Loan   D (sf)

Ratings Unaffected

A        A (sf)
B        A (sf)
C        A (sf)


ODEON & UCI: Moody's Lowers Corp. Family Rating to 'B3'
-------------------------------------------------------
Moody's Investors Service has downgraded to B3 from B2 the
corporate family rating (CFR) of Odeon & UCI Bond Midco Limited
("Odeon"). Concurrently, Moody's has also downgraded (1) Odeon's
probability of default rating (PDR) to B3 from B2; and (2)
Odeon's GBP90 million revolving credit facility (RCF) to Ba3 from
Ba2. The rating of the GBP475 million notes, issued by ODEON &
UCI Finco plc, remains unchanged at B3. The outlook on the
ratings is stable.

Ratings Rationale

"The rating action reflects our expectation that, on the back of
a weaker-than-anticipated operating performance, over the next
18-24 months Odeon will continue to operate with leverage that is
not commensurate with a B2 rating," says Knut Slatten, Moody's
lead analyst for Odeon.

The European cinema industry has been through a turbulent three
first quarters of the year, which has seen cinema operators'
operating performance negatively affected by (1) the decline in
the market as a result of major sporting events such as the UEFA
European Football Championship and the Olympic Games; (2) a film
slate largely skewed towards the last quarter of the year; and
(3) unfavorable weather. Notwithstanding these features of a more
exceptional character, since Moody's first assigned a rating to
Odeon in May 2011, the company's operating performance has not
been in line with the rating agency's initial expectations.

Despite the cinema industry's track record of maintaining a
stable audience in the past few years, Moody's cautions that
Odeon may yet be negatively affected by the economic downturn.
Notably, Moody's believes that the currently challenging
advertising market and increased VAT on cinema tickets in Spain
could negatively affect the company in the short to medium term.

Odeon's rating continues to reflect the company's high leverage
and the overall limited organic growth potential of the cinema
industry. However, these factors are mitigated by (1) its
positioning as Europe's largest multiplex operator; and (2) its
solid market positioning in key markets such as the UK, Spain and
Italy.

Moody's considers Odeon's liquidity profile to be adequate,
supported by around GBP15 million of cash on the balance sheet
and a GBP90 million committed revolving credit facility without
maintenance covenants. Moody's expects the company's liquidity to
improve in the current quarter ending December 2012, in line with
the seasonality of the film slate this year where the large
blockbusters are largely skewed towards the last quarter. Further
improvements to Odeon's overall liquidity profile are likely to
depend on the company's pace of capital expenditure (capex).

The B3 rating of the company's GBP475m senior secured notes -- in
line with the CFR -- is a reflection of some degree of
subordination in the capital structure vis-…-vis the RCF.
However, the LGD4-60% assigned to the notes is not considered
substantial enough to maintain a notching of the notes in view of
(1) the notes benefiting from some collateral such as charges
over certain bank accounts and (2) Odeon's relatively solid
positioning in the B3-category.

The stable outlook on the ratings reflects Moody's expectation
that Odeon's leverage will decrease from its expected peak at the
end of Q3 2012, which the rating agency estimates will be around
8.0x debt/EBITDA. The outlook also incorporates Moody's
assumption that Odeon will calibrate its expansionary capex to
its free cash flow and as such prevent a further deterioration in
liquidity.

WHAT COULD CHANGE THE OUTLOOK UP/DOWN

Positive rating pressure could develop if Odeon succeeds in
deleveraging below 6.5x debt/EBITDA.

Conversely, Moody's could downgrade the company's ratings further
if (1) its leverage remains above 7.5x debt/EBITDA on a sustained
basis; (2) it continues to generate negative free cash flows.

Principal Methodology

Odeon's ratings were assigned by evaluating factors that Moody's
considers relevant to the credit profile of the issuer, such as
the company's (i) business risk and competitive position compared
with others within the industry; (ii) capital structure and
financial risk; (iii) projected performance over the near to
intermediate term; and (iv) management's track record and
tolerance for risk. Moody's compared these attributes against
other issuers both within and outside Odeon's core industry and
believes Odeon's ratings are comparable to those of other issuers
with similar credit risk. Other methodologies used include Loss
Given Default for Speculative-Grade Non-Financial Companies in
the U.S., Canada and EMEA published in June 2009.

