TCREUR_Public/130207.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

                           E U R O P E

           Thursday, February 7, 2013, Vol. 14, No. 27

                            Headlines



A U S T R I A

A-TEC INDUSTRIES: Plans to Restart Business Activities


C Y P R U S

* CYPRUS: Germany Won't Block Bailout if Conditions Are Meet


F R A N C E

ATARI SA: CEO's Group & Alden Global Buy Out BlueBay Funds
BELVEDERE SA: Bruce Willis to Vote in Favor of Restructuring
LABCO SA: Fitch Affirms 'B+' Long-Term Issuer Default Rating
PETROPLUS HOLDINGS: Gets Five Offers for Petit-Couronne Refinery


G E R M A N Y

118000 AG: Insolvency Proceedings Commence
S-CORE 2008-1: S&P Lowers Ratings on Five Note Classes to 'D'


G R E E C E

* GREECE: Cuts & Debt Relief Reduce Fiscal Deficit, Fitch Says


I T A L Y

16 UNO FINANCE: Fitch Upgrades Rating on Class C Notes to 'BB+'
BANCA MONTE: Set to Unveil Derivative Losses Amid Criminal Probes
EUROHOME MORTGAGES: S&P Lowers Rating on Class C Notes to 'D'
PATAGONIA FINANCE: Moody's Reviews Caa2-Rated Notes for Downgrade
SEAT PAGINE: Plan to Seek Creditor Protection Hits Bond Value


I R E L A N D

STATIC FUNDING 2001-1: Moody's Affirms B1 Rating on EUR15MM Notes


L I T H U A N I A

AGROWILL GROUP: Creditors' Meeting Set for February 15


N E T H E R L A N D S

AEGON: Ends Unnim Partnership; Reaffirms Commitment to Spain
DUTCH MBS XVIII: Fitch Assigns 'B' Rating to Class E Notes
DUTCH MBS XVIII: Moody's Rates EUR4.5MM Class E Notes 'Ba2'
KPN NV: Mulls EUR4-Bil. Capital Increase to Fix Balance Sheet
LEVERAGED FINANCE: Moody's Cuts Rating on Class E Bond to 'Caa3'

SNS BANK: Fitch Cuts Rating on Hybrid Tier 1 Securities to 'C'
SNS BANK: S&P Lowers Rating on EUR320MM Perpetual Hybrid to 'CCC'
SNS REAAL: ISDA Set to Rule on Credit-Default Swap Payout
SNS REAAL: S&P Lowers Rating on Non-Deferrable Debt to 'D'
SRLEV NV: S&P Affirms 'BB+' Rating on Jr. Subordinated Debt


P O L A N D

LOT POLISH: Seeks New Chief Executive; Faces Enormous Challenges


R U S S I A

SDM-BANK: Fitch Assigns 'B' Rating to Senior Unsecured RUB Bonds
SITRONICS JSC: Fitch Cuts LT Issuer Default Rating to 'CCC'


S P A I N

* SPAIN: Real Estate Exposures Key Weakness for Banks, Fitch Says


T U R K E Y

SEKER PILIC: Court Approves Request to Suspend Bankruptcy Process


U N I T E D   K I N G D O M

CATTLES PLC: Files Suit v. PwC Over Two-Year Financial Audits
EQUITABLE LIFE: More Than 370,000 Savers Get Partial Compensation
KELDA FINANCE: Fitch Assigns 'BB+' Final Senior Secured Rating
MOBILEWAVE GROUP: Portman Estates' Winding-Up Petition Withdrawn
* UK: MPs Express Concerns Over Controversial Pre-Pack Deals


X X X X X X X X

* EUROPE: S&P Withdraws Rating on 9 Synthetic CDO Tranches
* Upcoming Meetings, Conferences and Seminars


                            *********


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


A-TEC INDUSTRIES: Plans to Restart Business Activities
------------------------------------------------------
The board of directors of A-TEC INDUSTRIES AG on Feb. 4 disclosed
that as per Ad-hoc information of Nov. 6, 2012, the trustee to
the restructuring proceedings of A-TEC intended to effect the
payment of a cash quota in the amount of 39%, to A-TEC's
creditors -- as per the restructuring proceedings.  This payment
has been effected.  Due to the fact that all assets of A-TEC have
been transferred to the trustee, and the major part of the assets
having been sold, the restructuring of A-TEC, i.e. release of all
debts, has been effected as per restructuring plan of Dec. 29,
2010, by payment of a 39 % quota which exceeded the 30% quota
required by the restructuring plan.  A-TEC now is planning to
recommence its business activities, in the medium term, by
re-establishing its original core business fields which have been
in place since 2001, i.e. industrial investments in
machine(tool)production, plant construction (energy and
environment), drive technologies, and minerals and metals
(upstream, downstream, with focus on copper production).
Presently, A-TEC is sounding and pre-discussing possible
acquisitions.  Financing may be effected by means of capital
increases, share issuings, equity like instruments, mezzanine
capital, or debt financing.  At the same time, share capital
increases by using newly issued shares as consideration for the
acquisition, may be considered.  First acquisitions may take
place in the first or second half of 2013.

A-TEC has and had, both during and after end of the restructuring
proceedings, the infrastructure -- staff, premises, an acting
management (CEO and CFO) -- necessary to maintain an industrial
holding company.  All expenses accrued during and after the
restructuring proceedings, have and will be borne by the main
shareholder M.U.S.T. private-foundation ("Main Shareholder")
until A-TEC's ability to effect repayment.  The financing of
these expenses has been agreed between A-TEC and the Main
Shareholder, whereupon the repayment shall be subordinated and
free of interests and performed by Dec.31, 2013, provided
acquisitions have been made until Dec. 31, 2013, otherwise at a
later date following acquisitions.  Additional holding expenses
have not accrued until now and are not planned. Both board of
directors and supervisory board are presently acting free of
charge, until further notice.

Once A-TEC has recommenced its regular business activities, the
company plans to increase personnel to a level required by an
operational industrial holding company, and to relocate the
present office premises -- located at a hotel at 1100 Vienna and
owned by the Main Shareholder -- to Vienna city center premises
suitable for an industrial holding company.  During 2013 the
company should be provided with new funding, both from its core
shareholders, and, if applicable and feasible, by share capital
increase via public offering in the year 2013.

The Austrian Financial Market Authority announced on Feb.1, 2013,
that it mandated the Vienna Stock Exchange AG to examine reasons
for a possible delisting of A-TEC's financial instruments from
the Official Market, based on reasons which already have been
reported in the public media.

Finally, A-TEC announces that, following suggestion of several
shareholders, an informative meeting solely for A-TEC's
shareholders, will take place to discuss the future of the
company and possible business activities, on Feb. 15, 2013,
9:00-11:00 a.m., at 1100 Vienna Kurbadstrasse 8, Airo Tower
Hotel.

A-Tec Industries AG is an Austrian engineering company.



===========
C Y P R U S
===========


* CYPRUS: Germany Won't Block Bailout if Conditions Are Meet
------------------------------------------------------------
Rainer Buergin and Tony Czuczka at Bloomberg News report that
German Deputy Finance Minister Steffen Kampeter said Germany
won't stand in the way of aid for Cyprus so long as the
Mediterranean nation fulfills the criteria to qualify for help
from Europe's bailout fund.

According to Bloomberg, Mr. Kampeter said in an interview in
Berlin that outstanding questions still need to be addressed
including Cyprus's systemic relevance to the euro area, the
future size of the country's banking industry, tax policy and how
the Cypriot authorities deal with money "which perhaps isn't
legally sent in" to the island.

Mr. Kampeter, as cited by Bloomberg, said on Tuesday, "If the
answers are given in a proper way and are impressing our
parliament, I don't see any objections" to a program for Cyprus
in the lower house.

Members of Chancellor Angela Merkel' Christian Democratic Union
as well as the main opposition Social Democrats have questioned
the need to help Cyprus, which represents about 0.15% of euro-
area gross domestic product, Bloomberg discloses.  European
Central Bank Executive Board member Joerg Asmussen said Jan. 27
that governments have to realize Cyprus has the potential to
cause damage beyond the size of its economy, Bloomberg recounts.

Bloomberg notes that Mr. Kampeter said Ms. Merkel's coalition and
the opposition have a "common understanding" that Cyprus still
has to provide information to satisfy the conditions for any
bailout.

"I don't see anybody in the German parliament who has given a
final 'no' to the Cyprus call for a program," Bloomberg quotes
Mr. Kampeter as saying.  "What I see in the German parliament is
that we want to have delivered additional information, additional
decisions, for example on privatization, by the authorities."



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


ATARI SA: CEO's Group & Alden Global Buy Out BlueBay Funds
----------------------------------------------------------
Paris, France-based Atari SA has been informed by its main
shareholder and sole lender, The BlueBay Value Recovery (Master)
Fund Limited, and The BlueBay Multi-Strategy (Master) Fund
Limited -- which together hold c. 29% of the shares and voting
rights in the Company on a non-diluted basis and c. 63% on a
fully diluted basis -- that BlueBay has agreed to enter into a
binding agreement for the acquisition of all of BlueBay's
interests in the Atari group presented by Ker Ventures LLC, a
holding company ultimately controlled by Mr. Frederic Chesnais, a
long-time videogame professional and former CEO of Atari
Interactive, Inc., and Alden Global Capital on behalf of Alden
Global Value Recovery Master Fund, L.P.

With the filing for Chapter 11 of its US operations on Jan. 21,
2013, and the filing for bankruptcy (liquidation judiciaire avec
poursuite d'activite) of Eden Games SARL, its French subsidiary,
on Jan. 29, 2013, Atari said it sees an opportunity to protect
its business and welcomes the Offer.

                     Ker Ventures Transaction

Ker Ventures, or any affiliates, will acquire from BlueBay
7,451,122 ordinary Atari shares and 291,600 New ORANEs 2009
(giving access to 5,528,736 ordinary Atari shares).  At closing,
Ker Ventures will hold 7,451,122 ordinary Atari shares
representing 25.23% of Atari's share capital and voting rights on
a non-diluted basis, and potentially, with the New ORANEs 2009,
18.96% on a fully diluted basis.

The aggregate consideration to be paid by Ker Ventures for such
securities is EUR400.

Ker Ventures also agreed, following completion of the
transaction, to postpone the payment of any interest payable
under the 291,600 New ORANEs 2009 to be purchased from BlueBay
until the earlier of September 30, 2013 and a period expiring 30
days after the expiry of the US Proceeding.

Given the urgency of the situation, Ker Ventures agreed to grant
a EUR250,000 short term cash financing to Atari SA, without
waiting for the completion of the transaction.

                      Alden Fund Transaction

The Alden Fund will acquire:

      (i) the Senior Loan of c. EUR21 million and the related
          security package, pursuant to a transfer of the credit
          facility agreement entered into between The BlueBay
          Value Recovery (Master) Fund Limited, Atari Europe SAS
          and the Company.  To financially express Ker Ventures'
          commitment to the recovery of the Atari Group, Ker
          Ventures also committed to provide a minority
          investment for the purchase of the Credit Facility and
          the related security package, in exchange for a
          minority beneficial interest in such Credit Facility.

     (ii) the remaining mandatory convertible debt instruments
          held by BlueBay, being 342,095 ORANEs 2009 (giving
          access to 10,019,963 ordinary Atari shares), 152,636
          ORANEs 2010 (giving access to 4,028,064 shares), and
          795,023 New ORANEs 2009 (giving access to 15,073,636
          ordinary Atari shares), as well as a residual direct
          equity stake in Atari (the remaining 1,165,176 ordinary
          Atari shares held by BlueBay), representing 3.95% of
          Atari's share capital and voting rights on a non-
          diluted basis, and potentially, with the ORANEs 2009,
          New ORANEs 2009 and ORANEs 2010, 44.2% on a fully
          diluted basis.

                      Alden Replaces DIP Lender

In the context of the Chapter 11 proceedings opened in the United
States, the Alden Fund has made available to the Atari group's US
subsidiaries -- Atari Inc., Atari Interactive Inc., California US
Holding, Inc. and Humongous, Inc. -- a debtor in possession cash
financing of USD5 million in favorable terms given such
subsidiaries' financial situation, which replaced the DIP
financing previously made available by another lender to the
Atari group's US subsidiaries as announced on Jan. 21, 2013.

The US Bankruptcy court approved this financing in a signed order
dated Jan. 25, 2013.  As part of the DIP cash financing, the
Alden Fund made an initial USD2 million loan to the Atari group's
US subsidiaries.  The remaining USD3 million will be available to
such subsidiaries upon the satisfaction of additional conditions,
including the entry of a final order at a court hearing to be
held on Feb. 14, 2013.

                      Loan Maturity Extended

Following completion of the transaction, the Alden Fund has
already agreed to support the Company by extending the maturity
of the Credit Facility Agreement and to forbear from requesting
interest payments at this point until July 25, 2013, which is
also the maturity date of the DIP financing.  It is believed
that, by then, the outcome of the Chapter 11 proceedings will be
known.

The Alden Fund also agreed to postpone the payment of any
interest payable under the 342,095 ORANEs 2009, the 795,023 New
ORANEs 2009, and the 152,636 ORANEs 2010 until the earlier of
September 30, 2013 and a period expiring 30 days after the expiry
of the US Proceeding.

Alden Global Capital, on behalf of the Alden Fund, indicated that
it only intends to act as a financing party in this transaction
and does not intend to participate in the board and/or the
management of the Atari group.  Furthermore, Alden Global Capital
said that, although it reserves its lender's rights to act as it
best sees fit to protect its investment, it intends to be
supportive of the actions the Company takes to maximize value
during the course of the various proceedings.  However, given
that neither the Alden Fund nor Alden Global Capital has any
control over the bankruptcy proceeding, there is no guarantee as
to the Company's future prospects.

The execution of the final binding documentation for the purposes
of this transaction took place Feb. 5, 2013, and the closing of
the transfer of the BlueBay's interests is expected to take place
within a few days after.

There is no shareholders agreement nor voting undertaking between
Ker Ventures and the Alden Fund, which have declared not to be
acting in concert vis-a-vis Atari and their respective
investments described above.  Each of Ker Ventures and the Alden
Fund will remain fully free to determine how to vote in the
shareholders meeting of the Company, as well as how and when to
dispose of its interests in the Company.

The completion of the transaction contemplated in the Offer will
not trigger any obligation on Ker Ventures and/or on the Alden
Fund to file a mandatory public offer pursuant to applicable laws
and regulations.

The Board of the Company met Friday, Feb. 1, 2013, to review the
developments, and approve these proposals and this course of
action (during which The BlueBay Value Recovery (Master) Fund
Limited, being a director of the Company, was excused from
participating in such deliberations and approval in accordance
with the Board's procedures for the management of conflicts of
interest).  It took note of the terms and conditions of the Offer
and of Ker Ventures' intention to provide its expertise to
support the development of the Atari group.  Accordingly, the
Board approved and welcomed the proposed acquisition of BlueBay's
interests in Atari by Ker Ventures and the Alden Fund, as well as
the favorable DIP financing made available by the Alden Fund in
the US bankruptcy proceedings.

