TCREUR_Public/130111.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, January 11, 2013, Vol. 14, No. 8



TORM A/S: Board Reports on Restructuring, Debt Moratorium


VIRGIN FRANCE: Files for Bankruptcy; Court to Decide on Fate


ADAM OPEL: Begins Production of Small Car Amid Recession


NEWLEAD HOLDINGS: Receives Investment of US$236.4 Million


E-STAR ALTERNATIVE: Seeks Approval on HUF500MM Capital Raise


BANK OF IRELAND: Gov't Sells EUR1-Bil. Convertible Capital Notes


CODEIS SECURITIES: S&P Assigns Preliminary 'BB+' Credit Rating


CENTRAL EUROPEAN: Moody's Downgrades CFR/PDR to 'Caa3'


BANCO INTERNACIONAL: Fitch Affirms 'BB' LT Issuer Default Rating


ARCELORMITTAL: JV, Stock Issuance No Impact on Moody's Ba1 Rating
OTP BANK: Fitch Affirms 'BB' Long-Term Issuer Default Rating


DEKANIA EUROPE: Fitch Affirms Ratings on 23 Note Classes

U N I T E D   K I N G D O M

BIOTICA: In Administration, Maybe Saved or Sold
BRITANNIA DEVELOPMENTS: In Administration on Difficult Trading
DOFF PORTLAND: Restructures GBP6-Million Debt Through CVA
DU CANE: Restaurant Goes Into Liquidation
JESSOPS: In Administration, 2,000 Jobs at Risk

* Fitch Expects Weak Top-Line Growth for UK Retailers in 2013


* Fitch Says Assets Optimization Key Theme for EMEA Cement Firms
* Moody's Says Global Spec-Grade Corp. Default Rate Down 2.6%
* BOOK REVIEW: Performance Evaluation of Hedge Funds



TORM A/S: Board Reports on Restructuring, Debt Moratorium
In connection with TORM A/S' Extraordinary General Meeting that
was set to be held on Jan. 9, TORM published the Board of
Directors' report on the restructuring of TORM which was
completed on November 5, 2012 and related equity transactions
including acquisition of treasury shares.




"I am going to elaborate on the restructuring agreement under
this item [Wednes]day.  The agreement ensures TORM a substantial
deferral of its bank credit facilities, new liquidity and
significant cost savings from the restructuring of the fleet of
chartered-in vessels, which in itself is positive.  This allows
TORM to become cash flow positive, even at the current freight
rate levels.  The Company has thereby been given time to secure
its future, long-term capital structure."

"I will provide a brief summary of the events leading up to the
Company's Annual General Meeting held on April 23, 2012, at which
I reported on the conditional agreement in principle between the
bank group, the time charter partners and TORM."

The summary will be followed by a report on the most significant
events leading up to the completion of the final restructuring
agreement on November 5, 2012 and the subsequent listing

Entering the Conditional Agreement in Principle

Since 2010, TORM has worked on improving the Company's capital
structure and liquidity situation by seeking to tap into
different corporate bond markets and through other measures.
Mainly due to the Company's strategic position as a spot-oriented
company, low freight rates and the generally challenging
conditions in the capital markets, TORM was unable to obtain this
type of financing. With the continuously low freight rates and
cyclically low vessel values since fall 2011, TORM's Board of
Directors did not find it prudent to inject new equity in the
Company at the time without substantial amendments to the
existing credit facilities.  In October 2011, TORM therefore
presented a proposal to the banks that combined an equity
injection of US$100 million with subscription rights for existing
shareholders and a bank moratorium.  The proposal was not
accepted by the banks, but the Company achieved a standstill
agreement with the banks, which was extended several times during
2012 to ensure that a long-term, comprehensive financing solution
was found and implemented.

Throughout the whole process, TORM's Board of Directors and
Executive Management have worked on avoiding bankruptcy or other
in-court solutions in Denmark or abroad in order to best preserve
value and put all stakeholders in the best possible position.
However, the process also involved detailed negotiations and
preparations for a suspension of payments, including under the US
"Chapter 11" rules.  In the spring of 2012, TORM also succeeded
in obtaining conditional offers from reputable, international
shipping investors as well as institutional investors, who were
prepared to make new investments in the Company provided that
substantially amended bank terms were agreed.  However, the banks
chose not to enter into substantive negotiations with any of
these investors as they did not find the investor proposals
sufficiently attractive.

Since the fourth quarter of 2011 the Company's liquidity
situation has been very tight, and the total bank debt could be
called at any time at the banks' discretion due to non-compliance
with certain financial covenants.  Through negotiations with the
bank group during 2012 it became clear that the only achievable
solution with the bank group would not provide immediate debt
relief in the balance sheet nor any new liquid equity
contribution.  A solution could be found where TORM gained time
for a potential general market improvement in order to best
preserve shareholder value.  Therefore, TORM signed a conditional
agreement in principle with the banks and the major time charter
partners regarding a long-term financing solution as stated in
announcement no. 14 dated April 4, 2012 and elaborated in
announcement no. 20 dated April 23, 2012 and at the Annual
General Meeting.

Completion of the Restructuring Agreement

The conditional agreement in principle formed the basis of the
restructuring agreement, which is very comprehensive and contains
a number of supplementary agreements with individual parties,
including amendments to TORM's existing financing agreements.
During the period from April to November 2012, the final
contractual framework was detailed, documented and completed by
the banks, the group of time charter partners and the Company.
This prolonged process, including the period leading up to this,
was very costly to the Company, but it was preferable to the
alternative.  I will now explain the details of the

Content of the Restructuring Agreement - Banks

New facility

As part of the restructuring, TORM has secured new working
capital of US$100 million until September 30, 2014 with first
lien in the majority of the Company's vessels.

Amended Terms and Conditions

Through the implementation of the restructuring, the Company's
group of banks has aligned key terms and conditions and financial
covenants across all existing debt facilities, and all maturities
on existing credit facilities have been adjusted to December 31,

The bank debt remained unchanged at US$1,794 million as of
September 30, 2012.  The book value of the fleet excluding
vessels under finance leases as of September 30, 2012 was
US$2,167 million.  TORM's quarterly impairment test as of
June 30, 2012 supported the carrying amount of the fleet based on
the same test and principles as used by the Company since the
Annual Report for 2009.  Based on broker valuations, TORM's fleet
excluding vessels under finance leases had a market value of
US$1,316 million as of September 30, 2012, which was US$851
million lower than the carrying amount.  The recognized equity
amounted to US$358 million as of September 30, 2012.

Going forward, interest on the existing debt will only be paid if
the Company has sufficient liquidity, and otherwise the remainder
will be accumulated until at least June 30, 2014 with potential
extension until September 30, 2014.  On average the interest
margin will increase to approximately 240 basis points on the
bank debt. The Company will pay interest on the new working
capital facility until September 30, 2014.

The new financing agreements provide for a deferral of
installments on the bank debt until September 30, 2014, in which
period rescheduled principal amortizations will only be payable
if the Company has sufficient liquidity.  Provided that the
Company generates sufficient positive cash flows, certain cash
sweep mechanisms will apply.  Annualized minimum amortizations of
US$100 million will commence with effect from September 30, 2014
until December 31, 2016.  If vessels are sold, the related
secured debt will fall due.

Changed Legal Group Structure

As part of the restructuring agreement, TORM has implemented
substantial changes to the Company's internal legal group
structure, including transfers of vessels to separate legal
entities in Denmark and Singapore based on the individual loan
facilities.  All legal entities are ultimately owned by TORM A/S.

New Financial Covenants

New financial covenants will apply uniformly across the bank debt
facilities and will include:

-- Minimum liquidity: Cash plus the available part of the new
US$100 million working capital facility must exceed US$50 million
to be tested from December 31, 2012.  This will later be adjusted
to a cash requirement of US$30 million by September 30, 2014 and
US440 million by March 31, 2015.

-- Loan-to-value ratio: A senior loan tranche of US$1,020 million
has been introduced out of the total bank debt of US$1,793
million as of June 30, 2012.  The senior tranche must have an
initial agreed ratio of loan to TORM's fleet value based on
broker valuations (excl. vessels under finance leases) at 85% to
be confirmed from June 30, 2013.  This will gradually be stepped
down to 65% by June 30, 2016.  The remaining bank debt of US$773
million has been divided into two additional debt tranches, both
with collateral in the Company's fleet.

-- Consolidated total debt to EBITDA: Initial agreed ratio of a
maximum of 30:1 to be tested from June 30, 2013, gradually
stepped down to a 6:1 ratio by June 30, 2016.

-- Interest cover ratio: Agreed EBITDA to interest ratio of
initially a minimum of 1.4x by June 30, 2014, gradually stepped
up to 2.5x by December 31, 2015.

Additional Material Covenants

The terms of the credit facilities will include a catalogue of
additional covenants, including amongst others:

-- A change-of-control provision with a threshold of 25% of
shares or voting rights.

-- No issuance of new shares or dividend distribution without
consent from the banks.