Headquartered in London, Odeon & UCI Bond Midco Limited is the
largest cinema operator in Europe and the largest operator in the
world outside of the Americas. As of end December 2011, it had
231 cinemas and 2,153 screens across seven countries (UK, Italy,
Germany, Spain, Austria, Ireland and Portugal). Odeon has grown
rapidly through acquisitions and has established a long-term
track record of integrating smaller operators. During FYE
December 2011, the company reported revenues of GBP725 million
and OpCo EBITDA of GBP93 million.


PICKFORDS: Bought Out of Administration; 900 Jobs Secured
---------------------------------------------------------
Jamie Grierson at The Independent reports that Pickfords has been
bought out of administration.

The firm was immediately bought back by directors Yogesh Mehta
and Timothy Romer under a new shell company called Pickfords Move
Management in a move that preserves 900 jobs, the Independent
relates.

"With this sale, the business can now move forward on a secure
financial footing," the Independent quotes David Gilbert,
business restructuring partner at administrator BDO, as saying.
"Going forward, it will be business as usual at all sites,
operating under the Pickfords name, and all contracts, moves and
orders will be fulfilled."

The pre-pack deal, which took place on November 23, comes as the
housing market continues to endure sluggish growth with house
moves still below historic averages, the Independent notes.

Wembley-based Pickfords is a 400-year-old removal company at the
heart of a Channel 5 documentary series.



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


* Fitch Affirms Rating on EFSF's Debt Issues
--------------------------------------------
Fitch Ratings has affirmed the Long-Term rating of guaranteed
medium and long-term debt issued by the European Financial
Stability Facility (EFSF) at 'AAA', and the Short-Term rating of
the short-term (less than 12 months contractual maturity)
guaranteed debt instruments issued by the EFSF at 'F1+'.

The rating assigned to the EFSF's debt issues rely on the
irrevocable and unconditional guarantees and over-guarantees
provided by 'AAA' and 'F1+'-rated euro area member states (EAMS).
These commitments are governed by an international treaty signed
in June 2010 by the 17 EAMS -- the Framework Agreement -- and by
a Deed of Guarantee.

The original Framework Agreement and Deed of Guarantee ensured
that all payments due on EFSF debt issues were covered by
guarantees from EAMS pro-rata their share (contribution key) in
European Central Bank (ECB) capital, adjusted for stepped-out
guarantors, and over-guarantees (i.e. guarantees that could be
extended up to 120% of their initial amount in the event of one
or more guarantors stepping out of the pool of guarantors) rated
'AAA' or 'F1+', and by a cash reserve ensuring sufficient
liquidity.

The amendment to the Framework Agreement and Deed of Guarantee
made in June 2011, applicable to all debt issued since October
2011, reduced the cash reserve requirement for EFSF and extended
the amount of over-guarantees by EAMS from 120% to a maximum of
165% of the initial guaranteed amount.  This increased the
aggregate amount of guarantees and over-guarantee to EUR726
billion, and the maximum amount that EFSF can lend to EUR440bn
(EUR726 billion/1.65).  As of end-November 2012, EFSF's lending
commitment stood at EUR188.3 billion; this included loans and
commitments to Greece ('CCC'), Ireland ('BBB+'; Stable) and
Portugal ('BB+'; Negative).

In addition to loans to EAMS under EU-IMF programs, the June 2011
amended Framework Agreement has authorized the EFSF to conduct a
wider range of financial assistance operations for EAMS
including, loans to governments to fund recapitalization of
financial institutions outside macroeconomic adjustments
programs; purchases of sovereign bonds; and precautionary credit
facilities.  In contrast to EAMS receiving EFSF loans under an
EU-IMF program, EAMS are not expected to 'step-out' as guarantors
in the event that they benefit from such financial assistance
operations, though such support is subject to some policy
conditionality as agreed under a memoranda of understanding.

While under the original framework agreement all loans had to be
funded by debt of the same maturity, the June 2011 amendment has
also allowed EFSF to issue short-term securities, implying a
greater mismatch between the debt issued by the EFSF and the
loans that it extends.  Another amendment to the Deed of
Guarantee has required EFSF's short-term debt issuance to be
covered by guarantees and over-guarantees from EAMS rated 'F1+',
including guarantees from EAMS with a Long-Term rating below
'AAA', such as Belgium ('AA'; Negative).  This amendment allowed
the reduction of the amount of the over-guarantee ratio to 151.7%
for short-term debt issued by EFSF, versus 160.8% for long-term
debt.  Further flexibility was introduced by the February 2012
amendment to the Deed of Guarantee, which requires new debt
issues to be covered by guarantees from EAMS having a rating
equal or higher than that of EFSF, and not necessarily by EAMS
rated 'AAA' or 'F1+'.