                           Board Shuffle

The Board also took note of the resignation of The BlueBay Value
Recovery (Master) Fund Limited, represented by Mr. Gene Davis,
from its position as director and thanked BlueBay for the support
provided to the Company during BlueBay's period of investment.
Mr. Jim Wilson, who was named CEO of Atari SA following BlueBay's
announcement of its intention to sell its shares in 2010, has
presented his resignation as CEO and director of Atari SA.
Mr. Wilson will continue in his role as CEO of Atari, Inc., a
position that he has also held since 2008, in order to focus his
activity on the Chapter 11 proceedings in the US and running the
day-to-day business.  The Board thanks Mr. Wilson for his role in
identifying an investor to replace BlueBay over the last two
years, the transformation of the business to digital and mobile
games and licensing, two years of positive current operating
income as at March 31, 2012 and staying at the helm of the
Company during the most recent challenging times.

The Board resolved to appoint by cooptation Mr. Frederic Chesnais
and Mr. Erik Euvrard (independent member) as new directors of the
Company.  The Board also resolved to appoint Mr. Frederic
Chesnais to the position of CEO of Atari SA.  Mr. Frederic
Chesnais has accepted this position for a nominal compensation of
EUR 1,000 monthly payable at the termination of the US bankruptcy
procedure.

Upon closing of the transaction which results in Ker Ventures
holding 25.23% of the Company's share capital, the Board has
resolved to elect Mr. Chesnais as Chairman.  Following this
appointment and the closing of the transaction, the Board shall
be composed Frederic Chesnais (Chairman and CEO), Frank E.
Dangeard (independent director, Chair of the Audit committee),
Erik Euvrard (independent director), Alexandra Fichelson and Tom
Virden (independent director, Chair of the Nomination and
Remuneration Committee).

Going forward, the Board and the management will review the
situation of the Atari group in more detail, assess and seek to
obtain the financing needed for ongoing operations and work
closely with the Atari group's US subsidiaries in reviewing the
options available to them under the pending Chapter 11
proceedings. The management will keep the markets regularly
informed of the changes in the Company's situation and of major
decisions taken.

Since most of the employees and valuable assets are located in
the United States, the outcome of the US bankruptcy procedure
will be of particular importance to the Company.  Management
expects to have a better appreciation of the outcome of this
proceeding within the next 6 months and before the maturity date
of the DIP financing on July 25, 2013.

             Safeguard Proceedings in France Withdrawn

On the basis of the extension of the maturity of the Credit
Facility, and the waiver of any events of default resulting from
the opening of the US Chapter 11 proceedings, Atari SA and Atari
Europe SAS have decided to withdraw their requests for the
opening of a safeguard in France.

Given the short timing of these events, in light of the limited
resources available, the Company was unable to continue to
support its French subsidiary, Eden Games SARL.  The Board took
note that the manager (gerant) of Eden Games SARL filed for
receivership and the Commercial Court of Lyon initiated a
bankruptcy on Jan. 29, 2013 (liquidation judiciaire avec
poursuite d'activite).  In France, Atari SA has now 4 employees
and Eden Games, 19 employees.  Despite these developments, the
Company remains in a difficult position. No assurances can be
made at this point regarding any potential recoveries to the
existing shareholders.

"Despite the entry of new shareholders and financial support, the
Company finds itself in a delicate and complex situation.  But
when I heard about the news, I did not hesitate a second,"
indicated Frederic Chesnais.  "I made this move because I love
the team, I know about games, I love the brand and in the past we
have all spent nights and days to make it shine. We will work as
hard as we can to review each option available and seek to
obtain, going forward, the financing needed for Atari S.A. and
for the Atari Group in the current circumstances. I am just given
a few weeks to put the Company back on track and I have to give
it a try."

The Company intends to resume the flotation of all Company's
listed securities after the publication of its revenues for the
quarter ended Dec. 31, 2012 and after the first hearings of the
US proceedings, which will be decisive for the perspective of the
group, in order to previously provide the shareholders with the
most accurate information.  The resumption of the flotation may
take place within a 4 to 6-week period, with a 48-hour prior
announcement.

             About Ker Ventures and Frederic Chesnais

Ker Ventures is an affiliate of Ker Ventures, LLC, a limited
liability company organized under the laws of the State of
Delaware, ultimately controlled by Frederic Chesnais.  Frederic
Chesnais has a very long background in the videogame industry. He
was the Chief Executive Officer of Atari Interactive, as well as
the Chief Financial Officer and Deputy-Operating Officer for the
Atari Group. In that capacity, he has participated in the
creation and launch of many games.

The strategy of Ker Ventures, his personal holding, is to
facilitate the creation and promotion of any form of interactive
entertainment.  Through Ker Ventures, Frederic Chesnais has been
the primary investor and executive producer of many entertainment
projects.

Atari's Investor relations may be reached at:

          Calyptus - Marie Ein
          Tel + 33 1 53 65 68 68
          e-mail: atari@calyptus.net

Atari's Media relations may be reached at:

          FTI - Guillaume Granier / Nicolas Jehly
          Tel: + 33 1 47 03 68 10
          E-mail: guillaume.granier@fticonsulting.com
                  nicolas.jehly@fticonsulting.com

                           About Atari

Atari -- http://www.atari.com-- is a multi-platform, global
interactive entertainment and licensing company.  Atari owns
and/or manages a portfolio of more than 200 games and franchises,
including world renowned brands like Asteroids(R), Centipede(R),
Missile Command(R), Pong(R), Test Drive(R), Backyard Sports(R),
and Rollercoaster Tycoon(R).

Atari Inc. and its U.S. affiliates filed for Chapter 11
bankruptcy (Bankr. S.D.N.Y. Lead Case No. 13-10176) on Jan. 21,
2013, to break away from their unprofitable French parent company
and secure independent capital.

Peter S. Partee, Sr. and Michael P. Richman of Hunton & Williams
LLP are proposed to serve as lead counsel for the U.S. companies
in their respective Chapter 11 cases.  BMC Group is the claims
and notice agent.  Protiviti Inc. is the financial advisor.

Attorneys for (i) Alden Global Distressed Opportunities Master
Fund, L.P., (ii) Alden Global Value Recovery Master Fund, L.P.,
and (iii) Turnpike Limited, are:

          Robert G. Burns, Esq.
          Andrew J. Schoulder, Esq.
          Kurt A. Mayr II, Esq.
          BRACEWELL & GIULIANI LLP
          1251 Avenue of the Americas, 49th Fl.
          Telephone:(212) 508-6100
          E-mail: Robert.Burns@bgllp.com
                  Andrew.Schoulder@bgllp.com
                  Kurt.Mayr@bgllp.com


BELVEDERE SA: Bruce Willis to Vote in Favor of Restructuring
------------------------------------------------------------
Andy Morton at just-drinks.com, citing French newspaper Le
Figaro, reports that actor Bruce Willis, a shareholder in
Belvedere, is to vote in favor of the company's restructuring at
a shareholders meeting next week.

According to just-drinks.com, Mr. Willis, who owns a 3% stake in
Belvedere, as cited by Le Figaro, said that restructuring will
save jobs and is the only option that makes sense.

Le Figaro said that shareholders including Mr. Willis, who
received his stake in return for promoting the company's Sobieski
vodka brand, will vote on Feb. 12 on restructuring plans set out
by Belvedere's administrators, just-drinks.com relates.

The company has been in bankruptcy protection for four years and
last year agreed to repay creditors through asset sales and stake
transfers, just-drinks.com discloses.  In November, a senior
executive at Belvedere confirmed to just-drinks.com that the
company's receivers had received several offers for some
Belvedere assets.

Belvedere is struggling with debts, which are thought to total in
the region of EUR400 million (US$518.6 million), just-drinks.com
notes.

Belvedere SA -- http://www.belvedere.fr/-- is a France-based
company engaged in the production and distribution of beverages.
The Company's range of products includes vodka and spirits,
wines, and other beverages, under such brands as Sobieski,
William Peel, Marie Brizard, Danzka and others.  Belvedere SA
operates through its subsidiaries, including Belvedere Czeska,
Belvedere Scandinavia, Belvedere Baltic, Belvedere Capital
Management, Sobieski SARL and Sobieski USA, among others.  It is
present in a number of countries, such as Poland, Lithuania,
Bulgaria, Denmark, France, Spain, Russia, Ukraine, the United
States and others.  In addition, the Company holds a minority
stake in Abbaye de Talloires, involved in the hotel and wellness
center.


LABCO SA: Fitch Affirms 'B+' Long-Term Issuer Default Rating
------------------------------------------------------------
Fitch Ratings has affirmed France-based clinical laboratory
services company Labco SA's Long-term Issuer Default Rating (IDR)
at 'B+'. The Outlook is Stable. Fitch has also affirmed the
senior secured notes at 'BB-' with a Recovery Rating of 'RR3' and
the super senior revolving credit facility rating at 'BB' with a
Recovery Rating of 'RR2'.

Key Drivers

Market-Leading Positions: Labco is the largest medical
diagnostics company in France and Iberia. It is also the second-
largest diagnostic company, with a pan-European presence, in
Western Europe. Labco continues to benefit from this geographical
diversity through reduced reliance on single healthcare systems.

Stable End-Markets: Healthcare markets are underpinned by
favorable demographics and socioeconomic factors. While these
drivers vary from country to country the overall trend is
positive.

Low Organic Growth: Despite favorable demographics, Fitch expects
price reductions by the ultimate payer of the tests, such as
governments and insurance companies, to hold back growth. Price
reductions are expected at average yearly rates of between -1%
and -3% due to cost containment measures, particularly in
countries where the regulator is the payer. In our view future
growth will mainly be achieved through acquisitions, rather than
organically

Weak Debt Protection Measures: End-2012 (pro forma for
acquisitions ) funds from operations (FFO) net adjusted leverage
and FFO interest cover will likely still be weak for the rating
level, at 6.0x and 1.9x, respectively based on Fitch projections.

Slow Deleveraging Expected: Despite a slowdown in Labco's
acquisition pace in 2012, credit metrics are expected to have
improved slightly, helped by recent acquisitions leading to
EBITDA margin improvements over time, and a EUR25m rights issue
completed in March 2012.

Weak Free Cash Flow: Labco's business model is capable of
delivering solid cash flow generation given low capital
expenditure combined with high EBITDA margins. However, free cash
flow is expected to be weak due to high interest expense and
relatively high corporate tax payments.

Flat Q312 Performance: Like-for-like Q312 revenue and EBITDA were
flat on prior year. Performance was held back by the revenue
decline in Portugal and Germany mitigated by growth in Belgium.
Extraction of synergies from recent acquisitions and Portuguese
restructuring actions are expected to feed through in the coming
quarters.

Labco recently announced EUR100 million tap issue under its
senior secured bond program which, in line with Fitch's
expectations, will be used to clean down the revolving credit
facility. Fitch expects Labco to use this liquidity to continue
its consolidation of the European clinical laboratory services
market in 2013 and beyond.

Fitch continues to apply a distressed EV/EBITDA multiple of 6x
when assigning bespoke recoveries to Labco. This is a slight
discount to the average EBITDA multiple at which Labco typically
acquires laboratories in need of restructuring. Recoveries on the
senior secured notes remain at the low end of Fitch's 'RR3'
range, of 51% to 70%. This provides limited headroom in the
recovery rating for additional senior secured debt. However the
likely continued draw down of the revolving credit facility for
acquisitions should increase Labco's enterprise value in the
long-term and therefore supports the 'RR3' rating.

RATING SENSITIVITY GUIDANCE

Negative: Future developments that could lead to negative rating
action include:

-FFO net adjusted leverage greater than 6.25x and FFO interest
  charge cover of less than 1.5x on a sustained basis (both on a
  pro forma basis annualizing the EBITDA of any acquisitions).

-Since Labco's ability to source, execute and extract additional
  cost savings from acquiring laboratories at attractive EBITDA
  multiples is a key factor underpinning the current rating, a
  larger acquisition not complying with these parameters could
  also lead to a negative rating action.

Positive: Future developments that could lead to positive rating
actions include:

-Continued industry leading profitability with at least mid-
  single digit free cash flow as a percentage of revenue.

-FFO net adjusted leverage below 4.5x and FFO fixed charge cover
  above 2.5x on a sustained basis


PETROPLUS HOLDINGS: Gets Five Offers for Petit-Couronne Refinery
----------------------------------------------------------------
Michel Rose at Reuters reports that France has received five
offers for the takeover of its troubled Petroplus refinery, two
of them "serious," as a deadline passed on Tuesday for potential
bidders to submit offers to legal administrators and avoid a
liquidation the government hopes to avoid.

Late on Tuesday, French Industry Minister Arnaud Montebourg
described as "serious" the offers received by Switzerland's
investor group Terrae and Egypt's energy company Arabiyya Lel
Istithmaraat, Reuters notes.

Another known firm bidder for the 161,000 barrels-per-day
refinery is NetOil, led by Middle Eastern businessman Roger
Tamraz, Reuters discloses.  He submitted an improved offer after
the commercial court in Rouen in northern France rejected an
initial bid on financial and technical grounds last year, Reuters
recounts.

Earlier on Tuesday, Mr. Montebourg said France was ready to help
in a potential takeover, Reuters relates.  Mr. Montebourg sought
to strike a deal with Libya's sovereign fund in November, but the
Libyans said they had only sent a letter of intent, Reuters
notes.

According to Reuters, the minister insisted on Tuesday that the
possibility of a Libyan involvement remained "serious".

                           Liquidation

The Petit-Couronne unions met with government advisers on Monday
to discuss offers on the table, but have warned of possible
industrial action if the plant were to be liquidated, Reuters
relates.

The Rouen court is expected to rule on the suitability of
potential bidders today, Feb. 7, at the earliest, after legal
administrators submit any firm offers to the court, Reuters
discloses.

If none appear, the court could decide to liquidate the plant,
which would lead to the loss of 500 jobs -- a scenario the
government hopes to prevent, Reuters states.

A Petit-Couronne liquidation could also be a headache for former
owner Shell, with unions saying the company should be asked to
contribute to the cost of dismantling the facility and cleaning
up the site, Reuters says.

Shell, which opened the refinery in 1929, sold it to Swiss
refiner Petroplus in April 2008, Reuters recounts.

In December, Shell ended a six-month oil processing deal with the
troubled plant and has not extended the contract, making the
refinery less attractive for buyers due to expensive re-start
costs, Reuters relates.

                        Government Help

According to Bloomberg News' Tara Patel, Mr. Montebourg said in a
radio interview that the French government could take a minority
stake in Petit-Couronne oil refinery in Normandy.