Specific Information on Option Rights for Banks

As part of the restructuring, certain specific option rights were
agreed that may result in a sales process to be defined by TORM
prior to January 31, 2013 for up to 22 vessels and repayment of
the related secured debt.  The options given to three bank
consortiums, which are subject to certain agreed terms and
conditions, have a duration until July 31, 2014.  One bank
consortium has given notice on five of the vessels.  TORM will
seek to maintain the vessels' association with the Company. I
will revert to this subject later.

Content of the Restructuring Agreement - Chartered-in tonnage

As part of the restructuring agreement, the time charter partners
have accepted that the existing time charter contracts will
either be permanently changed and rates will be aligned to market
level with upside/downside split or allow for termination of the
contracts with return of vessels.  These amendments will result
in a significant reduction of the Company's future time charter
commitments.  TORM estimates that the changes in time charter
contracts correspond to a total positive nominal mark-to-market
impact on TORM of approximately US$270 million.  A small number
of owners of chartered-in tonnage do not take part in the
restructuring.  As part of the restructuring, TORM will return 22
vessels to the time charter partners ahead of the original
contract schedule.

Effective from November 5, 2012, the date of the restructuring,
TORM's future time charter commitments were reduced by
approximately US$590 million, from US$818 million to US$228
million, due to the freight rates being aligned to market level,
as mentioned, or by redelivery of the vessels.

As a result of the agreement, the Tanker Division has reduced the
expected average time charter costs for the first quarter 2013
from US$/day 18,848 to US$/day 12,141, equal to a 36% reduction.

In the same period, the Bulk Division will reduce the average
time charter costs from US$/day 16,286 to US$/day 13,755, equal
to a 16% reduction.

Overall, the restructuring agreement has provided TORM with a
moratorium on its bank debt and new liquidity, and it has reduced
the time charter costs to the prevailing market level, against
the banks and the time charter partners becoming shareholders of
TORM holding an aggregate of 90% of the shares.

New Ownership Structure as a Result of the Restructuring

The receivable that the time charter partners were given as a
consequence of the amended contractual conditions as well as a
fee to the banks, estimated at a total net present value of
US$200 million, has been converted into shares in the Company,
corresponding to 90% of the Company.  In this way, the existing
shareholders retained an ownership interest of 10.0% against the
7.5% announced at the Annual General Meeting held in April 2012.
The equity allocation between the banks and the time charter
partners has been agreed between them and is part of the
restructuring agreement.

"The conversion into new share capital will be described shortly.
First, however, I will explain the basis of the Board of
Directors' resolution to accept the restructuring agreement
including the supplementary agreements.

The Basis of the Board of Directors' Decision

Since September 2011, TORM has retained the assistance of the
international financial advisor Evercore Group LLC.  In addition,
the Board of Directors has obtained a valuation opinion letter
from the international investment advisor Moelis & Company UK LLP
and a valuation report from the accounting firm Ernst & Young
with respect to the debt conversion and the issue of the new
shares to the banks and the time charter partners in connection
with the restructuring.

Having carefully considered the financial and operational
position of the Company and the opinion letter from Moelis &
Company UK LLP, the Board of Directors assessed that it would be
in the best interests of the Company, its shareholders,
creditors, other stakeholders and other interested parties to
issue the new shares in the Company against conversion of the
total consideration of USD 200 million from time charter partners
and banks to allow TORM to continue its operations without
bankruptcy or similar in-court proceedings.

The new shares were issued under the authorization given to the
Board of Directors at the Annual General Meeting held on April
23, 2012."

"I will now provide an account of the changes to the share
capital that took place on November 5, 2012.

Capital Decrease

At TORM's Annual General Meeting held on April 23, 2012 it was
decided to reduce the share capital of TORM by a nominal value of
DKK363,272,000 from DKK364,000,000 nominal value to DKK728,000
nominal value by transfer of the reduction amount to a special
reserve fund and by changing the nominal amount per share
(denomination) from DKK5.00 to DKK0.01 in accordance with section
188(1)(3) of the Danish Companies Act.  One of the reasons for
this was that new shares could not be issued at a price below the
nominal value.  Accordingly, TORM was unable to issue new shares
prior to the capital reduction, as the share price was below

By publication of the resolution to reduce the Company's share
capital via the IT system of the Danish Business Authority on
April 23, 2012, TORM's creditors were notified of the resolution
and given the statutory four-week period for filing claims from
23 April 2012 under section 192(1) of the Danish Companies Act.
By the end of the statutory creditor notice period, TORM had not
received notice of any claims outside the ordinary course of
business which were not waived or settled in connection with the
completion of the restructuring.

On November 5, 2012, as part of the restructuring, the Board of
Directors decided to complete the capital reduction pursuant to
the resolution passed at TORM's Annual General Meeting held in
April 2012.

Capital Increase

At TORM's Annual General Meeting held on April 23, 2012 the Board
of Directors was also among others also authorized to increase
the share capital of TORM by up to a total nominal value of
DKK2,400,000,000 by payment in cash, conversion of debt or
contribution of assets other than cash without pre-emptive
subscription rights for the existing shareholders at a rate
discounted to the market price, as per article 2.14 of the
Articles of Association.

Following the decision to reduce the share capital as described
above, the Board of Directors decided to exercise the
authorization in article 2.14 of the Articles of Association to
increase the share capital of TORM by a nominal value of
DKK6,552,000 by issuance of 655,200,000 shares of a nominal value
of DKK 0.01 each.

The capital increase comprised a directed issue of new shares by
conversion of debt of DKK1,174,100,581 in total (approximately
US$200 million) pursuant to the terms of the restructuring
agreement and supplementary agreements to TORM's banks and time
charter partners or their assignees.  The capital increase was
fully subscribed for the aggregate of 655,200,000 new shares of a
nominal value of DKK0.01 each, at a subscription price of
DKK1.79 per share of DKK nominal value 0.01 each (approximately
US$0.31 per share).  The new shares issued corresponded to 90% of
TORM's registered share capital and votes following the
registration of the capital increase with the Danish Business
Authority.  TORM's issued share capital now amounts to DKK
7,280,000 nominal value, equal to 728,000,000 shares of a nominal
value of DKK0.01 each.

The same rights apply to the new shares as to the existing shares
including that the new shares are also negotiable instruments,
and no special restrictions apply to the transferability of the
new shares under Danish company law.

TORM's existing share option programs were subsequently adjusted
in accordance with the capital increase, but exercise prices
still remain significantly higher than the current share price,
and the share option programs are therefore "under water".

Acquisition of Own Shares

On September 27, 2012, in connection with the restructuring, TORM
signed a separate agreement to acquire own shares from certain
time charter partners, who were also parties to the
restructuring. The agreement concerned the acquisition of
3,739,840 shares in TORM with an aggregate nominal value of
DKK37,398.40, corresponding to 0.5% of TORM's total share

The shares were transferred immediately after the completion of
TORM's restructuring on November 5, 2012, against the release of
a claim of an estimated value of US$0.6 million according to
independent valuation.  TORM's shares closed at DKK2.72 and
DKK2.56 on NASDAQ OMX Copenhagen A/S on the date of the
completion of the agreement and on the date of the share
transfer, respectively.

Following prolonged negotiations, and supported by statements
from various advisers, the Board of Directors assessed that the
agreement to acquire own shares was the Company's only real
opportunity of securing participation by the involved parties in
the overall restructuring and thus avoid the serious and imminent
detrimental effects to TORM and its stakeholders of a potential
bankruptcy or other insolvency proceedings, cf. section 199 of
the Danish Companies Act.

Listing Prospectus

The new shares were issued and registered with the Danish
Business Authority on November 5, 2012 at the completion of the
restructuring.  The shares were issued under a temporary ISIN
code, which was combined with the ISIN code for the existing
shares after the publication of a listing prospectus in early
December 2012.

This prospectus describes in detail the Company's current
situation after the restructuring agreement and provides an in-
depth description of risk factors.

Among other things, the prospectus states that with the
restructuring TORM has gained time for a potential market
improvement and to secure the Company's future, long-term capital
structure.  However, TORM currently has a considerable bank
financing and in the absence of substantial market and rate
improvements TORM will most likely continue to generate losses,
thus eroding the equity.  Moreover, the existing capital
structure does not provide the necessary basis for the financing
of TORM's operations and growth in the medium to long term, and
additional financing, remission of debt or alternative actions
will be required.

Based on broker valuations, the market value of TORM's fleet,
excluding finance leases, of US$1,316 million at September 30,
2012 was significantly lower than TORM's bank debt of US$1,906
million at the completion of the restructuring.  If the
underlying market conditions do not improve, there is a risk that
the gap between the debt and the fleet market value will widen,
simply because the vessels age.  In case the freight rates remain
low over a longer period, there will be a considerable risk of an
impairment of the Company's fleet values.  The same may apply in
case the assumptions for the quarterly impairment test are
changed.  This is described in detail in note 2 of the Company's
quarterly reports as well as in the listing prospectus.

