TCREUR_Public/121221.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 21, 2012, Vol. 13, No. 254

                            Headlines



C R O A T I A

ZAGREBACKI HOLDING: S&P Cuts LT Issuer Credit Rating to 'B'


F R A N C E

ALCATEL-LUCENT: Moody's Rates Sr. Sec. Credit Facilities '(P)B1'


G E R M A N Y

BEAUTY HOLDING: Moody's Assigns 'B2' CFR/PDR; Outlook Stable
DOUGLAS HOLDING: S&P Assigns 'B' Long-Term Corp. Credit Rating
TMD FRICTION: Moody's Cuts CFR/PDR to 'B3'; Outlook Stable


G R E E C E

* GREECE: Moody's Confirms Junk Ratings on Structured Deals


H U N G A R Y

MAGYA TAKAREKBANK: S&P Cuts Counterparty Credit Rating to 'BB-'


I R E L A N D

* IRELAND: Moody's Says Prime RMBS Performance Worsens in Oct.


L I T H U A N I A

BITE FINANCE: Moody's Raises CFR/PDR to 'B3'; Outlook Stable


N E T H E R L A N D S

CADOGAN SQUARE: S&P Lowers Rating on Class E Notes to 'B+'
CLASSIC I: Moody's Reviews 'Ba1' Rating on Notes for Downgrade
CLONDALKIN INDUSTRIES: S&P Cuts Corporate Credit Rating to 'B-'
E-MAC PROGRAM: Moody's Cuts Rating on Class D Notes to 'B1'
WPE INT'L: S&P Puts 'B+' Issuer Credit Rating on Watch Negative

* Gabrielle Reijnen Joins A&M's Restructuring Team in Amsterdam


P O R T U G A L

BMORE FINANCE 4: S&P Lowers Rating on Class D Notes to 'CC'
METROPOLITANO DE LISBOA: S&P Raises Issuer Credit Rating to 'B'


R O M A N I A

HIDROELECTRICA: Creditor Agrees to EUR20-Mil. Debt Reduction


S P A I N

AYT UNICAJA: DBRS Confirms 'BB(low)(sf)' Rating on Class D Notes
BANCO POPULAR: Sells EUR1.14-Bil Troubled Consumer Loan Portfolio
BANCO POPULAR: S&P Raises Rating on Preferred Stock to 'CCC-'
CODERE SA: S&P Cuts Long-Term Corporate Credit Rating to 'CCC'
HIPOCAT 7: S&P Cuts Rating on Class D Floating-Rate Notes to 'BB'


S W I T Z E R L A N D

VEGA CAPITAL: Moody's Reviews 'Ba2' Rating for Possible Upgrade


U N I T E D   K I N G D O M

CALDERVALE FORGE: In Liquidation; 24 Jobs Affected
COMET: Final Group of 49 Stores Closes After No Buyer Found
HBOS PLC: Peter Cummings Balks at FSA's Supervisory Approach
MANGANESE BRONZE: Zheijiang Geely Submits Takeover Bid
MUTUAL SECURITISATION: S&P Cuts Rating on Cl. A2 Notes to 'CCC-'

SPEYMILL CONTRACTS: Goes Into Administration
* UK: May Force Banks to Break Up Under Banking Reform Bill


X X X X X X X X

* EUROPE: Leaders to Seek Strategy for Handling Failing Banks
* EUROPE: Moody's Says Euro Area Crisis Hits Toll Road Traffic
* BOOK REVIEW: Legal Aspects of Health Care Reimbursement


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C R O A T I A
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ZAGREBACKI HOLDING: S&P Cuts LT Issuer Credit Rating to 'B'
-----------------------------------------------------------
Standard & Poor's Ratings Services lowered its long-term issuer
credit rating on Croatia-based Zagrebacki holding d.o.o. to
'B' from 'B+'. The outlook is negative.

"The rating on Croatia-based Zagrebacki Holding reflects our
assessment of the likelihood that its 100% owner, the City of
Zagreb (BB+/Stable/--), would provide timely and sufficient
extraordinary support in the event of financial distress as
'high' and our assessment of the company's stand-alone credit
profile (SACP) at 'ccc+'," S&P said.

In accordance with its criteria for rating government-related
entities, S&P views of a 'high' likelihood of extraordinary
government support is based on its assessment of Zagrebacki
Holding's:

-- "'Very important' role in providing essential municipal
    services, such as transport, gas supply, water supply, and
    waste collection, as well as its role as the city's financial
    vehicle in the context of strict legal limits imposed on
    municipal borrowing in Croatia. In the event of a default,
    S&P believes the failure to roll over debts coming due would
    result in Zagrebacki Holding scaling down its activity.

-- "Strong" link with Zagreb.  The city council has a strong
    influence on Zagrebacki Holding's strategy and S&P believes
    the city's 100% ownership is unchallenged in the medium term.
    S&P also assumes that a default of the company would affect
    the city's reputation in the market. However, the city's
    ability to provide timely support to the company has weakened
    as it has maintained a low cash position and high payables
    since 2009, and, in spite of significant ongoing support from
    the city, Zagrebacki Holding significantly increased its
    stock of short-term debt in 2010-2011.

"Because of our view of the 'high' likelihood of extraordinary
support from Zagreb, the rating on Zagrebacki Holding is three
notches higher than its SACP, which we assess at 'ccc+'," S&P
said.

"Our view of the SACP is based on the combination of Zagrebacki
Holding's 'highly leveraged' financial profile with 'weak' stand-
alone liquidity arrangements and unpredictable financial policy
and 'weak' business profile," S&P said.

"The SACP is underpinned by Zagrebacki Holding's monopoly
position as a provider of public services as well as its strong
ongoing support from the owner via operating and capital
subsidies, guarantees on some debt (which are repaid indirectly
from the city's budget), and asset transfers. Overall, through
the purchase of services and subsidies, Zagreb contributed about
33% of Zagrebacki Holding's operating revenues in 2011. The city
council decides the makeup of the holding's management board,
most tariffs for regulated businesses, and its investment plan,"
S&P said.

"Nevertheless, as a result of recent changes in national
legislation, the company may be forced to divest one of its
lucrative water supply and sewage businesses, which may affect
the company's role in the provision of public services as well as
put additional pressure on its profitability," S&P said.

"Since 2008, Zagrebacki Holding has had no long-term financial
strategy. It remains subject to the city's politically motivated
decisions on mandates and sources of income. Zagrebacki Holding
has recently applied some cost-cutting measures, which, together
with raised tariffs on public transport and water supply as well
as fewer people eligible for free public transport, may reduce
its net loss in 2012-2014 in line with our base-case scenario.
Nevertheless, the company will continue to generate losses. Its
debt burden will stay high over this period with debt-to-EBITDA
projected to average a high 7.0x-8.0x and FFO to debt staying at
a low 8.0%-9.5%," S&P said.

"We view Zagrebacki Holding's liquidity as 'less-than-adequate'
under our criteria, based on what we view as the company's 'weak'
stand-alone liquidity position, combined with our opinion that
the City of Zagreb has the ability and willingness to provide
sufficient liquidity support to the company in a timely manner.
We also note the fact that the city continues to transfer funds
earmarked for the repayment of a portion of the company's debt,"
S&P said.

"Throughout 2012, the holding's free cash and available credit
facilities was about Croatian kuna (HRK) 180 million (EUR24
million), well below its debt service within the next year of
about HRK1.3 billion (or HRK1.1 billion, excluding debt repaid
from the city's budget)," S&P said.

"Based on our forecast, the holding's sources of liquidity (cash,
committed credit lines, and funds from operations) will cover
only 50% of the uses of liquidity -- such as capital investments
and principal repayment -- over the next year. We expect that
beyond the investment in the water and sewage networks, the
holding's capital expenditures will be close to minimal," S&P
said.

"The company's debt repayment profile has weakened significantly
since 2009, with a short-term portion of the debt raised to 19%
of total debt outstanding by year-end 2011," S&P said.

"By Croatian law, a public sector company is not allowed to raise
long-term borrowings unless it has a corresponding investment
program approved -- which the company has failed to do so far.
Under such circumstances, the company is to refinance its long-
term debts coming due with short-term bank loans, raising the
company's annual funding needs and pressuring its liquidity
position," S&P said.

"Moreover, since 2010 the company has occasionally delayed
payments to suppliers and operating-lease payments. We don't
consider this a default, but rather a sign of a strained
liquidity position," S&P said.

"The company can use about HRK120 million (EUR17 million) of an
arranged, earmarked credit facility from the European Bank for
Reconstruction and Development (AAA/Stable/A-1+) for the final
stage of its water and sewage network upgrade project and is
expected to successfully roll over its short-term bank loans of
HRK640 million coming due in December 2012 and July 2013," S&P
said.

"The company owns significant real-estate assets, which it
initially planned to start selling in 2008, using the proceeds to
repay debt. However, the inability of the company's supervisors
to approve its investment program, combined with reduced prices
in the residential property market, has led to a delay of sales
by more than 40 months," S&P said.

"The negative outlook reflects our expectation that Zagrebacki
Holding's SACP may deteriorate further as a result of unfavorable
organizational changes, an inability to contain expenditures, or
because of rising refinancing risks," S&P said.

"Our base-case scenario for the SACP (which is consistent with
the 'ccc+' level) assumes that in 2012-2013 the holding will
benefit from higher tariffs on its (primarily transport)
services, continue to reduce personnel costs, and successfully
extend short-term credit lines from local banks and leasing
obligations," S&P said.

"We could take a negative rating action on Zagrebacki Holding
within the next 12 months, if as a result of the divestiture of
its water supply and sewage branch and insufficient consolidation
measures, the company fails to improve its profitability or it
takes materially more short-term debt than envisaged in our base-
case scenario, or its access to external liquidity deteriorates,"
S&P said.

"We could also consider negative rating action if we took a
negative rating action on Zagreb, or if we revised downward our
view of the likelihood of the city providing timely and
sufficient extraordinary support to the company in case of
financial distress," S&P said.

"We could revise the outlook to stable as a result of a
confirmation of a 'high' probability of extraordinary support,
and stabilization of the holding's SACP in line with our base-
case scenario," S&P said.



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ALCATEL-LUCENT: Moody's Rates Sr. Sec. Credit Facilities '(P)B1'
----------------------------------------------------------------
Moody's Investors Service has assigned a provisional (P)B1 rating
to the proposed EUR1.615 billion senior secured guaranteed credit
facilities to be raised by Alcatel-Lucent USA Inc., an Alcatel-
Lucent subsidiary, to refinance in part the group's senior
unsecured notes and convertible bonds.

Moody's has also affirmed Alcatel-Lucent's corporate family
rating (CFR) and probability of default rating (PDR) at B3.
Concurrently, Moody's has affirmed the ratings on the existing
senior unsecured instruments issued by Alcatel-Lucent and its
subsidiaries at Caa1 and 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
at Caa2.

The outlook on all ratings remains negative.

Ratings Rationale

The (P)B1 rating on the proposed senior secured guaranteed notes
reflects (1) the priority position of the loans within the
capital structure of the Alcatel-Lucent group; (2) the benefits
of the security, consisting predominantly of part of Alcatel-
Lucent's intellectual property portfolio, and (3) a guarantee
package provided by the key holding companies and operating
companies of the group, initially representing at least 43% of
consolidated sales for the first nine months of 2012 and 159% of
consolidated EBITDA and 53% of consolidated assets as per the
last twelve months ended September 30, 2012.

The new transaction is intended to allow Alcatel-Lucent to raise
a US$500 million asset sale facility and US$1.275 billion and
EUR250 million senior secured term loans. Proceeds from the
financing will be used to refinance (through a public tender or
open market purchases or at maturity) near-term maturities and
for general corporate purposes. The announced transaction is
fully underwritten and will allow the company to extend the
maturity profile of its debt, thus gaining flexibility to
implement its previously announced EUR1.25 billion cost reduction
measures and the exiting or restructuring of unprofitable managed
services contracts and geographic markets. The existing unsecured
revolving credit facility will be terminated in connection with
the transaction.

Alcatel-Lucent USA, Inc., an Alcatel-Lucent subsidiary, will be
the borrower under the facilities whilst Alcatel-Lucent and some
of its material subsidiaries will be guarantors. The senior
secured credit facilities are expected to be denominated in US
dollars and in euros, with maturities of between three-and-a-half
and six years.

Provisional ratings reflect Moody's preliminary credit opinion
regarding the transaction only. Moody's will aim to assign a
definitive rating following a review of the final details of the
transaction. A definitive rating may differ from a provisional
rating.

Rationale For Affirmation

Although Moody's considers the new debt issuance to be credit-
positive for Alcatel-Lucent, the rating agency's decision to
affirm the B3 CFR and PDR with a negative outlook was driven by
the continued uncertainty about the company's ability to
significantly reduce its free cash outflows in 2013 and move
towards break-even thereafter. However, the refinancing buys the
company time and gives it additional room for underperformance
within the B3 rating category.

The envisaged transaction is credit negative for the existing
senior debt of Alcatel Lucent as it significantly reduces the
value of assets available for repayment of that debt in case of a
default of Alcatel Lucent. However, Moody's decision to affirm
Alcatel-Lucent's senior debt ratings at Caa1 as well as the
ratings on two convertible bonds issued by Lucent Technologies,
Inc. at Caa2 reflects the fact that these ratings are already
notched below the CFR and that the expected recovery values
implied at current rating levels, although lower than without the
transaction, have already been low.

Alcatel-Lucent USA, Inc. is both an operating and intermediate
holding company primarily for the US operations of the group,
owing around half of the group's debt. Customers located in USA
account for approximately one third of Alcatel-Lucent's group
sales. In its loss given default approach, Moody's has aligned
the recovery rankings for the senior unsecured debt of Alcatel-
Lucent and of Alcatel-Lucent USA, Inc. because the USA business
is fully integrated and strategically very important to the
group. As such, any potential financial restructuring is likely
to treat the two borrowers similarly, with comparable recovery
rates. Although Alcatel-Lucent USA, Inc. is closer to part of the
group's operating cash flows, it currently also carries
approximately half of the group's debt whilst Alcatel-Lucent S.A.
holds the majority of the group's cash and marketable securities.

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.

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



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BEAUTY HOLDING: Moody's Assigns 'B2' CFR/PDR; Outlook Stable
------------------------------------------------------------
Moody's Investors Service has assigned a B2 corporate family
rating (CFR) and probability of default rating (PDR) to Beauty
Holding One GmbH, which is to be the parent company and one of
the borrowing entities for Douglas Holding AG's ('DHAG') new
credit facilities. Concurrently, Moody's has assigned a B1 rating
with a loss-given default (LGD) assessment of LGD3 to Term loans
A and B, in aggregate amounting to EUR650 million, as well as to
the group's revolving credit facility (RCF), initially amounting
to EUR180 million, for which Beauty Holding One GmbH, Beauty
Holding Two AG and Beauty Holding Three AG are parties to the
Senior Facilities Agreement. The outlook on the ratings is
stable. This is the first time that Moody's has assigned ratings
to Beauty Holding One GmbH.

