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        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

           Thursday, January 17, 2013, Vol. 14, No. 12

                            Headlines



B U L G A R I A

VMZ-SOPOT: Bulgarian Government Mulls Rescue Options


C R O A T I A

SPORTSKI GRAD: Submits Pre-Bankruptcy Settlement Application


F R A N C E

CERBA EUROPEAN: Moody's Gives B2 CFR; Rates EUR355MM Notes (P)B2
LOXAM: S&P Assigns 'BB-' Preliminary Corporate Credit Rating


G E R M A N Y

CENTROTHERM PHOTOVOLTAICS: Expects to Come Out of Insolvency
XL AIRWAYS: Files For Bankruptcy; Administrator Seeks Investor


H U N G A R Y

E-STAR ALTERNATIVE: BSE Tosses Request to Delist Bonds


I T A L Y

CERVED TECHNOLOGIES: S&P Assigns 'B' Prelim. Corp. Credit Rating
TAURUS CMBS 2: Fitch Affirms 'CCCsf' Rating on Class F Notes


L U X E M B O U R G

ARDAGH PACKAGING: Moody's Affirms 'B2' CFR; Rates Notes 'Ba3'
MINERVA LUXEMBOURG: Fitch Rates US$500-Mil. Unsecured Notes 'B+'


N E T H E R L A N D S

ARDAGH PACKAGING: S&P Affirms 'B' Corporate Credit Rating
DUTCH MBS XVIII: Fitch Assigns 'B' Rating to EUR4.5MM Cl. E Notes
* Fitch Affirms 136 Tranches of Dutch Prime RMBS Transactions


R U S S I A

NATIONAL RESERVE: Fitch Maintains RWN on 'B-' Long-Term IDRs


U N I T E D   K I N G D O M

BLUSTOCKING LTD: Fashion Distributor Files For Insolvency
DE VERT INSURANCE: Gibraltarian Police Probes Collapse
HMV GRP: Deloitte Named Administrator; Hilco, Moulton Eye Stores
LA SENZA: Lingerie Retailer Enters Liquidation Process
OLD MUTUAL: Fitch Cuts Subordinated Debt Rating to 'BB'

* Moody's Sees Slight Increase in EMEA Liquidity Stress Index
* Moody's Says Creditworthiness of CEE Sovereigns Steady
* Fitch Reveals Highlights of London Credit Outlook Conference
* Fitch Says Eurozone & US Key Drivers of Global Credit Outlook


X X X X X X X X

* Upcoming Meetings, Conferences and Seminars


                            *********


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B U L G A R I A
===============


VMZ-SOPOT: Bulgarian Government Mulls Rescue Options
----------------------------------------------------
FOCUS News Agency reports that a rescue program is to be worked
out for Bulgaria's military plant VMZ-Sopot.

After a privatization plan failed, three options were outlined at
a meeting on Tuesday called by Minister of Economy, Energy and
Tourism Delyan Dobrev, FOCUS News relates.

The first option, which the minister described as the worth-case
scenario, is declaration of insolvency, the second option is a
new privatization strategy drafted by the parliament, and the
third one -- a rescue program worked out in cooperation with the
VMZ-Sopot management, FOCUS News discloses.

Tuesday's meeting was also attended by Minister of Labor and
Social Policy Totyu Mladenov, trade unions and others, FOCUS News
recounts.

According to FOCUS News, Minister Dobrev said the rescue plan for
the military plant should take place as soon as possible.  The
payment of workers' salaries in VMZ-Sopot depends on the incomes
coming into the plant, FOCUS News notes.

"The government, employers and trade unions will definitely seek
an urgent solution to the issue.  When a company is absolutely
de-capitalized and deeply in debt -- with debts of over BGN150
million -- there is surely no easy and quick solution.  I am
certain that the right solution will be found," FOCUS News quotes
Bulgarian President Rosen Plevneliev as saying on Tuesday.



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C R O A T I A
=============


SPORTSKI GRAD: Submits Pre-Bankruptcy Settlement Application
------------------------------------------------------------
SeeNews reports that Institut Gradjevinarstva Hrvatske said on
Tuesday Sportski Grad TPN has submitted its application for the
start of a pre-bankruptcy settlement procedure.

IGH, a local civil engineering company, owns 40% of the share
capital of Split-based Sportski Grad TPN, SeeNews discloses.

According to SeeNews, IGH said in a notice posted on the Web site
of the Zagreb Stock Exchange that the application was submitted
on December 28.

Sportski Grad TPN is based in Croatia.



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F R A N C E
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CERBA EUROPEAN: Moody's Gives B2 CFR; Rates EUR355MM Notes (P)B2
----------------------------------------------------------------
Moody's Investors Service has assigned a B2 corporate family
rating (CFR) and a B2-PD probability of default (PDR) to Cerba
European Lab S.A.S. Concurrently, Moody's has assigned a (P)B2
rating, with a loss given default (LGD) assessment of LGD4, 57%,
to the company's proposed EUR355 million of senior secured notes.
The outlook on the ratings is stable. This is the first time that
Moody's has assigned a rating to Cerba.

Moody's issues provisional ratings in advance of the final sale
of securities and these reflect Moody's credit opinion regarding
the transaction only. Upon closing of the refinancing and a
conclusive review of the final documentation, Moody's will
endeavour to assign definitive ratings to Cerba. A definitive
rating may differ from a provisional rating. The ratings assigned
to Cerba assume the successful refinancing of the company's
current financing package.

Ratings Rationale

"The B2 CFR assigned to Cerba primarily reflects its high
leverage and our view that its annual acquisitions will likely
surpass its free cash flow generation, given our expectation that
the company will continue to play an active role in the further
consolidation of the French routine test market," says Knut
Slatten, Moody's lead analyst for Cerba. "The rating also
reflects Cerba's high concentration upon France and the potential
for further pricing pressure."

However, these factors are balanced to an extent by (1) Cerba's
vertical integration within clinical pathology, allowing for
synergies between its three operating segments; (2) barriers to
market entry as a result of complex logistics, as well as the
company's scientific competencies, brand recognition and strong
competitive positioning in some of its markets; (3) its high
profit margins.

Initially a company focused on specialty tests, over the years
Cerba has also developed a presence within the central lab and
routine test market. Cerba's vertical integration allows for
synergies to be achieved through interaction between its various
divisions and as such allows the company to extract the full
revenue potential of a test throughout its lifecycle.

Acquisitions have permitted Cerba to build scale and a
competitive positioning in the routine test markets of France and
Belgium over the past few years. However, while the rating agency
acknowledges that Cerba has successfully integrated a number of
laboratories to date, the company's acquisitive nature could
represent a risk factor should it face challenges in terms of
integration as it attempts to further consolidate the French
routine test market. In addition, Moody's notes that the amounts
Cerba has spent on acquisitions exceed its free cash flow and
could at some point constrain the company's overall liquidity
profile.

Although Moody's would expect downward pricing pressure in the
European routine test market to continue, the rating agency
believes this will largely be mitigated by expected continued
volume growth. However, given Cerba's high concentration upon
France, a steeper decline in pricing in the French market could
exert pressure on the company's profitability and cash flows.

In addition to the proposed issuance of EUR355 million in senior
secured notes, Cerba is putting in place a new revolving credit
facility (RCF) of EUR50 million. The notes and the RCF will
benefit from a similar maintenance guarantor package,
representing more than 80% of the company's EBITDA and more than
85% of the company's total assets at closing. Both instruments
will be secured by share pledges exceeding 80% of EBITDA and
total assets, intercompany receivables and bank accounts. Moody's
understands, however, that the notes will be contractually
subordinated to the RCF with respect to collateral enforcement
proceeds. The (P)B2 rating on the notes -- at the same level of
the CFR -- is a reflection of the amount of debt ranking ahead of
them in Cerba's capital structure.

Moody's notes that, as a consequence of the regulatory framework
in France, Cerba has put in place an organizational structure in
which Cerba's holds 25% of the voting rights and 74% and 99%
respectively of the financial rights (i.e. right to receive
dividends) in two intermediate laboratory holding companies. One
of these two intermediate laboratory holding companies in turn
holds 49% of the voting rights and between 70-90% of the
financial rights in certain French operating subsidiaries
(clinical pathologists operating these laboratories hold the
balance). Cerba exercises control of these subsidiaries through
various shareholder agreements it has put in place with the
clinical pathologists. The complexity of this ownership structure
may limit the enforceability of the share pledges in the French
operating subsidiaries, although the bondholders will benefit
from pledges above the issuer level in two entities incorporated
in France and Luxembourg respectively. Moreover, Moody's also
notes French insolvency laws impose limitations on the validity
of upstream guarantees.

Moody's expects Cerba's liquidity profile to remain adequate.
While the rating agency expects Cerba to continue generate
positive free cash flows, the company's overall liquidity profile
is likely to depend on the pace at which it makes acquisitions.
In addition, Moody's expects Cerba to maintain solid headroom
under the financial covenant contained with its RCF.

The stable outlook on the rating reflects Moody's expectation
that, going forward, Cerba will be able to deleverage further
while maintaining a satisfactory liquidity profile.

WHAT COULD CHANGE THE RATING UP/DOWN

Positive pressure on the rating could develop if Cerba's
operating performance improves, allowing for leverage, measured
by debt/EBITDA, to be around 5.0x on a sustained basis.
Conversely, negative pressure could develop if leverage moved
above 6.0x for an extended period of time or if Moody's became
concerned about the company's liquidity.

The principal methodology used in this rating was the Global
Business & Consumer Service Industry Rating Methodology published
in October 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.

Cerba is a France-based operator of clinical pathology
laboratories in Europe. As of September 30, 2012, the company had
around 2,000 employees, including approximately 195 clinical
pathologists. For the 12 months ended September 30, 2012, Cerba
generated pro forma net sales of EUR329.9 million and adjusted
pro forma EBITDA of EUR74.4 million.


LOXAM: S&P Assigns 'BB-' Preliminary Corporate Credit Rating
------------------------------------------------------------
Standard & Poor's Ratings Services said it assigned its 'BB-'
preliminary long-term corporate credit rating to France-based
equipment rental firm Loxam SAS.  The outlook is stable.  At the
same time, S&P assigned a 'B' preliminary issue rating and a '6'
preliminary recovery rating to Loxam's proposed EUR300 million
seven-year bonds issue.

Loxam is planning to issue EUR300 million subordinated unsecured
seven-year bonds to fund external growth up to a maximum amount
of EUR150 million, the remainder being used to redeem existing
outstanding banking debt for EUR150 million.  As part of its
refinancing plan, Loxam will also benefit from the extension of a
EUR75 million five-year committed and undrawn revolving credit
facility (RCF).