The prospectus also describes that TORM's financing agreements
entered into in connection with the restructuring contain
financial and operational covenants.  If the difficult market
conditions experienced during 2012 continue, TORM expects that
the credit agreements may be breached at the time of testing of
the financial covenants on June 30, 2013 and, under certain
scenarios, before or after this date.  In case of a risk of
breach of covenants, TORM plans to initiate renegotiations with
the secured lenders to obtain the necessary waivers and

The prospectus also provides a detailed description of the
individual option rights that I mentioned earlier for the lenders
under three of the Company's bank facilities to request the sale
of vessels being financed by the bank facilities in question.
The options relate to bank facilities financing thirteen, five
and four vessels, respectively.  Under the options, the Company
will be required to propose a sales strategy to be agreed with
the relevant lenders for the vessels comprised by the options.
The lenders under the bank facility financing five vessels have
exercised their option and thus initiated the process set out in
relation to these five vessels.

The total outstanding debt relating to the bank facility
financing five vessels was US$121 million as of the
restructuring.  The carrying amount of the five vessels was
US$210 million at
September 30, 2012 and the market value based on broker
valuations was US$141 million at September 30, 2012.  The average
age of the five vessels was two years as of the restructuring.
Based on the above-mentioned broker valuations, a sale of the
five vessels would result in P&L loss of approx. US$69 million.

The complete listing prospectus is available at the Company's
Web site

Substantial Contact with Public Authorities

As mentioned earlier, completing the contractual framework and
finalizing preparations for the technical completion of the
restructuring agreement has been a long, drawn-out process. Due
to the complexity of the agreements, it was necessary to maintain
substantial concurrent contact with, in particular, the Danish
Business Authority, the Danish Securities Council and the Danish
FSA, which have contributed very efficiently.

For example, the banks and certain of the time charter partners
behind the restructuring of TORM requested the Danish FSA to
grant an exemption from the Danish rules on mandatory takeover
bids in line with the advance indications to this effect
previously received from the FSA.  On December 3, 2012, TORM was
informed that the FSA had issued exemption from the obligation to
submit a takeover offer to the shareholders in TORM.

The Danish Securities Council was asked to make a ruling on the
planned accounting treatment of the restructuring with the
Company's banks and time charter partners.  The ruling is
described in a separate company announcement dated November 15,
2012, and its net effects in the fourth quarter of 2012 are as
follows: The capital increase of US$200 million by conversion of
debt will be recognized as an increase in equity.  A net loss of
approx. US$150 million mainly related to cancelled time charter
agreements (operating leases) and finance lease time charter
agreements will be recognized in the income statement.
Accordingly, the net impact on equity is an increase of US$50
million.  There is no impact on liquidity.

TORM hereafter forecasts a loss before tax for 2012 of US$500-530
million including the accounting effects of the restructuring and
excluding further vessel sales and potential impairment charges
and any consequences if the sales options are exercised.

The Significance of Freight Rates for TORM's Future

As everybody is well aware, shipping is a cyclical industry with
very volatile freight rates.  Looking back at the past decade, it
was characterized by major freight rate fluctuations which gave
us some five years with very high earnings, but also the past
four years with very low freight rates resulting in significant

If the difficult tanker and bulk market conditions experienced in
2012 continue for an extended period, the Company expects to
breach the new financial covenants during the course of 2013.

If, however, the recent freight rate levels seen in the product
tanker market in the fourth quarter of 2012 are maintained over a
number of years, the Company will be able to meet its new
financial covenants and in the future be able to service its debt
as it falls due.  If freight rates reach the ten-year historical
average, TORM will be in a position of generating profits and it
will be able to make considerable repayments on its bank debt.

Simply put: With a substantial and fast improvement in freight
rates, TORM will be able to service all its debt.  Alternatively,
a future agreement with TORM's lenders regarding a significant
change in the capital structure of the Company is a necessity.

TORM Going Forward

The comprehensive restructuring agreement provides a financial
safety net under TORM. This is in the interest of all concerned.
The shareholders avoid losing all their assets . The banks avoid
incurring the major losses that a potential bankruptcy would
entail.  TORM will remain a going concern based on the existing
employees.  A group of owners consisting of Nordic and
international banks with large ownership interests can only be
seen as an asset for the Company.  At the beginning of 2014,
TORM's owned fleet consisted of 65 product tankers and two dry
bulk vessels.  In addition to the owned vessels, TORM had
chartered-in 12 product tankers and 28 dry bulk vessels.

"TORM will once again be able to focus 100% on operations and its
collaboration with customers and other important stakeholders.
TORM has thus gained time to await improved market conditions and
freight rates and to secure a final capital structure solution.

"I am confident that, under the new ownership, with a new Board
of Directors and a continuously dynamic management and staff in
Denmark, abroad and onboard vessels, TORM will be able to define
a new strategy that will ensure the Company's ability to benefit
from the economic recovery, when it comes, and continue to make
TORM an interesting and challenging place to work.  Please give
the new Board of Directors together with the management and
employees time to present their plan for the future.

"On behalf of the Board of Directors, I am pleased and content
that the time charter partners and our banks have shown their
confidence in TORM.  I am certain that the Company will honor
these expectations by delivering the best possible results for
customers in terms of quality and costs, and thereby the owners."

Proposals for the Amendments to the Articles of Association

The proposals for the amendments to the Articles of Association
are a consequence of the restructuring.  Proposal 2.a. will
cancel the authorizations to increase the share capital, which
were given at the Annual General Meeting in 2012 in order to
conclude a restructuring agreement.  Proposal 2.b. is editorial
in nature due to the name change of the Danish Business
Authority.  Proposals 2.c. to 2.e. concern minority protection,
which is a part of the agreement between the banks and the owners
of the chartered-in tonnage.  This can of course be a good thing,
but may prove difficult to handle when TORM's final capital
structure is to be determined.  Proposal 2.f. to change the term
of office of board members is part of the restructuring

Thank you

"On behalf of all the members of the Board of Directors, I would
like to conclude this report by thanking all our stakeholders for
their cooperation and strong commitment to finding a joint
solution through this highly challenging period for the Company."

                            About TORM

With headquarters in Copenhagen, Denmark, TORM (NASDAQ: QMX) is
one of the world's leading carriers of refined oil products as
well as a significant player in the dry bulk market. The Company
runs a fleet of approximately 110 modern vessels in cooperation
with other respected shipping companies sharing TORM's commitment
to safety, environmental responsibility and customer service.


VIRGIN FRANCE: Files for Bankruptcy; Court to Decide on Fate
BBC News reports that Virgin France has filed for bankruptcy, the
latest music chain to fail against a backdrop of consumers
shifting to buying music online.

The firm has 26 stores in France, including a flagship outlet on
the Champs Elysees in Paris, BBC discloses.  It employs 1,000
people and is owned by French investment firm Butler Capital, BBC

The Paris Commercial Court will decide if the firm should pursue
a recovery plan or be put into liquidation, BBC says.

Butler bought 80% of Virgin in 2007 from French media company
Lagardere, which had purchased the chain from Richard Branson's
Virgin in 2001, BBC recounts.


ADAM OPEL: Begins Production of Small Car Amid Recession
Dorothee Tschampa at Bloomberg News reports that General Motors
Co.'s unprofitable Opel division started production of the Adam
small car, named after the 151-year-old brand's founder, in a bid
to win back European customers amid a recession in the region.

Opel invested EUR190 million (US$248 million) to prepare its
factory in Eisenach, Germany, which also builds the Corsa
hatchback, to make the Adam, interim Chief Executive Officer
Thomas Sedran, as cited by Bloomberg, said on Thursday during a
presentation at the plant.  The model is being marketed as giving
buyers a choice of as many as 61,000 exterior and 82,000 interior
design combinations, Bloomberg discloses.

GM's losses in Europe since 1999 have totaled US$17.3 billion,
Bloomberg says.  The Detroit-based carmaker has a target of
bringing the operations to break-even by 2015, Bloomberg notes.
Sales by Opel and its U.K. sister brand Vauxhall have fallen
faster than European industrywide deliveries have contracted,
cutting the divisions' combined market share to 6.7% in the first
11 months of 2012 from 8.4% for all of 2007, Bloomberg relates.

The new models are part of a global GM strategy that also
includes refreshing 70 percent of its U.S. brands' lineup over a
year and a half, Bloomberg states.  Opel faces an extra challenge
as European carmakers' sales are set to shrink a sixth
consecutive year, Bloomberg notes.

Opel will stop producing cars at its 3,100-employee plant in
Bochum, Germany, in 2016 in the first shutdown of an auto plant
in the country since World War II, Bloomberg discloses.  GM
closed a factory in Antwerp, Belgium, in 2010 and is selling a
transmission plant in Strasbourg, France, that employs about
1,000 people, according to Bloomberg.

Adam Opel GmbH -- is General Motors
Corp.'s German wholly owned subsidiary.  Opel started making cars
in 1899.  Opel makes passenger cars (including the Astra, Corsa,
and Vectra) and light commercial vehicles (Combo and Movano).
Its high-performance VXR range includes souped-up versions of
Opel models like the Meriva minivan, the Corsa hatchback, and the
Astra sports compact.  Opel is GM's largest subsidiary outside
North America.


NEWLEAD HOLDINGS: Receives Investment of US$236.4 Million
NewLead Holdings Ltd. on Jan. 9 disclosed that the Company
received a capital contribution of industrial metal valued at
US$236.4 million for a 36.8% equity interest in NewLead.