Douglas Holding AG, which has been publicly listed on the
Frankfurt Stock Exchange, is being acquired by private equity
firm Advent International, while the Kreke family, who are the
founding family of the business, are to retain a 20% indirect
stake in Beauty Holding One GmbH. Under the new financing
agreement, the target financing group has excluded its Thalia
books division ('the ring-fenced group') from the financing group
under the terms of the loan documentation. As such, the remaining
divisions within the financing group include Douglas Perfumery,
Christ Jewellery, AppelrathCpper clothing, and Hussel
Confectionary, although the first two divisions will be the key
drivers of the group's earnings and credit profile.

Ratings Rationale

"The assigned B2 CFR reflects Moody's view that the four
divisions within the financing group have demonstrated stability
in terms of earnings in recent years, albeit with modest sales
and profit growth," says Richard Morawetz, a Moody's Vice
President - Senior Credit Officer and lead analyst for DHAG. This
resilience reflects DHAG's focus on the more mainstream market
for both perfumes and jewellery (the latter notably under its
Jette brand, for which it has sole distribution rights), while
retaining high name recognition in the domestic market.

On the above basis, the ratings factor in only limited
deleveraging over the next 12-18 months. On a pro-forma basis for
the transaction, and based on earnings for the financing group
excluding the Thalia books division, Moody's estimates DHAG's
gross adjusted leverage to be approximately 5.9x, or 6.1x
including a subordinated shareholder loan (which is assigned 50%
equity credit). Moody's understands that the Thalia division
currently has negligible borrowings. However, Thalia suffered a
steep decline in earnings and margins in the past year due to
consumer migration to the internet. Moody's metrics are based on
the consolidated group, where the rating agency expects annual
accounts to be audited going forward. However, Moody's recognizes
the potential for a deviation between these metrics and those of
the financing group, depending on the financial policies and
performance of Thalia. As such, Moody's will continue to monitor
developments and metrics at both entities.

The terms of the loan documents limit cash outflows to Thalia or
other non-financing group entities. Nevertheless, Moody's notes
that in 2013, the financing group will need to settle certain
intra-group liabilities to Thalia, which are expected to amount
to approximately EUR60 million (of which EUR30 million will be
contributed in the form of equity by the shareholders) and are
factored into the ratings and Moody's liquidity assessment. In
addition, DHAG continues to to be a party to certain lease
liabilities in respect of the Thalia business, but which Moody's
expects to gradually amortise. In general, the ratings assigned
to Beauty Holding One assume that the group's liabilities for
Thalia will be limited to the terms of the financing group's loan
agreements, notably in terms of funding of the ring-fenced group,
which includes a permitted payments cap of EUR30 million, and
that any additional support or liabilities of Thalia will be
satisfied by equity contributions from the owners. Although not
anticipated or factored into the current rating, should any
liabilities arise at Thalia that require additional funding from
the financing group, this could affect Moody's rating assessment.

The capital structure of the new financing group will consist of
EUR850 million in debt instruments, including (1) a Term loan A
of EUR200 million, which is amortizing and matures in 2018; (2) a
Term loan B of EUR450 million, with a bullet repayment in 2019;
and (3) EUR200 million in mezzanine debt maturing in 2020. The
capital structure will also include a shareholder loan of EUR260
million maturing in 2022, which is subordinated to all other debt
instruments of the borrower. Finally, the acquisition will also
be funded with approximately EUR795 million in equity from Advent
International, with a respective amount being invested by the
Kreke family, assuming a 100% acquisition of Douglas Holding AG.
Under the terms of an intercreditor agreement, the term loans and
the RCF rank pari passu, and ahead of the mezzanine debt (second
lien). As such, the term loans and RCF are rated at B1, one notch
above the CFR. All of these instruments are secured on all
material assets of the financing group, which together are
required to amount to at least 85% of the financing group's
assets and EBITDA.

Moody's would expect DHAG's liquidity to remain satisfactory to
cover the fairly significant swings in its working capital during
the year. These tend to peak in the January-March period (the
second quarter of the reporting year), while reaching the lowest
point in the quarter prior to Christmas (first quarter of the
reporting year). Moody's expects the financing group's liquidity
to consist of approximately EUR50 million in cash after the
closing of the transaction, in addition to the EUR180 million
RCF, which is to be reduced to EUR130 million after the debt
push-down at the financing group. The term loans contain
financial covenants for cash flow coverage, interest coverage,
leverage and capex. In Moody's view, DHAG will likely require the
RCF to cover working capital seasonality in the business, and
hence access to the facility, as well as the maintenance of solid
headroom under its financial covenants, will be ongoing
considerations in the rating agency's assessment of the group's
liquidity.

Outlook

The stable outlook on the ratings factors in the recent trend in
DHAG's performance, with stable earnings but limited growth
within the financing group, such that Moody's expects metrics to
remain fairly stable over the medium term.

What Could Change The Rating Up/Down

Positive pressure on the rating or outlook could occur if DHAG's
gross leverage were to fall sustainably below 5.5x on the back of
supportive industry conditions. Conversely, negative pressure
would likely occur if leverage were to remain above 6.0x on a
continued basis, implying fairly limited flexibility in the
current rating category. Any deterioration in the group's
liquidity profile, including but not limited to reduced covenant
headroom, could also put downward pressure on the ratings.

The principal methodology used in rating Beauty Holding One GmbH
and Beauty Holding Two AG was the Global Retail Industry
Methodology published in June 2011. Other methodologies used
include Loss Given Default for Speculative-Grade Non-Financial
Companies in the U.S., Canada and EMEA published in June 2009.

Douglas Holding AG, based in Hagen, Germany, is a mid-sized
German retailer whose divisions include Douglas (perfumery),
Christ (jewellery), AppelrathCupper (clothing), Hussel
(confectionary), and Thalia (books). The financing group where
the rated loan instruments are being borrowed excludes the Thalia
division. In FY2011 (to September 2011), the consolidated group
reported revenues and EBITDA of EUR3.38 billion and EUR293
million, respectively. In the first nine months of FY2012 (to
June 2012), the company reported revenues and EBITDA of EUR2.7
billion and EUR204 million (prior to restructuring charges at
Thalia), respectively.


DOUGLAS HOLDING: S&P Assigns 'B' Long-Term Corp. Credit Rating
--------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B' long-term
corporate credit rating to German nonfood discretionary goods
retailer Douglas Holding AG. The outlook is stable.

"At the same time, we assigned an issue rating of 'B+' to
Douglas' EUR830 million senior secured debt facilities, maturing
in 2018 and 2019, based on a recovery rating of '2', which
indicates our expectation of substantial (70%-90%) recovery in a
default scenario," S&P said.

"The ratings reflect our view of Douglas' 'fair' business risk
profile and 'highly leveraged' financial risk profile, as defined
in our criteria. Douglas runs retail operations for beauty
products, jewelry, fashion, and sweets. For the 12 months to June
30, 2012, these segments achieved about EUR227 million of EBITDA,
of which about 65% were generated in Douglas' home market and the
remainder in several Western and Central European countries. The
company generates about 35% of its sales in the final quarter of
a calendar year. We exclude from our assessment the contribution
of the company's book retail operations (Thalia), which will be
recapitalized and restructured on a stand-alone basis following
Advent's acquisition of Douglas. We note that the finance
documentation includes a ring-fencing feature that limits cash
outflows from Douglas to Thalia in the future," S&P said.

"We base our view of the company's business risk profile as
'fair' mainly on Douglas' reported profitability (EBITDA) margin
of about 9%, which is below that of peers, who typically post
reported EBITDA margins above the 10% mark. We also think that
growth potential in Douglas' home market is limited, given the
company's high degree of market penetration. In addition, we
believe that Douglas' top-line growth trends in fiscal 2013 will
be marginally positive at best, due to ongoing, difficult trading
conditions and hesitant consumer spending, especially in Southern
and Western European markets. Ahead of the important year-end
quarter, which is the company's first quarter of fiscal 2013, we
do not exclude that Douglas' EBITDA margins could move at least
temporarily below the 9% mark over the next 12 months, unless the
company achieves some cost-efficiency gains during this period,"
S&P said.

"We consider as mitigating factors that Douglas' competitive
position is very resilient in Germany, where it runs the only
beauty products operation of its kind, with high customer
recognition and market shares. Therefore, we think the relatively
low profitability levels are largely stable within the indicated
boundaries and not currently threatened by competitive or
transformative pressures," S&P said.

"The increase in Douglas' financial debt after closing the
transaction will likely result in an adjusted debt-to-EBITDA
ratio in excess of 6x (including adjustments for operating leases
and a EUR260 million shareholder loan, which we regard as debt),
and adjusted EBITDA cash interest coverage (excluding the noncash
interest parts of the capital structure) of 2.0x-2.5x. This
positions the company's financial risk profile in our 'highly
leveraged' category. Under a scenario of adverse market
conditions, we believe that the company's financial metrics will
weaken somewhat over the next 12 months, while the adjusted
interest coverage could move toward the lower end of our forecast
Parameters," S&P said.

"However, we also think that even in a more adverse scenario,
Douglas will be able to generate free operating cash flow, based
on its ability to generate funds from operations of at least
EUR140 million and maintain capital expenditure at not more than
EUR80 million. Therefore, we see free operating cash flow of at
least EUR40 million in the coming year as achievable, which
represents 4%-5% of gross senior debt and 1%-2% of adjusted
debt," S&P said.

"The majority of free cash flow will be used to pay back senior
debt, in line with the cash flow sweeps fixed in the loan
documentation," S&P said.

"The stable outlook reflects our view that based on its strong
market positions in its relatively resilient German core market,
Douglas will be able to maintain an adjusted debt-to-EBITDA ratio
of about 6.5x and adjusted EBITDA cash interest coverage of 2.0x-
2.5x after Advent's acquisition of the company, while achieving
free operating cash flow of EUR40 million to EUR50 million over
the next 12 months. This assessment includes our assumption of a
marginally declining macroeconomic environment for Douglas'
operations in some of its markets. This will likely lead to some
deterioration of EBITDA margins against the 9.2% achieved in
fiscal 2012, unless the company garners some quick wins in
operating efficiency," S&P said.

"We could lower the ratings if higher pressure on earnings than
we anticipate or unexpected shortfalls in operating efficiency
caused Douglas' financial metrics to fall short of the
aforementioned levels, notably if EBITDA cash interest coverage
fell below 2x and free operating cash flow generation remained
below EUR40 million. A stronger-than-anticipated contraction of
headroom under financial covenants following such a scenario
could be another reason for a downgrade," S&P said.

"We could take a positive rating action if early wins in
operating efficiency outweighed the threats triggered by the
difficult trading environment, causing the historical trend of
improving EBITDA margins to continue. In addition, we see upside
potential if, notwithstanding operating improvements, adjusted
EBITDA cash interest cover exceeded 3x and adjusted debt to
EBITDA fell below 5.0x. However, we believe the latter scenario
unlikely over the next 12 months," S&P said.


TMD FRICTION: Moody's Cuts CFR/PDR to 'B3'; Outlook Stable
----------------------------------------------------------
Moody's Investors Service downgraded the corporate family and
probability of default rating of TMD Friction Group S.A. to B3
from B2. At the same time the rating agency affirmed the rating
on the EUR 97 million senior secured notes issued by TMD Friction
Finance S.A. at B2 (LGD3, 43%). The outlook on the ratings is
stable.

Ratings Rationale

"The downgrade of TMD Friction's corporate family rating (CFR) to
B3 reflects the group's deteriorating financial performance over
the course of 2012 and the continuing sluggish demand in the
company's home market", says Oliver Giani, a Moody's Vice
President and lead analyst for TMD. "Key drivers for the weaker
than expected earnings levels at TMD Friction were the difficult
macroeconomic environment in Europe where the company generates
the vast majority of its group sales (86% in FY2011) and an
adverse margin impact from continued high and volatile raw
material prices. The rating on the senior secured notes has been
affirmed at B2, one notch higher than the CFR in consideration of
its secured position and seniority above the EUR72 million
subordinated shareholder loan, which has been given a 50% equity
credit," adds Mr. Giani.

With car production volumes in Europe (especially Southern
Europe) diminishing materially during 2012, most of TMD
Friction's original equipment manufacturing customers (OEMs),
except for the German and UK premium carmakers, distinctly cut
back demand for the company's friction materials. Moreover, the
company faced unfavorable trading conditions also in its relevant
markets outside Europe such as China, for instance, where local
customers chose to delay several vehicle production programs.
Persistently high and volatile raw material prices (e.g. copper,
tin or steel) also negatively affected the company's earnings
over the course of this year. As a result, TMD Friction's
revenues and profitability significantly suffered with EBITDA (as
adjusted by TMD) declining by 35% during the last twelve months
to EUR41.8 million.

During that period Moody's adjusted leverage for TMD Friction
increased to 5.7x debt to EBITDA from 4.5x as of year-end 2011.
In light of the lasting gloomy outlook for the European car
market also in 2013 (Moody's forecasts demand for new cars and
light commercial vehicles in Western Europe to decline by 3.0% in
2013), Moody's does not expect TMD Friction to be able to improve
its credit metrics to levels that would be commensurate with a
rating higher than B3 in the foreseeable future.

Apart from the recent weakening of its financial ratios, Moody's
continues to positively assesses TMD Friction's affiliation to
its single shareholder Nisshinbo Holdings Inc. (NISH), a widely
diversified industrial conglomerate, active in textiles,
automobile brakes, papers, mechatronics, chemicals and
electronics. In particular, Moody's favorably acknowledges that
NISH provided strong financial support to TMD Friction by funding
a EUR63 million redemption of its senior notes through
subordinated shareholder loans in 2012. In addition, as these
intercompany loans are non-cash interest bearing debt, TMD
Friction will save approximately EUR7 million of annual cash
interest going forward. Moreover, due to their subordinated
nature, Moody's considers 50% of these shareholder funds as
equity which helped to reduce debt levels at TMD Friction,
accordingly. A further contribution of NISH to provide TMD
Friction another time with shareholder loans to replace
additional amount of its outstanding EUR97 million notes remains
not an unlikely scenario in Moody's view. In addition, Moody's
believes that the company will benefit from certain opportunities
associated with its new ownership structure, such as joint
purchasing and marketing activities and from a logistical
perspective.

Moody's views TMD's liquidity profile to be weak. The company's
liquidity sources for the next 12 months comprise of cash on hand
(EUR26.7million net of trapped cash), funds from operations of
around EUR13.1 million and EUR27.7 million availability under the
company's revolving credit facilities, which are subject to
financial covenants with only limited headroom. These sources,
together total about EUR67 million and give little cushion
against liquidity needs estimated at around EUR58 million
including EUR32 million required for capital expenditures, EUR7.3
million debt repayments and EUR19 million cash required to run
the business.

Overall, TMD Friction's B3 CFR balances the company's (i) rather
limited size; (ii) its poor profitability and (iii) weak
liquidity profile; with (iv) a strong position in the original
equipment market and the usually more resilient aftermarket for
automotive brake pads and linings; (v) advanced technologies,
which allow it to supply OEM customers worldwide despite region-
specific product requirements; (vi) established and solid
relationships with automobile manufacturers and auto equipment
suppliers; and (vii) its operating footprint, which benefits from
a reduced cost base on the back of successful rationalization and
cost-cutting initiatives in recent years.