Bloomberg relates that Mr. Montebourg said, "It's a refinery that
is losing money so the investor would have do so with the state
because we are available" for a partnership.

The facility went into administration after Petroplus filed for
insolvency in January 2012, the fourth French plant to be
suspended in about two years as European refining profits
dwindled, Bloomberg recounts.

French unions have fought to keep the plant running even as the
country's oil industry lobby, Union Francaise des Industries
Petrolieres, hasn't stepped in to defend the plant, which
employs about 470 workers, Bloomberg notes.  The group represents
Total SA, Exxon Mobil Corp. and other companies that operate
plants in France, Bloomberg discloses.

"To take over a refinery of this size one needs two things, lots
of money and oil," Bloomberg quotes Mr. Montebourg as saying on
Tuesday.  "It's in the interest" of producer countries like Libya
who want European market share to have refineries close to
distribution.

The government's role would be one of a "minority" investor to
help provide the "large amount" of capital needed to make the
refinery profitable, Mr. Montebourg, as cited by Bloomberg, said.
"We would prefer to maintain our refining capacity rather than
have to rely on imports."

                         About Petroplus

Based in Zug, Switzerland, Petroplus Holdings AG is one of
Europe's largest independent oil refiners.

Petroplus was forced to file for insolvency in January 2012 after
struggling for months with weak demand due to the economic
slowdown in Europe and overcapacity amid tighter credit
conditions, high crude prices and competition from Asia and the
Middle East, MarketWatch said in a March 28 report.

According to MarketWatch, Petroplus said in March a local court
granted "ordinary composition proceedings" for a period of six
months. As part of the court process, Petroplus intends to sell
its assets to repay its creditors.

Some of Petroplus' units in countries other than Switzerland have
filed for "different types of proceedings" and are currently
controlled by court-appointed administrators or liquidators,
which started the process to sell assets, including the company's
refineries.



=============
G E R M A N Y
=============


118000 AG: Insolvency Proceedings Commence
------------------------------------------
The insolvency proceedings over the assets of 118000 AG have been
opened on February 1, 2013.

As reported by the Troubled Company Reporter-Europe on
December 3, 2012, the Management Board of 118000 AG on Nov. 29
resolved to file for insolvency with the competent insolvency
courts with regard to the assets of 118000 AG and its material
subsidiaries, especially 118000 Innovations GmbH, 118000
Telefonvermittlungs GmbH and GD GmbH.

118000 AG, formerly known as GoYellow Media AG, is a Germany-
based provider of telephone and Internet-based communication
services.  Its portals provide an advertising environment for
companies of all sizes. The Company is solely engaged in the
media portal business within Germany.


S-CORE 2008-1: S&P Lowers Ratings on Five Note Classes to 'D'
-------------------------------------------------------------
Standard & Poor's Ratings Services lowered its credit ratings on
S-CORE 2008-1 GmbH's class A1, A2, B, C, D, and E notes.

The rating actions follow S&P's review of the transaction,
including the latest available information report (dated Dec. 28,
2012), which includes the distribution of available funds on the
January 2013 payment date, as well as loan-level data from the
servicer.

On the January 2013 payment date, the class A2, B, C, D, and E
notes were subject to missed interest payments.  S&P has
therefore lowered to 'D (sf)' its ratings on the class A2, B, C,
D, and E notes.

The missed interest payment was a result of insufficient revenue
funds available to pay interest in accordance with the
transaction's interest priority of payment provisions.  On the
January 2013 payment date, 61.6% of the transaction's total
reported asset balance of EUR300.5 million consisted of principal
cash received from the November 2012 payments of the five-year
underlying bullet loans.  This resulted in the transaction's
fixed-interest income from the remaining loan balance being
insufficient, after payment of senior items (including payments
due by the issuer under its fixed-to-floating interest rate
swap), to pay scheduled interest due to the classes A2, B, C, D,
and E notes.

On the January 2013 payment date, the issuer used about 82% of
its interest income to pay amounts due under its fixed-to-
floating interest rate swap.  Under the swap, which allows for
adjustment of its notional amount, the issuer pays a 4.2% fixed
rate of interest in return for three-month EURIBOR (Euro
Interbank Offered Rate) calculated on the swap notional.  The
swap notional on the January 2013 payment date equaled about
EUR308.8 million (equivalent to the total reported outstanding
balance of the class A to F notes).  While the class A1 notes
received their full scheduled interest on the January 2013
payment date, the class A2 notes received about 46.54%, and the
class B, C, D, and E notes received no interest.  From the
information the servicer provided to S&P, the swap notional
amount has been reduced to EUR116.8 million from the January 2013
payment date, and will reduce further only if the total
outstanding note balance (currently reported at about EUR123.65
million) drops below this level.

According to the transaction documents, the issuer is required to
pay any interest shortfall on subsequent payment dates, excluding
accrued interest, using revenue funds remaining after payment of
senior items including payments due to the swap counterparty.
Revenue funds include interest earned on the assets and the
transaction's accounts, as well as recovery proceeds.  In S&P's
view, the issuer may be able to repay the interest shortfall on
the class A2 and B notes on future payment dates, assuming there
is no rise in nonperforming loans and no further decline in
interest rates.

According to S&P's analysis, excluding assets that S&P consider
as defaulted, the transaction's asset balance is currently
exceeding the principal amount outstanding of the class A1, A2,
B, C, and D notes.  This reflects the available credit
enhancement to these classes, which (according to S&P's
calculation) stands at about 54% for the class A1 notes, 24.8%
for the class A2 notes, 17.6% for the class B notes, 12.0% for
the class C notes, and at about 4.9% for the class D notes.
However, the repayment of the principal amount of the class E
notes relies on recovery proceeds and assets that S&P considers
to be defaulted.

The December 2012 report lists the transaction's asset balance at
EUR115.3 million.  However, this amount includes EUR2.096 million
of waived debt, while an additional EUR3.650 of the assets are
rated 'iCC+' and below on the originator's internal rating scale.
S&P has considered the entire balance of EUR5.746 million as
defaulted in its analysis.

The class A1 notes received their full scheduled interest on the
January 2013 payment date.  Additionally, this class has repaid
by EUR185.2 million, resulting in a reduction of its remaining
outstanding principal amount to about 13% of its initial issuance
amount.  The issuer made this paydown using the payments received
from 106 borrowers, whose underlying loans matured in November
2012.

From the December 2012 report, S&P has observed that
restructuring arrangements, including payment extensions and
revised repayment schedules, have been agreed for six loans with
an original outstanding amount of EUR4.5 million--of which EUR3
million was due for repayment in November 2012.  The
restructuring outcome for one borrower (EUR0.75 million), who did
not repay on the November 2012 due date, is still unclear.
Furthermore, the servicer, on behalf of the issuer, has granted a
total debt waiver of EUR2.096 million for four loans with a
combined original balance of EUR2.800 million.  While these
arrangements have resulted in no further principal deficiency
events being reported since S&P's previous review in March 2012,
they have resulted in a drop in the transaction's performing
asset balance.  Overall, compared with S&P's previous review, the
credit quality of the portfolio--measured by the weighted-average
portfolio rating according to Deutsche Bank AG's (the originator
and servicer) internal rating scale--has dropped by two notches
to 'iB-'.

In S&P's view, these developments, together with the swap
mechanics outlined above, pose an increased risk that the class
A1 notes may suffer an interest shortfall from insufficient
revenue funds--particularly in a declining interest rate
environment.  S&P has therefore lowered its rating on the class
A1 notes to 'BBB- (sf)' from 'AA (sf)'.

S-CORE 2008-1 is a cash securitization of senior unsecured
payment claims of the issuer against German small and midsize
enterprises under certain corporate promissory notes
(Schuldscheindarlehen) originated and serviced by Deutsche Bank.

         STANDARD & POOR'S 17G-7 DISCLOSURE REPORT

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

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

            http://standardandpoorsdisclosure-17g7.com

RATINGS LIST

Class               Rating
            To                From

S-CORE 2008-1 GmbH
EUR460 Million Asset-Backed Floating-Rate Notes and Floating-Rate
Notes

Ratings Lowered

A1          BBB- (sf)         AA (sf)
A2          D (sf)            A (sf)
B           D (sf)            BBB- (sf)
C           D (sf)            BB (sf)
D           D (sf)            B (sf)
E           D (sf)            CCC (sf)



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


* GREECE: Cuts & Debt Relief Reduce Fiscal Deficit, Fitch Says
--------------------------------------------------------------
Fitch Ratings said that Greece has hit its fiscal target for 2012
and posted a minor primary surplus despite economic
underperformance. The deficit reduction was achieved by a
combination of larger than expected cuts in primary government
expenditure and private and official sector debt relief.

Continued progress in reducing the fiscal deficit, coupled with
comparable developments in the current account balance, indicate
that the Greek economy is rebalancing. However, implementation of
deeper structural reforms, including completion of financial
sector restructuring and privatization, will be necessary to
restore the Greek economy to a sustainable growth path. Fitch
Ratings forecasts a further contraction of 4% in GDP this year.

Greece, which had the highest peak deficit of any eurozone
country, has done the most to balance its books. However, it
still has a long way to go before debt starts to fall and it
complies with the EU fiscal compact. Public debt sustainability
remains extremely fragile, notwithstanding the provision of
further official sector debt relief late last year, including
further rate cuts and a debt buy-back.

Provisional data, on a cash basis, indicate that Greece's general
government deficit narrowed from 9.4% of GDP in 2011 to 6.6% of
GDP in 2012. A minor primary surplus of 0.2% of GDP outperformed
IMF projections of a 1.5% of GDP deficit, even as revenues
declined by a further 3.6%. While the government succeeded in
reducing primary expenditure by almost 8%, this outturn owed much
to sharp cutbacks in planned investment and a lack of funding.
Arrears remained high at EUR8 billion (4% of GDP) at end-2012.

The combination of private sector and official sector debt relief
reduced interest payment by more than EUR5 billion in 2012,
helping to keep a lid on general government expenditure. However,
the continued decline in nominal GDP, which contracted by more
than 6% in 2012, meant that interest payments remained over 6% of
GDP on a cash basis. Greece should reap further benefits from
lower debt service in 2013 as the impact of additional official
debt relief agreed in late 2012 starts to feed through. Even so,
we expect the overall stock of general government debt to remain
high, peaking at around 179% in the near term, before falling to
some 124% by 2020.

The revised EU-IMF program agreed at end-2012 acknowledged the
need for a more manageable fiscal consolidation path and reset
Greece's fiscal targets with a primary surplus of 4.5% of GDP now
targeted for 2016 as opposed to 2014 previously.



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


16 UNO FINANCE: Fitch Upgrades Rating on Class C Notes to 'BB+'
---------------------------------------------------------------
Fitch Ratings has upgraded 16 Uno Finance S.r.l. and affirmed
Compagnia Finanziaria 1 S.r.l. Series 2007-1, as follows:

16 Uno Finance:

  EUR23.5m Class B notes: upgraded to 'A+sf' from 'BBB-sf';
  Outlook Stable

  EUR23.3m Class C notes: upgraded to 'BB+sf' from 'BB-sf';
  Outlook Stable

Compagnia Finanziaria 1 2007-1:

  EUR35.0m Class B notes: affirmed at 'A-sf'; Outlook Stable

  EUR47.5m Class C notes: affirmed at 'BB+sf'; Outlook Stable

The upgrade of 16 Uno Finance's notes incorporates the cash
injection into the structure from the originators as well as the
available cash, which almost fully collateralizes the class B
notes, credited to the issuer's accounts at BNP Paribas
('A+'/Stable/'F1+'), creating credit dependency on this
counterparty for the class B notes. The affirmation of Compagnia
Finanziaria 2007-1 reflects the portfolio's stabilized
performance since the last review in February 2012 as well as the
significant credit enhancement available to the outstanding rated
notes.

Both portfolios have been rapidly amortizing allowing the class A
notes in both deals to be repaid in full over the past year. The
delinquencies and default trend has not deviated from the
agency's updated expectations.

On the June 2012 interest payment date (IPD), the originators
injected EUR18.8 million into 16 Uno Finance's cash reserve
account. Available cash was immediately depleted to reduce the
outstanding unpaid PDL, which amounted to EUR18.3 million (about
33% of the unrated notes balance) as of the December 2012 IPD.

As a consequence of the increased prepayments, since June 16,
2012, Uno Finance's portfolio has been amortizing faster than the
amortization schedule defined in 2010 through a documentation
amendment. Accordingly, any excess of principal collections over
the amounts needed to meet the contractual amortization plan and
avoid breaching the lower band of the swap is trapped into the
issuer's accounts and released over the next payment dates. As of
December 2012, EUR21.8 million of principal collections was
trapped. According to the amortization schedule, Fitch expects
the class B notes to be repaid in full in the June 2013 IPD while
the class C notes in the September 2014 IPD.

Compagnia Finanziaria 2007-1's cash reserve has been fully
depleted since April 2010 with the structure unable to generate
enough excess spread to bring the outstanding PDL to zero (EUR
28.7m or 29.6% of the unrated notes balance as of October 2012)
and replenish the cash reserve.

From a servicing continuity perspective, Fitch is continuing to
monitor the situation regarding the transactions' servicers,
Carifin Italia S.p.A. (Carifin, not rated) and Plusvalore S.p.A.
(Plusvalore, not rated), which were placed under voluntary
winding-up by their controlling group, Gruppo Delta S.p.A.
(Delta, not rated). According to the restructuring plan of the
Delta group, both servicers will be replaced by a newco in their
current obligations under transactions' documents. Fitch has been
informed that the replacement will occur at end-February 2013.

In the agency's view, existing mitigants to payment interruption
risk are commensurate with the ratings of the notes, and include:
(i) a hot back-up servicer (UniCredit Credit Management Bank SpA,
rated 'RSS1-'/'CSS1-'); (ii) waterfalls that, despite being
separate, allow for principal collections (including the EUR21.8
million set aside for 16 Uno Finance) to be used to cover for
interest shortfalls; and (iii) the newco having already carried
out the necessary due diligence to step-in as servicer.

Compagnia Finanziaria 2007-1 and 16 Uno Finance are the second
and third securitization of consumer and personal loans
receivables originated in Italy by Carifin and Plusvalore,
following Compagnia Finanziaria 1 S.r.l. which was paid in full
on December 9, 2009.


BANCA MONTE: Set to Unveil Derivative Losses Amid Criminal Probes
-----------------------------------------------------------------
Elisa Martinuzzi and Sonia Sirletti at Bloomberg News report that
Banca Monte dei Paschi di Siena SpA, engulfed by criminal probes
into the conduct of its former management, was expected to
disclose as early as Tuesday, Feb. 5, the size of losses the bank
hid in 2008 and 2009 using derivatives.