Michael Zolotas, President and Chief Executive Officer of
NewLead, stated, "this significant investment demonstrates
confidence in the management team and the future of NewLead.  The
investment will provide valuable collateral for loans funding our
capital-intensive activities and provides a solid platform to
execute on our diversified growth strategy."

Upon completion of this transaction, it is expected that NewLead
will have a total of 701,904,963 shares of common stock
outstanding.  NewLead will issue, following NASDAQ's approval,
unregistered shares in exchange for the new investment.  The new
shareholder has agreed, subject to certain limited exceptions,
not to pledge, borrow or dispose of the NewLead shares or
otherwise transfer ownership of the shares until June 30, 2014.
The new shareholder will not have board representation or other

The value of the industrial metal was established on January 7,
2013 by an independent appraiser.  The foreign currency exchange
rate on January 7, 2013 was used for currency translation.

                      About NewLead Holdings

NewLead Holdings Ltd. -- is an
international, vertically integrated shipping company that owns
and manages product tankers and dry bulk vessels.  NewLead
currently controls 22 vessels, including six double-hull product
tankers and 16 dry bulk vessels of which two are newbuildings. N
ewLead's common shares are traded under the symbol "NEWL" on the
NASDAQ Global Select Market.

PricewaterhouseCoopers S.A. in Athens, Greece, said in a May 15,
2012, audit report NewLead Holdings Ltd. has incurred a net loss,
has negative cash flows from operations, negative working
capital, an accumulated deficit and has defaulted under its
credit facility agreements resulting in all of its debt being
reclassified to current liabilities.  These raise substantial
doubt about its ability to continue as a going concern, PwC said.


E-STAR ALTERNATIVE: Seeks Approval on HUF500MM Capital Raise
MTI-Econews reports that the board of E-Star Alternative, which
filed for bankruptcy protection in December, will ask
shareholders for authorization to raise capital by HUF500 million
at an extraordinary general meeting on March 14.

Shareholders rejected a proposal to raise capital by HUF500
million at an extraordinary general meeting on Jan. 3, voting
instead to increase capital by HUF50 million, MTI-Econews

According to MTI-Econews, E-Star also said Raiffeisen Bank had
cancelled all loan contracts with its wholly owned unit E-Star
ESCO.  The bank cancelled its contracts with E-Start Alternative
in December, MTI-Econews discloses.

As reported by the Troubled Company Reporter-Europe on
January 10, 2013, E-Star disclosed on Dec. 28 that the company
had current liabilities of HUF8.01 billion and current assets of
HUF5.16 billion on November 30, 2012.  E-Star had total assets of
HUF21.1 billion and total liabilities of HUF18.69 billion on that
date, MTI-Econews disclosed.  The company sustained losses of
HUF1.78 billion in the first eleven months of 2012, compared to
losses of HUF2.04 billion for all of 2011, MTI-Econews said.
E-Star is scheduled to hold talks with the company's creditors in
early February, MTI-Econews noted.

E-Star Alternative is a Hungarian energy-services company.


BANK OF IRELAND: Gov't Sells EUR1-Bil. Convertible Capital Notes
Joe Brennan at Bloomberg News reports that Ireland's government
said it sold its entire EUR1 billion (US$1.3 billion) of so-
called contingent convertible capital notes in Bank of Ireland
Plc as investors bid for almost five times the amount on offer.

According to Bloomberg, Finance Minister Michael Noonan told
reporters in Dublin on Wednesday that the sale was completed at a
1% premium to par value, and the proceeds will be used to lower
the nation's debt.

The government received EUR4.8 billion of orders for the notes,
which are a form of fixed-income security that convert into stock
automatically if capital levels fall, Bloomberg discloses.

Mr. Noonan, as cited by Bloomberg, said that the state intends to
sell its almost EUR7 billion of remaining non-equity investments
in Irish banks "in time," with CoCos in state-controlled Allied
Irish Banks Plc the next potential offering.  The government
acquired the CoCos in Bank of Ireland in July 2011 as part of a
EUR5.2 billion recapitalization of the nation's lenders,
Bloomberg recounts.

Bank of Ireland is the only one of the country's six largest
lenders to have moved on from state control, Bloomberg notes.

                          *     *     *

As reported by the Troubled Company Reporter-Europe on Dec. 18,
2012, Standard & Poor's Ratings Services expects to assign a 'B'
rating to Bank of Ireland's (BOI; BB+/Negative/B) proposed new
dated nondeferrable subordinated debt issue, subject to a review
of the final documentation. "At the same time, we have raised the
ratings on BOI's existing dated subordinated debt issues to 'B'
from 'CC'. In addition, we have raised the ratings on BOI's
existing junior subordinated debt and preference shares to 'B-'
from 'CC'," S&P said.


CODEIS SECURITIES: S&P Assigns Preliminary 'BB+' Credit Rating
Standard & Poor's Ratings Services assigned its preliminary
'BB+/Watch Neg' credit rating to Codeis Securities S.A.'s
(Codeis, or the issuer) first fixed-coupon and variable-rate
index-linked coupon notes (the Codeis notes).

The transaction is a repackaging of three zero-coupon bonds and
one note issuance from Societe Generale Effekten GmbH (the SGE

   -- Banca Monte dei Paschi di Siena SpA's (MPS) zero-coupon
      bond, which matures in February 2018 (the MPS zero bond);

   -- The Republic of Italy's euro-denominated zero-coupon bond,
      which matures in February 2018 (the Italian zero bond);

   -- The Republic of Italy's euro-denominated zero-coupon bond,
      which matures in February 2014 (the Italian income bond);

   -- The SGE notes.

"The credit risk applicable to the Codeis notes is equal to that
of the four assets listed above.  As such, we have weak-linked
our preliminary rating on the Codeis notes to the rating on the
lowest-rated asset (the most severely constraining factor), the
MPS zero bond.  On Dec. 5, 2012, we lowered and placed on
CreditWatch negative our rating on the MPS zero bond issuer (and
consequently our rating on the proposed MPS zero bond) to
'BB+/Watch Neg' from 'BBB-' (see "Banca Monte dei Paschi di Siena
Ratings Lowered To 'BB+/B' And Placed On CreditWatch Negative").
Therefore, we have assigned our preliminary 'BB+/Watch Neg'
rating to the Codeis notes," S&P said.

The MPS zero bond, the SGE notes, and the Codeis notes will be
issued simultaneously.

S&P have assigned its preliminary rating based on the information
it has received for this transaction as of Sept. 24, 2012.

Rating Rationale

"In our analysis, we have applied our weak-linking approach that
we use to base our ratings on repackaged securities, supported by
our analysis of each cash flow source.  Our preliminary rating on
Codeis' notes is weak-linked to the
ratings on four entities:

   -- MPS zero bond as collateral, which as it stands will have a
      'BB+/Watch/Neg' rating;

   -- The Italian zero bond and the Italian income bond as
      collateral, the rating on which is at the same level as the
      unsolicited 'BBB+' long-term rating on the Republic of

   -- Societe Generale, the guarantor of the SGE notes, the fixed
       interest on which is used to pay the structure's costs;

   -- Societe Generale Bank & Trust (A/Negative/A-1), as

      This is because there is no replacement language, in line
      with S&P's 2012 counterparty criteria.

S&P's weak-linking approach determines the overall
creditworthiness of the issuer's notes using the weakest link,
i.e., the most severely constraining factor--in this case, the
MPS zero bond.

Therefore, S&P's rating on the Codeis notes is weak-linked to the
rating on the MPS zero bond.  In addition, the performance of the
Codeis notes, in S&P's view, will likely depend on that of the
MPS zero bond.


We currently await the issuer's legal opinions and the
transaction documents, including the collateral management
agreement, the custody agreement, and the trust deed.

The final rating on the Codeis notes is subject to our review of
the transaction documents, legal opinions, and the final rating
on the MPS zero bond.

                    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

There is no Standard & Poor's 17g-7 Disclosure Report included in
this credit rating report because, in S&P's view, there are no
representations, warranties, and enforcement mechanisms available
to investors.


CENTRAL EUROPEAN: Moody's Downgrades CFR/PDR to 'Caa3'
Moody's Investors Service has downgraded the corporate family
rating (CFR) and probability of default rating (PDR) of Central
European Distribution Corporation (CEDC) to Caa3 from Caa2.
Concurrently, Moody's has downgraded to Caa2 from Caa1 the rating
on the senior secured notes due in 2016 issued by CEDC Finance
Corporation International. All ratings are under review for

Ratings Rationale

"The downgrade follows CEDC announcement on the 28 of December
that it had agreed with Russian Standard a revised transaction to
repay its $310 million of convertible notes due March 2013 which,
in Moody's view, has increased the risk of potential loss for
existing bondholders", says Paolo Leschiutta, a Moody's Vice
President - Senior Credit Officer and lead analyst for CEDC. "The
downgrade also reflects CEDC's failure so far to secure adequate
financing to repay the convertible notes and Moody's
understanding that the old strategic alliance agreement between
Russian Standard and CEDC, which was previously supporting the
rating, will now expire on the 21 of January", continued
Mr. Leschiutta.