The stable outlook on TMD Friction's ratings is based on Moody's
expectation that the company will be able to maintain leverage at
levels close to 6x debt/EBITDA on an adjusted basis during 2013.
Furthermore, Moody's expects the company to gradually improve its
profitability to adjusted EBIT margins above breakeven in the
near term.

What Could Change The Rating UP/DOWN

Moody's would consider upgrading TMD Friction's ratings if the
company were able to (i) generate EBIT margins sustainably above
3%; (ii) reduce leverage to 4.5x debt/EBITDA or lower; (iii)
achieve an interest coverage of close to 1.0x EBIT/interest
expense and; (iv) return to positive free cash flow on a
sustainable basis.

Conversely, downward pressure on TMD Friction's ratings could
arise if the company's (i) earnings were to deteriorate further;
(ii) leverage ratios increase to levels above 6.5x debt/EBITDA;
and (iii) a further erosion of its liquidity profile. The rating
would also come under pressure should TMD Friction -- contrary to
expectations -- start upstreaming cash to its owner, by dividend
payments or other means.

Principal Methodology

The principal methodology used in rating TMD Friction Group S.A.
and TMD Friction Finance S.A. was the Global Automotive Supplier
Industry Methodology published in January 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.

                         Company Profile

TMD Friction is a manufacturer of brake pads and linings, based
in Luxembourg and with manufacturing operations in Europe, USA,
China, Mexico, Brazil and South Africa. The company generated EUR
640 million in revenues in the twelve-months-period ended
September 2012. Thereof, 45% were generated by the Independent
Aftermarket Segment ("IAM") which manufactures branded
(approximately 90%) and private-label (around 10%) replacement
brake pads and linings for sale to end customers through
independent dealers and repair shops. In addition, 24% of group
revenues were generated by the OES segment, which produces
original brake pads and linings for replacement that are sold
through the dealership network of car manufacturers. Furthermore,
some 31% of group revenues were generated by the OEM segment,
which supplies brake pads and linings for the initial car or
truck production. In the OEM segment, TMD Friction actually
delivers to Tier-1 suppliers that manufacture the brake systems.
However, the car manufacturer specifies the brake pad/lining
supplier in most cases. In total, TMD Friction operates 14
manufacturing sites with approximately 4,800 employees.

Nisshinbo Holdings Inc. is a Japanese holding company listed on
the Tokyo Stock Exchange. In the fiscal year ended March 2012,
NISH's consolidated sales amounted to JPY379,340 million
(approximately EUR3.5 billion).



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


* GREECE: Moody's Confirms Junk Ratings on Structured Deals
-----------------------------------------------------------
Moody's Investors Service has confirmed the Caa2(sf) and Caa3(sf)
ratings on nine Greek structured finance (SF) transactions,
reflecting the rating agency's view that significant tail risks
for Greece are adequately captured in the country's Caa2 country
ceiling. In most Greek SF transactions, Moody's rates senior
notes at the ceiling of Caa2(sf) and subordinated notes at
Caa3(sf) to reflect the higher severity on these notes in the
event of a default. The rating confirmations conclude the review
for downgrade initiated by Moody's on June 6, 2012.

Moody's has also found the collateral performance of all Greek SF
transactions to have deteriorated significantly over the past
year. For most transactions, however, such performance trends
remain consistent with Moody's expectations. Moody's has updated
its expected loss assumptions for two Greek SF transactions in
light of negative collateral performance. Notwithstanding this,
Moody's did not downgrade the ratings of any Greek SF
transactions because they already reflect stresses related to
adverse economic scenarios in which losses would significantly
exceed those associated with Moody's expected case.

Ratings Rationale

"The rating confirmations reflect our conclusion that, while
there remain significant tail risks for Greece, in particular in
terms of a euro area exit and related currency redenomination
risk, these risks are adequately captured in the Greek country
ceiling," says Ariel Weil, a Moody's Vice President -- Senior
Analyst. Moody's lowered Greece's country ceiling to Caa2 on
June 1, 2012 and it has maintained it at this level since then.

Since the start of Moody's review, the new Greek government has
passed a fiscal tightening package and the 2013 budget. Moreover,
it has been able to secure assistance funding from the Eurogroup
and the International Monetary Fund (IMF), albeit at a material
domestic political cost. Greece will still face very significant
implementation risks to its fiscal and economic reforms. The
success of the economic adjustment program is contingent upon the
Greek government's ability and willingness to implement and
execute the reforms necessary to boost the country's economic
growth prospects.

-- Performance deterioration

While credit enhancement has increased for all Greek SF
transactions and would reduce the severity of losses in a default
scenario, collateral performance has deteriorated for all Greek
SF transactions. As at December 2012, year-over-year 60-day
delinquencies have increased by 23%, 90-day delinquencies by 37%
and cumulative defaults by 54% on average across Greek RMBS.
Similarly, Epihiro Plc. a CLO transaction, experienced a steep
year-over-year increase in cumulative defaults from 1.9% to 8.1%
(of the original pool balance) as of July 2012, as did Synergatis
Plc, an ABS backed by loans to SME.

To reflect the particularly negative performance of outlier
transactions, Moody's has revised its default assumptions for two
transactions. In RMBS transaction Estia II, cumulative defaults
have increased from 2.3% to 4.4% of original balance in the 12-
month period to October 2012. As a result, Moody's has revised
the transaction's expected loss assumption to 6% from 4.2% of
original balance. In ABS transaction Synergatis, 90-day
delinquencies have increased to 22.8% from 9.12% in the three-
month period to October 2012 and year-over-year cumulative
defaults have increased from 3.9% to 12.7% (of the original
balance plus replenishments) as of October 2012. As a result,
Moody's has revised the transaction mean default expectation to
33% from 18.4% of original balance.

Moody's periodically publishes a Greek RMBS Index, which contains
details on the performance evolution of rated Greek RMBS.

No cash flow analysis was conducted for this rating action, which
was driven by an analysis of the macroeconomic situation as
reflected in the Greek country ceiling. Moody's stress scenarios
reflected in the transactions' ratings include a higher
probability assigned to a disorderly default on Greek sovereign
debt and an exit of the country from the euro area. Further
increases in the likelihood of these events, as well as further
collateral performance deterioration, would be credit negative.

List of Affected Ratings:

CLO Transaction:

Issuer: EPIHIRO PLC

    EUR1,623,000,000 Class A Asset Backed Floating Rate Notes due
    January 2035, Confirmed at Caa2 (sf); previously on Jun 6,
    2012 Downgraded to Caa2 (sf) and Placed Under Review for
    Possible Downgrade

ABS Transaction:

Issuer: Synergatis Plc

    A, Confirmed at Caa2 (sf); previously on Jun 6, 2012
    Downgraded to Caa2 (sf) and Placed Under Review for Possible
    Downgrade

RMBS Transactions:

Issuer: Estia Mortgage Finance II PLC

    A, Confirmed at Caa2 (sf); previously on Jun 6, 2012
    Downgraded to Caa2 (sf) and Placed Under Review for Possible
    Downgrade

Issuer: Grifonas Finance No. 1 Plc

    A, Confirmed at Caa2 (sf); previously on Jun 6, 2012
    Downgraded to Caa2 (sf) and Placed Under Review for Possible
    Downgrade

    B, Confirmed at Caa3 (sf); previously on Jun 6, 2012
    Downgraded to Caa3 (sf) and Placed Under Review for Possible
    Downgrade

    C, Confirmed at Caa3 (sf); previously on Jun 6, 2012
    Downgraded to Caa3 (sf) and Placed Under Review for Possible
    Downgrade

Issuer: KION Mortgage Finance Plc

    A, Confirmed at Caa2 (sf); previously on Jun 6, 2012
    Downgraded to Caa2 (sf) and Placed Under Review for Possible
    Downgrade

    B, Confirmed at Caa3 (sf); previously on Jun 6, 2012
    Downgraded to Caa3 (sf) and Placed Under Review for Possible
    Downgrade

    C, Confirmed at Caa3 (sf); previously on Jun 6, 2012
    Downgraded to Caa3 (sf) and Placed Under Review for Possible
    Downgrade

Issuer: Themeleion II Mortgage Finance Plc

    A, Confirmed at Caa2 (sf); previously on Jun 6, 2012
    Downgraded to Caa2 (sf) and Placed Under Review for Possible
    Downgrade

    B, Confirmed at Caa3 (sf); previously on Jun 6, 2012
    Downgraded to Caa3 (sf) and Placed Under Review for Possible
    Downgrade

    C, Confirmed at Caa3 (sf); previously on Jun 6, 2012
    Downgraded to Caa3 (sf) and Placed Under Review for Possible
    Downgrade

Issuer: Themeleion III Mortgage Finance Plc

    A, Confirmed at Caa2 (sf); previously on Jun 6, 2012
    Downgraded to Caa2 (sf) and Placed Under Review for Possible
    Downgrade

    M, Confirmed at Caa3 (sf); previously on Jun 6, 2012
    Downgraded to Caa3 (sf) and Placed Under Review for Possible
    Downgrade

    B, Confirmed at Caa3 (sf); previously on Jun 6, 2012
    Downgraded to Caa3 (sf) and Placed Under Review for Possible
    Downgrade

    C, Confirmed at Caa3 (sf); previously on Jun 6, 2012 Caa3
    (sf) Placed Under Review for Possible Downgrade

Issuer: Themeleion IV Mortgage Finance Plc

    A, Confirmed at Caa2 (sf); previously on Jun 6, 2012
    Downgraded to Caa2 (sf) and Placed Under Review for Possible
    Downgrade

    B, Confirmed at Caa3 (sf); previously on Jun 6, 2012
    Downgraded to Caa3 (sf) and Placed Under Review for Possible
    Downgrade

    C, Confirmed at Caa3 (sf); previously on Jun 6, 2012
    Downgraded to Caa3 (sf) and Placed Under Review for Possible
    Downgrade

Issuer: Themeleion Mortgage Finance PLC

    A, Confirmed at Caa2 (sf); previously on Jun 6, 2012
    Downgraded to Caa2 (sf) and Placed Under Review for Possible
    Downgrade

    B, Confirmed at Caa3 (sf); previously on Jun 6, 2012
    Downgraded to Caa3 (sf) and Placed Under Review for Possible
    Downgrade

    C, Confirmed at Caa3 (sf); previously on Jun 6, 2012
    Downgraded to Caa3 (sf) and Placed Under Review for Possible
    Downgrade

The rating considerations described in this press release
complement the methodologies applicable to each specific
transaction asset class.

The methodology used in rating the RMBS transactions was "Moody's
Approach to Rating RMBS in Europe, Middle East, and Africa",
published in June 2012. The methodology used in rating the CLO
transaction was "Moody's Approach to Rating Corporate
Collateralized Synthetic Obligations", published in September
2009. The methodology used in rating the ABS transaction was
"Moody's Approach to Rating CDOs of SMEs in Europe", published in
February 2007.



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


MAGYA TAKAREKBANK: S&P Cuts Counterparty Credit Rating to 'BB-'
---------------------------------------------------------------
Standard & Poor's Ratings Services lowered its long-term
counterparty credit rating on Magyar Takarekszovetkezeti Bank
ZRt. (Takarekbank)to 'BB-' from 'BB' and affirmed its 'B' short-
term rating. The outlook is stable. "We are also lowering our
stand-alone credit profile (SACP) on Takarekbank to 'b-' from
'b'. At the same time we affirmed our long- and short-term
ratings on OTP Bank PLC and its core subsidiary OTP Mortgage Bank
at 'BB/B'. The outlook is stable. We are lowering OTP's SACP to
'bb' from 'bb+'. We also affirmed our unsolicited public
information (pi) ratings on three subsidiaries of foreign groups-
-K&H Bank and Central-European International Bank Ltd. (CIB) at
'BBpi', and MKB Bank ZRT at 'Bpi'," S&P said.

"We view economic risks for Hungarian banks as having increased
incrementally, based on expectations of a more protracted
downturn in the country with an expected 1.5% GDP contraction in
real terms in 2012 and a muted 0.5% rebound in 2013. Continued
fiscal rationalization, a distortionary and unpredictable tax
environment for the financial sector, and very tight credit
conditions because of the fragility of the banking system weigh
on future growth prospects. We expect a deterioration of the
creditworthiness of the main economic agents -- households,
corporates, and public bodies -- which should translate into
higher levels of problem loans for banks. We expect nonperforming
loans (NPLs) to continue to rise rapidly, moving toward 18% in
the household segment in 2013 from 16.2% at midyear 2012 and 3.5%
in 2008, and 23% in the corporate sector from 20.9% at midyear
2012 and 3.5% in 2008. We therefore believe the banking sector
will be loss making in 2012 and 2013, the third consecutive year,
burdened by the need to create new provisions," S&P said.

"We also see a negative trend in industry risk. The banking
sector's profitability is being impaired by falling volumes. Most
of the banks, especially foreign-owned ones, are deleveraging
rapidly. We recognize the weak internal demand for credit, but
believe another important reason for this rapid deleveraging is
the punitive and distortionary set of ad hoc measures implemented
by authorities and specifically targeting the financial sector to
shore up public finances and relieve debt burden in foreign
currency to households. In particular, banks suffered huge losses
in fourth-quarter of 2011 when the mortgage repayment law enabled
households to repay mortgages denominated in foreign currency --
above 60% of the stock -- at a fixed rated much lower than market
rates prevailing at that time, implicitly equivalent to a debt
write off for the banking system. The authorities' decision to
implement a transaction tax and their decision not to halve the
bank levy in 2013, as originally agreed in December 2011, will
further weaken the banks' financial profiles and their ability to
generate capital internally. This, in turn, will lead to a rapid
reduction of credit supply to the economy, delaying recovery
prospects. We also believe the authorities' unpredictable policy
framework and unfriendly attitude toward the banking system may
lead foreign parents to gradually reduce, but not stop, the
channeling of resources in the form of capital and liquidity to
their subsidiaries, accelerating the deleveraging process. We
believe there is a risk of the industry downsizing, affecting its
long-term dynamics," S&P said.

"Our affirmation of the ratings on OTP Bank and its core
subsidiary OTP Mortgage Bank reflects our belief that the bank
has better business and geographic diversification than its
domestic peers, notably profitable activities in Central and
Eastern Europe (CEE) and Russia, which have enabled it to
maintain strong operating performance despite the continuous rise
in nonperforming loans in Hungary. OTP's ratings are the highest
for a bank in Hungary, at the level of the sovereign," S&P said.

"We have lowered OTP's SACP to 'bb' from 'bb+' to reflect higher
economic risks in Hungary, where half of OTP's assets are
located. We believe the bank remains exposed to the deterioration
of the domestic economy and sovereign creditworthiness through
its holding of government debt and lending to public sector
entities like municipalities," S&P said.

"The stable outlook reflects our expectation that the bank's
business and financial profile will remain fairly unchanged over
the next 12 months. It also reflects our view that the bank's
capacity to generate capital from earnings will remain high,
despite the current asset quality pressure and constrained
business growth," S&P said.

"As a core subsidiary, OTP Mortgage Bank's ratings move in tandem
with those on OTP," S&P said.