Final ratings will depend on S&P's receipt and satisfactory
review of all final transaction documentation.  Accordingly, the
preliminary ratings should not be construed as evidence of final
ratings.  If Standard & Poor's does not receive final
documentation within a reasonable time frame, or if final
documentation departs from materials reviewed, Standard & Poor's
reserves the right to withdraw or revise its ratings.

Potential changes include, but are not limited to, utilization of
bond proceeds, maturity, size and conditions of bonds and of RCF,
financial and other covenants, security and ranking.

The preliminary ratings on Loxam reflect Standard & Poor's view
of the company's business risk profile as "fair" and financial
risk profile as "significant", as S&P's criteria define these
terms.

In S&P's opinion, the rating is constrained by the high
operational leverage that S&P believes is associated with the
equipment-rental industry; limited forward visibility on
revenues; the cyclical nature of demand, which largely depends on
construction and civil engineering spending in France; and
Loxam's significant leverage.

These risks are partly offset by Loxam's well-maintained fleet of
rental equipment and its capacity to reduce fleet investment
significantly when earnings growth subsides.  Other supporting
factors are the company's ability to maintain break-even free
operating cash flow (FOCF) in a weak economy through active fleet
management measures, such as disposals, and S&P's assessment of
its liquidity as "adequate" under our criteria.

"The stable outlook reflects our view that Loxam's solid market
positions and medium-term factors supporting the rental equipment
industry should enable the company to go through the forthcoming
low in the French construction cycle with a limited erosion of
its credit ratios.  According to our base-case scenario, the
company's credit ratios in the next 12 months should remain
comparable with levels at year-end 2012," S&P noted.

"We think that Loxam will be able to maintain its credit ratios
within the range that we consider as commensurate with a
"significant" financial risk profile, such as an adjusted
FFO/debt in the middle of the 20%-30% range and adjusted
debt/EBITDA below 4x.  We also expect the company to sustain
break-even FOCF through the cycle and to regularly extend the
maturity of its committed bilateral lines so as to maintain
"adequate" liquidity," S&P added.

S&P could raise the rating if Loxam achieves stronger credit
metrics on a sustainable basis, materially reduces its debt in
absolute amounts, and shows some moderation in terms of external
growth.

S&P could lower the rating if Loxam's credit ratios deteriorate,
including adjusted debt to EBITDA exceeding 4x and adjusted FFO
to debt below 20%.  Inability to maintain adequate liquidity in
particular through non-extension of bilateral committed lines or
negative FOCF could also put downward pressure on the rating.



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G E R M A N Y
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CENTROTHERM PHOTOVOLTAICS: Expects to Come Out of Insolvency
------------------------------------------------------------
Mark Osborne at pv-tech.org reports that German PV manufacturer
centrotherm photovoltaics has agreed a plan it says could bring
the company out of insolvency and avoid possible financial
collapse.

pv-tech.org relates that a vote by creditors on a restructuring
plan agreed and authorised by the courts has been set for
Jan. 29, 2013.  Should the plan be approved, the struggling
equipment supplier could come out of administration and operate
on a standalone basis with technically little debt and remain a
stock market listed company, the report relays.

"No creditor or shareholder of the debtor is any worse off than
would be the case from the liquidation of assets in a standard
liquidation procedure. The insolvency plan also enables the
continued existence of the company, which in turn preserves the
greatest possible number of jobs," the report quotes Tobias
Hoefer, Management Board member of centrotherm photovoltaics, as
saying.

According to pv-tech.org, Centrotherm's plan is for creditors to
agree to transferring 70% of their insolvency claims to an
independent administration company, which entitles them to become
shareholders of the company.

pv-tech.org relates that the plan is for the administration
company to acquire 80% of the shares, with the other 20%
remaining with the existing shareholders of the debtor, whose
share portfolios will be pooled together at a ratio of five to
one.

Maintaining a stock market listing is therefore important as
creditors could potentially receive full compensation and even
exceed debt repayments should the company and its stock recover,
pv-tech.org relays.

Management said that a recovery in the PV industry could begin in
2014 and the aim was to satisfy creditor's claims by the end of
2015, the report adds.

As reported in the Troubled Company Reporter-Europe on Oct. 3,
2012, the reorganization of centrotherm photovoltaics AG has
entered a decisive phase.  The District Court of Ulm on Oct. 1
granted the company's application to open reorganization
proceedings under its own administration.  The same also applies
for the subsidiaries centrotherm thermal solutions GmbH & Co. KG
and centrotherm SiTec GmbH, which have also been in insolvency
protection proceedings since July 12. The provisional creditor
committee had provided unanimous support to the application.

                        About centrotherm

photovoltaics AG centrotherm photovoltaics AG, which is based at
Blaubeuren, Germany, is a technology and equipment provider for
the photovoltaics sectors.  The Group currently employs around
1,300 staff, and operates globally in Europe, Asia and the USA.


XL AIRWAYS: Files For Bankruptcy; Administrator Seeks Investor
--------------------------------------------------------------
Natalie Brueggemann at ch-aviation.com reports that XL Airways
Germany has been assigned Jan Markus Plathner --
frankfurt@brinkmann-partner.de -- as its administrator after
having filed for bankruptcy at the end of December.

According to ch-aviation.com, Mr. Plathner has told German
newspapers that he expects that new investors can be found to
allow the airline to resume charter operations with some of its
B737-800s next summer season as previously announced prior to the
bankruptcy filing.

XL Airways still has a wet-lease contract with Luxair (LG,
Luxembourg Findel International (LUX)) for one B737-800 planned
to be operating from Luxembourg Findel International (LUX) for
next summer season.

XL Airways, which temporarily suspended operations
Dec. 14, filed for bankruptcy Dec. 27, CAPA reports.

XL Airways Germany operated a fleet of five Boeing 737-800s for
Condor and Oger Tours, as well as providing wet lease and charter
services.



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H U N G A R Y
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E-STAR ALTERNATIVE: BSE Tosses Request to Delist Bonds
------------------------------------------------------
MTI-Econews reports that the Budapest Stock Exchange on Tuesday
said it has rejected a request from E-Star Alternative to delist
the bankrupt company's bonds from the exchange.

MTI-Econews relates that the BSE said that E-Star, which filed
for bankruptcy protection in early December, had requested that
the BSE delist company bonds E-STAR 2015/A, E-STAR 2016/C and RFV
2014/A citing the possibility that not all the company's lenders
reported their claims by the January 11 deadline.  According to
MTI-Econews, the BSE said that neither Hungarian law nor BSE
regulations warrant delisting E-Star's company bonds.

E-Star is a A-category issuer at the Budapest Stock Exchange,
MTI-Econews discloses.

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



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I T A L Y
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CERVED TECHNOLOGIES: S&P Assigns 'B' Prelim. Corp. Credit Rating
----------------------------------------------------------------
Standard & Poor's Ratings Services said that it assigned its 'B'
preliminary long-term corporate credit rating to Italy-based
credit information provider Cerved Technologies SpA (Cerved).
The outlook is stable.

At the same time, S&P assigned its 'B' preliminary issue rating
to Cerved's proposed EUR250 million senior secured floating rate
notes, due 2019, and proposed EUR300 million senior secured fixed
rate notes, due 2020.  The recovery rating on these proposed
notes is '4', indicating S&P's expectation of a meaningful (30%-
50%) recovery for creditors in the event of a payment default.

"We also assigned our 'CCC+' preliminary issue rating to Cerved's
proposed EUR230 million senior subordinated notes, due 2021.  The
recovery rating on these notes is '6', indicating our expectation
of negligible (0%-10%) recovery for creditors in the event of a
payment default," S&P said.

"The rating actions reflect our assessment of the group's
financial risk profile as "highly leveraged" and business risk
profile as "fair."  Cerved's private equity ownership has led the
group to adopt a higher tolerance for aggressive financial
policies, including acquisitions and sizable cash dividends.  As
a result of the acquisition and new debt package, we forecast
Standard & Poor's-adjusted debt to EBITDA of about 6x for the
fiscal year-ending Dec. 31, 2013.  We also factor into our rating
Cerved's business risk profile, which we assess as "fair" under
our criteria.  The group, which operates in the fragmented
Italian small and midsize enterprise and regulated Italian bank
markets, faces ongoing exposure to potential litigation and
reputational damage," S&P noted.

"In absolute terms, Cerved has smaller operations and weaker
geographic diversity when compared with larger credit information
providers.  These weaknesses are partially offset by the fact
that Cerved is the clear market leader in Italy, with a broad,
diverse client base.  The group benefits from profitable and cash
generative operations, with minimal capital expenditure (capex)
and working capital requirements.  What's more, the Italian
credit information services market has high barriers to entry,
which help to protect Cerved's strong market position.  New
entrants would need to invest heavily in order to replicate
Cerved's database, which the group has developed over many
years," S&P added.

The proposed EUR250 million senior secured floating rate notes
(FRNs; due 2019) and EUR300 million senior secured fixed notes
(due 2020) issued by Cerved Technologies have been assigned a
preliminary issue rating of 'B', in line with the corporate
credit rating.  The recovery rating on the secured notes is '4',
indicating S&P' expectation of average (30%-50%) recovery in the
event of a payment default.

The EUR230 million subordinated notes (due 2021) also issued by
Cerved Technologies have been assigned an issue rating of 'CCC+',
two notches below the corporate credit rating.  The recovery
rating on the subordinated notes is '6', indicating S&P's
expectation of negligible (0%-10%) recovery in the event
of a payment default.

The group also has access to a EUR75 million super senior
revolving credit facility (RCF; due 2018, not rated), available
to Cerved Technologies and other subsidiaries.  The secured notes
also rank junior to three factoring facilities for a modest
EUR29 million (all held at operating subsidiaries).

The rating on the proposed secured notes is constrained by their
subordination to the RCF and factoring facilities, their weak
guarantee and security package and the Italian jurisdiction that
S&P views as relatively unfriendly for creditors.  The
documentation for the proposed notes is relatively standard for
this type of instrument, providing limited credit protection,
except for an incurrence-based limitation on debt with various,
relatively permissive carve-outs.

Recovery prospects for the rated debt are supported by S&P's
expectation that, in a default, the company would be reorganized
rather than liquidated, given the group's leading market
positions and strong clients and customer relationships, which
S&P believes amount to a sustainable business model.