Under the new agreement, Russian Standard has released US$50
million in cash previously invested in CEDC, that are now
available for working capital and general corporate purposes,
agreed to provide a new $15 million revolving credit facility to
CEDC, and agreed to provide up to $107 million in new capital to
CEDC subject to and conditional upon an overall restructuring of
CEDC's capital structure that is acceptable to CEDC and Russian
Standard. Despite the renewed support and despite the limited
details so far on what the restructuring of CEDC's capital
structure might involve, the rating agency is concerned about an
increase likelihood of default for the group.

The ratings are under review for further downgrade in light of
the uncertainty regarding the potential restructuring of CEDC
capital structure. The review will focus on (1) the likelihood
that the Russian Standard proposal will progress; (2) the impact
that a capital restructuring might have on current creditors of
the group; (3) the liquidity profile of CEDC over the coming
weeks; and (4) CEDC's operating performance in Q4 2012.

What Could Change The Rating UP/DOWN

Given the current review for downgrade, Moody's does not
currently expect upward rating pressure. A further rating
downgrade could result from (1) any transaction that could
qualify as a distressed exchange under Moody's definitions,
leading to potential losses for bondholders; or (2) failure on
the part of CEDC to demonstrate progress in addressing its
refinancing needs over the next few weeks. Moody's methodology
for evaluating a distressed exchange considers inter alia whether
(1) the issuer is offering creditors a new package of security or
cash, and whether this amounts to a diminished financial
obligation relative to the original obligation prescribed by the
notes' indentures; and (2) the exchange is being offered to allow
the issuer to avoid a bankruptcy or payment default.


  Issuer: Central European Distribution Corporation

     Corporate Family Rating, Downgraded to Caa3 from Caa2;
     Placed Under Review for Downgrade

     Probability of Default Rating, Downgraded to Caa3 from Caa2;
     Placed Under Review for Downgrade

  Issuer: CEDC Finance Corporation International

     US$380M 9.125% Senior Secured Bond, Downgraded to Caa2 from
     Caa1; Placed Under Review for Downgrade

     EUR380M 8.875% Senior Secured Bond, Downgraded to Caa2 from
     Caa1; Placed Under Review for Downgrade

Outlook Actions:

     Outlooks, Changed To Rating Under Review From Negative

Principal Methodology

The principal methodology used in rating Central European
Distribution Corporation and CEDC Finance Corporation
International was the Global Alcoholic Beverage Rating Industry
Methodology published in September 2009. Other methodologies used
include Loss Given Default for Speculative-Grade Non-Financial
Companies in the U.S., Canada and EMEA published in June 2009.

Headquartered in Warsaw, Poland, CEDC is one of the largest vodka
producers in the world, with annual sales of around 33.2 million
nine-litre cases, mainly in Russia and Poland. Following
investments in Russia over the past two years and the
consolidation since February 2011 of Whitehall Group, an importer
and distributor of premium spirits and wine, CEDC generated net
revenues of around US$830 million during financial year-end
December 2011.


BANCO INTERNACIONAL: Fitch Affirms 'BB' LT Issuer Default Rating
Fitch Ratings has affirmed Banif - Banco Internacional do
Funchal, S.A.'s Long-term Issuer Default Rating (IDR) at 'BB',
Short-term IDR at 'B', Support Rating at '3' and Support Rating
Floor (SRF) at 'BB'. At the same time, the agency has downgraded
Banif's Viability Rating (VR) to 'f' from 'c'. The rating actions
follow the disclosure of capital needs and the commitment of
capital support from the Portuguese government.

Rating Action Rationale

Banif's Long-term IDR is at its SRF of 'BB' and is driven by
support from the Portuguese state. Portugal has been supportive
of its banks, injecting capital as required from the EUR12
billion capital backstop facility available for banking sector
recapitalization under the IMF/EU support program.

The downgrade of the VR was triggered by confirmation on 31
December 2012 by the Portuguese Ministry of Finance, that
approval had been granted for the state to recapitalize Banif.
The capital injection will comprise EUR700 million of special
shares subscribed by the Portuguese state and the state's
underwriting of an additional EUR400 million of hybrid
instruments. Under Fitch's rating definitions and criteria, Banif
has failed, and would have defaulted had it not received
extraordinary support.

Banif's shareholders will approve the recapitalization process on
Jan. 16, 2013. The process will be completed by end-January and
this will boost Banif's capital adequacy ratios to comply with
the 10% core capital ratio required by the Bank of Portugal.


Banif's Long-term IDR and SRF are one notch below Portugal's
sovereign rating ('BB+'/Negative). This reflects Fitch's view
that the state's propensity to support the country's second-tier
banks is marginally weaker than its propensity to support
systemically important banks. The SRFs assigned to the large
banks are equalized with the sovereign rating. The SRFs reflect
Fitch's assessment of available sovereign and international
support for Portuguese banks available under the IMF/EU support

The Negative Outlook on Banif's Long-term IDR mirrors that on the
sovereign. This reflects the high correlation between bank and
sovereign ratings in Portugal, as is the case in many countries.
Banif's Long-term IDR and SRF are therefore sensitive to a
downgrade of Portugal's sovereign rating. In addition, the
Negative Outlook reflects a potential change in Fitch's
assumptions regarding the Portuguese authorities' propensity to
support Banif in the future.


Once capital is injected into Banif, the agency will reassess the
bank's VR and upgrade it to a level commensurate with its credit
profile. Fitch believes this is likely to be in the 'b' category,
subject to completion of a full analysis. In particular, Fitch
will conduct a review of Banif's business plan, which assumes a
subsequent capital increase from private investors; an assessment
of loan and asset concentration, valuation of assets and funding
and liquidity profiles.


The bank's subordinated debt and preference shares have been
affirmed at 'C'. Given the bank's weak financial profile, Fitch
believes there is a high risk of non-performance associated with
these debt instruments. The ratings are sensitive to an upgrade
of Banif's VR.

The ratings actions are:

Long-term IDR affirmed at 'BB', Outlook Negative
Short-term IDR affirmed at 'B'
VR downgraded to 'f' from 'c'
Support Rating affirmed at '3'
SRF affirmed at 'BB'
Senior unsecured debt affirmed at 'BB'
Senior unsecured short-term debt affirmed at 'B'
Lower Tier 2 subordinated debt issues affirmed at 'C'
Preference shares affirmed at 'C'


ARCELORMITTAL: JV, Stock Issuance No Impact on Moody's Ba1 Rating
Moody's Investors Service has said that it views two recently
announced cash-raising actions by ArcelorMittal as credit
positive, given that the actions will help the company reduce
debt in support of its Ba1 rating (negative outlook). However,
these actions do not have an immediate impact on ArcelorMittal's
rating because Moody's had already taken them into account when
it downgraded the company's rating to Ba1 on November 6, 2012.
Over the next six months, Moody's expects the company to conclude
additional asset sales and execute other credit-enhancing
measures that will facilitate debt reduction in support of the
Ba1 rating.

On January 9, 2013, ArcelorMittal announced the launch of an
offering of common stock and mandatorily convertible subordinated
notes (MCNs) for an expected amount of approximately US$3.5
billion in proceeds (together, "the Combined Offering"), with the
Mittal family participating in the Combined Offering for an
aggregate amount of US$600 million. The proposed MCNs are a
hybrid instrument that receives 100% equity treatment from

On January 2, 2013, ArcelorMittal announced that it had entered
into an agreement to set up a joint venture (JV) partnership for
its iron ore mining and infrastructure assets in the Labrador
Trough of eastern Canada. Under the JV partnership, ArcelorMittal
will sell a 15% interest in ArcelorMittal Mines Canada for a
total consideration of US$1.1 billion in cash to a consortium led
by POSCO (Baa1 negative) and China Steel Corporation (CSC, not
rated). Sale proceeds are moderately less than Moody's had

Application of the US$4.6 billion in potential proceeds from the
aforementioned cash-raising actions to debt reduction would lower
ArcelorMittal's as-reported debt as of September 30, 2012 to
US$22 billion and its Moody's-adjusted debt to US$29.5 billion.
As a result, the company's debt/EBITDA metrics would decrease by
0.6x, to 3.1x and 4.1x on a last-12-months basis, respectively.
This would also go a long way to relieving Moody's concerns about
ArcelorMittal's ability to comply with a 3.5x net debt/EBITDA
financial covenant under the prevailing soft steel market.
However, Moody's believes the company needs to reduce debt
further in order to support the Ba1 rating and will maintain its
negative rating outlook until that happens and the global economy
and steel market conditions begin to improve.

Regarding the Labrador Trough iron ore assets, ArcelorMittal
Mines Canada and its affiliates will retain an 85% interest in
the mines and infrastructure assets. As part of the transaction,
POSCO and CSC will enter into long-term iron ore off-take
agreements proportionate to their JV interests. This move is part
of ArcelorMittal's strategy to build strategic relationships with
key customers. In addition to POSCO and CSC, the consortium
includes certain financial investors.