"We lowered our rating on Takarekbank by one notch to reflect our
lowering of its anchor, and subsequently its SACP, to 'b-' from
'b'. Takarekbank continues to benefit from three notches of
support from the Integrated Savings Cooperatives (SCs), for which
it acts as the central organ. We believe Takarekbank is a
'strategically important' subsidiary of the SCs," S&P said.

"The stable outlook reflects the above-average resilience of the
SCs business and financial profiles, which have been less
affected than private banks in Hungary because of the SCs low
share of foreign currency lending to households, well entrenched
franchise in rural areas, and therefore favorable funding
profiles. We also consider unlikely, at this stage, a revision of
Takarekbank's SACP to the 'ccc' category, given its adequate
liquidity and weak, but not deteriorating, capital position. The
stable outlook also takes into account the outlook on the
sovereign. Any negative action on the sovereign would likely be
reflected in Takarekbank's ratings," S&P said.

"Our affirmation of the 'BBpi' rating on K&H despite worsening
operating conditions in Hungary reflects that we expect Belgian
parent bank KBC Bank N.V. (A-/Positive/A-2) to provide it with
extraordinary support in case of need. We view K&H as a
'strategically important' subsidiary of KBC, and therefore the pi
rating benefits from some uplift. Parental support partly offsets
higher economic risks, in our view. K&H's SACP is in  the 'bb'
category," S&P said.

"Our affirmation of the 'BBpi' rating on CIB despite worsening
operating conditions in Hungary reflects that we expect Italian
bank Intesa SanPaolo (BBB+/Negative/A-2) to provide it with
extraordinary support in case of need. We view CIB as a
'strategically important' subsidiary of Intesa, and therefore
the pi rating benefits from one category of uplift. Parental
support, shown by regular capital increases and funding support
over the past months partly offsets, in our view, higher economic
and industry risks. CIB's SACP remains in the 'b' category," S&P
said.

"Our affirmation of the 'Bpi' rating on MKB Bank despite
operating conditions in Hungary reflects that we expect the bank
to receive extraordinary support from the Hungarian government in
case of need, as it is of 'high' systemic importance, according
to our criteria. MKB's majority owner Germany-based Bayerische
Landesbank (not rated) has regularly provided capital support in
recent quarters, but its longer-term intentions are unclear.
Systemic support offsets higher economic risk, in our view. We
have revised the SACP to the 'ccc' category to reflect the bank's
very weak capital position and its continued dependence on
parental support to maintain regulatory ratios above the minimum
required, but with an extremely thin margin," S&P said.

BICRA SCORE SNAPSHOT*
Hungary                          To                   From

BICRA Group                      8                    7

Economic risk                   8                    7
  Economic resilience            High risk           High risk
  Economic imbalances            Very High risk      High risk
  Credit risk in the economy     Very High risk      Very High
                                                      risk

Industry risk                   7                    7
  Institutional framework        High risk           High risk
  Competitive dynamics           High risk           High risk
  Systemwide funding             Very High risk      Very High
                                                      risk

* Banking Industry Country Risk Assessment (BICRA) economic risk
   and industry risk scores are on a scale from 1 (lowest risk)
   to 10 (highest risk).

RATINGS LIST

Downgraded; Upgraded; Ratings Affirmed;
CreditWatch/Outlook Action
                               To                From

DOWNGRADED
Magyar Takarekszovetkezeti Bank ZRt.
  Counterparty Credit Rating   BB-/Stable/B      BB/Negative/B

AFFIRMED
OTP Bank PLC
OTP Mortgage Bank
  Counterparty Credit Rating   BB/Stable/B       BB/Stable/B
n

K&H Bank
  Counterparty Credit Rating   BBpi                  BBpi

Central-European International Bank Ltd.
  Counterparty Credit Rating   BBpi                  BBpi

MKB Bank ZRT
  Counterparty Credit Rating   Bpi              Bpi



=============
I R E L A N D
=============


* IRELAND: Moody's Says Prime RMBS Performance Worsens in Oct.
--------------------------------------------------------------
The performance of the Irish prime residential mortgage-backed
securities (RMBS) market steadily worsened during the three-month
period leading to October 2012, according to the latest indices
published by Moody's Investors Service.

From July to October 2012, the 90+ day delinquency trend and 360+
day delinquent loans (which are used as a proxy for defaults)
reached a new peak, rising steeply to 16.52% from 15.19% and to
7.91% from 6.58%, respectively, of the outstanding portfolios.
Moody's annualized total redemption rate (TRR) trend was 2.95% in
October 2012, down from 3.40% in October 2011.

Moody's outlook for Irish RMBS is negative. The steep decline in
house prices since 2007 has placed the majority of borrowers deep
into negative equity. Falling house prices will increase the
severity of losses on defaulted mortgages. The rating agency
expects that the Irish economy will only grow 1.1% in 2013. In
this weak economic recovery, it will be difficult for distressed
borrowers to significantly increase their debt servicing
capabilities and so arrears are likely to continue increasing.

On November 15, Moody's downgraded nine senior notes and placed
on review for downgrade one senior note out of five Irish RMBS
transactions, following the rating agency's revision of key
collateral assumptions. The downgrades reflect insufficient
credit enhancement for notes rated at the country ceiling. All
notes affected by this rating action remain on downgrade review
pending re-assessment of required credit enhancement to address
country risk exposure. Moody's also increased assumptions in
eight other transactions, which did not result in any rating
action due to sufficient credit enhancement.

As of October 2012, the 19 Moody's-rated Irish prime RMBS
transactions had an outstanding pool balance of EUR48.97 billion.
This constitutes a year-on-year decrease of 7.1% compared with
EUR52.69 billion for the same period in the previous year.



=================
L I T H U A N I A
=================


BITE FINANCE: Moody's Raises CFR/PDR to 'B3'; Outlook Stable
------------------------------------------------------------
Moody's Investors Service has upgraded the corporate family
rating (CFR) and probability of default rating (PDR) of Bite
Finance International B.V to B3 from Caa1. Moody's also upgraded
the rating on the senior secured Notes due 2014 to B3 from Caa1,
and the rating on the stub of unsecured notes due 2017 to Caa2
from Caa3. The outlook is stable.

Ratings Rationale

The B3 CFR reflects Bite's steady improvement in performance over
the last seven quarters driven by a slowdown in the decline of
Lithuanian revenues and good growth momentum in Latvia's EBITDA.
This has led to an improvement in credit metrics, with adjusted
Debt / EBITDA decreasing to 3.9x at end of Q3 2012 from 4.5x at
the end of 2011 and 5.3x at the end of 2010. Moody's anticipates
that Bite will continue to deleverage towards 3.5x by the end of
2013.

In addition, the B3 CFR remains supported by (i) the company's
established market position in Lithuania; (ii) the positive free
cash flow generation in 2011 and the first three quarters of 2012
which is expected to be maintained in the future; (iii) EBITDA
margins improvements on the back of tight cost control programs
in the last couple of years; and (iv) Moody's expectation that
the declining trend in revenues in Lithuania has now stabilized.

The rating also recognizes the risks associated with (i) the
company's relatively small scale in the global telecommunications
industry; (ii) its narrow geographical focus on the Lithuanian
and Latvian markets; (iii) its relatively weak market position as
a "challenger" in Latvia; (iv) the company's weak liquidity
profile, which will be challenged as its revolving credit
facility expires over the next 6 months.

Over the last three years, Bite has experienced a strong decline
in its top line revenues driven by its Lithuanian operations
which still generate the majority of Bite's revenues (75% for
2011). This decline in revenues came despite Bite's Lithuanian
SIM market share remaining stable over that period, and reflected
the impact of reduced consumer spending in a period of economic
strain as well as the negative impact of regulatory driven cuts
to the interconnect rates in Lithuania.

Lithuania's mobile termination rate (MTR) has fallen from 10
Eurocents in 2009, to 1.6 Eurocent, and was announced to fall
further to 0.8 euro cent in 2013. Although the general macro-
economic landscape remains uncertain and ARPU growth could
continue to be volatile, Moody's expects that these further cuts
in MTRs should have relatively limited net impact on Bite.

In Latvia, Bite has a revenue market share well below its two
main competitors, LMT and Tele2. However, Bite has achieved
substantial subscriber and revenue growth; with Latvia's positive
revenue trends further aided by MTR cuts, which in Latvia
represent a net cost to the company. This led to Latvia's EBITDA
turning positive in 2011 (EUR3 million) for the first time.
Moody's expects Latvia to generate EUR7 million of EBITDA in
2012. Further MTR cuts in 2013 should continue to support EBITDA
growth for Bite Latvia.

Despite the group's overall revenues decline in the last three
years, Bite had positive EBITDA growth, +14.5% in 9m 2012 vs. 9m
2011 and +12% in FY2011 vs. FY2010. The company improved its
EBITDA margins through cost rationalization programs which saw it
reduce headcount and subscriber acquisition costs, renegotiate
supplier contracts and eliminate handset subsidies for the
consumer segment of its subscriber base. Bite's EBITDA margin for
LTM September 2012 grew to 28% from 25% in 2011.

In the medium term, Moody's expects costs to rise slightly as the
company invests in network modernization in Lithuania and
provides for the network to be LTE ready in both countries. In
addition Bite is expected to maintain marketing spend in Latvia
to support brand positioning and to counteract the increased
churn in its prepaid segment. Moody's however believes that these
costs should not lead to any material deterioration in key credit
metrics.

Bite's liquidity profile is weak. The company generates positive
free cash flow (EUR17 million in 2011, and EUR8 million in 2012
as expected by Moody's) and the next maturing debt is in March
2014. However, availability under the RCF reduces progressively,
with final maturity in June 2013; and repayments required on this
facility pressurize available liquidity.

The stable outlook assumes that revenue decline in Lithuania will
continue to slow down, and that the company's EBITDA margin will
remain above 25%. The outlook also assumes that Bite's liquidity
profile will not deteriorate, assuming the company refinances its
capital structure in Q1 2013.

Negative pressure on the rating could develop should: (i) Bite
fail to refinance its debt in Q1 2013; (ii) any other weakening
of its position occur and/ or (iii) Bite's Gross Debt/ EBITDA (as
calculated by Moody's) move above 4.0x.

Positive rating pressure is not anticipated in the near term.
However, this could develop as (i) the operations in Lithuania
returns to growth; (ii) Bite Latvia's EBITDA continues to grow in
line with expectations; (iii) positive free cash flow generation
is maintained, further strengthening Bite's liquidity profile;
and (iv) leverage as calculated by Moody's adjusted debt/EBITDA
falls sustainably well below 3.0x.

The principal methodology used in rating Bite Finance
International B.V was Moody's Global Telecommunications Industry
Rating 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.

Bite Finance International B.V. is the Dutch holding company of
the Lithuanian company Bite Lietuva UAB. Bite is a mobile
telecommunications operator in Lithuania and Latvia, which
reported 2011 revenue of about EUR172 million. In February 2007 a
private equity consortium led by Mid Europa Partners acquired
Bite through a leveraged buyout for a total consideration of
EUR443 million.



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


CADOGAN SQUARE: S&P Lowers Rating on Class E Notes to 'B+'
----------------------------------------------------------
Standard & Poor's Ratings Services took various credit rating
actions on all rated classes of notes in Cadogan Square CLO B.V.

Specifically, S&P has:

-- raised its ratings on the class A, B, and C notes;

-- affirmed its rating on the class D notes; and

-- lowered its rating on the class E notes.

"The rating actions follow our assessment of the transaction's
performance using data from the latest available trustee report
in addition to our credit and cash flow analysis. We have taken
into account recent developments in the transaction and reviewed
it under our relevant criteria for transactions of this type,"
S&P said.

"Following our analysis, we have observed that the proportion of
assets rated in the 'CCC' category (i.e., rated 'CCC+', 'CCC', or
'CCC-') has decreased to 2.25% of the remaining pool, from 3.98%
at our last review. Over the same period, the percentage of
defaulted assets has increased to 3.16% from 2.51%," S&P said.

"We subjected the transaction's capital structure to a cash flow
analysis to determine the break-even default rate for each rated
class at each rating level. We incorporated various cash flow
stress scenarios, using various default patterns, in conjunction
with different interest stress scenarios. The transaction has
material exposure to assets in Spain (BBB-/Negative/A-3), Ireland
(BBB+/Negative/A-2), and Italy (Unsolicited; BBB+/Negative/A-2).
We have therefore applied additional stresses on assets in those
countries in our 'AAA' scenario," S&P said.

"The transaction now benefits from a shorter weighted-average
life of 3.99 years and a higher weighted-average spread of 3.98%.
Our analysis also indicates that the level of credit enhancement
available to the class A notes has increased, as the outstanding
principal amount of the class A notes has reduced by 17.5%. The
levels of credit enhancement available to the class B and C notes
have increased as well. Consequently, we have raised our ratings
on the class A, B, and C notes," S&P said.

"We have affirmed our rating on the class D notes as our analysis
indicates that the level of credit enhancement that is available
to these notes is commensurate with their current rating," S&P
said.

"Our rating on the E notes is constrained by the application of
the largest obligor test, a supplemental test that we introduced
in our 2009 cash flow collateralized debt obligation (CDO)
criteria. This test addresses event and model risk that
might be present in the transaction. Although the break-even
default rates generated by our cash flow model indicated higher
ratings, the largest obligor test effectively capped the rating
on the class E notes at 'B+ (sf)'. We have therefore lowered our
rating on the class E notes to 'B+ (sf)'," S&P said.

"The Bank of New York Mellon (Ireland) Ltd. (AA-/Negative/A-1+)
acts as an account bank and custodian. In our view, the
counterparty is appropriately rated to support the ratings on the
notes," S&P said.

"Cadogan Square CLO entered into a number of derivative
agreements to mitigate currency risks in the transaction. We
consider that the documentation for these derivatives does not
fully comply with our 2012 counterparty criteria. Therefore, in
our cash flow analysis for scenarios above 'AA-', we have applied
additional foreign exchange stresses," S&P said.

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

               STANDARD & POOR'S 17G-7 DISCLOSURE REPORT

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

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

          http://standardandpoorsdisclosure-17g7.com

RATINGS LIST

Class                   Rating
                  To            From

Cadogan Square CLO B.V.
EUR450 Million Secured Floating-Rate Notes

Ratings Raised

A1                AAA (sf)     AA+ (sf)
A2                AAA (sf)     AA+ (sf)
B                 AA (sf)      AA- (sf)
C                 A (sf)       A- (sf)

Rating Affirmed

D                 BB+ (sf)

Rating Lowered

E                 B+ (sf)      BB- (sf)


CLASSIC I: Moody's Reviews 'Ba1' Rating on Notes for Downgrade
--------------------------------------------------------------
Moody's Investors Service has placed under review for possible
downgrade the rating of the following notes issued by CLASSIC I
(Netherlands) B.V.:

Issuer: CLASSIC I (Netherlands) B.V.

    Series 2003-1 EUR 75,000,000 Secured Fixed Rate Asset-Backed
    Notes due July 24, 2013, Ba1 Placed Under Review for Possible
    Downgrade; previously on Dec 22, 2011 Downgraded to Ba1

This transaction represents the repackaging of a Hungarian
Forints ("HUF") denominated mortgage bond issued by FHB Mortgage
Bank Co. Plc. (the "Collateral").