To determine recoveries, S&P simulates a default.  Under S&P's
hypothetical scenario, S&P envisage a combination of the
operating and macroeconomic stresses and the company's excessive
financial leverage and interest burden.  This scenario would lead
to a default in 2016, with EBITDA declining to about EUR80
million.

The stable outlook reflects S&P's view that Cerved's credit
metrics will remain in line with levels commensurate with a
"highly leveraged" financial risk profile.  S&P's base case also
assumes that EBITDA margins will remain stable.

"We consider that rating upside is limited at this stage, given
the group's high tolerance for aggressive financial policies,
such as high leverage, potential acquisitions, and cash
dividends.  However, sustained deleveraging, improvements in
EBITDA and cash flow generation, and stronger-than-anticipated
credit metrics could cause us to raise the ratings.
Specifically, the group's ability to sustain an adjusted debt-to-
EBITDA ratio of less than 5x, and an adjusted FFO-to-debt ratio
of more than 12% could provide the basis for a positive rating
action," S&P said.

"We do not anticipate that Cerved will increase its debt at this
stage.  However, we could lower the rating if the group
experiences weak operating conditions that lead to severe margin
pressure, or poorer cash flows leading to weaker credit metrics.
Additionally, debt-financed acquisitions, and/or an increase in
shareholder distributions, could also result in weaker credit
metrics, which could in turn lead us to lower the rating," S&P
added.


TAURUS CMBS 2: Fitch Affirms 'CCCsf' Rating on Class F Notes
------------------------------------------------------------
Fitch Ratings has affirmed Taurus CMBS No.2 S.r.l. as follows:

-- EUR19.2m class B (IT0003957013) affirmed at 'AAAsf'; Outlook
    Negative
-- EUR14.2m class C (IT0003957021) affirmed at 'AAsf'; Outlook
    Stable
-- EUR16.6m class D (IT0003957039) affirmed at 'Asf'; Outlook
    Stable
-- EUR14.2m class E (IT0003957047) affirmed at 'BBsf'; Outlook
    Negative
-- EUR9.5m class F (IT0003957054) affirmed at 'CCCsf'; Recovery
    Estimate RE100%
-- EUR14.1m class G (IT0003957062) affirmed at 'BBsf'; Outlook
    Stable

The affirmations reflect the overall stable performance of the
one remaining loan (Berenice) since Fitch's last rating action in
February 2012. The reported loan-to-value (LTV) decreased to
52.9% from 59.2% 12 months ago (June 2012 valuation). The
collateral consists of a portfolio of 29 properties, mainly
offices located in northern Italy. 17 assets are currently fully
let to Telecom Italia ('BBB'/Negative). In the last 12 months,
the borrower sold two major properties (Via Tevere, 50 and Via
Corso d'Italia, 41-43) in Rome and repaid EUR16.9 million to the
notes (110% of the allocated loan amount). The borrower, an
Italian closed-end listed real estate investment fund managed by
Idea Fimit, is currently divesting the portfolio.

The higher rating of the class G notes (compared to the class F
notes) is due to the available funds cap, which means that
Fitch's analysis does not incorporate the likelihood of interest
being paid on this class following principal amortization and
related reduced affordability. A recent step-up in the loan
margin (by 15 basis points to 1.1% in July 2012) is supportive of
credit, and lessens the risk of imminent shortfalls of interest
on the class F notes. However, a combination of loan repayments
and (volatile) issuer costs could encroach on interest payments
owed under this class and to a lesser extent also the class E
notes. This possibility explains the 'CCCsf' rating of the class
F and the Negative Outlook maintained on the class E notes.

At closing in December 2005, Taurus 2 was a securitization of
four commercial mortgage loans originated in Italy. The Berenice
loan was a one-third pari passu participation in a EUR490 million
syndicated loan, granted to a closed-ended listed real estate
investment fund. The loans, originated by Merrill Lynch Capital
Markets Bank Ltd, were secured by 83 predominantly office
properties. Following the prepayment of the Bentra, Little Domus
and Leather loans, only the Berenice loan remains outstanding.

Fitch will continue to monitor the performance of the
transaction.



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


ARDAGH PACKAGING: Moody's Affirms 'B2' CFR; Rates Notes 'Ba3'
-------------------------------------------------------------
Moody's Investors Service affirmed all ratings of Ardagh
Packaging Group, including its B2 Corporate Family Rating and B2-
PD Probability of Default Ratings, its senior secured notes
ratings at Ba3, its senior unsecured notes ratings at B3 and its
PIK note rating at Caa1.

Moody's also assigned provisional (P)Ba3 (LGD 2, 25%) ratings to
proposed US$750 million equivalent of senior secured notes
maturing 2022 and provisional (P)B3 (LGD 5, 76%) ratings to
proposed US$700 million equivalent of senior notes maturing 2020,
issued to finance the announced acquisition of Verallia North
America. The new notes will be issued by Ardagh Packaging Finance
plc and Ardagh Holdings USA Inc with a USD and EUR tranche each.
Moody's also assigned definitive Ba3 (LGD 2, 25%) ratings to the
EUR520 million senior secured notes due 2017 issued in
conjunction with the Anchor transaction in July 2012. The outlook
on all ratings remains negative.

The rating action follows Ardagh's announcement on January 14,
2013, that it has reached an agreement with Compagnie de Saint-
Gobain (rated Baa2, negative) to acquire all of the share capital
of Verallia North America, the second largest glass container
manufacturer in the US. The transaction value of approximately
US$1.7 billion values Verallia North America at about 6.3x
EBITDA, which is somewhat above recent transactions in the
sector. The acquisition is subject to customary closing
conditions, including approval from regulatory authorities, which
is expected to be obtained over H2 2013.

Moody's issues provisional ratings in advance of the final sale
of securities and these reflect the rating agency's credit
opinion regarding the transaction only. Upon a conclusive review
of the final documentation, Moody's will endeavor to assign a
definitive rating to the notes. A definitive rating may differ
from a provisional rating.

Ratings Rationale

The affirmation of Ardagh's ratings balances Moody's view of the
transaction having a compelling strategic rationale and
significant positive impact on the group's business profile with
Ardagh's highly-leveraged financial profile as indicated by
Moody's adjusted Debt/EBITDA at 7 times pro forma for the recent
acquisitions of Boxal, Anchor and Verallia North America and
management's aggressive approach to growing the company, which
has so far been entirely debt funded with the targeted IPO
delayed for some time now.

While the acquisition of Verallia's North American operations
will not materially change the group's financial leverage,
Moody's nevertheless cautions that execution risk related to the
integration and realization of synergies as well as the short
operating history of the enlarged entity pose further risks that
could lead to a rating downgrade in the future if not managed
appropriately.

Moody's notes that Verallia's operations are largely
complementary to Ardagh's existing business portfolio in the US.
In the rating agency's view, the acquisition would materially
enhance Ardagh's position in the glass container industry by
growing its market share to about 50% of glass container
production in North America as per Moody's estimates, although at
somewhat lower margins compared to its European operations.
Nevertheless, targeted synergies reaching US$70 million on a
running basis from 2016 onwards should provide for some margin
upside potential, although mitigated by integration costs
initially.

Moody's expects Ardagh to moderately reduce its debt load on the
back of a recovery in EBITDA following significant restructuring
activity, largely aimed at improving efficiencies in its metal
operations as well as on the back of continued cost control and
realization of synergies from recent acquisitions. This should
enable Ardagh to achieve modest though positive free cash flow
generation. However, Moody's expects the group's financial
profile to remain weak for the rating category with Debt/EBITDA
to approach 6x in 2014 only, which is mirrored by the negative
rating outlook.

The ratings could therefore be downgraded should Ardagh (i) not
be able to improve profitability, caused for instance by the
inability to turn around profitability in its metal operations,
volume weakness, the inability to manage volatile raw material
costs or should the integration of recent acquisitions prove to
be more difficult or costly than currently expectated; (ii)
generate negative free cash flows or; (iii) should Ardagh be
unable to reduce Debt/EBITDA towards 6 time and interest coverage
in terms of (EBITDA-Capex)/Interest declines towards 1x.

Although rather unlikely at this juncture, the ratings could be
upgraded should Ardagh be able to reduce leverage in terms of
Debt/EBITDA towards 5 times and keep interest coverage in terms
of (EBITDA-Capex)/Interest around 1.5x by improving its operating
profitability and continued free cash flow generation.

Liquidity is estimated to remain adequate going forward. Ardagh
had EUR251 million cash available on balance sheet as of year-end
2012 and EUR131 million availability under securitization and
guarantee lines, however, the group's EUR150 million
securitization facility provided by HSBC will mature in December
2013 (current availability of EUR100 million). Within the context
of the acquisition of Verallia, Ardagh expects to obtain a USD300
million asset backed credit facility with a maturity of 5 years
to support its liquidity needs. The group's liquidity profile
further benefits from a well extended debt maturity profile with
no material maturities before 2016 and 2017 when EUR296 million
and EUR2.1 billion of debt comes due.

Structural Considerations

The instrument ratings for the proposed US$750 million senior
secured notes of (P)Ba3 and for the proposed US$700 million
senior unsecured notes of (P)B3 are based on indicative terms and
conditions received so far according to which (i) the senior
secured notes benefit from the same guarantors and security
package as Ardagh's existing senior secured notes, and (ii) the
additional senior unsecured notes benefit from the same guarantee
package as Ardagh's existing senior unsecured notes. Ardagh's
existing senior secured notes are supported by senior guarantees
of subsidiaries representing at least 85% of consolidated assets
and EBITDA and security interests, which Moody's understands
comprise the clear majority of the guarantors' assets. While
Ardagh's senior unsecured debt is supported by guarantees from
the same entities that guarantee the senior secured debt, it does
not benefit from any tangible collateral.

The two notch uplift of the secured notes compared to the
corporate family rating is driven by limited priority debt
sitting ahead of these notes, which in Moody's view should result
in limited losses to be borne by the secured notes holders in a
default scenario. Priority debt sitting ahead of the secured
notes in Ardagh's capital structure relates to the group's EUR150
million securitization facility as well as the new US$300 million
asset based lending facility that benefit from priority access to
proceeds from certain collateral. Moody's has ranked trade
payables of the group in line with senior secured debt. The
group's senior unsecured notes are rated two notches below the
corporate family rating, reflecting the implemented effective
subordination relative to a sizeable amount of senior secured
debt that ranks ahead in the capital structure with a closer
proximity to operating cash flows and assets.