Monte Paschi, the subject of investigations spanning from
allegations of market manipulation to false bookkeeping, will
probably restate earnings because of losses obscured by the
structured deals dubbed Santorini, Alexandria and Nota Italia,
Bloomberg says.  The bank's board was set to meet in Siena on
Feb. 5 to discuss the impact on its balance sheet, Bloomberg
discloses.

Chief Executive Officer Fabrizio Viola and Chairman Alessandro
Profumo are trying to reassure investors that Italy's third-
largest bank will succeed with a turnaround plan that is central
to a EUR3.9 billion (US$5.3 billion) taxpayer bailout due this
month, Bloomberg relates.  Monte Paschi is seeking state funds to
boost capital after failing to meet European regulators' minimum
requirements in a rescue that some lawmakers and consumer groups
oppose, Bloomberg notes.

"This is the occasion to clean up the balance sheet, even if I
don't think management will come down heavily on provisioning,
which might scare investors," Bloomberg quotes Jacopo Ceccatelli,
a partner at JC & Associati SIM, a Milan-based financial advisory
firm, as saying.  "I expect losses of around 700 million euros,
in line with market expectations.  Still, we're a long way from a
turnaround and regaining market confidence."

The lender increased a bailout request by EUR500 million to
EUR3.9 billion in November to cover losses from derivatives
arranged by the previous management, Bloomberg recounts.

Monte Paschi borrowed about EUR1.5 billion from Deutsche Bank AG
in December 2008 as part of Project Santorini, a derivatives deal
that helped it disguise a EUR367 million loss, Bloomberg
discloses.  The bank has said it will conduct a "thorough" review
of several such arrangements to determine their effect on the
previous years' accounts as well as any future impact, Bloomberg
relates.

Banca Monte dei Paschi di Siena SpA -- http://www.mps.it/-- is
an Italy-based company engaged in the banking sector.  It
provides traditional banking services, asset management and
private banking, including life insurance, pension funds and
investment trusts.  In addition, it offers investment banking,
including project finance, merchant banking and financial
advisory services.  The Company comprises more than 3,000
branches, and a structure of channels of distribution.  Banca
Monte dei Paschi di Siena Group has subsidiaries located
throughout Italy, Europe, America, Asia and North Africa.  It has
numerous subsidiaries, including Mps Sim SpA, MPS Capital
Services Banca per le Imprese SpA, MPS Banca Personale SpA, Banca
Toscana SpA, Monte Paschi Ireland Ltd. and Banca MP Belgio SpA.


EUROHOME MORTGAGES: S&P Lowers Rating on Class C Notes to 'D'
-------------------------------------------------------------
Standard & Poor's Ratings Services lowered to 'B+ (sf)' from 'BB
(sf)' and placed on CreditWatch negative its credit rating on
Eurohome (Italy) Mortgages S.r.l.'s class B notes.  At the same
time, S&P has lowered to 'D (sf) from 'CC (sf)' its rating on the
class C notes, and have affirmed its 'AA- (sf)' and 'D (sf)'
ratings on the class A and D notes, respectively.

The rating actions follow S&P's review of the transaction, which
shows that the performance of the underlying collateral has
significantly deteriorated over the November 2012 and February
2013 interest payment dates (IPDs).

Between the August 2012 and the February 2013 IPDs, total arrears
decreased to 24.38% from 25.60%.  However, the level of new
defaults on the pool's performing balance has substantially
increased:  New defaults totaled 1.44% as of the November 2012
IPD, and 1.24% as of the February 2013 IPD, compared with an
average of 0.68% recorded over the previous four IPDs (November
2011 to August 2012).

The transaction has an interest-deferral mechanism based on the
cumulative defaults on the class B, C, D, and E notes.  This
mechanism provides additional protection to the class A notes.
If an interest-deferral trigger is breached, the interest on that
class of notes is deferred after the principal deficiency ledger
(PDL) is cleared and the principal borrowed under the principal
priority of payments is repaid.

The level of cumulative defaults in the pool has also increased
significantly, reflecting the deterioration in the transaction's
performance.  The level of cumulative defaults increased to
20.71% from 19.46% between the November 2012 and February 2013
IPDs.

Because of the increase in the level of cumulative defaults, the
transaction has breached the 19.50% interest-deferral trigger for
the class C notes.  As a result, the class C notes experienced an
interest shortfall on the February 2013 IPD.  S&P has therefore
lowered to 'D (sf)' from 'CC (sf)' its rating on the class C
notes.

S&P consider it increasingly likely that the level of cumulative
defaults could reach or exceed the 23.75% interest-deferral
trigger for the class B notes.  S&P has therefore lowered to 'B+
(sf)' from 'BB (sf)' and placed on CreditWatch negative its
rating on the class B notes.

The high level of overall defaults has led to considerable PDL
balances, in S&P's opinion.  In February 2013, the aggregate PDL
balance increased by EUR3,227,088 to EUR33,800,721.  The PDLs for
the class C, D, and E notes have reached the levels of the
nominal outstanding amount of the notes, and EUR4,886,196 was
allocated to the class B notes' PDL in February 2013.

S&P has affirmed its 'D (sf)' rating on the class D notes because
the notes has experienced interest shortfalls since the May 2011
IPD.  At the same time, S&P has affirmed its 'AA- (sf)' rating on
the class A notes as it consider the credit enhancement available
to this class to be commensurate with the currently assigned
rating.

Eurohome (Italy) Mortgages is an Italian residential mortgage-
backed securities (RMBS) transaction with loans originated by
Deutsche Bank Mutui SpA.  The transaction closed in December
2007.

            STANDARD & POOR'S 17G-7 DISCLOSURE REPORT

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

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

            http://standardandpoorsdisclosure-17g7.com

RATINGS LIST

Eurohome (Italy) Mortgages S.r.l.

EUR260.85 Million Mortgage-Backed Floating-Rate Notes

Class     Rating                  Rating
          To                      From

Rating Lowered and Placed On CreditWatch Negative

B         B+ (sf)/Watch Neg       BB (sf)

Rating Lowered

C         D (sf)                  CC (sf)

Ratings Affirmed

A         AA- (sf)
D         D (sf)


PATAGONIA FINANCE: Moody's Reviews Caa2-Rated Notes for Downgrade
-----------------------------------------------------------------
Moody's Investors Service has placed under review for downgrade
the rating of the following notes issued by Patagonia Finance
S.A.:

Issuer: Patagonia finance S.A. Restructuring

   EUR324.730M Senior Zero coupon Notes, Caa2 Placed Under Review
   for Possible Downgrade; previously on Oct 23, 2012 Downgraded
   to Caa2

This transaction represents a repackaging of Banca Monte dei
Paschi di Siena S.p.A subordinate bonds, where the fixed coupon
is reinvested to match the accretion of the zero coupon notes.

Ratings Rationale

Moody's explained that the rating action is the result of the
Caa2 rating action on the subordinate rating of Banca Monte dei
Paschi di Siena S.p.A being placed under review for possible
downgrade on January 30, 2013.

This rating is essentially a pass-through of the rating of the
underlying securities. Noteholders are exposed to the credit risk
of Banca Monte dei Paschi di Siena S.p.A and therefore the rating
moves in lock-step.

Moody's expects to conclude this review when the review of Banca
Monte dei Paschi di Siena S.p.A. is completed.

Moody's notes that this transaction is subject to a high level of
macroeconomic uncertainty, which could negatively impact the
ratings of the notes, as evidenced by 1) uncertainties of credit
conditions in the general economy especially as the transaction
is exposed to an obligor located in Italy and 2) more
specifically, any uncertainty associated with the underlying
credits in the transaction could have a direct impact on the
repackaged transaction.

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

No cash flow analysis, sensitivity or stress scenarios have been
conducted as the rating was directly derived from the rating of
the underlying securities.


SEAT PAGINE: Plan to Seek Creditor Protection Hits Bond Value
-------------------------------------------------------------
Tom Freke at Bloomberg News reports that Seat Pagine Gialle SpA's
bonds plunged to a record low on Feb. 5 after the company said it
can't pay debt coming due this year and sought protection from
its creditors.

Seat Pagine's EUR550 million (US$746 million) of 10.5% senior
bonds due January 2017 and redeemable by the company next year
fell 9.5 cents, or 29%, to 23.5 cents as of 12:22 p.m. in London
on Tuesday, Feb. 5, according to Bloomberg generic prices.  The
notes have lost more than 60% of their value in the past three
weeks, Bloomberg discloses.

Seat Pagine restructured its debt in September, swapping EUR1.3
billion of junior-ranking bonds into shares and refinancing 686
million euros of loans, Bloomberg recounts.

                         About SEAT Pagine

SEAT Pagine Gialle SpA (PG IM) -- http://www.seat.it/-- is an
Italy-based company that operates multimedia platform for
assisting in the development of business contacts between users
and advertisers.  It is active in the sector of multimedia
profiled advertising, offering print-voice-online directories,
products for the Internet and for satellite and ortophotometric
navigation, and communication services such as one-to-one
marketing.  Its products include EuroPages, PgineBianche,
Tuttocitta and EuroCompass, among others.  Its activity is
divided into four divisions: Directories Italia, operating
through, Seat Pagine Gialle; Directories UK, through TDL
Infomedia Ltd. and its subsidiary Thomson Directories Ltd.;
Directory Assistance, through Telegate AG, Telegate Italia Srl,
11881 Nueva Informacion Telefonica SAU, Telegate 118 000 Sarl,
Telegate Media AG and Prontoseat Srl, and Other Activitites
division, through Consodata SpA, Cipi SpA, Europages SA, Wer
liefert was GmbH and Katalog Yayin ve Tanitim Hizmetleri AS.

                          *     *     *

As reported by the Troubled Company Reporter-Europe on
February 4, 2013, Standard & Poor's Ratings Services said that it
lowered to 'SD' (selective default) from 'CC' its long-term
corporate credit rating on Italy-based classified directories
publisher SEAT PagineGialle SpA (SEAT).

At the same time, S&P lowered to 'D' (default) from 'CC' its
issue rating on SEAT's EUR750 million senior secured notes and
EUR65 million new senior secured notes, both due in 2017.  The
recovery ratings on these instruments remain unchanged at '3',
indicating S&P's expectation of meaningful (50%-70%) recovery.

In addition, S&P affirmed its 'CC' issue rating on SEAT's
EUR686 million new senior secured facilities (including a new
EUR90 million revolving credit facility).  The recovery rating on
the senior secured facilities remains unchanged at '3',
indicating S&P's expectation of meaningful (50%-70%) recovery in
the case of a default.

The downgrade follows SEAT's nonpayment of the EUR42.3 million of
interest on its 2017 senior secured bonds.  The payment was due
on Jan. 31, 2013.

As reported by the Troubled Company Reporter-Europe on
February 1, 2013, Moody's Investors Service downgraded Seat
Pagine Gialle SpA's CFR to Caa3 from Caa1, and PDR to Caa3-PD
from Caa1-PD.  Concurrently, Moody's has downgraded SEAT's EUR750
million senior secured bonds due 2017 ("the Senior Secured
Bonds") and EUR65 million senior secured stub bonds due 2017
("the Senior Secured Stub Bonds") to Caa3 from Caa1.  All ratings
are placed under review for further downgrade.

The rating action follows the company's announcement that it has
suspended payment of the interest coupon for EUR42.2 million on
the Senior Secured Bonds due on January 31, 2013.  The Board of
Directors has launched an assessment of the ongoing validity of
the assumptions underlying the recent debt restructuring
completed on September 6, 2012.  The conclusion of this
assessment will help management to determine whether the
company's current capital structure is sustainable in the medium
term.



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


STATIC FUNDING 2001-1: Moody's Affirms B1 Rating on EUR15MM Notes
-----------------------------------------------------------------
Moody's Investors Service has upgraded the ratings of the
following notes issued by Static Loan Funding 2007-1 Limited:

  EUR20M Class B Senior Secured Floating Rate Notes due 2017,
  Upgraded to Aaa (sf); previously on Oct 14, 2011 Upgraded to
  Aa2 (sf)

  EUR25M Class C Deferrable Senior Secured Floating Rate Notes
  due 2017, Upgraded to A1 (sf); previously on Oct 14, 2011
  Upgraded to A3 (sf)

  EUR17.5M Class D Deferrable Senior Secured Floating Rate Notes
  due 2017, Upgraded to Baa3 (sf); previously on Oct 14, 2011
  Upgraded to Ba1 (sf)

  Moody's affirmed the Aaa (sf) rating of the Class A notes and
  the B1 (sf) rating of the Class E notes issued by Static Loan
  Funding 2007-1 Limited .

  EUR366.257M Class A Notes (currently EUR85.48M outstanding),
  Affirmed Aaa (sf); previously on Oct 14, 2011 Upgraded to Aaa
  (sf)

  EUR15M Class E Deferrable Senior Secured Floating Rate Notes
  due 2017, Affirmed B1 (sf); previously on Oct 14, 2011 Upgraded
  to B1 (sf)

Ratings Rationale

Static Loan Funding 2007-1, issued in Jan 2008, is a static
Collateralized Loan Obligation backed by a portfolio of mostly
senior secured European loans. CELF Advisors LLP is the
liquidation agent.

According to Moody's, the rating actions taken on the notes
result primarily from the amortization of the Class A Notes,
which have been paid down by approximately 47%, or EUR 75.8
million, since the rating action in October 2011. As a result,
the overcollateralization ratios have increased since the rating
action in October 2011. As of the trustee report dated December
2012, the Class A/B, Class C, Class D, and Class E
overcollateralization ratios are reported at 168.11%, 140.88%,
126.53%, and 116.37%, respectively, versus Oct 2011 levels of
149.08%, 131.02%, 120.77%, and 113.19% respectively.

In its base case, Moody's analyzed the underlying collateral pool
to have a performing par and principal proceeds balance of EUR
220.11 million, defaulted par of NIL, a weighted average default
probability of 21.42% (consistent with a WARF of 3617), a
weighted average recovery rate upon default of 47.2% for a Aaa
liability target rating, a diversity score of 22 and a weighted
average spread of 3.15%. The default probability is derived from
the credit quality of the collateral pool and Moody's expectation
of the remaining life of the collateral pool. The average
recovery rate to be realized on future defaults is based
primarily on the seniority of the assets in the collateral pool.
For a Aaa liability target rating, Moody's assumed that 93% of
the portfolio exposed to senior secured corporate assets would
recover 50% upon default, while the remainder non first-lien loan
corporate assets would recover 10%. In each case, historical and
market performance trends and collateral manager latitude for
trading the collateral are also relevant factors. These default
and recovery properties of the collateral pool are incorporated
in cash flow model analysis where they are subject to stresses as
a function of the target rating of each CLO liability being
reviewed.