Ratings Rationale

Moody's explained that the rating action is the result of a
rating action on FHB Mortgage Bank Co. Plc. Covered Bond, whose
Ba1 rating was placed under review for possible downgrade on 14
December 2012.

The issuer entered into a currency swap at close, whereby HUF
collateral interest and principal is passed to Commerzbank AG,
originally Dresdner Bank AG, (the "Swap Counterparty") and the
Swap Counterparty pays the EUR interest and principal due under
the notes. The transaction is exposed to the risk of the
Collateral and the Swap Counterparty, but considering the short
time to maturity and the Swap Counterparty is currently rated A3,
Moody's considers that the dominant risk to noteholders is that
of the Collateral.

Moody's notes that this transaction is subject to a high level of
macroeconomic uncertainty, which could negatively impact the
ratings of the notes, as evidenced by 1) uncertainties of credit
conditions in the general economy and 2) more specifically, any
uncertainty associated with the underlying credits in the
transaction could have a direct impact on the repackaged
transaction and 3) additional expected loss associated with
hedging agreements in this transaction may also negatively impact
the ratings.

The principal methodology used in this rating was "Moody's
Approach to Rating Repackaged Securities" published in April
2010.

Moody's quantitative analysis of Repacks is designed to estimate
the expected loss "EL" borne by the Repack investor, given the
transaction structure, the Collateral and any other credit risks
arising under the transaction. To this end, Moody's relies on an
EL analysis in which Moody's identifies and attach probabilities
to events that might give rise to losses to Repack noteholders.

Moody's EL calculation assesses the probability and severity of
each possible loss-inducing event happening at discrete
(typically one-year) intervals through the life of the
transaction. The EL for each of these time points can then be
aggregated to provide a weighted-average EL for the rated notes.

No additional cash flow analysis, sensitivity or stress scenarios
have been conducted as the rating was directly derived from the
rating of the collateral and the swap counterparty.


CLONDALKIN INDUSTRIES: S&P Cuts Corporate Credit Rating to 'B-'
---------------------------------------------------------------
Standard & Poor's Ratings Services lowered its long-term
corporate credit rating on Netherlands-based packaging group
Clondalkin Industries B.V. to 'B-' from 'B'. The outlook is
negative.

"At the same time, we lowered our issue rating on the senior
secured revolving credit facility (RCF) issued by Clondalkin
Acquisition B.V. to 'BB-' from 'BB'. The recovery rating on this
RCF is unchanged at '1+', indicating our expectation of full
recovery in the event of a payment default," S&P said.

"In addition, we lowered our issue rating on the EUR300 million
and US$150 million senior secured floating-rate notes due
December 2013, issued by Clondalkin Acquisition, to 'B-' from
'B'. The recovery rating on this debt is unchanged at '3',
indicating our expectation of meaningful (50%-70%) recovery in an
event of payment default," S&P said.

"Finally, we lowered our issue rating on the EUR170 million
senior subordinated notes due March 2014, issued by Clondalkin,
to 'CCC' from 'CCC+'. The recovery rating on these notes is
unchanged at '6', indicating our expectation of negligible (0%-
10%) recovery in an event of payment default," S&P said.

"The downgrades reflect our view of the refinancing risk
associated with the maturity of Clondalkin's EUR300 million and
US$150 million senior secured floating-rate notes in December
2013. The downgrades also factor in the downward revision of our
assessment of Clondalkin's liquidity to 'weak' from 'less than
adequate,' as our criteria define these terms, to reflect that,
absent a refinancing, Clondalkin's uses of liquidity will exceed
its sources in the financial year ending Dec. 31, 2013," S&P
said.

"A downgrade is likely should Clondalkin not refinance its EUR300
million and US$150 million senior secured notes at least six
months before the scheduled maturity date of December 2013. If
Clondalkin does not address the refinancing risk in a timely
manner, we could lower the long-term corporate credit rating on
Clondalkin to 'CCC+'. We factor into our analysis the fact that
Clondalkin is considering several refinancing options, including
potentially raising funds from disposals," S&P said.

"There is also a possibility of a downgrade if deterioration in
the macroeconomic and financial environment in Western Europe and
North America significantly weakens Clondalkin's operating
performance beyond our base-case forecast. Such a weakening would
entail a sustained deterioration in the group's credit metrics,"
S&P said.

"The current rating and negative outlook are driven by liquidity
concerns. We could revise our outlook to stable if the group were
to successfully refinance its senior secured notes, and if it
continues to sustain operating performance in line with our base-
case projections. If Clondalkin were to complete a substantial
refinancing, we would likely reassess our long-term corporate
credit rating on the group," S&P said.


E-MAC PROGRAM: Moody's Cuts Rating on Class D Notes to 'B1'
-----------------------------------------------------------
Moody's Investors Service has downgraded three classes of notes
issued by E-MAC Program II B.V. / Compartment NL 2007-IV (E-MAC
NL 2007-IV), a Dutch residential mortgage-backed securities
(RMBS) transaction:

    EUR654.85M A Notes, Downgraded to Aa1 (sf); previously on
    Jul 10, 2009 Confirmed at Aaa (sf)

    EUR12.6M C Notes, Downgraded to Baa1 (sf); previously on
    Jul 10, 2009 Confirmed at A2 (sf)

    EUR15.75M D Notes, Downgraded to B1 (sf); previously on
    May 25, 2012 Baa3 (sf) Placed Under Review for Possible
    Downgrade

The rating action concludes the review for downgrade initiated by
Moody's on 25 May 2012

Ratings Rationale

The rating action takes into consideration revision of key
collateral assumptions due to the worse-than-expected performance
and declining house prices in the Netherlands.

Key collateral assumptions revised

The performance of E-MAC NL 2007-IV has been deteriorating. 60+
day delinquencies in the series have increased to 1.3% of the
current portfolio balance, while the cumulative losses reached
approximately 0.2% of original portfolio balance. The transaction
pool factor is still relatively high at approximately 80%.

Portfolio Expected Loss

After considering the current amounts of realized losses and
completing a delinquency roll rate and analysis for the
portfolio, Moody's increased its lifetime expected loss
assumption for E-MAC nl 2007-IV to 1.2% of the original pool
balance, from the previous 0.5%.

MILAN Aaa CE

Moody's has re-assessed loan-by-loan information to determine the
MILAN Aaa CE. As a result, Moody's has increased its MILAN Aaa CE
assumption to 11%, up from 7% assumed at closing. This increase
is mainly driven by higher delinquency levels for a relative
smaller outstanding portfolio compared to closing as well as by
declining house prices in the Nethrerlands. Also, the proportion
of bullet loans in the portfolio is relatively high at 80%.

Moody's has also factored into its analysis its expectations of
key macro-economic indicators. Moody's expects GDP to contract by
0.6% in 2012 followed by a 0.8% increase in 2013, unemployment to
rise from 4.4% in 2011 to approximately 5.2% in 2012 and remain
at that level in 2013, and house prices to continue to decrease
over the next year.

Factors and Sensitivity Analysis

Expected loss assumptions remain subject to uncertainty with
regard to general economic activity, interest rates and house
prices. Lower than assumed realised recovery rates or higher than
assumed default rates would negatively affect the ratings in
these transactions.

Additional factors that may affect the ratings of the notes are
described in "Approach to Assessing Linkage to Swap
Counterparties in Structured Finance Cashflow Transactions:
Request for Comment"

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

In rating this transaction, Moody's used ABSROM to model the cash
flows and determine the loss for each tranche. The cash flow
model evaluates all default scenarios that are then weighted
considering the probabilities of the lognormal distribution
assumed for the portfolio default rate. In each default scenario,
the corresponding loss for each class of notes is calculated
given the incoming cash flows from the assets and the outgoing
payments to third parties and noteholders. Therefore, the
expected loss or EL for each tranche is the sum product of (i)
the probability of occurrence of each default scenario; and (ii)
the loss derived from the cash flow model in each default
scenario for each tranche.


WPE INT'L: S&P Puts 'B+' Issuer Credit Rating on Watch Negative
---------------------------------------------------------------
Standard & Poor's Ratings Services corrected its 'B+' issuer
credit rating on WPE International Cooperatief U.A. (WPE) by
placing it on CreditWatch with negative implications. "On Nov. 1,
2012, we placed our ratings on WPE's parent company, Industrias
Metalurgicas Pescarmona S.A.I.C. y F (B+/Watch Neg/--) on
CreditWatch with negative implications. As a result of an error,
the issuer credit rating on WPE wasn't placed on CreditWatch on
November 1," S&P said.

RATINGS LIST

Rating Placed On CreditWatch

WPE International Cooperatief U.A.
  Corporate credit rating             B+/Watch Neg/--


* Gabrielle Reijnen Joins A&M's Restructuring Team in Amsterdam
---------------------------------------------------------------
Global independent professional services firm Alvarez & Marsal
has appointed Gabrielle Reijnen as a Managing Director within its
corporate restructuring team for the Benelux in Amsterdam.

Prior to joining A&M, Ms. Reijnen was Head of Corporate Coverage
and a member of the management team with RBS in the Netherlands.
At RBS she was involved in capital structuring (event-driven)
financing, M&A and risk management situations for clients in a
number of industries.

Just Spee, Head of A&M's Restructuring Group in the Benelux said:
"In the current uncertain economic environment across Europe we
see rising demand for our specialist restructuring services --
which includes taking temporary management positions in troubled
companies needing assistance.  The firm made a decision some time
ago to invest in our Benelux-based practice as we feel our
business model of using experienced advisors with hands-on
operational know-how across a range of industries is particularly
well suited to these markets.  With the addition of Gabrielle
Reijnen we have complemented our senior Amsterdam-based team with
strong financial restructuring skills."

Before moving to RBS, Ms. Reijnen was Managing Director in Global
Clients Energy & Resources at ABN AMRO in Amsterdam, where she
managed teams and executed numerous transactions involving multi-
product acquisition financing, refinancing and corporate finance
advisory mandates.  She also spent seven years in corporate
finance/M&A with ABN AMRO and five years in equity capital
markets with ABN AMRO Rothschild, working on assignments in
Europe and Asia.

Ms. Reijnen earned a master's degree in business economics from
Erasmus University, Rotterdam and is also an alumnus (AMP 182)
from Harvard Business School.

                      About Alvarez & Marsal

Alvarez & Marsal (A&M) is a global professional services firm
specializing in turnaround and interim management, performance
improvement and business advisory services.



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


BMORE FINANCE 4: S&P Lowers Rating on Class D Notes to 'CC'
-----------------------------------------------------------
Standard & Poor's Ratings Services lowered and removed from
CreditWatch negative its credit rating on BMORE Finance No. 4
PLC's class D notes.

"The rating actions follow our increased loss expectations for
the notes' legal maturity date in May 2014. On June 11, 2012, we
lowered and placed on CreditWatch negative our rating on BMORE
Finance No. 4's class D notes, following our assessment of the
pool's deteriorating performance and uncertainty about the pool's
future performance," S&P said.

"Our ratings on the notes in this transaction address the timely
payment of interest due under the rated notes, and ultimate
payment of principal at maturity of the rated notes," S&P said.

"Since then, the transaction has paid down significantly, and the
outstanding portfolio balance as of the November 2012 interest
payment date was 1.10% of the original balance (0.46% of the pool
balance after the second tap issuance). The class D notes are the
only notes outstanding; the issuer has repaid the rest of the
notes issued at closing," S&P said.

"Based on the November 2012 investor report from the trustee, the
level of delinquent loans (loans in arrears for more than 30
days) remains high at 41.76% of the outstanding pool balance.
Long-term delinquent loans (loans in arrears for between three
and 12 months) accounted for 25.94% of the outstanding portfolio
balance. As of November 2012, cumulative defaults amounted to
EUR30.74 million and cumulative recoveries totaled EUR7.77
million," S&P said.

"Due to the accumulation of a large amount of severe delinquent
loans that have not been written-off, as long-term delinquencies
continue to roll into defaults, we don't expect to see high
recovery levels on defaulted assets in the transaction's
portfolio," S&P said.

"The reserve fund has not been replenished since the May 2012
interest payment date when it was fully depleted. Consequently,
in the absence of any reserve fund, the transaction relies solely
on excess spread to cure defaults, which we believe is
insufficient," S&P said.

"As of November 2012, there was a debit balance of EUR382,402
outstanding on the class D notes' principal deficiency ledger,"
S&P said.

"Taking into consideration the above factors and the application
of our criteria for assigning 'CCC+', 'CCC', 'CCC-', And 'CC'
ratings, we have lowered to 'CC (sf)' from 'CCC (sf)' our rating
on the class D notes. We have also removed the rating on the
notes from CreditWatch negative where we placed it on June 11,
2012," S&P said.

"The downgrade reflects our default expectations relating to the
issuer's full payment of principal on the class D notes due on
the 2014 payment date. Our default expectations even consider the
most optimistic collateral performance scenario over a longer
period of time," S&P said.

"BMORE 4 Finance No. 4 is a Portuguese asset-backed securities
(ABS) transaction, which closed in May 2004. The portfolio
backing the transaction comprises loans originated and serviced
by Banco Banif Mais, a subsidiary of Banif (Banco Internacional
do Funchal)," 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 Rule applies to in-scope securities initially
rated (including preliminary ratings) on or after Sept. 26, 2011.

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

          http://standardandpoorsdisclosure-17g7.com


METROPOLITANO DE LISBOA: S&P Raises Issuer Credit Rating to 'B'
---------------------------------------------------------------
Standard & Poor's Ratings Services raised its long-term issuer
credit rating on Portuguese state-owned subway company
Metropolitano de Lisboa E.P. (Metro) to 'B' from 'CCC+'. The
outlook remains negative.

"The rating action follows our upward revision of our view of
Metro's link to the central government to 'integral' from 'very
strong' previously and our reassessment of the likelihood of
government support for Metro to 'extremely high' from 'very
high,'" S&P said.

"This reflects our opinion that the central government has
gradually consolidated a policy of extraordinary support for
Metro, which fortifies the 'link' between the company and the
central government, as our criteria define the term.
Specifically, we see a sound track record of timely and
substantial extraordinary support to Metro since June 2011, and
believe this support is very likely to persist during our
forecast horizon until the end of 2013," S&P said.

Measures deployed by the government since June 2011 include:

-- Several laws reclassifying Metro within the ESA 95 European
    Standard of Accounts, enhancing monitoring and surveillance
    over the company, taking over the management of its
    derivatives, and setting up a formal channel to cover its
    debt service and other funding needs through central
    government loans;

-- Metro has received EUR1.2 billion, or 28.5% of its total debt
    as of December 2012, in the form of central government budget
    loans to cover debt service; and

-- The 2013 central government budget envisages some EUR549
    million in budget loans to Metro, which should suffice to
    repay the company's debt service of EUR512 million in 2013.

"We continue to see Metro as an extension of the central
government in charge of managing and enlarging the subway
network, in strict accordance with a plan defined by the
government. The central government decides Metro's strategy,
makes its main budgetary decisions, and exercises very tight
control over the company. Around 92% of the company's debt,
excluding central government loans, is currently guaranteed by
the central government, and the guaranteed debt bears cross-
default clauses with all Metro's financial obligations," S&P
said.