Assignments:

  Issuer: Ardagh Packaging Finance plc

    Senior Secured Regular Bond/Debenture Nov 15, 2022, Assigned
    (P)Ba3

    Senior Secured Regular Bond/Debenture Nov 15, 2022, Assigned
    a range of LGD2, 25 %

    Senior Secured Regular Bond/Debenture Oct 15, 2017, Assigned
    Ba3

    Senior Secured Regular Bond/Debenture Oct 15, 2017, Assigned
    a range of LGD2, 25 %

    Senior Unsecured Regular Bond/Debenture Nov 15, 2020,
    Assigned (P)B3

    Senior Unsecured Regular Bond/Debenture Nov 15, 2020,
    Assigned a range of LGD5, 76 %

Affirmations:

  Issuer: ARD Finance S.A.

    Senior Unsecured Regular Bond/Debenture Jun 1, 2018, Affirmed
    Caa1

  Issuer: Ardagh Glass Finance plc

    Senior Subordinated Regular Bond/Debenture Jun 15, 2017,
    Affirmed B3

    Senior Secured Regular Bond/Debenture Jul 1, 2016, Affirmed
    Ba3

    Senior Unsecured Regular Bond/Debenture Feb 1, 2020, Affirmed
    B3

  Issuer: Ardagh Packaging Finance plc

    Senior Secured Regular Bond/Debenture Oct 15, 2017, Affirmed
    Ba3

    Senior Unsecured Regular Bond/Debenture Oct 15, 2020,
    Affirmed B3

The principal methodology used in this rating was the Global
Packaging Manufacturers: Metal, Glass, and Plastic Containers
published in June 2009. Other methodologies used include Loss
Given Default for Speculative-Grade Non-Financial Companies in
the U.S., Canada and EMEA published in June 2009.

Ardagh Packaging Group, registered in Luxembourg, is a leading
supplier of glass and metal containers by volume focusing on the
European food and beverage market with increasing operations in
North America following the recent acquisition of Anchor Glass
and the intended acquisition of Verallia North America. Pro forma
for the acquisition of Verallia North America, the company
generated sales of about EUR5.4 billion in 2012.


MINERVA LUXEMBOURG: Fitch Rates US$500-Mil. Unsecured Notes 'B+'
----------------------------------------------------------------
Fitch Ratings has assigned an expected rating of 'B+/RR4' rating
to Minerva Luxembourg S.A.'s proposed US$500 million senior
unsecured notes due 2023. These notes will be unconditionally
guaranteed by Minerva S.A. Proceeds are expected to be used to
refinance in part or in whole the outstanding notes due 2017,
2019 and 2022, also issued by Minerva Luxemburg S.A.

Minerva's ratings are supported by the company's business
position as the second-largest Brazilian exporter of fresh beef
and its strong liquidity position. Risks include the company's
high product and production concentration in Brazil, which limit
its flexibility to respond to regional bans on exports. Similar
to other Brazilian protein processors, Minerva is exposed to the
unfavorable currency fluctuations and potential disease
outbreaks.

For the LTM ending Sept. 30, 2012, Minerva's EBITDA increased by
36% to BRL446 million from BRL328 million during 2011. During the
same period, EBITDA margins increased to 10.5% from 8.2% in 2011.
These improvements fed through to the company's cash flows.
Minerva's cash flow from operations (CFFO) was BRL373 million, a
significant improvement from negative BRL10 million in 2011. Free
cash flow (FCF) was BRL244 million, reversing seven straight
years of negative FCF.

As of Sept. 30, 2012, Minerva had BRL2.6 billion of total debt
and BRL920 million of cash and marketable securities. These
levels of debt and cash compare with 2.1 billion of debt and
BRL746 million of cash as of Dec. 31, 2011. The increase in total
debt is primarily a result of the depreciation of the Brazilian
real versus the U.S. dollar during the year, as about 81% of the
company's debt as of Sept. 30, 2012 was denominated in USD. Per
Minerva's estimation, the total exposure to USD is slightly lower
at 74%, due to existing currency swaps. As of Sept. 30, 2012, the
company's net leverage was 3.8x. This level of leverage was
higher than Fitch's previous expectation of 3.0x for the end of
2012 - a level consistent with the rating category during a
positive moment in the beef cycle. During December 2012, Minerva
issued BRL470 million of equity, which lowered its pro forma net
leverage to 2.7x.

Fitch expects Minerva's free cash flow generation to be negative
to neutral in 2013. The company's recently announced plans to
increase expansion capex and to pursue acquisitions in the
Brazilian state of Mato Grosso, Uruguay, Paraguay and Colombia.
While these investments should limit deleveraging, they should
improve the company's business profile. By 2015, the percentage
of Minerva's sales from processed food should increase to about
10% of revenue from 5% during 2012, while its revenues from
operations outside of Brazil should increase to 20% - 25% from
12% in 2012.

Key Rating Drivers

The ratings are likely to remain stable unless cash flow
generation and leverage ratios trend different than Fitch's
expectations. A positive rating action could be triggered by
additional decreases in leverage to about 2.0x in mid cycle. This
level of debt reduction is unlikely to be achieved in the short-
to-medium term.

A negative rating action could occur if net leverage increases to
4.0x on a normalized basis. This could be as a result of either a
large debt financed acquisition or asset purchases, or as a
result of operational deterioration due to disruptions in
exports.

Fitch currently rates Minerva and Minerva Luxembourg as follows:

Minerva:

-- Local currency Issuer Default Rating (IDR) 'B+';
-- Foreign currency IDR 'B+';
-- National scale rating 'BBB+(bra)';
-- BRL200 million outstanding debentures due 2015 'BBB+(bra)'.

Minerva Luxembourg:

-- Local currency IDR 'B+';
-- Foreign currency IDR 'B+';
-- Senior unsecured notes due in 2017, 2019 and 2022 'B+/RR4'.

The Rating Outlook for Minerva and Minerva Luxembourg is Stable.



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


ARDAGH PACKAGING: S&P Affirms 'B' Corporate Credit Rating
---------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'B' long-term
corporate credit ratings on Luxembourg-based glass-container and
metal packaging manufacturer Ardagh Packaging Group Ltd. (Ardagh)
and related entities Ardagh Packaging Holdings Ltd. and ARD
Finance S.A.  The outlook is stable.

At the same time, S&P assigned its issue rating of 'B+' to
Ardagh's proposed $750 million-equivalent (EUR562 million) senior
secured notes due 2022 to be issued by Ardagh Packaging Finance
PLC and Ardagh Holdings USA Inc.  The recovery rating on these
notes is '2', indicating S&P's expectation of substantial (70%-
90%) recovery in the event of a payment default.

"We assigned our issue rating of 'CCC+' to Ardagh's proposed
US$700 million-equivalent (EUR525 million) senior notes due 2020
to be issued by Ardagh Packaging Finance and Ardagh Holdings USA.
The recovery rating on these notes is '6', indicating our
expectation of negligible (0%-10%) recovery prospects in the
event of a payment default," S&P said.

S&P affirmed its issue ratings on Ardagh's senior secured debt
instruments at 'B+', and its issue ratings on the group's senior
debt instruments and subordinated payment-in-kind (PIK) notes at
'CCC+'.  The recovery ratings on these notes are '2' and '6'
respectively.

The affirmation follows Ardagh's announcement that it has agreed
to acquire the North American operations of Compagnie de Saint-
Gobain's (BBB/Negative/A-2) glass business Verallia, Saint-Gobain
Container Inc. (not rated).  Ardagh is planning to finance the
acquisition by raising EUR1.1 billion-equivalent of senior
secured and senior notes.

"The affirmation reflects our view that, after the acquisition,
on a normalized pro forma basis, Ardagh's credit metrics will
remain within our guidelines for the rating.  In our opinion,
Ardagh's free operating cash flow generation is unlikely to make
a significant contribution toward reducing debt over the near
term because S&P-adjusted funds from operations (FFO) to debt is
unlikely to exceed 10%.  On Sept. 30, 2012, Ardagh's S&P-adjusted
debt totaled EUR4.7 billion," S&P noted.

While S&P understands that Ardagh and Saint-Gobain have signed a
sale and purchase agreement, the transaction still has to pass
certain regulatory checks before it can complete.

"Our ratings on Ardagh and related entities Ardagh Packaging
Holdings Ltd. and ARD Finance S.A. reflect Ardagh's "highly
leveraged" financial risk profile and "satisfactory" business
risk profile.  We assess management and governance as "fair"
under our criteria," S&P said.

In S&P's view, the main rating constraints include Ardagh's very
aggressive financial policy and highly leveraged capital
structure; its exposure to volatile input prices; and the
capital-intensive nature of its glass operations.

These weaknesses are tempered to some extent by Ardagh's leading
position as one of the largest glass and metal packaging
providers in Europe.  Its primary focus is on the relatively
stable food and beverage end markets.  The ratings also reflect
Ardagh's relatively robust profitability, underpinned by its
scale, efficient cost base, and ability to manage input cost
changes.

"In our view, the Verallia North America acquisition will add
further support to Ardagh's "satisfactory" business risk profile,
despite the usual integration risks associated with an
international acquisition of this size.  The acquisition will
meaningfully improve Ardagh's competitive positioning in the
U.S., where we understand the combined group will become the
market leader in glass container manufacturing.  Furthermore, we
recognize that the integration and associated synergies could
lead to improved profit margins in the future," S&P said.

The stable outlook reflects S&P's view that Ardagh's credit
metrics will remain at levels commensurate with the 'B' rating.
Specifically, this means adjusted FFO to debt is unlikely to
exceed 10%.  The outlook also takes into account the group's
aggressive financial policy and ongoing, largely debt-funded
growth strategy.

S&P could take a positive rating action if the group deleverages
and improves its credit measures in line with those S&P considers
commensurate with a 'B+' rating.  This could occur if Ardagh uses
an IPO to reduce its debt.

"Equally, we could take a negative rating action if Ardagh's
credit measures deteriorate further--for example, because of
further debt-funded acquisitions, financial underperformance, or
unexpected material shareholder returns.  Similarly, we could
downgrade Ardagh if the group suffers from liquidity issues.
However, we consider these risks to be remote in the near term,"
S&P added.