The increase in the over-guarantee mechanism from 120% to up to
165%, in October 2011, has greatly reduced the cash reserves that
the EFSF is required to hold in order to ensure that principal
and interest on its debt was fully covered by 'AAA' guarantors
and cash.  The current requirement is for the cash reserve to be
sufficient to service any debt payment at least three days prior
to the payment date; in addition, 10 days prior to the servicing
of debt, the cash reserve has to be at least equal to the share
of the debt service payment not covered by 'AAA'/'F1+' rated
guarantors or by EAMS having a rating equal or higher than that
of EFSF.  The cash reserve has to be conservatively managed, and
has to be invested in high quality assets.

All EFSF debt issues are managed on its behalf by the German
sovereign debt agency Finanzagentur ('AAA'/Stable).
Finanzagentur also undertakes treasury and risk management for
the EFSF, while the European Investment Bank ('AAA'/Stable)
provides administrative and legal support.  The high credit
quality of these institutions considerably reduces operational
risk associated with asset and liabilities management and
treasury management.

The main source of credit risk on EFSF debt lies in the
possibility that one or more of the largest 'AAA' guarantors
fails to honour its guarantee commitment or is downgraded.  In
the event of a downgrade of Fitch's rating of France (which
represents 21.8% of guarantees), the Outlook on which was revised
to Negative in December 2011, the 'AAA' guarantees and over-
guarantees on outstanding EFSF debt would drop below the level
consistent with the 'AAA' rating at the current lending capacity.
Unless additional credit enhancement mechanisms are introduced,
the 'AAA' rating of outstanding medium and long-term debt issued
by the EFSF would thus be downgraded.  The borrowing capacity of
the EFSF would remain unaffected, but the 'AAA' Long-Term rating
would only apply to medium and long term debt issues which are
fully guaranteed by 'AAA' guarantees and over-guarantees, (and
also by the cash reserve for debt issued before end-October
2011).  Incorporated as a "Societe Anonyme' in Luxembourg, the
EFSF is a supranational financing vehicle created in 2010 to make
loans to EAMS facing financing difficulties.  It is part of a
wider European and international initiative to support the
eurozone, and benefits from broad political support.


* EUROPE: Moody's Says Outlook for Steel Companies Negative
-----------------------------------------------------------
European steel companies' profitability is likely to deteriorate
in 2013 as a result of declining demand and weak prices, says
Moody's Investors Service in an Industry Outlook report published
on Dec. 5. As a result, Moody's is maintaining its negative
outlook for the European steel industry.

The new report is entitled "European Steel Industry: Struggles
Will Continue into 2013".

"Unfavorable fundamentals in steel's key end markets of
construction, automotive and capital goods will lead to a second
year of declining steel demand in Europe, which we estimate will
be 2%-4% lower than in 2012," says Steven Oman, a Senior Vice
President in Moody's Corporate Finance Group and author of the
report.

China's soft landing will translate into low prices for steel-
making raw materials and an excess of steel and, as a result,
higher levels of exports and lower steel prices. Uncertainties
surrounding the Chinese economy and the euro area's sovereign
debt issues will keep the downside risk associated with Moody's
forecast high for the region and the steel industry.

Moody's forecasts that hot-rolled coil prices in northern Europe
will average EUR500 per metric tonne and rarely move above EUR530
per tonne over the next year.

As a result, Moody's expects the profitability of many of the
rated western European steel companies will be moderately worse
in 2013 than in 2012. However, there are considerable differences
between the companies and the markets they serve, so their
prospects will vary. In fact, there is potential for two of the
companies to register improved EBITDA in 2013: Kloeckner & Co. SE
(Ba3 stable) and Aperam S.A. (B1 negative).

In contrast, fundamentals for the Russian and the Commonwealth of
Independent States (CIS) steel industry are more favorable.
Moody's expects domestic demand to be steady in these markets,
and the companies it rates generally have low costs, usually
owing to their high self-sufficiency in raw materials.
Nevertheless, Moody's also expects the profitability of the
Russian and CIS companies including NLMK (Baa3 stable) and
Magnitogorsk Iron & Steel Works (MMK, Ba3 stable) to decline in
2013, albeit from higher levels.