"We now believe the probability that the central government will
continue to provide timely extraordinary support to Metro is
extremely high, compared with our previous assessment of very
high," S&P said.

"We believe that a default by Metro would have a major, but not
critical, impact on the government. In a context of mounting
pressures on the sovereign's creditworthiness, we believe Metro's
role would not be the government's main priority. We base this
conclusion partly on the fact that the government has allowed
Metro's stand-alone credit profile (SACP) to deteriorate abruptly
since 2011, when the company started to encounter strong funding
difficulties," S&P said.

"We continue to see Metro as unable to face its large negative
financial cash flows, if left to its own devices. So far, the
government has not successfully created a formal, long-term
financial framework that would provide Metro with a stable
financial footing through sufficient capital transfers instead of
continuous central government extraordinary support. The company
has been relying on monthly extraordinary support from the
government since June," S&P said.

"The negative outlook reflects the possibility that the Republic
of Portugal's (BB/Negative/B) financial capacity to support Metro
could diminish further," S&P said.

"We might consider a negative rating action on Metro if saw
Portugal's credit profile continue to weaken and believed the
government could find it difficult to continue to provide Metro
with funds to repay debt," S&P said.

"We might revise our outlook on Metro to stable from negative if
we saw Portugal's credit profile improving, giving the government
increased ability to provide Metro with funds to face all its
liquidity needs," S&P said.



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


HIDROELECTRICA: Creditor Agrees to EUR20-Mil. Debt Reduction
------------------------------------------------------------
SeeNews reports that Hidroelectrica said its administrator had
talked its biggest unsecured creditor into a EUR20 million
(US$26.1 million) reduction of its debt.

According to SeeNews, Hidroelectrica said in a statement on
Tuesday that Euro Insol, Hidroelectrica's administrator, reached
an agreement last week with the German-Austrian consortium of
Voith Hydro and Andritz Hydro under which it will forgive EUR20
million from a total debt of EUR87 million.

The statement said that Hidroelectrica's judicial administrator
has so far re-negotiated 423 of all the company's 500 commercial
contracts in effect, reducing the company's costs by EUR93
million, SeeNews notes.

The administrator also announced that Romenergo will write off
some RON8.3 million (US$2.4 million/EUR1.8 million) representing
penalties for delays in payments for construction works, SeeNews
relates.

Hidroelectrica is a Romanian state-owned hydropower producer.



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


AYT UNICAJA: DBRS Confirms 'BB(low)(sf)' Rating on Class D Notes
----------------------------------------------------------------
DBRS, Inc. has confirmed the Class A, B, C and D notes issued by
AyT Unicaja Financiacion I, FTA at AAA (sf), 'A' (sf), BBB (low)
(sf) and BB (low) (sf) respectively.  Additionally, DBRS has
removed all notes from Under Review with Negative Implications.

The rating action reflects the following analytical
considerations:

  * The impact of the August 8, 2012 downgrade of the Kingdom of
    Spain from A (high) Under Review Negative to A (low) Negative
    Trend, including the incorporation of a sovereign related
    stress component related to the A (low) Negative Trend
    rating.

  * Upon incorporation of the sovereign related stress component,
    the transaction is performing within DBRS expectations and
    available credit enhancement for the notes is sufficient to
    cover DBRS stressed assumptions.


BANCO POPULAR: Sells EUR1.14-Bil Troubled Consumer Loan Portfolio
-----------------------------------------------------------------
Tracy Rucinski and Jesus Aguado at Reuters report that Popular
has sold a EUR1.14 billion (US$1.5 billion) portfolio of troubled
consumer loans to a consortium of international investors, in a
sign that sales of distressed assets are beginning to pick up.

According to Reuters, Popular said in a statement on Thursday
that a consortium led by Nordic distressed debt group Lindorff
and funds advised by financial services-focused private equity
firm Anacap bought the portfolio.

Banco Popular did not disclose the price of deal, though a source
familiar with the matter said on Thursday Popular could book a
gain of over EUR30 million from the sale, Reuters notes.

Popular, which unlike some other Spanish banks has not tapped
European aid even though it failed a September stress test on its
finances, shrank its capital gap with a EUR2.5 billion (US$3.3
billion) rights issue of new stock completed in early December,
Reuters relates.

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

                           *     *     *

As reported by the Troubled Company Reporter-Europe on Dec. 10,
2012, Standard & Poor's Ratings Services lowered its issue
ratings on some of the preferred stock issued by Spain-based
Banco Popular Espanol S.A. (Popular; BB/Negative/B), to 'C' from
'CCC' and on some of the issue ratings on Popular's non-
deferrable subordinated debt to 'D' from 'B-'.  "This follows
Popular's announcement on Nov. 30, 2012, that it had offered to
repurchase, among other securities, some of its outstanding
preferred stock and non-deferrable subordinated debt placed with
wholesale investors with a nominal value outstanding of EUR702
million," S&P said.  "The offer constitutes a 'distressed
exchange' under our criteria. This is because we believe that
investors will receive less value than the promise of the
original securities, as the offer implies the repurchase below a
par value. Additionally, we think the offer is not purely
opportunistic," S&P said.


BANCO POPULAR: S&P Raises Rating on Preferred Stock to 'CCC-'
-------------------------------------------------------------
Standard & Poor's Ratings Services raised to 'CCC-' from 'C' its
issue ratings on the remaining preferred stock of Spain-based
Banco Popular Espa¤ol S.A. (Popular) following the closing of
Popular's tender offer. "We have also raised to 'B-' from 'D' our
issue rating on Popular's remaining nondeferrable subordinated
debt," S&P said.

"At the same time, we lowered our issue ratings on the preferred
stock that was excluded from the tender offer to 'CCC-' from
'CCC'," S&P said.

"The rating action follows the bank's announcement on Dec. 12,
2012, that it had completed its Nov. 30, 2012, tender offer
launched to repurchase, among other securities, its outstanding
preferred stock and non-deferrable subordinated debt securities,"
S&P said.

"In our media release on Dec. 6, 2012, we said that we considered
Popular's tender offer a 'distressed exchange' under our
criteria. According to our criteria, we lowered our issue ratings
to 'C' on the tendered preferred stock and to 'D' on the tendered
non-deferrable subordinated debt," S&P said.

"Our 'CCC-' issue rating on Popular's preferred stock reflects
what we see as a high probability of deferral or nonpayment of
the dividends in the coming quarters. This is because we
anticipate that Popular will report losses in 2012 as a result of
Spain's new provisioning regulation. This would trigger mandatory
nonpayment on all preferred stock because of the narrow earnings
test currently included in the terms and conditions of the hybrid
instruments for Spanish banks. In Spain, the payment of the
preferred stock dividends for the current fiscal year is usually
conditioned on the existence of distributable profits in the
previous year. Distributable profits are usually defined as the
lower of net profits of either the bank or the consolidated group
as reported to the Bank of Spain. We understand that the Bank of
Spain and the Comision Nacional del Mercado de Valores could
still allow the dividend payments to be made if Popular reported
a loss, but we are unsure whether they would exercise this
power," S&P said.

"In accordance with our criteria, the 'B-' issue rating on the
non-deferrable subordinated debt is two notches below Popular's
stand-alone credit profile, which we assess at 'b+'," S&P said.

RATINGS LIST

Downgraded
                                        To                 From
Popular Capital S.A.
Preferred Stock*                       CCC-               CCC

Popular Preference (Cayman) Ltd.
Preference Stock*                      CCC-               CCC

Upgraded
                                        To                 From
Banco Popular Espanol S.A.
Subordinated                           B-                 D

BPE Financiaciones S.A.
Subordinated*                          B-                 D

Popular Capital S.A.
Preferred Stock*                       CCC-               C

* Guaranteed by Banco Popular Espanol S.A.


CODERE SA: S&P Cuts Long-Term Corporate Credit Rating to 'CCC'
--------------------------------------------------------------
Standard & Poor's Ratings Services lowered to 'CCC' from 'B-' its
long-term corporate credit rating on gaming company Codere S.A.

"At the same time, we lowered the issue rating on Codere's senior
unsecured notes issued by subsidiary Codere Finance (Luxembourg)
S.A. to 'CCC' from 'B-'. The recovery rating on the senior
unsecured notes remains unchanged at '4', indicating our
expectations of average (30%-50%) recovery for noteholders in the
event of payment default," S&P said.

"The downgrade reflects our reassessment of Codere's liquidity
profile as 'weak' compared with 'less than adequate' previously,
particularly due to the looming refinancing risk of its EUR120
million senior credit facilities (SCFs) maturing in June 2013.
These comprise a EUR60 million revolving credit facility (RCF),
and EUR40 million of letters of credit and EUR40 million of
surety bonds (from both of which Codere cannot draw more than
EUR60 million at a time). Although we recognize that some
progress has been made in the negotiations, we believe there are
still some execution risks in reaching a definitive agreement.
The downgrade further reflects our belief that Codere also faces
an increasing risk of tightening covenant headroom to below 10%,
if operating performance does not materially recover in the first
quarter of 2013 and absent any low-probability, high-impact
events that might significantly depress Codere's EBITDA," S&P
said.

"We also incorporate Codere's substantial exposure to the
Argentine market (61% of the company's consolidated EBITDA in the
first nine months of 2012) into our assessment and rating action,
which we believe is likely to be affected by the increasing risks
embedded in Argentina's current macroeconomic framework. Such
concerns include high inflation (which continues to appreciate
the real exchange rate), exchange rate controls, and other
actions that have also contributed to the emergence of a parallel
foreign exchange market. Therefore, we continue to foresee a
gradual devaluation of the Argentine currency over the next few
quarters. Additionally, we anticipate that the recent
implementation of the smoking ban in the gaming halls of Buenos
Aires on Oct. 1, 2012, will continue to add further strain on
Codere's cash flows from Argentina in the months to come," S&P
said.

"The negative outlook primarily reflects our concerns regarding
Codere's ability to timely refinance its SCF," S&P said.

"We could lower the rating on Codere if it is unable to refinance
its SCF in a timely manner, or if a further significant
macroeconomic and political deterioration in Argentina
materializes over the next few months causing additional pressure
on revenues, margins, and liquidity," S&P said.

"Any positive rating action would be conditional on a revision of
our current assessment of Codere's liquidity. This would
initially entail a successful refinancing of its SCF as well as
the maintenance of adequate covenant headroom on a sustainable
basis, in light of the currently weak macroeconomic environment
in Argentina," S&P said.


HIPOCAT 7: S&P Cuts Rating on Class D Floating-Rate Notes to 'BB'
-----------------------------------------------------------------
Standard & Poor's Ratings Services took various credit rating
actions in Hipocat 7, Fondo de Titulizacion de Activos; Hipocat
8, Fondo de Titulizacion de Activos; Hipocat 9, Fondo de
Titulizacion de Activos; Hipocat 10, Fondo de Titulizacion de
Activos; and Hipocat 11, Fondo de Titulizacion de Activos.

Specifically, S&P has:

-- lowered its ratings on Hipocat 7's class A2, B, C, and D
    notes;

-- lowered its ratings on Hipocat 8's class A2, B, C, and D
    notes;

-- lowered its ratings on Hipocat 9's class A2a, A2b, B, C, and
    D notes;

-- lowered its ratings on Hipocat 10's class A2 and A3 notes and
    affirmed its ratings on the class B, C, and D notes; and

-- lowered its ratings on Hipocat 11's class A2 and A3 notes and
    affirmed its ratings on the class B, C, and D notes.

"We have reviewed these five residential mortgage-backed
securities (RMBS) securitizations, which are backed by loans that
Catalunya Banc S.A. originated in its home market in the
Catalonia region. These transactions closed between 2004 and
2007, and are collateralized by residential mortgage loans
granted to individuals to acquire a property. The securitized
product is the first draw of a flexible mortgage loan called
'Credito Total', which is effectively a flexible, revolving
credit line with the possibility of having payment holidays.

"Given the credit quality deterioration these transactions have
shown since our last review in March 2011, we have  lowered all
of our ratings in these five transactions, except where we have
affirmed our 'CCC- (sf)' or 'D (sf)' rated classes in Hipocat 10
and Hipocat 11," S&P said.

"The significant pace of collateral quality deterioration in
these transactions in recent months has been greater than what we
have observed in any other Spanish RMBS transactions we rate. We
do not currently expect to see a similar trend in other
securitizations," S&P said.

"In all these transactions, we have observed a significant
increase in long-term delinquencies since the March 2012 interest
payment date (IPD). These long-term delinquencies are likely to
roll over into defaults, as we believe that the servicer of the
underlying collateral pools is facing increasing challenges to
cure delinquencies. We have therefore increased our default
expectations for each of the underlying pools," S&P said.

"Table showing increases in 90+ days delinquencies of the
outstanding balance of the nondefaulted assets in March 2011
(using data from the January 2011 IPD) and December 2012 (using
data from the October 2012 IPD; except for Hipocat 8, for which
we used data from the September 2012 IPD)," S&P said:

              March 2011    March 2012    December 2012
              review (%)      data (%)       review (%)
Hipocat 7           0.57          0.90             2.26
Hipocat 8           0.85          1.19             2.71
Hipocat 9           1.13          1.08             3.70
Hipocat 10          2.62          1.83             5.27
Hipocat 11          2.04          2.56             5.69

"As the level of the available performing balance will continue
to weaken, it will negatively affect the structural features of
the transaction, such as further depleting the reserve funds and
decreasing the levels of collateralization. In our view, the
forecasted collateral deterioration will not be offset by the
credit enhancement mechanism and the important support given by
the swap in these deals. At the same time, we are not giving
credit to the swaps as the swap counterparty is currently
ineligible under our 2012 counterparty criteria at any rating
level above its current 'BB+' long-term issuer credit rating
(ICR)," S&P said.

"On April 30, 2012, we downgraded Cecabank S.A. (BB+/Negative/B),
which is the swap counterparty in these transactions. The remedy
period to replace itself, which under the transactions' documents
is of 60 days, that began after this downgrade has now expired
with Cecabank being unable to find an eligible replacement. As
such, under our 2012 counterparty criteria, we have analyzed
these transactions without giving benefit to the swap," S&P said.

"Under our 2012 counterparty criteria, the ratings in these
transaction will be the higher of the credit and cash flow
ratings results without the support of the swap counterparty, and
the long-term ICR of the swap counterparty--except in those cases
in which, due to the transaction's performance, even with the
swap in place, the ratings from the credit and cash flow analysis
are below the long-term ICR on the swap counterparty," S&P said.

"Below, we provide details on each transaction's performance and
we indicate what the ratings would be in a scenario in which an
eligible swap counterparty is in place," S&P said.

In the tables, S&P shows these cash flow analysis outcomes:

-- What ratings would be achievable if an eligible swap
    counterparty under S&P's criteria were in place (column: With
    the support of the swap);

-- What the ratings would be if no credit was given to the swap
    counterparty (column: Without the support of the swap); and

-- The ratings S&P is assigning to the notes when giving credit
    to the swap features up to the ICR of the swap provider
    (column: With support of the swap up to its ICR).