DUTCH MBS XVIII: Fitch Assigns 'B' Rating to EUR4.5MM Cl. E Notes
-----------------------------------------------------------------
Fitch Ratings has assigned Dutch MBS XVIII B.V.'s EUR526.5
million mortgage-backed notes expected ratings, as follows:

* EUR140,000,000 floating-rate class A1 mortgage-backed notes:
   'AAAsf(EXP)'; Outlook Stable

* EUR360,000,000 floating-rate class A2 mortgage-backed notes:
   'AAAsf(EXP)'; Outlook Stable

* EUR8,000,000 floating-rate class B mortgage-backed notes:
   'AA+sf(EXP)'; Outlook Stable

* EUR7,000,000 floating-rate class C mortgage-backed notes:
   'A+sf(EXP)'; Outlook Stable

* EUR7,000,000 floating-rate class D mortgage-backed notes:
   'BBBsf(EXP)'; Outlook Stable

* EUR4,500,000 floating-rate class E mortgage-backed notes:
   'Bsf(EXP)'; Outlook Stable

* EUR2,700,000 floating-rate non-collateralized class F notes:
   'NRsf(EXP)'

The transaction is a true sale securitization of Dutch
residential mortgage loans, originated in the Netherlands and
owned by NIBC Bank N.V. (NIBC, 'BBB'/Negative/'F3'). The expected
ratings are based on Fitch's assessment of the underlying
collateral, available credit enhancement (CE), the origination
and underwriting procedures used by the seller, the servicing
capabilities of NIBC, STATER Nederland and Quion Groep B.V. and
the transaction's sound legal structure.

The transaction is backed by a nine-year seasoned non-revolving
portfolio of prime residential mortgage loans, with a relatively
low weighted-average original loan-to-market-value of 78.2% and a
debt-to-income ratio of 28.7%. The purchase of further advances
into the pool will not be allowed after closing

CE for the class A notes will initially total 5.5%, which is
provided by the subordination of the class B notes (1.5%), the
class C notes (1.3%) the class D notes (1.3%), the class E notes
(0.9%) and the reserve account (0.50%). The transaction benefits
from a fully funded non-amortizing reserve account equating to
0.5% of the initial class A to E notes balance and a cash advance
facility equating to 1.5% of the outstanding class A to E notes
balance, which may amortize to 0.75% of the initial class A to E
notes' balance. Under the interest rate swap agreement, the swap
counterparty pays the interest on the notes in exchange for the
scheduled interest on the mortgages, interest earned on the
guaranteed investment contract account, less senior fees and
excess spread of 0.5%.

The collateral review of the mortgage portfolio involved
reviewing vintage performance data and loan-by-loan loss severity
information on the originator's sold repossessions, which Fitch
used to validate the frequency of foreclosure assumptions, quick
sale adjustments and foreclosure timing assumptions used within
its analysis. While NIBC was unable to provide cumulative default
data by vintage, it provided static three-months plus arrears
data by vintage for both NHG and non-NHG loans and loan-by-loan
repossession data on all loans foreclosed over the past few
years. This data was in line with Fitch's performance assumptions
for the Dutch market and consequently no additional adjustments
to the standard assumptions were made.

To analyze the CE levels, Fitch evaluated the collateral using
its default model, details of which can be found in the reports
entitled "EMEA Residential Mortgage Loss Criteria", dated 7 June
2012, and "EMEA RMBS Criteria Addendum - Netherlands", dated 14
June 2012, at www.fitchratings.com. The agency assessed the
transaction cash flows using default and loss severity
assumptions under various structural stresses including
prepayment speeds and interest rate scenarios. The cash flow
tests showed that each class of notes could withstand loan losses
at a level corresponding to the related stress scenario without
incurring any principal loss or interest shortfall and can retire
principal by the legal final maturity

In Fitch's view, commingling risk is minimal due to the use of a
foundation structure. Consequently, the agency did not consider
the risk of a loss of funds due to commingling or disruption of
payments in its cash flow analysis. The transaction is not
exposed to the risk of deposit set-off or other claims. Fitch
incorporated in its analysis the risk that borrowers might
exercise set-off following the failure of insurance providers.


* Fitch Affirms 136 Tranches of Dutch Prime RMBS Transactions
-------------------------------------------------------------
Fitch Ratings has affirmed 136 tranches of Dutch prime RMBS.

The affirmations reflect the stable performance of the collateral
despite the deteriorating Dutch housing market with none of the
reviewed transactions reporting a reserve fund draw or a
principal deficiency ledger (PDL) outstanding. Fitch expects that
the current macroeconomic environment may lead to weaker
performance of mortgage loans, as well as downward pressure on
future house prices.

Transactions backed by the Nationale Hypotheek Garantie (NHG)
continue to outperform non-NHG ones. The current pipeline of
loans in arrears by more than three months (3m+ arrears) for the
NHG transactions remains low at around 0.4% of the current
portfolio compared to that for non-NHG transactions which
typically stand at 0.8%-1.7%. Cumulative losses remain below 1%
of the initial portfolio balance for all transactions.

In Fitch's view, the recent rise in the level of arrears across
Dutch RMBS transactions is mainly driven by an increase in the
portion of loans in late stage arrears. The agency believes that
the low level of activity in the residential market has made
consensual sales more difficult and made the process longer to
complete and therefore borrowers are in arrears for a longer
period.

Arena Series

The performance to date has remained in line with the rest of the
Dutch market with the rise in the level of arrears mainly driven
by the rise in the level of late stage arrears (6m+ arrears). As
of October 2012, the 6m+ arrears level in Arena 2006-1 and 2007-1
are broadly unchanged in the last year at 0.3% and 0.1%
respectively. The levels of credit enhancement remain at
sufficient levels and therefore all of the notes have been
affirmed.

Beluga Master Issuer

Beluga Master Issuer B.V. is a securitization program of Dutch
residential mortgages originated by subsidiaries of ABN AMRO Bank
N.V. ('A+'/Stable/'F1+'). The program features continuous
issuances and purchases of mortgages, with the collateral mainly
consisting of mortgage loans to self-employed individuals.

The level of arrears remains amongst the highest in the Dutch
prime market with 3m+ arrears as of December 2012 at 1.7% of
collateral balance. Despite the weaker performance, the level of
credit enhancement available remain sufficient and as such the
notes have been affirmed.

Candide Series

The longer time required to foreclose on properties in the
Netherlands seems to have been the main driver of the rise in the
levels of arrears across the Candide series. As of September
2012, the 6m+ arrears in Candide 2008 and 2008-2 have risen to
0.4% compared with 0.3% and 0.2% respectively 12 months ago.

The levels of cumulative defaults as a percentage of the original
pool remain quite limited despite the weaker performance, with
realised losses to date covered by the excess spread generated.
Fitch considers that the levels of credit enhancement for the
rated notes currently remain sufficient for their respective
stresses and has affirmed all the notes.

Citadel 2010-I, 2010-II and 2011-I

No defaults, losses or foreclosures have been reported in the
series since closing. The servicer, F. Van Lanschot Bankiers N.V.
('A-'/Negative/'F2') had been able to achieve a higher than
market average cure rate for arrears by liquidating other
valuable assets owned by its clients and tailoring repayment
plans for each of its high-net-worth borrowers. The affirmation
of the notes reflects the stable performance.

Dutch Mortgage Portfolio Loans (DMPL)

The DMPL series has seen a strong performance during the past
year. The level of 3m+ arrears in DMPL VIII, IX and X was 0.3%,
0.3% and 0.2% respectively in October 2012. DMPL IX and X are yet
to suffer any losses, while the cumulative losses in DMPL VIII
are only 0.01% of the opening collateral portfolio. The series
also benefits from a guaranteed excess spread of 0.35% per annum
provided by the interest rate swap agreement. The affirmation of
the notes is due to the strong performance to date.

Green Apple 2007 and 2008

Although being 100% backed by NHG, Green Apple 2008's 3m+ arrears
have increased to 0.6% in October 2012 compared with 0.3% 12
months ago. Cumulative losses since closing are also increasing
but remain low at around 0.2% of the initial pool balance. The
weaker performance can be explained by a drop in the cure rate
(reported by the originator and servicer Argenta Spaarbank N.V.)
for loans that are four to six months in arrears to 17% in 2012
from 30% in 2010. Despite the weaker performance, the agency
feels the credit enhancement levels are sufficient for their
respective stresses and has affirmed the notes.

Holland Homes

The Holland Homes series features highly seasoned, low LTV loans
and continues to be amongst the strongest performers in the
Fitch-rated Dutch RMBS portfolio. As of October 2012, Holland
Homes 2000-1, 2003-1 and Stichting Holland Homes III had reported
no defaults or losses and the 3m+ arrears remained below 0.1% of
collateral balance in all three transactions.

As a result of the strong performance, the levels of credit
enhancement have remained and the notes have been affirmed.

Lowland MBS No. 1

To date, performance has been stable with the portion of loans in
arrears by more than three months standing at only 0.2% of
collateral balance as of December 2012. Losses remain limited,
with the losses from the four properties foreclosed over the past
12 months provisioned for by the excess spread generated. Given
the stable performance, the agency has affirmed the ratings.

Orange Lion Series

The performance of the Orange Lion series remained stable,
although there has been a marginal deterioration since the last
review. As of the November 2012 IPD, the 3m+ arrears level in
Orange Lion IV and V has increased to 0.7% and 0.4%,
respectively. Orange Lion VII, which closed in June 2012, had a
3m+ arrears level of 0.2% in the same period. The affirmation of
the notes reflects the stable performance to date.

Phedina 2010 and 2011

The Phedina series has performed well in the past 12 months. The
3m+ arrears levels remained below 0.3%. In Fitch's view, this was
achieved by a pro-active arrears management strategy. Novalink,
which was appointed by the originator BNP Personal Finance B.V.
at closing, contacts borrowers on the first day after a payment
is missed and sends a default letter to the borrower after 16
days in arrears. The strong management of the portfolio and the
sufficient credit enhancement levels are the main reasons for the
affirmation of the notes.

Provide Lowlands 1

In this synthetic transaction, the ratings of the credit-linked
notes (CLNs) are reliant on the creditworthiness of KfW. SNS
Bank, as the originator of the reference portfolio, buys credit
protection from KfW (rated 'AAA'), which has issued
Schuldscheines (certificates of indebtedness) to the issuer.

Performance of the reference portfolio has slightly weakened over
the past 12 months with the portion of the portfolio in arrears
by more than three months increasing to 0.6% compared with 0.5%.
This has resulted in more credit events being declared for which
losses have yet to be determined. As of September 2012, the
credit events for which losses have yet to be determined stood at
EUR3.4m compared with EUR2.8m 12 months ago.

Although the levels of credit enhancement remain sufficient for
the respective ratings, in Fitch's view further house price
declines are likely to translate into higher losses for the loans
currently subject to a credit event. The revision of the Outlook
on the junior class C to Negative reflects these concerns.