In addition to the base case analysis described above, Moody's
also performed sensitivity analyses on key parameters for the
rated notes:

(1) Deterioration of credit quality to address the refinancing
and sovereign risks -- Approximately 26% of the portfolio assets
are rated B3 and below and maturing between 2014 and 2016, which
may create challenges for issuers to refinance. Approximately 9%
of the portfolio is exposed to obligors located in Ireland, Spain
and Italy. Moody's considered a scenario where the base case WARF
was increased to be 3927 by forcing ratings on 25% of such
exposures to Ca. This scenario generated model outputs that were
within one notch from the base case results.

Moody's notes that this transaction is subject to a high level of
macroeconomic uncertainty, which could negatively impact the
ratings of the notes, as evidenced by 1) uncertainties of credit
conditions in the general economy and 2) the large concentration
of speculative-grade debt maturing between 2014 and 2016 which
may create challenges for issuers to refinance. CLO notes'
performance may also be impacted either positively or negatively
by 1) the liquidation agent's investment strategy and behavior
and 2) divergence in legal interpretation of CDO documentation by
different transactional parties due to embedded ambiguities.

Sources of additional performance uncertainties are described
below:

1) Portfolio Amortization: The main source of uncertainty in this
transaction is whether delevering from unscheduled principal
proceeds will continue and at what pace. Delevering may
accelerate due to high prepayment levels in the loan market
and/or collateral sales by the liquidation agent, which may have
significant impact on the notes' ratings.

2) Recoveries on defaulted assets: Although there are no
defaulted assets currently in the collateral pool, market value
fluctuations in defaulted assets, if any, reported in the future
by the trustee and those assumed to be defaulted by Moody's may
create volatility in the deal's overcollateralization levels.
Further, the timing of recoveries and the manager's decision to
work out versus sell future defaulted assets, if any, may create
additional uncertainties. In general, Moody's analyses defaulted
recoveries assuming the lower of the market price and the
recovery rate in order to account for potential volatility in
market prices.

The principal methodology used in this rating was "Moody's
Approach to Rating Collateralized Loan Obligations" published in
June 2011.

Moody's modeled the transaction using the Binomial Expansion
Technique, as described in Section 2.3.2.1 of the "Moody's
Approach to Rating Collateralized Loan Obligations" rating
methodology published in June 2011.

Under this methodology, Moody's used its Binomial Expansion
Technique, whereby the pool is represented by independent
identical assets, the number of which is being determined by the
diversity score of the portfolio. The default and recovery
properties of the collateral pool are incorporated in a cash flow
model where the default probabilities are subject to stresses as
a function of the target rating of each CLO liability being
reviewed. The default probability range is derived from the
credit quality of the collateral pool, and Moody's expectation of
the remaining life of the collateral pool. The average recovery
rate to be realized on future defaults is based primarily on the
seniority and jurisdiction of the assets in the collateral pool.

The cash flow model used for this transaction, whose description
can be found in the methodology listed above, is Moody's EMEA
Cash-Flow model.

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

In addition to the quantitative factors that are explicitly
modeled, qualitative factors are part of the rating committee
considerations. These qualitative factors include the structural
protections in each transaction, the recent deal performance in
the current market environment, the legal environment, specific
documentation features, the collateral manager's track record,
and the potential for selection bias in the portfolio. All
information available to rating committees, including
macroeconomic forecasts, input from other Moody's analytical
groups, market factors, and judgments regarding the nature and
severity of credit stress on the transactions, may influence the
final rating decision.

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



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


AGROWILL GROUP: Creditors' Meeting Set for February 15
------------------------------------------------------
The meeting of the creditors of the restructuring Agrowill Group
AB will take place on February 15, 2013 at 9:00 a.m.

The meeting will take place at the conference room of the Hotel
Europa City Vilnius, Jasinskio St. 14, Vilnius.

The registration of creditors begins at 8:30 a.m.

Agenda of the Meeting:

1. Approval of the project of amendments of the Restructuring
plan.

The Restructuring plan will be amended in respect that some of
the information, given in the company's restructuring plan, is
updated as well as that the company aspires to specify the
procedure for disposing the assets since the current procedures
are not flexible enough for efficient management of the assets.

The documents possessed by the Company related to the agenda of
the Meeting, including draft resolutions, will be available for
the creditors at the headquarters of Agrowill Group AB, Smolensko
St. 10, Vilnius, Lithuania or on the Company's Web site at
http://www.agrowill.ltin terms set by law.

Agrowill Group AB (Agrowill Group JSC), formerly Agrovaldymo
grupe AB, is a Lithuania-based company engaged in the agriculture
sector.  The Company produces agricultural products in Lithuania,
as well as in the European Union.  The Company's activities are
structured mainly into three divisions, namely Dairy Farming,
Crop production and Land management.



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


AEGON: Ends Unnim Partnership; Reaffirms Commitment to Spain
------------------------------------------------------------
Aegon has reached an agreement to exit its life, health and
pension joint venture with Unnim Banc and sell its 50% stake to
Unnim for a total consideration of EUR353 million.  The sale is
expected to result in a book gain of approximately EUR105 million
before tax, and to generate an average annual return of 12% on
investment.

It is anticipated that the transaction will close during the
second quarter of 2013.  Aegon's share in underlying earnings
before tax of the joint venture totaled EUR20 million in 2012.

This anticipated divestment by Aegon is a consequence of the
consolidation underway within the Spanish banking sector.  Aegon
maintains a long-term commitment to Spain and has recently
reinforced its market position with an exclusive strategic
partnership with Banco Santander to distribute life and general
insurance products through its extensive network of 4,600 bank
branches.  The long-term alliance provides access to a potential
client base of 12 million individuals across the country.

Aegon has been active in Spain for over thirty years and has
established a reputation as a preferred provider of protection
products through its network of bancassurance joint ventures.

As reported by the Troubled Company Reporter-Europe on June 16,
2011, The Financial Times related that Aegon would repay the
remaining EUR750 million (US$1.1 billion) it owes the Dutch state
from aid received in the financial crisis.  According to the FT,
including a 50% premium, the total repayment would come to
EUR1.125 billion.  Aegon received EUR3 billion in support from
the Dutch state in 2008, the FT recounted.  Including earlier
repayments and premiums, it will have ultimately repaid the
government EUR4.1 billion, the FT disclosed.

                           About AEGON

As an international life insurance, pension and asset management
company based in The Hague, AEGON has businesses in over twenty
markets in the Americas, Europe and Asia.  AEGON companies employ
approximately 26,500 people and have some 40 million customers
across the globe.


DUTCH MBS XVIII: Fitch Assigns 'B' Rating to Class E Notes
----------------------------------------------------------
Fitch Ratings has assigned Dutch MBS XVIII B.V. final ratings, as
follows:

  EUR140,000,000 floating-rate Class A1 mortgage-backed notes:
  'AAAsf'; Outlook Stable

  EUR360,000,000 floating-rate Class A2 mortgage-backed notes:
  'AAAsf'; Outlook Stable

  EUR8,000,000 floating-rate Class B mortgage-backed notes:
  'AA+sf'; Outlook Stable

  EUR7,000,000 floating-rate Class C mortgage-backed notes:
  'A+sf'; Outlook Stable

  EUR7,000,000 floating-rate Class D mortgage-backed notes:
  'BBBsf'; Outlook Stable

  EUR4,500,000 floating-rate Class E mortgage-backed notes:
  'Bsf'; Outlook Stable

  EUR2,700,000 floating-rate non-collateralized Class F notes:
  'NRsf'

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 final
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 was 5.5% at closing, 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 0.50% 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 0.50%.

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. Whilst 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 "EMEA
Residential Mortgage Loss Criteria", dated June 7, 2012, and
"EMEA RMBS Criteria Addendum - Netherlands", dated June 14, 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.


DUTCH MBS XVIII: Moody's Rates EUR4.5MM Class E Notes 'Ba2'
-----------------------------------------------------------
Moody's Investors Service assigned definitive credit ratings to
the following classes of notes issued by Dutch MBS XVIII B.V.:

  EUR140MM Class A1 Notes, Definitive Rating Assigned Aaa (sf)

  EUR360MM Class A2 Notes, Definitive Rating Assigned Aaa (sf)

  EUR8MM B Class B Notes, Definitive Rating Assigned Aa2 (sf)

  EUR7MM Class C Notes, Definitive Rating Assigned Aa3 (sf)

  EUR7MM Class D Notes, Definitive Rating Assigned A3 (sf)

  EUR4.5MM Class E Notes, Definitive Rating Assigned Ba2 (sf)

The class F notes are not rated by Moody's.

The transaction represents the securitization of Dutch prime
mortgage loans backed by residential properties located in the
Netherlands and originated or acquired by subsidiaries of NIBC
Bank N.V. (Baa3/P-3). The portfolio will be serviced by NIBC.

Ratings Rationale

The ratings of the notes take into account the credit quality of
the underlying mortgage loan pool, from which Moody's determined
the MILAN Credit Enhancement and the portfolio expected loss.

The expected portfolio loss of 0.65% of the portfolio at closing
and the MILAN required Credit Enhancement of 5.4% served as input
parameters for Moody's cash flow model, which is based on a
probabilistic lognormal distribution as described in the report
"The Lognormal Method Applied to ABS Analysis", published in
July 2000.

The key drivers for the portfolio expected loss are (i) the
performance of the seller's precedent transactions as well as the
performance on the seller's book, (ii) benchmarking with
comparable transactions in the Dutch RMBS market, and (iii) the
current economic conditions in the Netherlands in combination
with historic recovery data of foreclosures received from the
seller.

The key drivers for the MILAN Credit Enhancement number, in line
with other prime Dutch RMBS transactions which closed during the
past twelve months, are (i) month current data which shows that
85.6% of the loans have never been in arrears since they were
disbursed, (ii) the weighted average loan-to-foreclosure-value
(LTFV) of 88.8%, which is in line with other prime Dutch RMBS
transactions, (iii) the proportion of interest-only loan parts
(62.4%) which is slightly higher than for other prime Dutch RMBS
transactions, and (iv) the weighted average seasoning of 9.1
years which is high relative to the Dutch market.

Approximately 26.2% of the portfolio is linked to life insurance
policies (life mortgage loans), which are exposed to set-off risk
in case an insurance company goes bankrupt. The seller has
provided loan-by-loan insurance company counterparty data,
whereby 61.1% of all life insurance-linked products are linked to
insurance policies provided by group companies of SRLEV N.V.
(Baa2 IFSR, Possible Downgrade), which is part of REAAL
Verzekeringen group. Moody's considered the set-off risk in the
cash flow analysis.

The transaction benefits from a non-amortizing reserve fund that
will be funded at 0.5% of the outstanding portfolio from the
proceeds of the class F notes. The reserve account is replenished
before interest payments on the class F notes. Apart from the
reserve fund, the transaction benefits from an excess margin of
50 bps through the swap agreement. The swap counterparty is
Credit Suisse International (A1/P-1). The transaction also
benefits from an amortizing liquidity facility of 1.5% of the
outstanding principal amount of the notes (excluding the class F
notes) with a floor of 0.75% of the principal amount of the notes
at closing (excluding the class F notes). The cash advance
facility is available for as long as the class A1 and class A2
notes are outstanding.

Moody's Parameter Sensitivities: At the time the rating was
assigned, the model output indicated that class A2 would have
achieved Aaa if the expected loss was as high as 2.0% assuming
MILAN CE increased to 7.6% and all other factors remained the
same. Class A1 would have achieved Aaa in all tested scenarios.

Moody's Parameter Sensitivities provide a quantitative/model-
indicated calculation of the number of rating notches that a
Moody's structured finance security may vary if certain input
parameters used in the initial rating process differed. The
analysis assumes that the deal has not aged and is not intended
to measure how the rating of the security might migrate over
time, but rather how the initial rating of the security might
have differed if key rating input parameters were varied.
Parameter Sensitivities for the typical EMEA RMBS transaction are
calculated by stressing key variable inputs in Moody's primary
rating model.

The V Score for this transaction is Low/Medium, which is in line
with the V Score assigned for the Dutch RMBS sector, mainly due
to the fact that it is a standard Dutch prime RMBS structure for
which Moody's has over 13 years of historical performance data on
precedent transactions. The primary source of uncertainty is due
to operational risks relating to the servicing arrangement. The
contractual servicer (NIBC) is rated Baa3/P-3 by Moody's. This
risk is mitigated by the fact that Stater and Quion will be
appointed at closing as sub-agents of NIBC and will perform the
loan administration.

V Scores are a relative assessment of the quality of available
credit information and of the degree of dependence on various
assumptions used in determining the rating. High variability in
key assumptions could expose a rating to more likelihood of
rating changes. The V Score has been assigned according to the
report "V Scores and Parameter Sensitivities in the Major EMEA
RMBS Sectors" published in April 2009.

Operational Risk Analysis: Moody's has analyzed the potential
operational risks associated with the servicing and cash
management functions in the transaction. The named servicer in
the transaction is NIBC (Baa3/P-3). NIBC has sub delegated the
loan administration to Stater and Quion (both not rated). If
NIBC's rating falls below Baa3, the issuer and the security
trustee will use best efforts to appoint a back-up servicer.
Furthermore, the issuer and security trustee will appoint a
substitute servicer if the main servicer is no longer able to
service the mortgage loan pool. Moody's views this undertaking to
be similar to a back-up servicer facilitator function. The role
of cash manager in this transaction is also performed by NIBC. If
NIBC's rating falls below Baa3, the issuer and the security
trustee will use best efforts to appoint a back-up cash manager.

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

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

As such, Moody's analysis encompasses the assessment of stressed
scenarios.

The rating addresses the expected loss posed to investors by the
legal final maturity of the notes. In Moody's opinion, the
structure allows for timely payment of interest and ultimate
payment of principal with respect to the notes by the legal final
maturity. Moody's ratings only address the credit risk associated
with the transaction. Other noncredit risks have not been
addressed, but may have a significant effect on yield to
investors.


KPN NV: Mulls EUR4-Bil. Capital Increase to Fix Balance Sheet
-------------------------------------------------------------
Anousha Sakoui and Daniel Thomas at The Financial Times report
that KPN was finalizing plans on Monday to raise as much as
EUR4 billion in new capital.

According to the FT, several people familiar with the proposal
said the group was likely to seek to raise EUR2 billion to
EUR4 billion in the form of a rights issue, in a move that would
help boost its financial flexibility.

However, one of the people cautioned that other financial
instruments could also be used to raise the funds and said talks
were continuing, the FT notes.  The size of the raising could
represent more than half KPN's equity value, the FT says.

The company's management told investors it was considering a
rights issue at the end of last year, given its relatively high
debt levels, the FT relates.

Several analysts have said that the group could have difficulties
in persuading its largest shareholder, America Movil, the Latin
American telecoms group controlled by Mexican billionaire Carlos
Slim, to support the move, the FT notes.