                             HIPOCAT 7

"This transaction was originated in June 2004. Since our March
2011 review, and especially since April 2012, the transaction's
performance has deteriorated and it has suffered a considerable
increase in delinquencies. This negates the benefit of the high
level of seasoning, which is currently at 122.6 months and the
transaction's current low loan-to-value (LTV) ratio of 58.17%,"
S&P said.

"The current level of defaults is reducing the credit enhancement
levels for the most subordinated class of notes: The class D
notes have a credit enhancement level (taking into account the
performing balance, including loans in arrears up to 90 days,
plus the reserve fund amount) of 3.61%, compared with 1.90% at
closing. Even though the reserve fund is at 97.36% of its
required level, the transaction is being affected by rapidly
accruing defaults," S&P said.

"The weighted-average margin in this transaction is 54 basis
points (bps) and the swap is paying the weighted-average coupon
of the notes plus 66 bps. Taking into account the recent
deteriorating performance, we have obtained the following credit
and cash flow ratings results," S&P said:

Credit and Cash Flow Ratings Results
             With the     Without the     With the support
              support         support          of the swap
Class     of the swap     of the swap        up to its ICR
A2           AA- (sf)       BBB+ (sf)            BBB+ (sf)
B             A+ (sf)       BBB- (sf)            BBB- (sf)
C             A- (sf)          B (sf)             BB+ (sf)
D             BB (sf)              NR              BB (sf)

NR - Not rated.

"We have lowered our ratings on the class A2, B, C, and D notes
to 'BBB+ (sf)', 'BBB- (sf)', 'BB+ (sf)', and 'BB (sf)'," S&P
said.

"A future downgrade of the swap counterparty could also adversely
affect our ratings on the class C and D notes. The potential roll
over of severe delinquencies into defaults, given the recent
performance, may further affect our ratings on the notes," S&P
said.

                             HIPOCAT 8

"This transaction was originated in June 2005. Since our March
2011 review, and especially since April 2012, the transaction's
performance has deteriorated and it has suffered a considerable
increase in delinquencies.  This negates the benefit of the high
level of seasoning, which is currently at 112.2 months and the
transaction's current low LTV ratio of 59.21%," S&P said.

"The current level of defaults is reducing the credit enhancement
levels for the most subordinated class of notes: The class D
notes have a credit enhancement level (taking into account the
performing balance, including loans in arrears up to 90 days,
plus the reserve fund amount) of 1.44% compared with 1.55% at
closing. Even though the reserve fund is at 85.85% of its
required level, the transaction is being affected by rapidly
accruing defaults," S&P said.

"The weighted-average margin in this transaction is 54 bps and
the swap is paying the weighted-average coupon of the notes plus
65 bps. Taking into account the recent deteriorating performance,
we have obtained these credit and cash flow ratings results," S&P
said:

Credit And Cash Flow Ratings Results
             With the     Without the     With the support
              support         support          of the swap
Class     of the swap     of the swap        up to its ICR
A2            AA (sf)          A (sf)               A (sf)
B            AA- (sf)       BBB- (sf)             BBB-(sf)
C           BBB- (sf)              NR             BB+ (sf)
D              B (sf)              NR               B (sf)

NR - Not rated.

"We have lowered our ratings on the class A2, B, C, and D notes
to 'A (sf)', 'BBB- (sf)', 'BB+ (sf)' and 'B (sf)'," S&P said.

"A future downgrade of the swap counterparty could also adversely
affect our ratings on the class C and D notes. The potential roll
over of severe delinquencies into defaults, given the recent
performance, may further affect our ratings on the notes," S&P
said.

                          HIPOCAT 9

"This transaction was originated in November 2005. Since our
March 2011 review, and especially since April 2012, the
transaction's performance has deteriorated and it has suffered a
considerable increase in delinquencies. This negates the benefit
of the high level of seasoning, which is currently at 98.9 months
and the transaction's current low LTV ratio of 62.99%," S&P said.

"The current level of defaults, 4.33% of the outstanding balance
of the nondefaulted loans, is reducing the credit enhancement
levels for the most subordinated class of notes: The class D
notes are undercollateralized with a negative credit enhancement
level (taking into account the performing balance, including
loans in arrears up to 90 days, plus the reserve fund amount) of
-0.09%, compared with 1.70% at closing. Even though the reserve
fund is at
85.85% of its required level, the transaction is being affected
by rapidly accruing defaults," S&P said.

"The weighted-average margin in this transaction is 63 bps and
the swap is paying the weighted-average coupon of the notes plus
65 bps. Taking into account the recent deteriorating performance,
we have obtained these credit and cash flow ratings results," S&P
said:

Credit and Cash Flow Ratings Results
             With the     Without the     With the support
              support         support          of the swap
Class     of the swap     of the swap        up to its ICR
A2a           A+ (sf)        BBB (sf)             BBB (sf)
A2b           A+ (sf)        BBB (sf)             BBB (sf)
B           BBB- (sf)         BB (sf)             BB+ (sf)
C            BB- (sf)         B+ (sf)             BB- (sf)
D             B- (sf)              NR              B- (sf)

NR - Not rated.

"We have lowered our ratings on the class A2a and A2b notes to
'BBB (sf)', and the class B, C, and D notes to 'BB+ (sf)', 'BB-
(sf)', and 'B- (sf)'," S&P said.

"A future downgrade of the swap counterparty could also adversely
affect our ratings on the class B, C, and D notes. The potential
roll over of severe delinquencies into defaults, given the recent
performance, may further affect our ratings on the notes," S&P
said.

                          HIPOCAT 10

"This transaction was originated in July 2006. Since our March
2011 review, and especially since April 2012, the transaction's
performance has deteriorated and it has suffered a considerable
increase in delinquencies," S&P said.

"The current level of defaults, 7.29% of the outstanding balance
of the nondefaulted loans, is reducing the credit enhancement
levels for the notes: The class A notes have a credit enhancement
level (taking into account the performing balance, including
loans in arrears up to 90 days, plus the reserve fund amount) of
9.89%, compared with 8.81% at closing. Similarly, the class C
notes are undercollateralized with a negative credit enhancement
level of -6.68%, compared with 1.70% at closing," S&P said.

"The weighted-average margin in this transaction is 62 bps and
the swap is paying the weighted-average coupon of the notes plus
65 bps. Taking into account the recent deteriorating performance,
we have obtained these credit and cash flow ratings results," S&P
said:

Credit and Cash Flow Ratings Results
             With the     Without the     With the support
              support         support          of the swap
Class     of the swap     of the swap        up to its ICR
A2           BBB (sf)        BB+ (sf)             BB+ (sf)
A3           BBB (sf)        BB+ (sf)             BB+ (sf)
B           CCC- (sf)              NR            CCC- (sf)
C              D (sf)              NR               D (sf)
D              D (sf)              NR               D (sf)

NR - Not rated.

S&P has:

-- lowered its ratings on the class A2 and A3 notes to 'BB+
    (sf)';

-- affirmed its 'CCC- (sf)' rating on the class B notes as,
    given the interest-deferral trigger mechanism included in
    this transaction, the class B notes will default on the
    following IPD; and

-- affirmed its 'D (sf)' ratings on the class C and D notes as
    they have already defaulted.

"A future downgrade of the swap counterparty could also adversely
affect our ratings on the class A2 and A3 notes. The potential
roll over of severe delinquencies into defaults, given the recent
performance, may further affect our ratings on the notes," S&P
said.

                            HIPOCAT 11

"This transaction was originated in March 2007. Since our March
2011 review, and especially since April 2012, the transaction's
performance has deteriorated and it has suffered a considerable
increase in delinquencies," S&P said.

"The current level of defaults, 7.23% of the outstanding balance
of the nondefaulted loans, is reducing the credit enhancement
levels for the notes: The class A notes have a credit enhancement
level (taking into account the performing balance, including
loans in arrears up to 90 days, plus the reserve fund amount) of
2.95%, compared with 9.05% at closing. Similarly, the class B and
C notes are undercollateralized with negative credit enhancement
levels of -5.16% and -6.88%, respectively, compared with 5.75%
and 1.75% at closing," S&P said.

"The weighted-average margin in this transaction is of 63 bps and
the swap is paying the weighted-average coupon of the notes plus
65 bps. Taking into account the recent deteriorating performance,
we have obtained these credit and cash flow ratings results," S&P
said:

Credit and Cash Flow Ratings Results
             With the     Without the     With the support
              support         support          of the swap
Class     of the swap     of the swap        up to its ICR
A2             B (sf)              NR               B (sf)
A3             B (sf)              NR               B (sf)
B              D (sf)              NR               D (sf)
C              D (sf)              NR               D (sf)
D              D (sf)              NR               D (sf)

NR - Not rated.

S&P has:

-- lowered its ratings on the class A2 and A3 notes to 'B (sf)';
    and

-- affirmed its 'D (sf)' ratings on class B, C, and D notes as
    they have already defaulted.

"A future downgrade of the swap counterparty could also adversely
affect our ratings on the class A2 and A3 notes. The potential
roll over of severe delinquencies into defaults, given the recent
performance, may further affect our ratings of the notes," 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 residential mortgage-backed security
as defined in the Rule, to include a description of the
representations, warranties and enforcement mechanisms available
to investors and a description of how they differ from the
representations, warranties and enforcement mechanisms in
issuances of similar securities. The Rule applies to in-scope
securities initially rated (including preliminary ratings) on or
after Sept. 26, 2011.

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

          http://standardandpoorsdisclosure-17g7.com

RATINGS LIST

Class             Rating
            To               From

Ratings Lowered

Hipocat 7, Fondo de Titulizacion de Activos
EUR1.4 Billion Mortgage-Backed Floating-Rate Notes

A2          BBB+ (sf)        AA- (sf)
B           BBB- (sf)        AA- (sf)
C           BB+ (sf)         AA- (sf)
D           BB (sf)          BBB+ (sf)

Hipocat 8, Fondo de Titulizacion de Activos
EUR1.5 Billion MOrtgage-Backed Notes

A2          A (sf)           AA- (sf)
B           BBB- (sf)        AA- (sf)
C           BB+ (sf)         A- (sf)
D           B (sf)           BBB- (sf)

Hipocat 9, Fondo de Titulizacion de Activos
EUR1.016 Billion Mortgage-Backed Floating-Rate Notes

A2a         BBB (sf)         AA- (sf)
A2b         BBB (sf)         AA- (sf)
B           BB+ (sf)         A+ (sf)
C           BB- (sf)         BBB (sf)
D           B- (sf)          BB- (sf)

Hipocat 10, Fondo de Titulizacion de Activos
EUR1.526 Billion Mortgage-Backed Floating-Rate Notes

A2          BB+ (sf)         A+ (sf)
A3          BB+ (sf)         A+ (sf)

Hipocat 11, Fondo de Titulizacion de Activos
EUR1.628 Billion Mortgage-Backed Floating-Rate Notes

A2          B (sf)           BBB- (sf)
A3          B (sf)           BBB- (sf)

Ratings Affirmed

Hipocat 10, Fondo de Titulizacion de Activos
EUR1.526 Billion Mortgage-Backed Floating-Rate Notes

B           CCC- (sf)
C           D (sf)
D           D (sf)

Hipocat 11, Fondo de Titulizacion de Activos
EUR1.628 Billion Mortgage-Backed Floating-Rate Notes

B           D (sf)
C           D (sf)
D           D (sf)



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


VEGA CAPITAL: Moody's Reviews 'Ba2' Rating for Possible Upgrade
---------------------------------------------------------------
Moody's Investors Service has placed the rating of the following
notes issued by Vega Capital Ltd. (the "Issuer") under review for
possible upgrade:

US$63,900,000 Series 2010-I Class C Principal At-Risk Variable
Rate Notes due December 20, 2013, Ba2 (sf) Placed Under Review
for Possible Upgrade; previously on February 3, 2012 Upgraded to
Ba2 (sf).

Ratings Rationale

According to Moody's, the rating action taken on the notes is
primarily a result of the reduction of the likelihood of losses
to the Class C Notes due to the build-up of a first-loss
protection layer via payments by Swiss Reinsurance Company Ltd.
("Swiss Re" or the "Counterparty") to the Reserve Account and to
the shortening of the risk period.

Moody's notes that the transaction receives reserve account
payments from the Counterparty on each payment date which has
resulted in a build-up of a significant first loss position in
the capital structure (US$45.7 million as of December 2012), in
addition to the US$42.6 million of unrated Class D Notes that
provide an additional layer of protection below the rated Class C
Notes. Additionally, with less than one year remaining in the
transaction, the likelihood of occurrence of the number of
qualified events with the associated aggregate losses required to
attach the Class C Notes has been significantly reduced. Both
these factors have been incorporated in Moody's analysis.

The positive factors mentioned above are partially offset by the
occurrence on October 30, 2012 of Hurricane Sandy, a covered PCS
North Atlantic Hurricane Event under the terms of the
transaction. In its analysis, Moody's has considered the
possibility that the losses resulting from this event may breach
the trigger level for such peril and result in payments from the
Reserve Account to the Counterparty, thus reducing the additional
first loss protection available to the rated notes. However, due
to (1) the sizeable remaining first loss protection layer
provided by the Reserve Account, (2) the Class D notes that sit
below the rated Notes, and (3) the structure of the loss trigger
mechanism of the transaction that limits the annual losses
attributable to each separate peril, potential losses to the
Class C Notes will require the occurrence of more than one of the
covered type of perils during the remaining risk period.

Moody's awaits the loss determination reported by the Calculation
Agent related to the Event Notice received with respect to
Hurricane Sandy to determine the final resolution to the review
for upgrade to the Class C Notes.

Vega Capital Ltd. is a catastrophe bond program that can issue
notes in different series to cover a portfolio of natural
catastrophe risks over specific risk periods. Investors in the
Series 2010-I Notes, issued on December 14, 2010, provide
protection to the Counterparty against losses that may result
from the occurrence of events from up to five separate perils
over a risk period of three years, i.e. until December 14, 2013.
The perils covered by the Series 2010-I issuance include:
European windstorms, Japan typhoons, Japan earthquakes,
California earthquakes and North Atlantic hurricanes.

The principal methodology used in this rating was "Moody's
Approach to Rating Catastrophe Bonds Updated" published in
January 2004.



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


CALDERVALE FORGE: In Liquidation; 24 Jobs Affected
--------------------------------------------------
Michael Pringle at Airdrie & Coatbridge Advertiser reports that
Caldervale Forge has gone into liquidation, affecting 24 jobs.

According to the Advertiser, liquidators moved in and suddenly
closed the company down last Friday.

"Elizabeth Mackay -- emackay@zolfocooper.eu -- Partner at Zolfo
Cooper was appointed provisional liquidator on December 6 and the
company is set to enter formal liquidation early next year," the
Advertiser quotes a spokesman for the liquidators, Zolfo Cooper,
as saying.  "Due to a lack of funding, the director made the
voluntary decision to liquidate the company which has now ceased
trading and 24 people, including the director, were made
redundant."

Caldervale Forge is an Airdrie manufacturing company.


COMET: Final Group of 49 Stores Closes After No Buyer Found
-----------------------------------------------------------
The Scotsman reports that Comet's last remaining stores traded
for the final time on Tuesday, as the high street spending slump
claims another high-profile casualty.