SAECURE Series

Although SAECURE 6 NHG benefits from a guaranteed gross excess
spread of 0.15% per annum and good recovery rates, Fitch is
concerned that the current macroeconomic environment may lead to
higher future losses on properties sold, which may not be fully
covered by excess revenue generated by the structure. This view
is reflected in the revision of the Outlook to Negative from
Stable on the non-collateralized class C notes. The tranche acts
as the first loss piece in this deal and is therefore most
vulnerable to increased loan losses as house prices continue to
fall.

SGML 1 and 2

The SGML series of transactions are fully backed by NHG loans and
have performed well in the past 12 months. Fitch notes that the
originator and servicer Achmea Hypotheekbank N.V. (AHB, 'A-
'/Stable/'F2') has a strong preference for private sales which
have historically shown a higher recovery rate, as opposed to
public auctions, especially with the NHG loans. Based on the
information received from AHB's total NHG mortgage book, private
sales have accounted for over 90% of all sold properties in 2011
compared to 60% in 2007. As a result, the levels of credit
enhancement remain sufficient and the notes have been affirmed.

Storm Series

The performance of the Storm series has deteriorated during the
past 12 months, but the overall level of performance remains
stable. As of November 2012, the level of 3m+ arrears in Storm
2006-I, 2006-II and 2007-1 has risen to between 0.6% - 0.9%
compared with 0.4% and 0.6% 12 months ago. Storm 2012-IV closed
only in late September 2012 and the 3m+ arrears were 0% at the
November 2012 IPD.

Despite the slightly weaker performance, the level of arrears
still remain low when compared to other Dutch transaction and as
such the notes have been affirmed.

Sound I and II

Performance in both of these 100% NHG transactions has remained
stable and manageable despite the marginal increase in the level
of arrears. As of October 2012, the level of 3m+ arrears rose to
0.6% and 0.3% in Sound I and II respectively compared with 0.4%
and 0.2% 12 months ago. The affirmation of the notes reflects the
continued stable performance of the portfolios.

Stichting Uiver 2002

This highly seasoned transaction has performed well during the
past 12 months. As of November 2012, the 3m+ arrears were 1.0%,
which is an increase of 0.2% since January 2012. The deal has yet
to suffer any losses and has amortized significantly to a pool
factor of 28%. The affirmation of the notes reflects the stable
performance and the strong build-up of credit enhancement as a
result of the repayment of the portfolio.

SwAFE 1

SwAFE 1 has also repaid significantly with a pool factor of 18%.
Performance to date has been strong with the 3m+ arrears at 0%
and no losses reported throughout the life of the transaction.

The deal structure allows excess spread to pay down the principal
on the notes and therefore provide extra credit protection
through overcollaterization. The affirmation of the notes is a
result of the strong performance as well as this structural
feature.



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


NATIONAL RESERVE: Fitch Maintains RWN on 'B-' Long-Term IDRs
------------------------------------------------------------
Fitch Ratings has maintained National Reserve Bank's 'B-' Long-
term Issuer Default Ratings (IDR) on Rating Watch Negative (RWN).

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

NRB's ratings and the RWN continue to reflect high uncertainty
and risks associated with the on-going wind-down of the bank's
business. The RWN also reflects the non-payment, to date, of
accrued interest on a subordinated loan, the principal of which
was repaid in January 2013. At the same time, the agency
recognizes the significant progress the bank has made since end-
Q312 in winding down its loan book, generating liquidity and
repaying liabilities.

Between end-Q312 and end-2012, NRB's net loan book contracted to
RUB4.8 billion from RUB12.7 billion as a result of loan sales,
repayments and set-offs of related party exposures with
corresponding liabilities. During the same period, the bank's
liquid assets (cash and short-term bank placements) increased to
RUB5.7 billion (RUB3.6 billion, adjusted for the RUB2.1 billion
subordinated loan repayment in early January) from RUB2.6
billion.

At end-2012, the bank still had RUB14.4 billion of liabilities
(adjusted for the loan repayment), of which Fitch estimates
approximately RUB10 billion were to non-related parties. The
latter includes about RUB5 billion of customer accounts and
RUB3.1 billion of funding secured by pledges of securities. Full
repayment of NRB's liabilities will require further generation of
cash from the loan book and fixed assets and/or a readiness to
sell down investments held in favor of the bank's owner,
Alexander Lebedev, in particular shares in OJSC Aeroflot
('BB+'/Stable), OAO Gazprom ('BBB'/Stable) and leasing company
Ilyushin Finance. These shares on the bank's balance sheet,
pledged against funding and held in a mutual fund controlled by
the bank, totalled RUB9.5 billion at end-2012.

In January 2013, NRB repaid a RUB2.1 billion subordinated loan,
but is currently negotiating the payment of RUB0.8 billion of
accrued interest. In Fitch's view, the non-payment is not an
indication of heightened liquidity stress given the liquid assets
currently on the balance sheet. However, a prolonged failure to
meet this obligation, or any indication that the terms of
settlement may be coercive for the lender, would be viewed
negatively by Fitch.

RATING SENSITIVITIES - IDRs, VR, NATIONAL RATING

The ratings could be downgraded if the bank's liquidity tightens
again, threatening its ability to further pay down its third-
party obligations. However, the ratings could stabilize at their
current level if NRB accumulates a more comfortable level of
liquidity relative to its remaining liabilities, and settles the
outstanding accrued interest on the subordinated loan.

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

The affirmation of the Support Rating at '5' and the Support
Rating Floor at 'No Floor' reflect the bank's low systemic
importance and high uncertainty with regard to the provision of
support by either the shareholder or the Russian authorities.

The rating actions are:

-- Long-Term Issuer Default Rating: 'B-'; RWN maintained
-- Short-Term Issuer Default Rating: 'B'; RWN maintained
-- Local currency Long-Term IDR: 'B-'; RWN maintained
-- National Long-Term Rating: 'BB-'; RWN maintained
-- Viability Rating: 'b-'; RWN maintained
-- Support Rating: affirmed at '5'
-- Support Rating Floor: affirmed at 'No Floor'



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


BLUSTOCKING LTD: Fashion Distributor Files For Insolvency
---------------------------------------------------------
Victoria Gallagher at Drapers reports that Manchester fashion
agent Blustocking Ltd has filed for insolvency, drafting in
corporate recovery specialists to deal with its creditors.

On December 17, Draper relates, Blustocking registered as
insolvent.

Darren Terence Brookes and Gary Corbett of corporate recovery
specialist Milner Boardman & Partners are acting as insolvency
practitioners for the fashion agent.

A source close to the situation told Drapers: "It was a shock
because we really believed in them."

Drapers discloses that Blustocking's most recent accounts, filed
at Companies House in January 2012, show the amount owed to
creditors had increased to GBP159,353 for the year to June 30,
2011, from GBP104,382 the year before.  In the same period, its
net assets dropped from GBP17,025 to GBP10,600.

Blustocking distributes women's young fashion brands Lipsy and
Little Mistress, and since July 2012 has wholesaled womenswear
brand Darling and its "dressier and edgier" sister label Beloved.


DE VERT INSURANCE: Gibraltarian Police Probes Collapse
------------------------------------------------------
Newsdesk reports that the Gibraltarian police are investigating
the collapse of De Vert Insurance.

De Vert Insurance ceased trading in August and sought a winding
up order from the Rock's Supreme Court last month, Newsdesk
recounts.

The insurer was licensed in February 2012 by the Financial
Services Commission but ceased trading just over six months later
ahead of an order to do so from the regulator itself, which came
in September, Newsdesk relates.  The company sold 56 insurance
policies to Italian customers with a total premium value of
GBP250,000, Newsdesk discloses.

The police are investigating the circumstances that led to the
winding up amid allegations that De Vert used invalid or false
sovereign bonds to the value of GBP6 million as surety on its
capital position, Newsdesk says.

De Vert is estimated to have no more than EUR57,000 (GBP47,285)
in cash from original share capital, Newsdesk notes.

According to Newsdesk, a "denuncia" -- a statement by which
persons can allege in court their belief that they have been the
victim of a crime -- has also been lodged in an Italian court
against Alliance SM, the company that produced the bond as
security for De Vert's capital position.

Last month, De Vert issued a statement confirming its application
for the winding up order, Newsdesk recounts.  The statement also
claimed De Vert had been the victim of "an external fraud against
the company by a party outside Gibraltar holding itself out as a
regulated investment manager", Newsdesk notes.


HMV GRP: Deloitte Named Administrator; Hilco, Moulton Eye Stores
----------------------------------------------------------------
Andrea Felsted and Robert Budden at The Financial Times report
that HMV Group is to go into administration, delivering a further
blow to Britain's embattled high streets after suppliers refused
a request for a GBP300 million lifeline for the struggling
retailer.

Deloitte, which has been advising HMV's lending banks, was
appointed as administrator to the chain on Monday night and the
company said its shares will be suspended, the FT relates.

The move puts 4,000 jobs at risk though HMV said Deloitte will
attempt to find a buyer for the business, the FT notes.

                         Potential Buyers

Separately, the FT's Ms. Felsted reports that Hilco, the retail
restructuring group, and private equity veteran Jon Moulton are
among those eyeing HMV after the entertainment retailer plunged
into administration late on Monday.

Mr. Moulton said he expected his Better Capital vehicle to be
among several parties looking at HMV, the FT relates.

According to the FT, Hilco, which owns HMV Canada, is interested
in some HMV stores, as is Endless, a private equity group that
targets distressed companies.  Oakley Capital, the investment
firm led by Peter Dubens which owns part of Time Out, is also
expected to look at some of HMV's stores, the FT notes.

Trevor Moore, chief executive of HMV, said he was "convinced"
that HMV had a future despite the board's decision late Monday to
call in Deloitte as administrator, the FT relates.  According to
the FT, Mr. Moore said he and finance director Ian Kenyon were
"really passionate about developing the plan for this business
evolving it moving forward".

"What we need to do with the administrators as and when they come
in is put the business plan together so we can continue to trade
the business for an appropriate period of time, and we need to
make certain that we are working at the same time on finding a
purchaser for it [HMV] quite quickly," the FT quotes
Mr. Kenyon as saying.

Mr. Moore, as cited by the FT, said the management team would
have to work with any bidder on how many stores would be
appropriate going forward.  He said HMV was represented in 142 of
the top 150 towns in the UK, and had well located stores, the FT
notes.

                           Vouchers

According to the FT's Elizabeth Rigby, ministers are being urged
to protect consumers from failing retailers by doing more to
ensure shoppers can still redeem gift cards and vouchers once a
chain goes out of business.

HMV, the latest high street casualty, on Tuesday, stopped
honoring vouchers after it went into administration, the FT
relates.

Penny Mordaunt, a Tory backbencher, said the government should
look at revising administration law to push customers higher up
the list of creditors, the FT notes.