Several analysts anticipated a capital raising by KPN, but in the
form of a hybrid bond issue -- debt instruments that have equity
like characteristics, the FT discloses.

The higher than expected cost of buying crucial spectrum in the
Netherlands brought the company closer to needing to fix its
balance sheet through an equity raising, the FT says, citing
those familiar with the group.  The increased cost of EUR1.4
billion has already spurred KPN to cut its dividend, and it faces
a potential junk downgrade, the FT discloses.

Robin Bienenstock, analyst at Bernstein, estimates that KPN would
need some EUR5 billion of new convertible debt in order to fix
its balance sheet, but that a deal that size would be simply too
big to get done, the FT notes.

Koninklijke KPN N.V. is a multimedia company in the Netherlands,
providing consumers and consumer households with fixed and mobile
telephony-, internet- and TV services. To business customers, KPN
delivers voice-, internet- and data services as well as fully
managed, outsourced ICT solutions. KPN provides wholesale network
services to third parties, including operators and service
providers.


LEVERAGED FINANCE: Moody's Cuts Rating on Class E Bond to 'Caa3'
----------------------------------------------------------------
Moody's Investors Service has taken the following rating actions
on the notes issued by Leveraged Finance Europe Capital III B.V.

Issuer: Leveraged Finance Europe Capital III B.V.

EUR11.7M Class C Bond, Downgraded to Ba1 (sf); previously on Nov
8, 2011 Upgraded to Baa3 (sf)

EUR19.8M Class D Bond, Downgraded to Caa2 (sf); previously on Nov
8, 2011 Upgraded to B1 (sf)

EUR7.35M Class E Bond, Downgraded to Caa3 (sf); previously on Nov
8, 2011 Upgraded to Caa2 (sf)

EUR6M (with current rated balance outstanding EUR 560 K) Class R
Bond, Downgraded to Caa3 (sf); previously on Nov 8, 2011
Confirmed at Caa1 (sf)

EUR15M (with current rated balance outstanding EUR1.8 M) Class S
Bond, Downgraded to Aa1 (sf); previously on Oct 26, 2004 Assigned
Aaa (sf)

EUR213.6M (with current rated balance outstanding EUR 67.5M)
Class A Bond, Affirmed Aaa (sf); previously on Nov 8, 2011
Upgraded to Aaa (sf)

EUR26.25M Class B Bond, Affirmed A2 (sf); previously on Nov 8,
2011 Upgraded to A2 (sf)

EUR10M (with current rated balance outstanding EUR 856 K) Class Q
Bond, Affirmed Aaa (sf); previously on Nov 8, 2011 Upgraded to
Aaa (sf)

Leveraged Finance Europe Capital B.V., issued in August 2004, is
a single currency Collateralized Loan Obligation backed by a
portfolio of mostly high yield European loans. The portfolio is
managed by BNP Paribas. The reinvestment period of this
transaction ended in October 2009. It is predominantly composed
of senior secured loans.

Ratings Rationale

According to Moody's, the rating actions taken on the notes
result primarily from 1) credit deterioration observed in the
underlying pool, reflected in an increase in defaults and
consequential par erosion and 2) increased concentration of
obligors exposed to refinancing and sovereign risks.

Amortization of the Class A Note has improved the
overcollateralization ratios for the senior notes, namely, Class
A and Class B Notes. However, the increased default and
concentration in obligors rated Caa1 and below eroded the OC
ratios for the junior classes of notes, namely, Class D and Class
E notes. As of the latest trustee report dated January 2013, the
Class A/B, Class C, Class D and Class E overcollateralization
ratios are reported at 129.8%, 117.1%, 100.4%, 98.6%,
respectively, versus October 2011 levels of 123.2%, 114.7%,
102.6% and 101.3% respectively.

In its base case, Moody's analyzed the underlying collateral pool
to have a performing par and principal proceeds balance of EUR
122.97 million, defaulted par of EUR 27.7 million, a weighted
average default probability of 23.17% (consistent with a WARF of
4,071), a weighted average recovery rate upon default of 48.05%
for a Aaa liability target rating, a diversity score of 20 and a
weighted average spread of 3.04%. The default probability is
derived from the credit quality of the collateral pool and
Moody's expectation of the remaining life of the collateral pool.
The average recovery rate to be realized on future defaults is
based primarily on the seniority of the assets in the collateral
pool. For a Aaa liability target rating, Moody's assumed that
95.12% of the portfolio exposed to senior secured corporate
assets would recover 50% upon default, while the remainder non
first-lien loan corporate assets would recover 10%. In each case,
historical and market performance trends and collateral manager
latitude for trading the collateral are also relevant factors.
These default and recovery properties of the collateral pool are
incorporated in cash flow model analysis where they are subject
to stresses as a function of the target rating of each CLO
liability being reviewed.

In addition to the base case analysis described above, Moody's
also performed sensitivity analyses on key parameters for the
rated notes:

(1) Deterioration of credit quality to address the refinancing
and sovereign risks -- Approximately 49.6% of the portfolio are
rated B3 and below and maturing between 2014 and 2016, which may
create challenges for issuers to refinance. Approximately 15.74%
of the portfolio are exposed to obligors located in Ireland,
Italy and Spain. Moody's considered a model run where the base
case WARF was increased to be 4,613 by forcing ratings on 25% of
such exposure to Ca. This run generated model outputs that were
within one notch from the base case results.

The ratings of the Combination Notes address the repayment of the
Rated Balance on or before the legal final maturity. For Class R,
the 'Rated Balance' is equal at any time to the principal amount
of the Combination Note on the Issue Date increased by a Rated
Coupon of 1% per annum respectively, accrued on the Rated Balance
on the preceding payment date minus the aggregate of all payments
made from the Issue Date to such date, either through interest or
principal payments. For Class Q and Class S, the 'Rated Balance'
is equal at any time to the principal amount of the Combination
Note on the Issue Date minus the aggregate of all payments made
from the Issue Date to such date, either through interest or
principal payments. The Rated Balance may not necessarily
correspond to the outstanding notional amount reported by the
trustee.

Moody's notes that this transaction is subject to a high level of
macroeconomic uncertainty, which could negatively impact the
ratings of the notes, as evidenced by 1) uncertainties of credit
conditions in the general economy and 2) the large concentration
of speculative-grade debt maturing between 2014 and 2016 which
may create challenges for issuers to refinance. CLO notes'
performance may also be impacted either positively or negatively
by 1) the liquidation agents behavior and 2) divergence in legal
interpretation of CDO documentation by different transactional
parties due to embedded ambiguities.

Sources of additional performance uncertainties are described
below:

1) Portfolio Amortization: The main source of uncertainty in this
transaction is whether delevering from unscheduled principal
proceeds will continue and at what pace. Delevering may
accelerate due to high prepayment levels in the loan market
and/or collateral sales by the liquidation agent, which may have
significant impact on the notes' ratings.

2) Recovery of defaulted assets: Market value fluctuations in
defaulted assets reported by the trustee and those assumed to be
defaulted by Moody's may create volatility in the deal's
overcollateralization levels. Further, the timing of recoveries
and the manager's decision to work out versus sell defaulted
assets create additional uncertainties. Moody's analyzed
defaulted recoveries assuming the lower of the market price and
the recovery rate in order to account for potential volatility in
market prices.

3) Moody's also notes that around 63% of the collateral pool
consists of debt obligations whose credit quality has been
assessed through Moody's credit estimates. Large single exposures
to obligors bearing a credit estimate have been subject to a
stress applicable to concentrated pools as per the report titled
"Updated Approach to the Usage of Credit Estimates in Rated
Transactions" published in October 2009.

The principal methodology used in this rating was "Moody's
Approach to Rating Collateralized Loan Obligations" published in
June 2011.

Moody's modeled the transaction using the Binomial Expansion
Technique, as described in Section 2.3.2.1 of the "Moody's
Approach to Rating Collateralized Loan Obligations" rating
methodology published in June 2011.

Under this methodology, Moody's used its Binomial Expansion
Technique, whereby the pool is represented by independent
identical assets, the number of which is being determined by the
diversity score of the portfolio. The default and recovery
properties of the collateral pool are incorporated in a cash flow
model where the default probabilities are subject to stresses as
a function of the target rating of each CLO liability being
reviewed. The default probability range is derived from the
credit quality of the collateral pool, and Moody's expectation of
the remaining life of the collateral pool. The average recovery
rate to be realized on future defaults is based primarily on the
seniority and jurisdiction of the assets in the collateral pool.

The cash flow model used for this transaction, whose description
can be found in the methodology listed above, is Moody's EMEA
Cash-Flow model.

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

In addition to the quantitative factors that are explicitly
modeled, qualitative factors are part of the rating committee
considerations. These qualitative factors include the structural
protections in each transaction, the recent deal performance in
the current market environment, the legal environment, specific
documentation features, the collateral manager's track record,
and the potential for selection bias in the portfolio. All
information available to rating committees, including
macroeconomic forecasts, input from other Moody's analytical
groups, market factors, and judgments regarding the nature and
severity of credit stress on the transactions, may influence the
final rating decision.

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


SNS BANK: Fitch Cuts Rating on Hybrid Tier 1 Securities to 'C'
--------------------------------------------------------------
Fitch Ratings has placed SNS Bank's Long-term and Short-term
Issuer Default Ratings (IDRs) of 'BBB+' and 'F2', respectively,
on Rating Watch Evolving (RWE). SNS REAAL's Long- and Short-term
IDRs have also been placed on RWE having previously been on
Rating Watch Negative (RWN). At the same time, the agency has
downgraded SNS Bank's Viability Rating (VR) to 'f' from 'bb'. SNS
Bank's hybrid Tier 1 securities have also been downgraded to 'C'
from 'B-'. SRLEV's and REAAL Schadeverzekeringen's Insurer
Financial Strength (IFS) have been maintained on RWE.

Rating Action Rationale

The rating actions on SNS Bank and its holding company, SNS
REAAL, follow the nationalization of SNS REAAL (and SNS Bank) on
Feb. 1, 2013. The action taken by the Dutch government was
carried out to solve the financial difficulties experienced by
SNS Bank in its property finance portfolio.

SNS Bank and SNS REAAL's 'BBB+' Long-term IDRs are at their
Support Rating Floors (SRF) and reflect Fitch's view that there
is a high probability that the Dutch state will continue to
support both SNS Bank and SNS REAAL to the extent that no senior
creditor will suffer losses. The decree nationalizing the bank
makes it clear that senior creditors will not suffer losses in
the nationalization process, while the claims of subordinated
creditors and equity holders have been fully wiped out.

The RWEs on both SNS Bank and SNS REAAL reflect uncertainty about
how the group will be restructured in the medium term. The
authorities have stated their aim for the bank to return to
private ownership once its financial situation is stabilized, but
how that process takes place is still to be determined and may
involve the possible spin off, or sale, of certain operations.
Fitch will resolve the RWE once details emerge on how the group
will be restructured, which it expects to be decided upon within
the next six months.

The downgrade of the bank's VR to 'f' reflects Fitch's view that
the nationalization signals that the bank has failed. The state
has provided substantial extraordinary support mainly in the form
of a EUR2.2 billion fresh capital injection in SNS REAAL, of
which EUR1.9 billion will be down streamed to the bank, EUR0.8
billion write-down of the 2008 state injection plus a premium and
a further injection of EUR0.7 billion for the real estate
portfolio, which will be isolated from the bank. The state will
also provide a EUR1.1bn loan to SNS REAAL and EUR5 billion worth
of funding guarantees for the real estate portfolio.

The downgrade of SNS Bank's hybrid Tier 1 securities reflects the
full write-down of the securities in the nationalization process
and the expropriation of the securities by the Dutch state. This
process is in line with the Dutch Intervention Act and reflects
the Dutch authorities' intention that private stakeholders share
the burden of bank resolution.

Fitch placed the insurance operating entities' ratings on RWE on
July 16, 2012 reflecting SNS REAAL's announcement that it will
take capital strengthening initiatives by the end of 2012. One
option to strengthen SNS REAAL's capital position had been the
sale of the group's insurance operations. After the Dutch State's
recent announcement that it has nationalized SNS REAAL, Fitch
continues to believe that a rating upgrade or downgrade remain
possible rating actions depending on the financial strength of
any potential future owner. Fitch expects to resolve the RWE once
there is greater clarity about the future of the insurance
operations as a consequence of the new shareholder's plan.

RATING DRIVERS AND SENSITIVITIES - IDRS, SUPPORT RATING, SUPPORT
RATING FLOORS AND SENIOR DEBT

SNS REAAL and SNS Bank's respective Long-term and Short-term
IDRs, Support Ratings, SRFs and senior debt ratings are all
sensitive to any weakening of the Dutch state's ability or
willingness to provide support. Therefore, although Fitch expects
to resolve the RWE on all of these ratings once there is further
clarity on the various strategic options envisaged for the group
by its state owner, the ratings may be further affected by any
change in the Dutch state's Long-term sovereign rating.

Although full support is being provided to senior creditors as
the situation is being resolved, Fitch will only be able to
assess the likelihood of any further state support that may
become necessary once it is clear how the group will be
restructured. It will then be able to decide whether the
resulting entities can be considered systemically important to
the Dutch banking system. If the medium term prospects of support
for the resulting entities are viewed by Fitch to have become
weaker than previously, the Support Ratings, SRFs, IDRs and
senior debt ratings will be downgraded. The expected spin off
into a "bad bank" of legacy business under state ownership may
result in an upgrade of that entity's ratings, depending on the
final set up.

The application of the Intervention Act by the authorities should
be seen in a European context and progress towards a European
Banking Union. Once the mechanism is in place to implement bank
resolution, with support only provided to the systematically
important business of banks, rather than to all of its banks,
Fitch expects the relative support benefits for Dutch banks to
reduce.

SNS Bank's state guaranteed debt instruments are rated 'AAA',
reflecting the Netherlands' guarantee and so would be sensitive
to any change in the Netherlands' rating.

RATING DRIVERS AND SENSITIVITIES - VR

SNS Bank's VR at 'f' reflects Fitch's opinion that the bank has
failed. Fitch expects to re-rate the bank once capital is
injected and details of the group's new structure become
available. Details on the effective isolation of the property
finance portfolio have not been disclosed but Fitch expects that
risks will be ring-fenced. Therefore, the new VR is likely to
reflect the bank's franchise in Dutch retail banking, its
expected focus on providing mortgage lending with a reduced
small- and medium-sized enterprises business. The VR will also
take into account enhanced liquidity and capitalization from the
measures being taken by the Dutch state.

RATING DRIVERS AND SENSITIVITIES - IFS

SNS REAAL's operating insurance subsidiaries, SRLEV and REAAL
Schadeverzekeringen's IFS ratings reflect the insurance
subsidiaries' strong business position in the Dutch insurance
market, solid capital adequacy and stable profitability. These
strengths are offset by moderate financial flexibility, following
the recent change of ownership.