The closure of the final group of 49 stores from the former
235-strong estate comes seven weeks after Deloitte was appointed
administrator, the Scotsman relates.

The firm, which was founded in Hull in 1933, employed around
6,895 people at the time of its collapse, the Scotsman notes.

According to the Scotsman, Deloitte has failed to find a buyer
for the company or any of its shops, and in a report last night
said it remained in talks with a small number of parties,
including over the sale of internet operations and the brand.

Headquartered in Rickmansworth, Comet is an electrical retailer.

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


HBOS PLC: Peter Cummings Balks at FSA's Supervisory Approach
------------------------------------------------------------
Patrick Jenkins at The Financial Times reports that Peter
Cummings, HBOS's former head of corporate banking, has launched a
stinging rebuke against the "bizarre", "offensive" and "inept"
culture of financial regulation, urging lawmakers not to blame
the crisis exclusively on bankers.

According to the FT, in private evidence to the parliamentary
commission on banking standards last month, a transcript of which
was released on Friday, Mr. Cummings said elements of the
Financial Services Authority's supervisory approach were
"appalling".

Hector Sants, formerly the FSA's chief executive and this week
named as Barclays' new head of regulatory affairs, said two years
ago that people should be afraid of the regulator, the FT
relates.

In September, Mr. Cummings was fined GBP500,000, becoming the
only former bank executive to be penalized for his role in HBOS's
dramatic meltdown, when loans turned bad and funding dried up for
the bank at the height of the global crisis, the FT recounts.

HBOS was forced into a rescue merger with Lloyds in 2008, which
in turn needed a GBP20 billion government bailout, the FT
discloses.

Mr. Cummings, as cited by the FT, said the FSA's handling of his
fine was "inept", with an original number of GBP1 million reduced
to GBP800,000 and then, after legal challenge, to GBP500,000.

HBOS plc is a banking and insurance company in the United
Kingdom, a wholly owned subsidiary of the Lloyds Banking Group
having been taken over in January 2009.  It is the holding
company for Bank of Scotland plc, which operates the Bank of
Scotland and Halifax brands in the UK, as well as HBOS Australia
and HBOS Insurance & Investment Group Limited, the group's
insurance division.  The group became part of Lloyds Banking
Group through a takeover by Lloyds TSB January 19, 2009.


MANGANESE BRONZE: Zheijiang Geely Submits Takeover Bid
------------------------------------------------------
Bloomberg News reports that Zhejiang Geely Holding Group Co. has
submitted a bid to buy Manganese Bronze Holdings Plc, which is
under creditor protection.

According to Bloomberg, one of the two people familiar with the
matter said that Zhejiang Geely, which owns Swedish automaker
Volvo Cars, is offering to buy 80.03% of Manganese Bronze.  The
people declined to say how much the company is offering for the
stake, Bloomberg notes.

Manganese Bronze, which has made taxis in Coventry, England,
since 1948, is fighting for survival after going into
administration -- a form of creditor protection -- on Oct. 30
after the tie-up with Geely Automobile Holdings Ltd. failed to
yield savings, Bloomberg discloses.

Geely Auto, the Hong Kong-traded unit of Zhejiang Geely, owns
19.97% in the cab maker, Bloomberg says.  The report relates that
one of the people said the listed unit isn't involved in the bid.

A Zhejiang Geely spokesman declined to comment on whether the
company is making the bid, Bloomberg states.

Manganese Bronze Holdings Plc is the manufacturer of London's
traditional black cabs.


MUTUAL SECURITISATION: S&P Cuts Rating on Cl. A2 Notes to 'CCC-'
----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its issue rating on
Mutual Securitisation PLC's class A2 notes to 'CCC-' from 'CCC'.

"The rating action reflects both the application of our updated
criteria and increased risk of nonpayment owing to weaker
collateral performance," S&P said.

"On Oct. 1, 2012, we updated our criteria for assigning 'CCC+',
'CCC', 'CCC-', and 'CC' ratings. According to our updated
criteria, we believe payment of principal and interest is highly
dependent on favorable business, financial, and economic
conditions. Moreover, we consider that recent and expected
collateral performance is increasing the risk of nonpayment," S&P
said.

"Principal and interest due under the notes are serviced out of
future emerging surplus from a defined pool of National Provident
Life Ltd.'s (NPL; not rated) life and pensions insurance policies
and a reserve account. Emerging surplus for year-end June 2012
was about 34% lower than expected in 2011 owing to poor
investment returns and a strengthening of the reserving basis,"
S&P said.

"In our opinion, timely payment of principal and interest is
likely to continue for at least the next five years, based on
current information and base-case assumptions relating to
investment returns. In addition to emerging surplus, payments are
currently supported by the reserve account balance, which we
understand totaled about GBP50 million at Sept. 30, 2012.
However, as the underlying pool of policies and related aggregate
emerging surplus decline, the likelihood of a recovery in
collateral performance to fully amortize the notes diminishes. As
a result, we believe there is an increasing probability of
eventual default. Final maturity of the A2 notes is due in 2022.
The A1 notes were fully repaid in September 2012," S&P said.

RATINGS LIST
Mutual Securitisation PLC
GBP260 Million Limited-Recourse Bonds

Class        Rating
             To          From
  A2         CCC-        CCC


SPEYMILL CONTRACTS: Goes Into Administration
--------------------------------------------
Speymill Contracts Limited entered into administration on Monday.

Cameron Frazer Gunn -- cameron.gunn@resolvegroupuk.com -- Mark
Christopher Supperstone and Simon David Harris --
simon.harris@resolvegroupuk.com -- each of ReSolve Partners LLP
have been appointed to act as the administrators of Contracts.

Speymill is not directly affected by this appointment and
continues to trade as normal.


* UK: May Force Banks to Break Up Under Banking Reform Bill
-----------------------------------------------------------
Matt Scuffham at Reuters reports that Britain will get the
go-ahead to force banks to shield their routine retail operations
from riskier investment banking activities when MPs announce the
conclusions of an inquiry into banking reform today, Dec. 21.

According to Reuters, commission sources said that the
Parliamentary Commission on Banking Standards will also recommend
that the government can resort to a "nuclear option" of breaking
up banks if they try to find ways around the new rules.

Britain is reforming its banks to avoid a repeat of the failures
of 2008 when it was forced to pump GBP45 billion and GBP20
billion into Royal Bank of Scotland and Lloyds Banking Group
respectively to keep them afloat at the height of the global
financial crisis, Reuters notes.

The commission, initially set up to examine the conduct of banks
following a series of scandals, was asked by Chancellor George
Osborne in October to conduct pre-legislative scrutiny of the
government's Banking Reform Bill, Reuters discloses.

Commission members have expressed concerns over the lack of
detail in the bill which they believe makes legislation
vulnerable to being watered down if bank lobbyists put pressure
on future governments, Reuters says.

The commission has considered ways to avoid that and will
recommend the threat of full separation if banks don't comply --
an idea supported by several witnesses, including John Vickers,
who was the architect of the initial proposals as head of the
Independent Commission on Banking, Reuters states.

Banks reluctantly accepted the principle of ring-fencing after
initial resistance although some remain unconvinced, according to
Reuters.

The commission has debated at length whether banks should be
allowed to sell derivatives within the ring-fenced operation,
Reuters recounts.



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


* EUROPE: Leaders to Seek Strategy for Handling Failing Banks
-------------------------------------------------------------
Rebecca Christie at Bloomberg News reports that European Union
chiefs pledged to seek a joint strategy for handling failing
banks as German Chancellor Angela Merkel demanded taxpayers be
spared the costs.

Bloomberg relates that leaders agreed to start work next year on
a single resolution mechanism for euro-area banks to complement
the European Central Bank oversight role approved on Dec. 12 by
European finance chiefs.  According to Bloomberg, EU leaders said
that lenders should underwrite financial stability by repaying
governments as needed.

Resolution "may not be at the cost of the taxpayers, but has to
be structured so that those responsible for the failures of the
banks carry the burden," Bloomberg quotes Ms. Merkel as saying.

Bolstering confidence in banks is a key component of policy
makers' effort to defeat the debt crisis that has rattled markets
since late 2009, Bloomberg notes.  They must decide how to handle
existing bank weakness as well as future failures that emerge
after the ECB takes on its oversight duties, Bloomberg states.
In the first half of 2013, they will seek a deal on the terms of
allowing the EU's EUR500 billion (US$656 billion) rescue fund to
provide direct aid to banks, Bloomberg discloses.

According to Bloomberg, leaders still need to settle the issue of
so-called legacy assets, which emerged as nations proved unable
to stave off financial contagion.  Bloomberg notes that the
statement said guidelines are needed "as soon as possible" on
when the European Stability Mechanism can channel aid to banks
instead of through a government as was done in Spain's case.

At the same time, the summit conclusions focused on the "medium-
term" costs without addressing the upfront outlays needed to shut
down or prop up failing institutions, Bloomberg says.  Existing
proposals, which nations will seek to conclude before launching
the joint resolution talks, would set common national standards
for protecting depositors and stabilizing banks, Bloomberg notes.


* EUROPE: Moody's Says Euro Area Crisis Hits Toll Road Traffic
--------------------------------------------------------------
The euro area crisis is negatively affecting tolled traffic in
Europe and weak traffic volumes will continue over the next 12
months, says Moody's Investors Service in a Special Comment
report published on Dec. 19. The extent of further declines in
traffic volumes will depend on the depth and longevity of the
economic downturn in Europe, and concomitant consumer and
business confidence.

The new report is entitled "European Toll Road Operators: Weak
Traffic Trends to Continue".

Moody's says that continued austerity measures affecting economic
activity and consumption is the major driver for traffic declines
on the European toll road networks. However, there is an
increasing divergence in the performance of European toll road
operators. Those in countries experiencing financial market
tensions are seeing much bigger drops in traffic volumes.

The issuers most exposed to traffic declines are Brisa Concessao
Rodoviaria S.A. (Ba2 negative) of Portugal, and Italian toll road
operators Atlantia S.p.A. (Baa1 negative) and SIAS - Societ…
Iniziative Autostradali e Servizi S.p.A. (Baa2 negative). French
toll road operators such as Autoroutes du Sud de la France (Baa1
stable), Societe des Autoroutes Paris-Rhine-Rhone (Baa3 stable)
and Sanef S.A. (Baa1 negative) have been most resilient so far.

Moody's says that declines in traffic volumes are mitigated
somewhat by higher tariffs. Inflation in the euro area is
beneficial for toll road operators given inflation-linked
tariffs. However, increases in tariffs may not ultimately be
sufficient to offset the decline in traffic volumes, and in the
current weak economic environment and high unemployment rates,
higher tolls can be an additional factor influencing
discretionary light vehicle travel.


* BOOK REVIEW: Legal Aspects of Health Care Reimbursement
---------------------------------------------------------
Authors:  Robert J. Buchanan, Ph.D., and James D. Minor, J.D.
Publisher: Beard Books
Softcover: 300 pages
List Price: $34.95
Review by Henry Berry

With Legal Aspects of Health Care Reimbursement, Buchanan, a
professor in the School of Public Health at Texas A&M, and Minor,
an attorney, have come up with an invaluable resource for lawyers
and anyone else seeking an introduction to the legal and social
issues related to Medicare and Medicaid.  The administrative
costs of Medicare and Medicaid reimbursement have been a heated
topic of debate among public officials and administrators of
provider healthcare organizations, especially health maintenance
organizations.  Although inflation and the use of costly medical
technology are key factors in the rise in Medicare and Medicaid
costs, some control can be gained through appropriate compliance,
using more efficient procedures and better detection of fraud.
This work is a major guide on how to go about doing this.
Though mostly a legal treatise, Legal Aspects of Health Care
Reimbursement, first published in 1985, also offers commentary
through legislative and regulatory analyses, thereby explaining
how healthcare reimbursement policies affect the solvency and
effectiveness of the Medicare and Medicaid programs.
In discussing how legislation and regulations affect the solvency
and effectiveness of government-provided healthcare, the authors
offer insight into the much-publicized and much-discussed issue
of runaway healthcare costs.  Buchanan and Minor do not deny that
healthcare costs are out of control and are onerous for the
government and ruinous for many individuals.  But healthcare
reimbursement policies are not the cause of this, the authors
argue.  To make their case, they explain how the laws and
regulations in different areas of the Medicare and Medicaid
programs create processes that are largely invisible to the
public, but make the programs difficult to manage financially.
The processes are not well thought out nor subject to much
quality control, with the result that fraud is chronic and
considerable.

The areas of Medicare covered in the book are inpatient hospital
reimbursement, long-term care, hospice care, and end-stage renal
disease.  The areas of Medicaid covered are inpatient hospital
and long-term care plus abortion and family planning services.
For each of these areas, the authors discuss the conditions for
receiving reimbursement, the legislation and regulations
regarding reimbursement, the procedures for being reimbursed, the
major areas of reimbursement (for example, capital-related costs,
dietetic services, rental expenses); and court cases, including
appeals.  Reimbursement practices of selected states are covered.
For each of the major areas of interest, the chapters are
organized in a manner that is similar to that found in reference
books and professional journals for attorneys and accountants.
Laws and regulations are summarized and occasionally quoted with
expert background and commentary supplied by the authors.  With
regard to court cases and rulings pertaining to Medicare and
Medicaid, passages from court papers are quoted, references to
legal records are supplied, and analysis is provided. Though the
text delves into legal issues, it is accessible to administrators
and other lay readers who have an interest in the subject matter.
Clear chapter and subchapter titles, a table of cases following
the text, and a detailed index enable readers to use this work as
a reference.

The value of this book is reflected in the authors' ability to
distill great amounts of data down to one readable text.  It
condenses libraries of government and legal documents into a
single work.  Answers to questions of fundamental importance to
healthcare providers -- those dealing with qualifications,
compliance, reimbursable costs, and appeals -- can be found in
one place. Timely reimbursement depends on proper application of
the rules, which is necessary for a provider's sound financial
standing. But the authors specify other reasons for writing this
book, to wit: "Providers should have a general knowledge of the
law and should not rely on manuals and regulations exclusively."
By summarizing, commenting on, and citing cases relating to
principal provisions of Medicare and Medicaid, the authors
accomplish this objective.

The authors also cover the topic of fraud with respect to both
Medicare and Medicaid, offering both a legal treatment and
commentary.  At the end of each chapter is a section titled
"Outlook," which contains a discussion of government studies,
changes in healthcare policy, or other developments that could
affect reimbursement.  Although this work was published over two
decades ago, much of this discussion is still relevant today.
Finally, the book is a call for change.  The authors remark in
their closing paragraph: "Given the increasing for-profit
orientation of the major segments of the health care industry,
proprietary providers should be particularly responsive to new
efficiency incentives" in reimbursement.  In relation to this,
"policymakers [should] develop reimbursement methods that will
encourage providers to become more efficient."

Robert J. Buchanan is currently a professor in the Department of
Health Policy and Management in the School of Rural Public Health
at the Texas A&M University System Health Sciences Center.  James
D. Minor, a former law professor at the University of
Mississippi, has his own law practice.


                            *********

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
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                 * * * End of Transmission * * *