                Administration's Impact on Indusry

According to the FT's Robert Budden, analysts warn that HMV's
disappearance from the high street would have an irreversible
negative impact on the entertainment industry, with sales of CDs
and DVDs already in terminal decline.

"If HMV were to close completely, we expect the entertainment
market to lose over GBP300 million -- this is over 9 per cent of
the total entertainment market value," the FT quotes Craig Armer,
consumer analyst at Kantar Worldpanel, as saying.  "Some shoppers
will simply move to other retailers, but the value generated from
browsing and buying on impulse will be lost."

This explains why suppliers -- from music labels to film
companies -- say they are keen to see HMV survive even if it is
unclear how much more financial support they will give the
retailer, the FT notes.

According to Verdict, HMV's share of the combined music and DVD
market, defined as physical and downloaded products bought on and
offline, was 22.3% last year, the FT discloses.

Analysts say the loss of such a major store chain would benefit
the UK's 295 independent music retailers, the FT discloses.  But
it could also hurt consumers, according to the FT.  Without a
deal to ensure the survival of HMV, the prices of CDs and DVDs
could rise, the FT states.

United Kingdom-based HMV Group plc is engaged in retailing of
pre-recorded music, video, electronic games and related
entertainment products under the HMV and Fopp brands, and the
retailing of books principally under the Waterstone's brand.  The
Company operates in four segments: HMV UK & Ireland, HMV
International, HMV Live, and Waterstone's.


LA SENZA: Lingerie Retailer Enters Liquidation Process
------------------------------------------------------
Hanna Sharpe at Business-Sale.com reports that troubled women's
lingerie retailer La Senza is being liquidated, despite being
rescued in a pre-pack administration early in 2012.

KPMG took care of the business' administration procedure at the
time, and David Standish -- david.standish@kpmg.co.uk -- of the
restructuring firm is now in charge of its liquidation, according
to the report.

As reported in the Troubled Company Reporter-Europe on Jan. 4,
2012, BBC News said that La Senza is to close four shops in
Northern Ireland.  The business, which announced on December 23
that it was going into administration, is closing more than 80
shops across the UK and Ireland, according to BBC News.  BBC News
noted that La Senza blamed "trading conditions" and "the overall
macro environment" for its decision to go into administration.
The report related that Andrew Irvine of Belfast City Centre
Management said that despite the problems for individual
retailers nationally, the broad picture locally remained
positive.

Business-Sale.com recalls that early in January 2012, Alshaya, a
Middle Eastern retail group, purchased 60 of La Senza's 146 shops
in the UK.  The pre-pack deal saved 1,100 jobs, though 84 shops
and 18 La Senza concessions were shut down, Business-Sale.com
notes.

Business-Sale.com, citing Companies House, La Senza Limited began
a voluntary creditors' liquidation process on the Jan. 8.  La
Senza Europe Limited is also being liquidated.

La Senza's last recorded accounts at Companies House show a
turnover of GBP98.2 million, profits of GBP 22.5 million and
total fixed assets of GBP 9.5 million, Business-Sale.com
discloses

La Senza is a lingerie chain.  The retailer had about 2,600 staff
at 146 stores and 18 concessions across the United Kingdom.


OLD MUTUAL: Fitch Cuts Subordinated Debt Rating to 'BB'
-------------------------------------------------------
Fitch Ratings has downgraded Old Mutual PLC's Long-term Issuer
Default Rating (IDR) to 'BBB' from 'A-', senior unsecured debt to
'BBB-' from 'BBB+' and subordinated debt to 'BB' from 'BBB-'. The
agency has also downgraded Old Mutual Life Assurance Company
(South Africa) Limited's subordinated debt to 'AA-(zaf)' from
'AA(zaf) and affirmed its National IFS rating at 'AAA(zaf)'. The
Outlooks on the group's IDRs and IFS ratings are Stable.

Rating Rationale

The rating actions follow the downgrade of South Africa's Long-
term foreign currency IDR to 'BBB'/Stable from 'BBB+'/Negative
and Long-term local currency IDR to 'BBB+'/Stable from
'A'/Negative.  The bulk of Old Mutual's IFRS group operating
earnings come from South Africa, with the remainder largely from
the UK.

The two-notch downgrade of the group's non-South African
operation Skandia Life Assurance Company Ltd reflects the change
in Fitch's view of the credit quality of the Old Mutual group as
a whole, which is driven by its South African business.

The group's IFS rating is one notch higher than the South African
local currency sovereign rating in recognition of Old Mutual's
geographical diversification, with a sizeable proportion of
earnings generated in the UK and Europe. The additional notch
also reflects the group's ability to share with policyholders
potential investment losses on its investments in the South
African financial markets, and the financial flexibility from
being listed on the London Stock Exchange.

RATING OUTLOOK - STABLE

The Stable Outlook on the group's ratings reflects the Stable
Outlook on South Africa's Long-term foreign and local currency
IDR.

RATING SENSITIVITIES

A change in South Africa's Long-term foreign or local currency
IDR could trigger a corresponding rating action on Old Mutual.

Old Mutual could be downgraded if there is greater than expected
earnings pressure on its South African operations from volatile
investment markets, weak consumer confidence and recessionary
fears. Further reduction in the geographical diversification of
earnings, or a deterioration in the quality of international
earnings, could also lead to a downgrade.

Fitch assesses Old Mutual's hard-currency cover to measure its
ability to service its non-rand-denominated debt obligations
based purely on its non-rand earnings. The agency expects this
ratio to be about 2.5x to 3x in 2013. Although failure to achieve
this level was a potential downgrade trigger at the previous
rating level, there is more tolerance at the new rating level and
provided the metric remains above 2x, a downgrade triggered
solely by hard-currency cover is unlikely.

The rating actions are:

Old Mutual plc
-- Long-term IDR: downgraded to 'BBB' from 'A-'; Outlook Stable
-- Senior unsecured debt: downgraded to 'BBB-' from 'BBB+'
-- Lower Tier 2 subordinated debt:
    GBP500m 8% subordinated notes due 2021 (XS0632932538):
    downgraded to 'BB' from 'BBB-'
-- Upper Tier 2 subordinated debt:
    EUR500m 5% subordinated notes undated (XS0234284668):
    downgraded to 'BB' from 'BBB-'
-- Tier 1 subordinated debt:
    GBP350m 6.376% perpetual callable securities (XS0215556142):
    downgraded to 'BB' from 'BBB-'
-- Short-term IDR and commercial paper: downgraded to 'F3' from
    'F2'

Old Mutual Life Assurance Company (South Africa) Limited
-- National IFS rating: affirmed at 'AAA(zaf)'; Outlook Stable
-- National Long-term rating: downgraded to 'AA+(zaf)' from
    'AAA(zaf)'; Outlook Stable
-- Subordinated debt: ZAR3bn callable notes (ZAG000026816):
    downgraded to 'AA-(zaf)' from 'AA(zaf)'

Skandia Life Assurance Company Ltd
-- IFS rating: downgraded to 'A-' from 'A+'; Outlook Stable
-- Long-term IDR: downgraded to 'BBB+' from 'A'; Outlook Stable


* Moody's Sees Slight Increase in EMEA Liquidity Stress Index
-------------------------------------------------------------
Moody's: "The EMEA Liquidity Stress Index (LSI) increased
slightly to 17% from 16% between July and November 2012,
primarily reflecting pressure on cash flows from weak operating
environments in parts of Europe and reduced overall global
growth", says Tobias Wagner, an analyst in the corporate finance
team at Moody's Investors Service, in its SGL Monitor: EMEA
Edition report published on Jan. 15.

Moody's continues to view liquidity profiles of EMEA speculative-
grade non-financial corporates as solid despite decreasing credit
quality. However, corporates based in the euro area periphery
have a higher percentage of the weakest SGL ratings, SGL-4, due
to higher exposure to recessionary economies, resulting weaker
cash flows and more limited access to external funding.

The capital structures of first-time issuers in this period
typically have adequate liquidity profiles that result in SGL
ratings of 2 or 3, broadly in line with the portfolio average.

Liquidity trends also vary significantly across regions. While
the LSI for Asia rose materially in 2012, this was not the case
in North America or EMEA. Liquidity in EMEA may weaken in 2013 as
the challenging operating environment persists; but Moody's does
not expect weaker liquidity profiles to trigger a substantial
uptick in the default rate.


* Moody's Says Creditworthiness of CEE Sovereigns Steady
--------------------------------------------------------
The creditworthiness of Central and Eastern Europe (CEE)
sovereigns will likely remain steady in 2013 despite
vulnerabilities, says Moody's Investors Service in a Special
Comment report published on Jan. 15. The median sovereign
creditworthiness among CEE countries is Baa3.

The new report, entitled "Central & Eastern European 2013
Sovereign Outlook: Subdued Macro Picture Tempers Credit
Strengths", is now available on www.moodys.com. Moody's
subscribers can access this report via the link provided at the
end of this press release.

"Our assessment balances a number of strengths and challenges,
including improved but subdued growth prospects for the region in
the context of an unsettled global environment," says Jaime
Reusche, a Moody's Assistant Vice President - Analyst and author
of the report. "Additionally, we expect steadier commodity
prices, which will support stable current accounts, and some
increases in foreign direct investment flows to the region," adds
Mr. Reusche.

In Moody's view, while growth is set to accelerate in nine out of
15 CEE countries, economic activity will remain subdued for the
region as a whole particularly when compared to the 5.6% average
for the 2004-08 period. Moody's expects output for the CEE region
to expand by 1.9% in 2013, from 0.7% in 2012.

With a few exceptions, Moody's currently expects most CEE
countries to experience a reduction in inflation in 2013, based
on the rating agency's view that energy prices will stabilize and
that some countries' economic performance will be restrained.

Moody's notes that domestic credit expanded at a robust pace in
the years leading up to the 2008-09 global financial crisis.
Managing the increasing financial penetration proved to be a
complex task for policymakers, given that credit growth
decelerated markedly once the financial impact of the crisis had
distorted demand and supply dynamics.

Overall, the CEE region remains exposed to the ongoing euro area
sovereign crisis and other external developments through the
trade channel, which can pose some risk of contagion even for the
economic performance of countries whose demand is mainly
domestically driven. If acute, these adverse developments could
add significant pressure on the balance sheet of national
governments in the region.

Despite a significant deterioration in creditworthiness
immediately following the 2008-09 crisis, the region's overall
credit quality has remained within investment-grade territory, at
the equivalent of a Baa3 rating, with 8 out of 15 CEE sovereign
ratings carrying a stable outlook, 2 positive outlooks and just 5
with a negative outlook.