Key ratings drivers for a downgrade of the IFS ratings would be a
sustained decline in the group regulatory solvency ratio to below
150% or a structural decline in the insurance activities'
profitability (for example, if reported net income was below
EUR200m and expected to remain below that level).

Although no information regarding the possible disposal of the
insurance operations has been made available yet, the agency
still views the sale of the group's insurance operations, either
partly or in total, as a possibility. If the insurance operations
are acquired by a financially stronger group, SRLEV and/or REAAL
Schadeverzekeringen's ratings could be upgraded. However, if the
insurance operations are sold to a financially weaker group, the
ratings could be downgraded.

The rating actions are:

SNS REAAL:
Long-term IDR: 'BBB+'; RWN changed to RWE
Short-term IDR: 'F2'; RWN changed to RWE
Support Rating: '2' ; RWN changed to RWE
Support Rating Floor: 'BBB+' ; RWN changed to RWE

SNS Bank:
Long-term IDR: 'BBB+'; placed on RWE
Short-term IDR: 'F2'; placed on RWE
Viability Rating: downgraded to 'f' from 'bb'
Senior debt: 'BBB+'; placed on RWE
Market linked notes: 'BBB+(emr)'; placed on RWE
Hybrid Tier 1 securities: downgraded to 'C' from 'B-'
Commercial paper: 'F2'; placed on RWE
Support Rating: '2'; placed on RWE
Support Rating Floor: 'BBB+' ; placed on RWE
Dutch government guaranteed securities: affirmed at 'AAA'

SNS REAAL N.V. Insurance Activities:
SRLEV N.V. IFS: 'A-'; remains on RWE
REAAL Schadeverzekeringen N.V. IFS: 'A-'; remains on RWE


SNS BANK: S&P Lowers Rating on EUR320MM Perpetual Hybrid to 'CCC'
-----------------------------------------------------------------
Standard & Poor's Ratings Services corrected its issue rating on
the EUR320 million variable rate perpetual hybrid (ISIN:
XS0468954523) issued by SNS Bank by lowering it to 'CCC' from
'BB'.  The rating remains on CreditWatch with negative
implications, where S&P initially placed it on July 20, 2012.

Due to an error, the rating on this issue was not lowered to
'CCC' at the time of S&P's most recent rating action on SNS Bank
N.V., which was on Jan. 29, 2013.


SNS REAAL: ISDA Set to Rule on Credit-Default Swap Payout
---------------------------------------------------------
Abigail Moses at Bloomberg News reports that the International
Swaps & Derivatives Association said it will rule whether the
nationalization of SNS Reaal NV constitutes a credit event that
will trigger payouts on derivatives insuring the debt.

According to Bloomberg, ISDA said on its Web site that the ruling
on credit-default swaps will be made after an anonymous request
was posed to the determinations committee, a group of 15 dealers
and money managers that govern the market.

The Netherlands took control of SNS after real estate losses
brought the fourth-largest Dutch bank to the brink of collapse,
with Finance Minister Jeroen Dijsselbloem saying the government
would "expropriate" equity and subordinated debt, Bloomberg
relates.

Bloomberg notes that there's no precedent in the derivatives
market for such a move and it doesn't fall into ISDA's defined
categories of credit events, which include bankruptcy, failure to
pay and restructuring.

ISDA is working on changes to standard swaps contracts to address
issues highlighted by credit events since the definitions were
written, Bloomberg states.

"The CDS definitions don't expressly address expropriation but
ultimately, expropriation could be a credit event depending on
how it's done," Bloomberg quotes David Geen, general counsel at
ISDA in London, as saying in an e-mail.

Ms. Moses in a Feb. 1 Bloomberg report related that SNS Reaal's
nationalization triggered a surge in the cost of insuring against
default on European junior bank debt amid concern the move will
encourage governments to impose losses on bondholders.

The Markit iTraxx Financial Index of credit-default swaps on the
subordinated bonds of 25 banks and insurers jumped as much as 15
basis points, the most since Sept. 26, to a more than seven-week
high of 265, according to data compiled by Bloomberg.

SNS's junior bonds tumbled to record lows, with its EUR250
million of 6.258% Tier 1 perpetual notes quoted 25 euro cents, or
61%, lower at 15.5 cents, according to Bloomberg prices.  Its
senior bonds rose after the government said investors in these
notes won't face losses, Bloomberg discloses.

As reported by the Troubled Company Reporter-Europe on February
4, 2013, Bloomberg News related that Dutch Prime Minister Mark
Rutte said the EUR3.7 billion (US$5 billion) nationalization of
SNS Reaal NV was the only way to protect savers and the banking
system.  "The collapse of SNS would have put both in danger,"
Bloomberg quoted Mr. Rutte as saying in The Hague on Feb. 1.  "We
needed to intervene."  SNS, which acquired ABN Amro Holding NV's
property-finance unit in 2006, has been hurt by losses on real
estate loans that left it struggling to repay a government
bailout before next year's deadline and bolster capital,
Bloomberg disclosed.  The finance ministry said that the
nationalization affects issued shares, core Tier 1 capital
securities and subordinated bonds, Bloomberg noted.  SNS shares
were suspended in Amsterdam, Bloomberg recounted.  Bloomberg
noted that Finance Minister Jeroen Dijsselbloem on Feb. 1 said
that while the government will "expropriate" SNS equity and
subordinated debt, senior bondholders won't be affected.  Senior
bonds were quoted higher, Bloomberg said.

SNS REAAL NV -- http://www.snsreaal.nl-- is a Netherlands-based
financial services provider engaged in banking and insurance.
The Company's activities are divided into five segments: SNS
Bank, providing banking services both for the retail and small
and medium enterprises, such as mortgages, asset growth and asset
protection, insurance, payments, savings and financing; Property
Finance; Zwitserleven, providing pension insurance services,
mortgages and investment products; REAAL providing life and non-
life insurances; and Group activities.  As of December 31, 2011,
the Company operated through 16 wholly owned subsidiaries, such
as SNS Bank NV, REAAL NV, SNS REAAL Invest NV and SNS Asset
Management NV, among others.

                          *     *     *

As reported by the Troubled Company Reporter-Europe on February
6, 2013, Moody's Investors Service downgraded SNS REAAL's and SNS
Bank's dated subordinated debt ratings to C from Caa3 and the
entities' Tier 1 securities ratings to C(hyb) from Ca(hyb).

The rating action follows the decision by the Government of the
Netherlands (Aaa negative) to nationalize the entire SNS REAAL
group on February 1, 2013 under the Intervention Act passed by
Parliament in 2012.  All issued shares in SNS REAAL NV and SNS
Bank NV held outside of SNS REAAL NV or its group companies will
be expropriated.  As a result, the government will assume 100%
control of SNS REAAL and of SNS Bank.

At the same time, Moody's placed SNS Bank's E bank financial
strength rating, which is equivalent to a standalone credit
assessment of ca, on review for upgrade.


SNS REAAL: S&P Lowers Rating on Non-Deferrable Debt to 'D'
----------------------------------------------------------
Standard & Poor's Ratings Services revised to developing from
negative its CreditWatch on the 'BBB-/A-3' counterparty credit
ratings on Netherlands-based bancassurance group SNS REAAL
N.V. (SNS REAAL, or the group) and the 'BBB/A-3' counterparty
credit ratings on the group's banking subsidiary, SNS Bank N.V.
(SNS Bank, or the bank).

At the same time, S&P lowered its ratings on the non-deferrable
debt of SNS Bank and SNS REAAL to 'D' from 'B' and 'B-',
respectively.  The ratings on the instruments were removed from
CreditWatch negative, where they were placed on Nov. 16, 2012.
S&P's also lowered its junior subordinated debt ratings on SNS
Bank and SNS REAAL to 'D' from 'CCC'.  The ratings on these
instruments were also removed from CreditWatch negative, where
they had been initially placed on July 20, 2012.

The CreditWatch developing on SNS REAAL and SNS Bank is based on
S&P's view that the nationalization of the group and the
associated package of measures announced by the government have
the potential to consolidate and possibly strengthen the group's
credit profile over the two-year outlook horizon.  However, S&P
recognizes downside risks to the bank's franchise as a
consequence of the nationalization.  Potential future
restructuring initiatives and other mandated actions may impair
the bank's business stability.  S&P also notes the current lack
of visibility about the new management's strategic priorities.

S&P's ratings on SNS Bank assume material elements of the support
package will be approved by the European Commission.
Furthermore, the ratings reflect S&P's expectation of benefits to
the bank's capital, risk profile, and liquidity from the upcoming
state capital injection, the transfer of a sizable portfolio of
commercial real estate exposures to an external asset management
company, and a bridging loan for liquidity support.

S&P has revised its assessment of SNS Bank's stand-alone credit
profile (SACP) before incorporating any benefit of government
support to 'ccc+' from 'bb+'.  This is in light of the large
losses that S&P expects will crystallize on the bank's
EUR8.55 billion commercial property portfolio (before provisions
at June 30, 2012) before the transfer of these assets.  S&P
assess the bank's compliance with regulatory capital ratios to be
"subject to regulatory forbearance", as S&P's criteria define
this term.  As a result, S&P assess capital and earnings as "very
weak" and S&P cap the SACP at 'ccc+'.

"Our ratings on SNS Bank incorporate eight notches of government
support above the SACP.  Seven notches take the form of short-
term support as the support measures are subject to approval and
implementation.  We believe that following the EUR1.9 billion
capital injection (for SNS Bank) and transfer of risky assets
off SNS Bank's balance sheet, our view of the bank's capital
position will likely improve to "adequate" from "very weak."  We
note that there could be some further upside to this assessment
depending on the size of the eventual write-down on the
commercial property portfolio and our view of the bank's risk-
weighted assets following the asset transfer.  The transfer of
risky assets will likely lead to a revision of our risk position
assessment to "moderate" from "weak" as commercial property has
comprised a disproportionate share of the bank's total credit
losses over the past few years.  We also expect to be able to
improve our assessment of the bank's liquidity to "adequate" from
"moderate" in light of substantial liquidity support in the form
of a EUR1.1 billion bridging loan to the holding company ," S&P
said.

When the capital increase and asset transfer take place, S&P
expects to reflect their benefits in its assessment of the bank's
SACP.  S&P will likely revise it to 'bbb-' from 'ccc+', all else
being equal.  At that point S&P would stop factoring short-term
support into its ratings on SNS Bank.

Historically, S&P's ratings on SNS REAAL were based on its view
of the combined strength of its banking and insurance operations.
However, given the likely separation of the bank and insurance
subsidiaries in due course, S&P is not factoring any uplift
related to the group's insurance operations into the ratings on
the bank and the group.  S&P considers the bank's systemic
importance in The Netherlands to be "moderate" and The
Netherlands to be "supportive" of its banking system, as S&P's
criteria define these terms.  As a result, the rating on the bank
benefits from one notch of uplift above its SACP under S&P's
government support approach.  This represents the eighth notch of
government support.

S&P rates SNS REAAL one notch below the operating entities, in
line with S&P's criteria for rating nonoperating holding
companies.

S&P has lowered the ratings on the junior subordinated debt and
non-deferrable subordinated debt of both SNS REAAL and SNS Bank
to 'D' (default) to reflect expropriation, which is not in line
with the terms and conditions of these instruments.

S&P expects to resolve the CreditWatch placements on SNS REAAL
and SNS Bank once S&P believes there is more visibility on the
European Commission approval process and implementation
timelines.

To resolve the CreditWatch on the long-term ratings, S&P will
consider:

   -- To what extent the solution will insulate the bank from
      commercial property-related risks;

   -- The future strength of the group and the bank's
      capitalization, after the announced capital injections
      materialize and property-finance-related haircuts;

   -- The bank's access to funding markets and the benefit of
      government's liquidity support;

   -- Implications for the bank's franchise of any imposed
      remedies, including possible asset disposals.


SRLEV NV: S&P Affirms 'BB+' Rating on Jr. Subordinated Debt
-----------------------------------------------------------
Standard & Poor's Ratings Services affirmed the 'BBB'
counterparty credit and insurer financial strength ratings on
insurance entities SRLEV N.V. and REAAL Schadeverzekeringen N.V.,
the 'BBB-' counterparty credit rating on REAAL Verzekeringen
N.V., and the 'BB+' issue credit ratings on the junior
subordinated and subordinated debt issues issued by SRLEV N.V.

At the same time, S&P revised to positive from developing its
CreditWatch placement on the ratings on SRLEV N.V., REAAL
Schadeverzekeringen N.V., and REAAL Verzekeringen N.V.
(collectively known as SNS REAAL insurance operations
or SRIO).  The ratings had been placed on CreditWatch developing
on July 20, 2012, when their future within the group had come
under question.

On Feb. 1, 2013, the Dutch government nationalized the SNS REAAL
banking and insurance group because it had lost confidence in the
group's ability to solve its deteriorating bank solvency position
following continued losses in its property finance portfolio.
Following the nationalization, the chairman, CEO, and chief
financial officer of SNS REAAL resigned.

S&P continues to see SRIO as being of adequate credit quality.
Its profitability and capitalization continue to be robust, in
S&P's view.  SRLEV's two subordinated debt issues continue to be
traded, in contrast to the group's other subordinated issues and
shareholders' funds, which have been expropriated by the
government.

"We expect that, when we resolve our CreditWatch placement, we
may decouple the ratings on SRIO from those of SNS Bank.  We
anticipate that the government could separate SRIO from the bank
and privatize it separately, sooner.  We base our view on
European Commission rules, the differentiated treatment of the
insurance subsidiary debt, and the precedent in the Netherlands.
Separation was also explicitly considered as an option in the
Dutch finance minister's open letter to his Parliament," S&P
said.

S&P's stand-alone credit profile on SRIO is 'a'.  The 'BBB'
rating on SRIO is constrained by that on its sister company SNS
Bank. Decoupling the two ratings could enable S&P to raise the
ratings on SRIO by up to three notches.

S&P do not expect to impute any support to the ratings in SRIO
from its state ownership because S&P expects the relationship to
be short term.  SRIO did not benefit directly from government
capital in the nationalization, which was aimed at preventing the
collapse of the bank.

The CreditWatch placement was revised to reflect potential upside
from decoupling the ratings on SRIO from those on the bank.  This
upside is tempered by potential negative implications of the
nationalization.

While acknowledging that the group is insulated to a degree from
reputational damage through its open architecture and multibrand
strategy, S&P considers that SRIO's competitive position could be
impaired by the nationalization, not least because the European
Commission is likely to impose operational and pricing
restrictions on SRIO, as a state-owned insurer.  The future
management, strategy, structure, and ownership of the group is
uncertain, as is its long-term solvency level.