The JV transaction is subject to various closing conditions,
including regulatory clearance by the Taiwanese government, and
is expected to close in two installments in the first and second
quarters of 2013.

The company's Mont-Wright iron ore mine and concentrator
currently have annual capacity of 16 million tonnes and this will
rise to 24 million tonnes by the end of 2013. Mont-Wright and the
nearby Fire Lake mine have proven and probable reserves of
approximately 2 billion tonnes and measured and indicated
reserves of 4.9 billion tonnes, which could support increased
production over time.

ArcelorMittal is the world's largest steel company. It operates
more than 60 integrated and minimill steel-making facilities in
over 20 countries. For the 12 months ended September 30, 2012,
ArcelorMittal shipped 84 million tonnes of steel and had sales of
US$87 billion.

OTP BANK: Fitch Affirms 'BB' Long-Term Issuer Default Rating
Fitch Ratings has affirmed OTP Bank Plc's Support Rating at '3'
and its Russian subsidiary OJSC OTP Bank's Long-term Issuer
Default Ratings (IDRs) at 'BB' and National Rating at 'AA-(rus)'
and revised the Outlooks to Stable from Negative. Simultaneously,
the agency has upgraded OTPR's Viability Rating to 'bb-' from


The affirmation of OTPH's Support Rating reflects Fitch's opinion
that the Hungarian government would likely have a high propensity
to support OTPH if needed, in light of its systemic importance in
the banking sector. However, Fitch believes that OTPH is unlikely
to require such support in the short to medium term given the
bank's generally sound and stable credit profile. At end-Q312,
OTPH was the largest bank in Hungary and accounted for about 25%
of sector assets and almost 30% of retail deposits.


OTPR's Long- and Short-term IDRs and Support Rating are driven by
potential support from OTPH. Fitch believes that the parent would
have a high propensity to support OTPR in light of the ownership,
quite high level of integration, and the Russian subsidiary's
important contribution to the group's results (34% of group's
9M12 net income).

The revision of the Outlook to Stable reflects the stabilization
of OTPH's asset quality metrics and of the macroeconomic
environment in Hungary. The Outlook revision also takes into
account Fitch's recent revision of the Hungarian sovereign's
Outlook to Stable, driven by progress in reducing the budget
deficit and stabilizing government debt along with improved
fiscal and external financing conditions.


The upgrade reflects OTPR's solid profitability, strong capital
and liquidity positions, moderate refinancing risk and sizeable
pre-impairment results, which provide a considerable buffer to
absorb loan losses. At the same time, the rating is weighed by
high credit risks inherent in OTPR's unsecured consumer lending
in the highly cyclical Russian economy, very rapid recent loan
growth, increasing loss rates and intensifying competition in the

Profitability has remained solid (annualized ROAE of 27.6% in
9M12) thanks to strong operating efficiency and adequately priced
credit risks. However, intensifying competition is likely to
weigh on the net interest margin both through more expensive
retail funding and tighter loan yields. In addition, the bank may
be forced to seek other distribution channels from the
traditional POS network to sustain growth, which may put pressure
on costs.

In common with other Russian consumer banks targeting the lower
mass market clientele, OTPR is exposed to high credit risk,
although so far this has been well compensated by high loan
rates. There was a moderate deterioration of asset quality in
9M12, reflected in an increase in the ratio of originated non-
performing loans (NPLs, more than 90 days overdue) to performing
loans to 9.2% (annualized) from 7.9% in 2011, although this is
significantly below the Fitch-estimated break-even rate of about

Capitalization is a rating strength with a Fitch core capital
ratio of 20.2% at end-Q312 and regulatory capital ratio of 16.7%
at the same date. The latter allows provisions to be increased to
25% from 16% of the loan book before breaching regulatory

Liquidity is linked to the stability of the retail deposit base
(44% of total liabilities at end-Q312), which is price-sensitive
and potentially flighty. Withdrawal risk is mitigated by
substantial coverage of deposits by liquid assets (32% at end-
November 2012) and the loan book's strong liquidity. Loan
repayments of about RUB8.3 billion per month (equal to 7.4% of
end-Q312 total liabilities) provide an additional safety buffer.
Refinancing requirements have been deferred, but are rather
concentrated, with RUB13.5 billion (12% of end-9M12 liabilities)
potentially coming due in H114.


OTPH's Support Rating could be upgraded or downgraded if there
was a multiple notch upgrade or downgrade of the Hungarian
sovereign rating. However, Fitch currently views this as


OTPR's ratings could be upgraded or downgraded if OTPH's credit
profile improved or deteriorated. The ratings could also come
under pressure if Fitch reassesses the parent's propensity to
provide support, although this appears unlikely at present.


OTPR's Viability Rating could come under pressure if credit
losses increase significantly due to portfolio seasoning and/or
worsening of macro environment. An upgrade is unlikely at
present, given the challenges of the almost saturated POS market
and the expected increase in competition as state-owned banks
roll out their mass-market lending.

The rating actions are:


Long-term foreign currency IDR: affirmed at 'BB'; Outlook
  revised to Stable from Negative

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

Long-term local currency IDR: affirmed at 'BB'; Outlook revised
  to Stable from Negative

National Long-term rating: affirmed at 'AA-(rus)'; Outlook
  revised to Stable from Negative

Viability Rating: upgraded to 'bb-' from 'b+'

Support Rating: affirmed at '3'

Senior unsecured debt long-term rating affirmed at 'BB'

Senior unsecured debt National rating affirmed at 'AA-(rus)'


Support Rating: affirmed at '3'


DEKANIA EUROPE: Fitch Affirms Ratings on 23 Note Classes
Fitch Ratings has affirmed the ratings on 23 classes of notes
from three European collateralized debt obligations (CDOs) as

Dekania Europe CDO I P.L.C. (Dekania Europe I)
-- EUR 104,004,206 class A1 notes at 'AAsf'; Outlook Stable;
-- EUR 11,500,000 class A2 notes at 'Asf'; Outlook Stable;
-- EUR 13,000,000 class A3 notes at 'Asf'; Outlook Stable;
-- EUR 35,000,000 class B1 notes 'BBsf'; Outlook Stable;
-- EUR 15,000,000 class B2 notes 'BBsf'; Outlook Stable;
-- EUR 29,500,000 class C notes at 'B-sf'; Outlook Stable;
-- EUR 15,461,821 class D notes at 'CCCsf'.

Dekania Europe CDO II P.L.C. (Dekania Europe II)
-- EUR 146,645,027class A1 notes at 'Asf'; Outlook Stable;
-- EUR 25,000,000 class A2-A notes at 'BBBsf'; Outlook Stable;
-- EUR 5,000,000 class A2-B notes at 'BBBsf'; Outlook Stable;
-- EUR 26,385,042 class B notes at 'Bsf'; Outlook Stable;
-- EUR 28,848,534 class C notes 'CCCsf';
-- EUR 13,602,088 class D1 notes at 'CCsf';
-- EUR 2,357,910 class D2 notes at 'CCsf';
-- EUR 14,417,491 class E notes at 'Csf'.

Dekania Europe CDO III P.L.C. (Dekania Europe III)
-- EUR 148,863,564 class A1 notes at 'BBsf'; Outlook Negative;
-- EUR 16,000,000 class A-2A notes at 'Bsf'; Outlook Negative;
-- EUR 12,000,000 class A-2B notes at 'Bsf'; Outlook Negative;
-- EUR 25,123,325 class B notes at 'CCCsf';
-- EUR 19,784,098 class C notes at 'CCsf';
-- EUR 13,274,287 class D notes at 'Csf';
-- EUR 9,023,523 class E notes at 'Csf';
-- EUR 4,427,163 class F notes at 'Csf.

These rating actions are based on the modeling results and a
qualitative discussion of the residual risks not fully captured
by Fitch's models, as described below.

The portfolios in all three transactions are comprised of
primarily subordinate debt, perpetual securities, and to a lesser
extent, senior unsecured debt issued by European insurance
companies, banks and real estate companies.

The primary rating driver behind today's affirmation is the
rating stability of the insurance issuers which represents the
majority of the collateral in Dekania Europe I and Dekania Europe
II, at 94% and 68% of the portfolio notional, respectively. The
average credit quality of the performing collateral in Dekania
Europe I migrated to 'BB+/BB' from 'BB/BB-' at last review, and
remained at 'BB+/BB' in Dekania Europe II. Recent negative trends
affecting European insurance issuers, such as a low interest rate
environment and a decline in consumers' demand for non-compulsory
insurance lines amidst a challenging economic environment are
largely factored into existing ratings. Barring contagion effects
from the ongoing euro-zone debt crisis considered by Fitch to be
a remote possibility at this point in time, the insurance portion
is expected to have a limited rating volatility over the next

At the same time, many of the European bank issuers of the hybrid
securities in Dekania portfolios are facing negative momentum as
a result of the continued weakness in the euro zone. Going
forward, subordinated creditors of failed banks are likely to
experience lower recovery given recent and pending changes in
bank resolution policies across the European countries. This is
reflected in the migration of the credit quality of Dekania
Europe III which, at 46% of the portfolio, has more exposure to
European bank issuers. The average credit quality of the
performing portfolio in Dekania Europe III deteriorated to 'BB-
/B+' as compared to 'BB/BB-' at last review.