* Fitch Reveals Highlights of London Credit Outlook Conference
--------------------------------------------------------------
Fitch Ratings says Jan. 15's London date of the rating agency's
European Credit Outlook series features discussion from its
Sovereign, Bank, Covered Bonds, Structured Finance and Corporate
groups on what it expects to be the key credit trends in 2013.

Below follows some highlight quotes from the presentations. The
European Credit Outlook is an annual series of events which will
also visit the following cities by late March: Amsterdam, Paris,
Frankfurt, Stockholm, Oslo, Copenhagen, Helsinki, Geneva, Madrid,
Munich, Zurich and Vienna.

Sovereigns:

"The ECB's commitment to do whatever it takes to save the euro
backed up by Outright Monetary Transactions, along with the Greek
deal and the creation of the European Stability Mechanism, has
provided breathing space for the imbalances across the Eurozone
to correct and necessary reform at the European level. Whether
2013 marks the beginning of the end of the Eurozone crisis
depends on governments delivering on deficit reduction and
structural reform, especially in the periphery, and on greater
fiscal and financial risk sharing. With elections in Italy and
Germany and the region in recession, the challenge of maintaining
the positive momentum gained in the latter part of 2012 should
not be under-estimated," says David Riley, Fitch's Global Head of
Sovereign Ratings.

"Seven of the ten largest economies in the world remain on
negative rating outlook, including the US, the UK and France,
reflecting weak economies and large government deficits and debt.
With governments financially constrained, policy-makers and
investors are increasingly looking to central banks to use non-
conventional and untested policy actions to unlock economic
recovery. The economic and financial outlook remains as uncertain
as ever," Mr. Riley added.

Banks:

"Progress towards regulatory certainty will heavily influence
bank behavior in the coming year. Most Northern European banks
will make steady progress towards more robust capital, as they
continue to delever and build equity reserves. We expect
increased issuance of subordinated debt and cautious issuance of
cocos as banks build secondary buffers," says James Longsdon, co-
head of EMEA Financial Institutions at Fitch.

"On profitability, low interest rates and flat/slow economic
growth are likely to keep the focus on costs, while conduct fines
hit the bottom lines of affected banks. Looking at funding, bank
debt issuance is likely to remain subdued until economies start
to grow and loan demand picks up. We may also see somewhat more
aggressive liquidity management," adds Mr. Longsdon.

European High-Yield:

"While European high-yield bond issuance volumes will continue to
grow this year, driven by continued bank deleveraging and the low
interest rate environment, Fitch expects that returns may not be
as robust as in 2012, as secondary market yields will start 2013
at much lower levels compared to 2012," says Edward Eyerman,
Fitch's Head of European Leveraged Finance.

"Despite the weak economic backdrop, Fitch does not see the high-
yield default rate rising materially in the short-term. This is
due to outstanding issuance reflecting a mix of fallen angels
with financial flexibility and higher quality leveraged buyouts
seeking to refinance loan debt and extend maturity profiles via
the high yield market. However, given the absence of new issue
bank and CLO funding for these higher risk LBOs, the default rate
in the leveraged loan market could rise materially over the
medium term," Mr. Eyerman added.

Structured Finance:

"It is too early to deem structured finance fully rehabilitated
though we are seeing positive signals from the market. The Basel
LCR decision to accept highly rated RMBS is indicative of a
general desire to diversify products that can be defined as
liquid," says Marjan van der Weijden, Fitch's Head of European
Structured Finance.

Covered Bonds:

"We expect the covered bonds market to continue to expand in new
jurisdictions, such as Belgium and Asia, in 2013. However, we
also expect a decrease in public sector covered bonds programs
activity. Some programs could become dormant, or be wound down,
because of the decreasing profitability of public sector lending
compared to funding cost," says Helene Heberlein, Managing
Director, Covered Bonds at Fitch.

"Fitch's outlook for the covered bond sector globally is mostly
stable, although there is sharp contract between ratings in the
peripheral eurozone, which are nearly all on negative outlook or
negative watch and the rest of Europe, North America and Asia
Pacific, which are mainly stable. In peripheral Europe, about 90%
of covered bond ratings would be affected by a one notch
downgrade of their issuer's issuer default rating. Overall, we
see less potential for multi-notch downgrades this year," adds
Ms. Heberlein.


* Fitch Says Eurozone & US Key Drivers of Global Credit Outlook
---------------------------------------------------------------
In its six-monthly The Credit Outlook report, Fitch Ratings said
the eurozone crisis and US fiscal and debt challenges will drive
the global credit outlook this year.

While the Outlook on seven of the 17 eurozone member countries
remains Negative, the ECB's "Outright Monetary Transactions"
(OMT) program in early September effectively addressed near-term
liquidity risks for troubled eurozone sovereigns, buying time for
the necessary but painful adjustments required to secure
solvency. However, notwithstanding some progress on banking union
at December's EU summit, significant challenges still confront
policy-makers, both in terms of moving towards greater fiscal and
financial risk-sharing and in breaking the negative feedback loop
between sovereigns and their banking systems. Policy complacency
remains a risk for 2013.

The extended and unresolved US fiscal and debt ceiling
negotiations will also be key to global risk appetite. The fiscal
cliff has been avoided but difficult decisions have been
deferred. The decisions on spending will now be taken
concurrently with negotiations on the raising of the statutory
debt ceiling which was reached on Dec. 31, 2012, with
extraordinary measures expected to last until the end of
February. Failure to reach agreement on raising the debt ceiling
in a timely manner would undermine confidence in the United
States as a reliable borrower and prompt a review of its 'AAA'
rating.

Fitch expects the weak operating environment for banks to
continue. Bank credit weakness is most pronounced in the eurozone
with a weak operating environment and continued sovereign
challenges. The US situation is more stable, but profit pressures
raise concern on execution of growth and expansion strategies.
Support remains a key factor for 2013, but Fitch expects this to
wane with developments of a banking union and resolution regimes.

The proportion of ratings with a Negative Outlook or on Rating
Watch Negative remains high across many sectors, primarily driven
by the unresolved eurozone crisis. The cross-sector shrinkage of
the universe of highest grade ratings ('AAA' and 'AA'), which has
occurred in the years since the start of the financial crisis,
was arrested with little change in this group in H212. However,
only 23% of sovereigns, 7% of financial institutions and 2% or
corporates were at this rating level as at end-2012.

'The Credit Outlook' report provides an overview of Fitch's
outlook across all rated sectors and regions, identifying the
main macro factors that will drive credit trends over the next
12-24 months.



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


* Upcoming Meetings, Conferences and Seminars
---------------------------------------------

Jan. 24-25, 2013
   AMERICAN BANKRUPTCY INSTITUTE
      Rocky Mountain Bankruptcy Conference
         Four Seasons Hotel Denver, Denver, Colo.
            Contact:   1-703-739-0800; http://www.abiworld.org/

Feb. 7-9, 2013
   AMERICAN BANKRUPTCY INSTITUTE
      Caribbean Involvency Symposium
         Eden Roc Renaissance, Miami Beach, Fla.
            Contact:   1-703-739-0800; http://www.abiworld.org/

Feb. 17-19, 2013
   AMERICAN BANKRUPTCY INSTITUTE
      Advanced Consumer Bankruptcy Practice Institute
         Charles Evans Whittaker Courthouse, Kansas City, Mo.
            Contact:   1-703-739-0800; http://www.abiworld.org/

Feb. 20-22, 2013
   AMERICAN BANKRUPTCY INSTITUTE
      VALCON
         Four Seasons Las Vegas, Las Vegas, Nev.
            Contact:   1-703-739-0800; http://www.abiworld.org/

Apr. 10-12, 2013
   TURNAROUND MANAGEMENT ASSOCIATION
      TMA Spring Conference
         JW Marriott Chicago, Chicago, Ill.
            Contact: http://www.turnaround.org/

Apr. 18-21, 2013
   AMERICAN BANKRUPTCY INSTITUTE
      Annual Spring Meeting
         Gaylord National Resort & Convention Center,
         National Harbor, Md.
            Contact:   1-703-739-0800; http://www.abiworld.org/

June 13-16, 2013
   AMERICAN BANKRUPTCY INSTITUTE
      Central States Bankruptcy Workshop
         Grand Traverse Resort, Traverse City, Mich.
            Contact:   1-703-739-0800; http://www.abiworld.org/

July 11-13, 2013
   AMERICAN BANKRUPTCY INSTITUTE
      Northeast Bankruptcy Conference
         Hyatt Regency Newport, Newport, R.I.
            Contact:   1-703-739-0800; http://www.abiworld.org/

July 18-21, 2013
   AMERICAN BANKRUPTCY INSTITUTE
      Southeast Bankruptcy Workshop
         The Ritz-Carlton Amelia Island, Amelia Island, Fla.
            Contact:   1-703-739-0800; http://www.abiworld.org/

Aug. 8-10, 2013
   AMERICAN BANKRUPTCY INSTITUTE
      Mid-Atlantic Bankruptcy Workshop
         Hotel Hershey, Hershey, Pa.
            Contact:   1-703-739-0800; http://www.abiworld.org/

Aug. 22-24, 2013
   AMERICAN BANKRUPTCY INSTITUTE
      Southwest Bankruptcy Conference
         Hyatt Regency Lake Tahoe, Incline Village, Nev.
            Contact:   1-703-739-0800; http://www.abiworld.org/

Oct. 3-5, 2013
   TURNAROUND MANAGEMENT ASSOCIATION
      TMA Annual Convention
         Marriott Wardman Park, Washington, D.C.
            Contact: http://www.turnaround.org/

Nov. 1, 2013
   AMERICAN BANKRUPTCY INSTITUTE
      NCBJ/ABI Educational Program
         Atlanta Marriott Marquis, Atlanta, Ga.
            Contact:   1-703-739-0800; http://www.abiworld.org/

Dec. 2, 2013
   BEARD GROUP, INC.
      19th Annual Distressed Investing Conference
          The Helmsley Park Lane Hotel, New York, N.Y.
          Contact:   240-629-3300 or http://bankrupt.com/

Dec. 5-7, 2013
   AMERICAN BANKRUPTCY INSTITUTE
      Winter Leadership Conference
         Terranea Resort, Rancho Palos Verdes, Calif.
            Contact:   1-703-739-0800; http://www.abiworld.org/


                            *********

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

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

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

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


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

Troubled Company Reporter-Europe is a daily newsletter co-
published by Bankruptcy Creditors' Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., 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
202-241-8200.


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