Moody's could stabilize its sector outlook for the European steel
industry if the European PMI rose to 49 and capacity utilization
in the European steel industry moved to a modest 75%.


* BOOK REVIEW: The Health Care Marketplace
------------------------------------------
Author: Warren Greenberg, Ph.D.
Publisher: Beard Books
Softcover: 179 pages
List Price: $34.95
Review by Henry Berry

Greenberg is an economist who analyzes the healthcare field from
the perspective that "health care is a business [in which] the
principles of supply and demand are as applicable . . . as to
other businesses."  This perspective does not ignore or minimize
the question of the quality of health, but rather focuses sharply
on the relationship between the quality of healthcare and
economic factors and practices.

For better or worse, the American healthcare system to a
considerable degree embodies the beliefs, principles, and aims of
a free-market capitalist economic system driven by competition.
In the early sections of The Health Care Marketplace, Greenberg
takes up the question of how physicians and how hospitals compete
in this system.  "Competition among physicians takes place
locally among primary care physicians and on a wider geographical
scale among specialists.  There is competition also between M.D.s
and allied practitioners: for example, between ophthalmologists
and optometrists and between psychiatrists and psychologists.
Regarding competition between physicians in a fee-for-service
practice and those in managed care plans, Greenberg cites
statistics and studies that there was lesser utilization of
healthcare services, such as hospitalization and tests, with
managed care plans.

Some of the factors affecting the economics of different areas of
the healthcare field are self-evident, albeit may be little
recognized or little realized by consumers.  One of these factors
is physician demeanor.  Most readers would see a physician's
demeanor as a type of personality exhibited during the course of
the day.  But after the author notes that "[c]ompetition also
takes place in professional demeanor, location, and waiting
time," the word "demeanor" takes on added meaning. The demeanor
of a big-city plastic surgeon, for example, would be markedly
different from that of a rural pediatrician.  Thus, demeanor has
a relationship to the costs, options, services, and payments in
the medical field, and also a relationship to doctor education
and government funding for public health.

Greenberg does not follow his economic data and summarizations
with recommendations or advice. He leaves it to the policymakers
to make decisions on the basis of the raw economic data and
indisputable factors such as physician demeanor.  Nor does he
take a political position when he selects what data to present or
emphasize.  It is this apolitical, unbiased approach that makes
The Health Care Marketplace of most value to readers interested
in understanding the economics of the healthcare field.

Without question, a thorough understanding of the factors
underlying the healthcare marketplace is necessary before changes
can be made so that the health needs of the public are better
met. Conditions that are often seen as intractable because they
are regarded as social or political problems such as the
overcrowding of inner-city health centers or preferential
treatment of HMOs are, in Greenberg's view, problems amenable to
economic solutions. According to the author, the basic economic
principle of supply-and-demand goes a long way in explaining
exorbitantly high medical costs and the proliferation of
specialists.

Greenberg's rigorous economic analysis similarly yields an
informative picture of the workings of other aspects of the
healthcare field.  Among these are hospitals, insurance, employee
health benefits, technology, government funding of health
programs, government regulation, and long-term health care.  In
the closing chapter, Greenberg applies his abilities as a keen-
eyed observer of the economic workings of the U.S. healthcare
field to survey healthcare systems in three other countries:
Canada, Israel, and the Netherlands.  "An analysis of each of the
three systems will explain the relative doses of competition,
regulation, and rationing that might be used in financing of
health care in the United States," he says.  But even here, as in
his economic analyses of the U.S. healthcare system, Greenberg
remains nonpartisan and does not recommend one of these three
foreign systems over the other.  Instead he critiques the
Canadian, Israel, and Netherlands systems -- "none [of which]
makes use of the employer in the provision of health insurance,"
he says -- to prompt the reader to look at the present state and
future of U.S. healthcare in new ways.

The Health Care Marketplace is not a book of limited interest,
and the author's focus on the economics of the health field does
not make for dry reading.   Healthcare is a central concern of
every individual and society in general.  Greenberg's book
clarifies the workings of the healthcare field and provides a
starting point for addressing its long-recognized problems and
moving down the road to dealing effectively with them.

Warren Greenberg is Professor of Health Economics and Health Care
Sciences at George Washington University, and also a Senior
Fellow at the University's Center for Health Policy Research.
Prior to these positions, in the 1970s he was a staff economist
with the Federal Trade Commission.  He has written a number of
other books and numerous articles on economics and healthcare.


                            *********

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

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

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

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


                            *********


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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