The Negative Outlooks on the class A-1 and A-2A and A-2B notes in
Dekania Europe III reflect the deterioration in the portfolio
quality since last review and higher exposure to the risk factors
described below.

All three transactions experienced a limited amount of de-
leveraging, with the highest paydowns in Dekania Europe I. The
class A1 note in Dekania Europe I received 10.5% of its last
review balance due to the redemption of one asset. The class A1
notes in Dekania Europe II and III each received 3.75% of their
respective balances at last review. The senior
overcollateralization tests are currently passing in Dekania
Europe I and II but failing in Dekania Europe III; however, the
subordinate overcollateralization tests are only passing in
Dekania Europe I.

This review was conducted primarily under the framework described
in the reports 'Global Rating Criteria for Corporate CDOs' and
'Global Rating Criteria for Structured Finance CDOs' using the
Portfolio Credit Model (PCM) for projecting future default levels
for the underlying portfolio. The default levels were then
compared to the breakeven levels generated by Fitch's cash flow
model of the CDO under various default timing and interest rate
stress scenarios, as described in the report 'Global Criteria for
Cash Flow Analysis in CDOs'.

The majority of the underlying assets in these portfolios have an
option to prepay after a non-call period ranging from five to ten
years. For some securities the end of a non-call period coincides
with a coupon step-up which may create an incentive to call prior
to the legal maturity date. The maturity profile of the
portfolios affects default rates projected by PCM and
availability and timing of cash flows.

Given the high degree of uncertainty with respect to the
likelihood of calls, Fitch considered two scenarios. Under the
first scenario, collateral securities were assumed to be
outstanding until their respective legal maturities. Under the
second scenario, Fitch incorporated collateral manager's
expectations for the likelihood of calls. The second scenario
resulted in a significantly shorter weighted average life of the
portfolios across all three transactions and consequently lower
default projections. However, this was offset by lower levels of
excess spread available over the life of the transactions.
Due to these offsetting factors, passing ratings indicated by
Fitch's cash flow model for the notes in all three transactions
generally were no more than a category higher in the second
scenario and remained in the same rating categories for some
interest rate/default timing stresses.

Given the current challenging refinancing environment for these
types of issuers and very limited occurrence of calls to date,
Fitch does not view the second scenario as very likely at this
point. The second scenario was used to evaluate the sensitivity
of the notes' ratings to the life expectations and may be given
more weight in the future if Fitch observes more actual calls
taking place.

In addition to the modeling results, Fitch considered the high
degree of portfolio concentration, with the number of performing
issuers in Dekania Europe I, II and III at 26, 27 and 26,
respectively. Further, each transaction has a significant
exposure to perpetual securities. The issuers of perpetual
securities can defer interest payments under certain conditions.
Missed interest can be cumulative as in the case with IVG
Immobilien in Dekania Europe II (EUR12MM) and Dekania Europe III
(EUR5.3MM) who deferred in April of 2012. Another issuer, Banco
Gallego (EUR 8MM notional) in Dekania Europe II suspended its
interest payment in July 2012; however, in this case missed
interest is non-cumulative.

The recoveries on the perpetual securities can be significantly
lower than that of other subordinated debt. In addition, if not
called prior to the CDO legal maturity date, they face the risk
of potential liquidation at a significant discount to their par
values, given their illiquid nature. The perpetual securities
comprise 13% of Dekania Europe I, 20% of Dekania Europe II, and
37% in Dekania Europe III.

U N I T E D   K I N G D O M

BIOTICA: In Administration, Maybe Saved or Sold
Cambridge News reports that Biotica Technology has gone into

Chris McKay -- -- and Andrew McTear -- -- of McTear Williams & Wood were appointed
joint administrators.

The administrators are working with the directors to save the
company or sell it, according to Cambridge News.

"We became involved late last year after the company hit cashflow
problems resulting from a licensing dispute with a drug
development partner . . . .  Eight people were made redundant in
November and now only three are left," the report quoted Chris
McKay as saying.

Biotica Technology was established in 1996 based on the research
of two Cambridge University professors.  Since then it has grown
through a series of collaborations into a successful drug
discovery and development company.

BRITANNIA DEVELOPMENTS: In Administration on Difficult Trading
Laurence Kilgannon at Insider Media Limited reports that
Britannia Developments Limited has fallen into administration.

The company was struggling against the "most difficult trading
conditions ever faced" by residential developers, according to
Insider Media Limited.

Deloitte partners Adrian Peter Berry and Daniel Francis Butters
were appointed joint administrators.

Since posting sales of GBP34.4 million in the year to Sept. 30,
2006, turnover has been steadily dropping at Britannia
Developments Ltd, accounts filed at Companies House reveal,
according to Insider Media Limited.

By 2010, turnover had fallen to GBP10.5 million and the following
year Britannia's sales had fallen to such an extent that it was
categorised as "a small company" with reduced reporting
obligations which did not require disclosure of its turnover, the
report notes.   Insider Media Limited relates that the company
also posted pre-tax losses of more than GBP1 million in each of
the years between 2008 and 2010.

In its latest full accounts, for the year to Sept. 30, 2010,
Britannia's directors reported that residential developers were
facing the most difficult trading conditions ever faced by the
sector, the report notes.

At that time, the company cut its costs base in a bid to match
the reduced levels of activity it had been experienced and
expressed hope that this, coupled with the support of its
bankers, would allow it to make future progress, the report adds.

Britannia Developments is an independent Yorkshire housebuilder.
It was founded by Paul Rider.

DOFF PORTLAND: Restructures GBP6-Million Debt Through CVA
James Graham at TheBusinessDesk reports that DOFF Portland, the
gardening supplies business acquired by Manchester-based b7
Ventures last month, has restructured debts of GBP6 million
through a company voluntary arrangement.

Creditors of the company have agreed to accept 20p in the pound,
TheBusinessDesk discloses.

The deal was approved on January 8 by more than 95% of trade
creditors, TheBusinessDesk relates.

"We have reassured Doff's customers that the restructuring
process has not affected its ability to supply.  We are now
looking forward to continuing strong ongoing relationships with
the vast majority of suppliers who have supported the CVA
proposals," TheBusinessDesk quotes b7's Richard Sonn as saying.

According to TheBusinessDesk, advisors on the deal included the
Manchester and Leeds offices of Leonard Curtis who will be the
supervisors of the CVA and the debt advisory and restructuring
team of Shoosmiths in Birmingham.

DOFF Portland is a Nottingham-based firm that supplies items such
as weedkiller, slug pellets and lawn feed.

DU CANE: Restaurant Goes Into Liquidation
Neil Gerrard at reports that a
restaurant owned by chef Jonathan Brown, who worked under the
likes of Marco Pierre White, Raymond Blanc and John Burton Race
before setting on his own, has closed.  The Du Cane restaurant in
Great Braxted, Essex, shut its doors after going into liquidation
last month, the report says.

Mr. Brown set the business up three years ago, and it won several
awards including accolades at the Essex Food & Drink Awards in
2010 and 2011, as well as at the Essex Life Fine Food and Drink

"As of December 21, 2012, the Du Cane has gone into liquidation
and are no longer able to trade. This means all bookings made
from 21 December onwards are cancelled. We are so sorry for any
inconvenience caused, especially over this Christmas period," the
restaurant said in a statement cited by

JESSOPS: In Administration, 2,000 Jobs at Risk
The Telegraph reports that Jessops stores across the country
could start to close by the end of this week after the struggling
photographic retailer collapsed into administration, putting
2,000 jobs at risk.

The administrators to Jessops face a battle to rescue any of the
company's 192 shops after leading camera makers tightened the
terms on which they sell products to the company following a
downturn in the market, according to The Telegraph.

Rob Hunt --  --  joint administrator for
PricewaterhouseCoopers, said: "Without the support of certain
people, we are looking at complete closure."

The report relates that Mr. Hunt said store closures were
"inevitable" and could begin "in the next day or two" unless an
agreement can be struck with suppliers, which include camera
makers such as Canon and Nikon.

"Jessops is critically dependent on half a dozen suppliers.
Absent their support, it is difficult to see how it could trade,"
the report quoted Mr. Hunt as saying.

At Jessops, it is understood that suppliers were concerned about
the health of the electricals sector after Comet collapsed, the
report notes.

* Fitch Expects Weak Top-Line Growth for UK Retailers in 2013
Sales data for UK retailers over the crucial Christmas period
support Fitch Ratings' expectation that 2013 will be a year of
weak top-line growth, flat margins and regular discounting for
European non-food retailers. Combined with high capital
expenditure, this will lead to limited free cash flow, which will
restrict deleveraging ability.

Fitch says: "Government austerity measures, low wage inflation
and high unemployment will limit growth across much of Europe in
the coming year. Operating margins are likely to hold steady as
retailers have made progress in managing costs, which mainly
applies to the largest chains, but any further savings are likely
to be reinvested in price promotions and reductions. This is
particularly the case in the UK, where Fitch's rated universe is
concentrated. The UK has become a promotion-led market as
consumers choose to buy only when there is a sale or special

"Despite weak sales growth, we expect many retailers to increase
their investment in multi-channel platforms, store refurbishment
and service quality to defend their market share. The need for a
multi-channel offering is backed up by the British Retail
Consortium figures released on Monday, which show that online
sales rose 17.8% in December from a year earlier, while total
sales rose 1.5% and like-for-like sales gained just 0.3%. The
figures include food and non-food sales. Increased use of
smartphones and tablets has helped and will continue to fuel
growth in online shopping.

"While European non-food retailers have been more efficient in
terms of their management of investment programs and have put
greater focus on internal cash flow generation, the investment in
multi-channel platforms and stores is likely to push capital
expenditure to a five-year high in 2013. This will limit both
free cash flow and deleveraging capacity in the near term.

These forecasts are included in S&P's report, "2013 Outlook:
European Non-Food Retail", available at


* Fitch Says Assets Optimization Key Theme for EMEA Cement Firms
Fitch Ratings says the recent announcement from Holcim Ltd
('BBB'/Stable) and Lafarge SA ('BB+'/Stable) confirm Fitch's view
that asset optimization will remain a key theme for EMEA cement
companies in 2013.

In December 2012, Holcim sold its 20% stake into Cementos
Progreso S.A., a cement producer in Guatemala, and reduced its
stake to 27.5% from 36.8% in Siam City Cement Company, a leading
cement and building material company in Thailand. The group also
announced the restructuring of its European operations, aimed at
achieving at least CHF120 million saving per annum via a leaner
management structure and higher capacity utilization rates.

Lafarge, following the completion of the 50%-50% joint venture
with Anglo American in UK, announced the creation of another
joint venture (JV) in Mexico with Elementia. In a non-cash deal,
Lafarge and Elementia will combine their cement assets in the
country (Lafarge's two plants with a total production capacity of
close to 1mt and the Elementia plant currently under construction
with a 1mt capacity). Lafarge will retain 47% of the new entity.

These deals confirm Fitch's view that EMEA cement companies will
continue to optimize their assets with the double aim of
deleveraging and increasing efficiency and profitability. Fitch
expects EMEA cement companies to continue to divest non-core
assets, such as minority stakes or single production facilities
in order to support deleveraging. Production capacity
restructuring is also like to accelerate, especially in Western
Europe as a consequence of continued weak cement demand, low
capacity utilization rates and lower income from the sale of
carbon trade certificates.

Fitch believes that the completion of other non-cash deals, such
as assets swaps or JV creations, could be possible, as these
deals can help to optimize geographical presence and reduce
excess capacity, especially in those markets that are most
affected by the crisis.

While these deals, on an individual basis, are usually too small
or with a limited scope to have a material impact on the
companies' credit profiles, Fitch believes that the overall
process is a mild credit positive factor, as in the mid-term it
will help to increase the industry's efficiency and recover

* Moody's Says Global Spec-Grade Corp. Default Rate Down 2.6%
Moody's Investors Service's trailing 12-month global speculative-
grade default rate came in at 2.6% in the final quarter of 2012,
down from 3.2% in the prior quarter and close to the rating
agency's year-ago forecast of 2.9%, Moody's Investors Service
says in its monthly default report. A total of 58 Moody's-rated
corporate debt issuers defaulted last year, with 10 defaulting in
the fourth quarter.

Moody's "December Default Report" is now available, as are
Moody's other default research reports, in the Ratings Analytics
section of

"Default rates remain low, consistent with our expectations,"
notes Albert Metz, Managing Director of Credit Policy Research.
"While European spreads are at a five-year low, we nevertheless
expect a slight increase in defaults going forward."

In the US, the speculative-grade default rate dropped to 3.2% in
December, down from 3.6% in the previous quarter. At this time
last year, the US rate was 1.9%. In Europe, the rate declined to
1.8% from 3.1% in the previous quarter. Last year, the European
default rate stood at 3.3% at end-December.

Based on its forecasting model, Moody's now expects that the
global speculative-grade default rate will rise modestly, to
3.0%, by the end of 2013. That rate, if realized, would be below
the average of 4.8% since 1983. By region, the model predicts
that the rate will be 3.0% in the US and 3.3% in Europe by the
end of this year. Across industries, Moody's continues to expect
default rates to be highest in the Media: Advertising, Printing &
Publishing sector in the US, and the Hotel, Gaming & Leisure
sector in Europe.

By dollar volume, the global speculative-grade bond default rate
dropped to 1.7% in the fourth quarter from 2.0% in the third. The
global dollar-weighted default rate ended 2011 at 1.8%.

In the US, the dollar-weighted speculative-grade bond default
rate came in at 1.5% in December, down slightly from 1.6% in the
prior quarter. The comparable rate was 1.1% a year ago.

In Europe, the dollar-weighted speculative-grade bond default
rate came in at 2.3% in the fourth quarter, down from the third
quarter's 3.3%. Last year, the rate stood at 4.3% at end-

Moody's global distressed index arrived at 14.1% at the end of
the fourth quarter 2012, down from 17.0% in the prior quarter. A
year ago, the index stood at 24.1%.

In the leveraged-loan market, there were three Moody's-rated
defaulters during the final quarter of 2012, including CoActive
Holdings LLC, which completed a distressed exchange on both its
first and second lien loans in December. Moody's trailing 12-
month US leveraged loan default rate closed 2012 at 2.9%, up from
2.6% in the prior quarter and 0.6% a year ago.

* BOOK REVIEW: Performance Evaluation of Hedge Funds
Edited by Greg N. Gregoriou, Fabrice Rouah, and Komlan Sedzro
Publisher: Beard Books
Hardcover: 203 pages
Listprice: $59.95
Review by Henry Berry

Hedge funds can be traced back to 1949 when Alfred Winslow Jones
formed the first one to "hedge" his investments in the stock
market by betting that some stocks would go up and others down.
However, it has only been within the past decade that hedge funds
have exploded in growth.  The rise of global markets and the
uncertainties that have arisen from the valuation of different
currencies have given a boost to hedge funds.  In 1998, there
were approximately 3,500 hedge funds, managing capital of about
$150 billion.  By mid-2006, 9,000 hedge funds were managing $1.2
trillion in assets.

Despite their growing prominence in the investment community,
hedge funds are only vaguely understood by most people.
Performance Evaluation of Hedge Funds addresses this shortcoming.
The book describes the structure, workings, purpose, and goals of
hedge funds.  While hedge funds are loosely defined as "funds
with no rules," the editors define these funds more usefully as
"privately pooled investments, usually structured as a
partnership between the fund managers and the investors."  The
authors then expand upon this definition by explaining what sorts
of investments hedge funds are, the work of the managers, and the
reasons investors join a hedge fund and what they are looking for
in doing so.

For example, hedge funds are characterized as an "important
avenue for investors opting to diversify their traditional
portfolios and better control risk" -- an apt characterization
considering their tremendous growth over the last decade.  The
qualifications to join a hedge fund generally include a net worth
in excess of $1 million; thus, funds are for high net-worth
individuals and institutional investors such as foundations, life
insurance companies, endowments, and investment banks.  However,
there are many individuals with net worths below $1 million that
take part in hedge funds by pooling funds in financial entities
that are then eligible for a hedge fund.

This book discusses why hedge funds have become "notorious as
speculating vehicles," in part because of highly publicized
incidents, both pro and con.  For example, George Soros made $1
billion in 1992 by betting against the British pound.
Conversely, the hedge fund Long-Term Capital Management (LTCP)
imploded in 1998, with losses totalling $4.6 billion.
Nonetheless, these are the exceptions rather than the rule, and
the editors offer statistics, studies, and other research showing
that the "volatility of hedge funds is closer to that of bonds
than mutual funds or equities."

After clarifying what hedge funds are and are not, the book
explains how to analyze hedge fund performance and select a
successful hedge fund.  It is here that the book has its greatest
utility, and the text is supplemented with graphs, tables, and

The analysis makes one thing clear: for some investors, hedge
funds are an investment worth considering.  Most have a
demonstrable record of investment performance and the risk is
low, contrary to common perception.  Investors who have the
necessary capital to invest in a hedge fund or readers who aspire
to join that select club will want to absorb the research,
information, analyses, commentary, and guidance of this unique

Greg N. Gregoriou teaches at U. S. and Canadian universities and
does research for large corporations.  Fabrice Rouah also teaches
at the university level and does financial research.  Komlan
Sedzro is a professor of finance at the University of Quebec and
an advisor to the Montreal Derivatives Exchange.


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

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

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

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


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

Troubled Company Reporter-Europe is a daily newsletter co-
published by Bankruptcy Creditors' Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., 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 2013.  All rights reserved.  ISSN 1529-2754.

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

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

The TCR Europe subscription rate is US$775 per half-year,
delivered via e-mail.  Additional e-mail subscriptions for
members of the same firm for the term of the initial subscription
or balance thereof are US$25 each.  For subscription information,
contact Peter Chapman at 215-945-7000 or Nina Novak at

                 * * * End of Transmission * * *