S&P expects to resolve the CreditWatch placement during February
2013, as more information about these issues emerges.  The
ratings could be raised by between one and three notches,
depending on S&P's assessment of the degree of separation of the
insurance operations from the bank and the extent to which the
transition damages the insurer's stand-alone profile.



===========
P O L A N D
===========


LOT POLISH: Seeks New Chief Executive; Faces Enormous Challenges
----------------------------------------------------------------
Jan Cienski at The Financial Times reports that the hunt for a
new chief for Poland's troubled Lot airlines has put two jobs on
the line -- one being the prospective CEO, the other being that
of Mikolaj Budzanowski, the embattled treasury minister who is
under fierce political pressure to stop Lot's losses.

The airline's previous boss, Marcin Pirog, was fired in December
after the airline revealed unexpected losses and had to turn to
the government for a PLN400 million (US$130 million) bailout, the
FT recounts.  In all, the airline may need as much as PLN1
billion in help to survive, the FT says.

Since then the treasury, which directly and indirectly owns 93%
of the flag carrier, has been hunting for a successor, the FT
relates.  According to the FT, the Polish press reports that the
contest is down to five finalists, but the scale of the
undertaking in saving Lot is so enormous that no final decision
has yet been made.

Rumors in the Polish press indicate that the new boss may be
Sebastian Mikosz, who headed Lot from 2009 to 2010, steering the
airline through the crisis that followed the September 2011
attacks in the US, the FT notes.  He ran afoul of unions for
making dramatic cost cuts, the FT says.

Lot is facing enormous challenges, the FT discloses.  It is under
threat at the bottom of the market from the likes of Ryanair and
Hungary's Wizz Air, whose low-cost flights whisk Poles to
destinations across western Europe, the FT states.  It is also
facing growing competition from two Middle East airlines, Qatar
Airways and Emirates, which are starting to fly passengers from
Warsaw to Asia via their hubs in the Gulf, the FT discloses.
According to the FT, this makes it increasingly difficult to turn
Lot around.  And Mr. Tusk has made it clear he does not want to
use any more public money to prop up the carrier, according the
FT.

Two rescue options are reportedly being considered, the FT says,
citng the Rzeczpospolita newspaper.  One involves dramatic cost
cuts, which would make Lot a much smaller airline, the FT states.
The other involves following the path blazed by airlines like
Swissair, which was reconfigured into a new airline, Swiss (now a
unit of Lufthansa) after running into financial trouble, the FT
notes.

Headquartered in Warsaw, Poland, Polskie Linie Lotnicze LOT, or
LOT Polish Airlines -- http://www.lot.com-- serves about a dozen
cities in Poland and about 120 destinations across Europe and
North America.  Subsidiaries include regional carrier EuroLOT and
charter operator Centralwings.  Overall, LOT and its affiliates
maintain a fleet of about 55 aircraft, consisting of Embraer
regional jets, Boeing 767s and 737s, and ATR turboprops.  The
airline is a member of the Star Alliance marketing group, and LOT
serves many of its North American destinations through code-
sharing with Star partners United Airlines and Air Canada.
(Code-sharing allows airlines to sell tickets on one another's
flights and thus extend their networks.) The Polish government
owns 68% of the company.



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


SDM-BANK: Fitch Assigns 'B' Rating to Senior Unsecured RUB Bonds
----------------------------------------------------------------
Fitch Ratings has assigned SDM-Bank's upcoming debut issue of
senior unsecured RUB bonds expected Long-term ratings of 'B(EXP)'
and a National Long-term rating of 'BBB(rus)(EXP)'. The bonds'
expected Recovery Rating is 'RR4(EXP)'

The bonds have a maturity of three years, a nominal value of
RUB1.5bn, semi-annual coupons and a one-year put option.

SDM has a Long-term Issuer Default Rating (IDR) of 'B', a Short-
term IDR of 'B', a Local Currency Long-term IDR of 'B', a
Viability Rating of 'b', a Support Rating of '5', a Support
Rating Floor of 'NF' and a National Rating of 'BBB(rus)'.

SDM is a small Moscow-based bank established in 1991. The bank is
funded by corporate and retail customer accounts and focuses on
SME and corporate lending. SDM is 66.2% owned by Anatoly
Landsman. Minority stakes are held by EBRD (15%) and Firebird
Avrora Fund (8.5%).


SITRONICS JSC: Fitch Cuts LT Issuer Default Rating to 'CCC'
-----------------------------------------------------------
Fitch Ratings has downgraded Sitronics JSC's Long-Term Issuer
Default Rating (IDR) to 'CCC' from 'B-' with a Negative Outlook.
The agency has simultaneously withdrawn all the ratings.

Fitch has withdrawn the ratings as Sitronics has chosen to stop
participating in the rating process. Therefore, Fitch will no
longer have sufficient information to maintain the ratings.
Accordingly, Fitch will no longer provide ratings or analytical
coverage for Sitronics.

Sitronics' ratings are shaped by its weak operating profile of a
struggling niche IT and technology company on a standalone basis
benefiting from tangible shareholder support.

- Weak Operations

Sitronics' standalone profile remains weak conforming with a 'CC'
rating. The group has undergone significant re-organization over
the past 12 months, and a new round of re-organization seems to
be in the pipeline. A transformational change would be required
to improve the company's standalone profile.

- Shareholder Support Strong but May Diminish

Shareholder support has been material and timely and is likely to
continue. The level of support from its ultimate shareholder,
OJSC Sistema ('BB-'/Stable) is likely to depend on the strategic
asset composition of Sitronics. Without pre-empting the outcome
of the company's ongoing re-organization, Fitch notes that
Sistema's propensity for support may diminish if Sitronics ends
up with fewer strategically important assets. The 'CCC' IDR
factors in Sitronics' standalone credit profile of 'CC' lifted by
one notch to 'CCC' on support from Sistema.

List of Rating Actions

  Long-Term IDR: downgraded to 'CCC' from 'B-' with a Negative
  Outlook, withdrawn


  Local currency IDR: downgraded to 'CCC' from 'B-' with a
  Negative Outlook, withdrawn

  National Long-Term Rating: downgraded to 'B+(rus)' from 'BB-
  (rus)' with a Negative Outlook, withdrawn

  Senior unsecured debt in foreign currency: downgraded to 'CCC'
  from 'B-', 'RR-4', withdrawn

  Senior unsecured debt in local currency: downgraded to 'CCC'
  from 'B-', 'RR-4', 'B+ (rus)' from 'BB-(rus)', withdrawn



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


* SPAIN: Real Estate Exposures Key Weakness for Banks, Fitch Says
-----------------------------------------------------------------
Six of the largest Spanish banks reported substantial loan
impairment provisions to cover real estate exposures in their
FY12 results last week, improving their coverage, Fitch Ratings
says. This led to a significant reduction in net income or
losses, despite better-than-expected revenues and strict cost
control. Real estate exposures remain the key weakness for the
bulk of the Spanish banks and there is also a risk of a continued
spill-over of impaired loans into other segments, especially as
we believe the economy will contract further this year.

Even the two international Spanish banks, Santander and BBVA,
reported a drop in profit of 59% and 44%, respectively. The
decline is mainly attributable to the provisions on domestic real
estate exposures. Earnings from other geographies, most notably
Latin America, helped offset the charges. Both banks have been
proactive in tackling their Spanish real-estate exposures. They
have accelerated the sale of these assets ahead of the
potentially even more challenging market that may emerge once the
Spanish bad bank, Sareb, starts its run-down and disposal
program.

Domestic revenues have held up reasonably well despite the weak
economy, lower customer volumes and bank deleveraging. Net
interest income has risen at all six banks, helped by close
spread management, particularly on new and rolled-over loans, and
carry trades on sovereign bonds at some institutions. These banks
have benefited from a flight to quality for deposits and have
been able to adjust pricing accordingly, despite competition for
funding. Their retail focus and cross-selling efforts meant
commission income held up well. Costs continue to be well
managed.

Fitch says, "We estimate that these banks' exposures to domestic
real estate will be 40% to 50% covered. Further deterioration can
be expected on the real estate portfolio, but a large scale
effort has already been made with the bulk of these banks
entirely complying with the two royal decree laws passed during
2012. Like the two international banks, CaixaBank, Banco Sabadell
and Banco Popular are making substantial efforts to sell real
estate exposures parked in their internal bad banks. Bankinter
has much smaller exposures to real estate.

"2013 will be another very challenging year as we expect domestic
GDP to fall a further 1.6%. A deterioration in the SME books and
in residential mortgages can be expected, considering the
recession and rising unemployment. Further deleveraging, low
interest rates and large stocks of impaired assets would depress
net interest income. Higher spreads on renewed loans could
mitigate some of this pressure.

"Encouragingly, investor appetite for Spanish senior and covered
bonds from the main players has recently increased. As the
issuance opportunity may be short-lived, most institutions
continue to reduce the funding gap by shrinking loans and
attracting retail deposits. But the latter may become more
challenging following the recently proposed deposit rate caps.
Banks have begun to prepay a substantial proportion of long-term
refinancing operation (LTRO) funds to the European Central Bank,
most notably Santander. We expect the smaller players to be more
cautious about the potential for market conditions to change.
They are more likely to hold on to the LTRO funds for insurance
or even for carry trade purposes."



===========
T U R K E Y
===========


SEKER PILIC: Court Approves Request to Suspend Bankruptcy Process
-----------------------------------------------------------------
Hurriyet Daily News reports that a Turkish court has acceded to
Seker Pilic's request to suspend its bankruptcy process.

The indebted company said they paid TRY3 million of the total
debt worth TRY19.6 million last week, Hurriyet relates.

But Banvit, a poultry and meat company, declared earlier on
Tuesday that it had not reached an agreement for a share sale
with Seker Pilic, Hurriyet notes.

"We will reconsider it if the conditions reappear in the future,"
Hurriyet quotes Banvit as saying in a statement.

Seker Pilic also conducted share sale talks with Torunlar Gida in
January, but the discussions were ended due to levies, Hurriyet
says.

Seker Pilic, based in the northwestern province of Balikesir's
Bandirma district, where many poultry firms are located, has seen
many of its activities terminated because of its debts to banks
and suppliers, Hurriyet discloses.

Seker Pilic is a Turkish poultry firm.



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


CATTLES PLC: Files Suit v. PwC Over Two-Year Financial Audits
-------------------------------------------------------------
Andrew Bounds at The Financial Times reports that scandal-hit
subprime lender Cattles is suing PwC, alleging negligence over
its audit of two years of financial statements.

PwC intends to contest what it called the "inflated and misguided
claim" in the High Court in London, the FT says.

The claim is being brought on behalf of creditors to Cattles,
which was hit by accounting irregularities, and its subsidiary
Welcome Financial Services, the FT discloses.  The company lent
to people with poor credit histories and entered into a financial
restructuring scheme in March 2011, the FT recounts.

According to the FT, a supervisor representing Cattles' creditors
asserted that PwC should not have signed off the 2006 and 2007
financial statements of the group, which once had a GBP1 billion
market capitalization.  "As a consequence, the financial
statements fundamentally mis-stated the financial position of the
group.  In particular, if the impairment provisions had been
properly audited, it would have revealed that the group's
business, over 90% of which comprised a loan book, was not
financially viable," it added.

In 2009, Cattles admitted it had underestimated the provisions it
needed to make for bad loans and restated its 2007 accounts,
while its 2008 accounts showed a GBP745 million loss when the
provisions were added, the FT recounts.

The supervisor, as cited by the FT, said that after the audits by
PwC the group "continued to trade for two more full years [after
2007], lending money and incurring liabilities and expenses in
excess of GBP1.6 billion throughout that time".

Trading in Cattles shares and bonds was suspended in 2009, the FT
notes.  Its bank lenders bought out those investors for nominal
sums after winning a legal battle, the FT recounts

PwC blamed the directors of the Batley-based business, two of
whom were fined last year by the Financial Services Authority,
the City watchdog, the FT discloses.

Cattles plc -- http://www.cattles.co.uk/-- is a financial
services company engaged in providing consumer credit to non-
standard customers in the United Kingdom and the provision of
debt recovery services to external clients and the Company's
consumer credit business.  Cattles also provides working capital
finance for small and medium size businesses.


EQUITABLE LIFE: More Than 370,000 Savers Get Partial Compensation
-----------------------------------------------------------------
Ian Cowie at The Telegraph reports that the UK government has
said that more than 370,000 policyholders who had their pensions
wiped out by the collapse of Equitable Life, Britain's oldest
insurance company, have been paid partial compensation.

According to the Telegraph, the Treasury claimed it has paid
nearly 80% of individual policyholders and aims to have
compensated all victims of the scandal before the end of next
year.

It is part of a GBP1.5 billion compensation package agreed by the
government in October 2010, the Telegraph notes.

It is now nearly 13 years since Equitable was forced to close and
many of the victims have died waiting for compensation, the
Telegraph discloses.

The company was derailed after guaranteed annuity rates (GARs),
which Equitable had sold with many pension savings schemes since
the 1960s, proved unaffordable after interest rates began to fall
in the 1990s, the Telegraph recounts.

The Treasury's third progress report on the Equitable Life
Payment Scheme, published on Tuesday, acknowledged that nearly
6,000 compensation payments have been sent to the estates of
deceased policyholders, the Telegraph discloses.  It also claimed
that many have received redress and the compensation program is
running to schedule, the Telegraph notes.

A Treasury spokesman, as cited by the Telegraph, said: "Some
339,794 non with-profits annuitants have received lump sum
payments totaling GBP426 million and 30,997 with-profits
annuitants have received their first payment totaling GBP54
million.

"Also, 76 group schemes have received payments totaling GBP9
million and the scheme is on track to complete payments to all
individual policyholders it can trace, by April 2013, as planned.

"The scheme confirms that it has written to the trustees of all
5,700 eligible company schemes to obtain policyholder contact
details.  Payments to these policyholders will accelerate from
April, 2013.  The scheme has also made payments to the estates of
5,760 deceased policyholders and continues to identify, trace and
contact estates."

The Telegraph relates that Paul Weir, a spokesman for the
Equitable Life Members Action Group (EMAG), said: "It beggars
belief that the scheme has only managed to pay 6,000 with-profits
annuitants since last July and left another 6,000 completely in
the dark, waiting anxiously for the postman.

"We are fielding hundreds of inquiries from worried elderly
annuitants, who cannot understand why they have not been
contacted by the compensation scheme.  While 80% of individuals
have now had a payment, it only represents about one fifth of
what they have lost.

"Meanwhile, 99% of more than 500,000 people in group schemes are
still waiting to hear from the scheme.  We have also seen
hundreds of the complaints sent to the scheme by policyholders
who cannot understand how the figures were arrived at.  They are
met with a wall of obstruction and the handling of customer
complaints so far has been abysmal."


KELDA FINANCE: Fitch Assigns 'BB+' Final Senior Secured Rating
--------------------------------------------------------------
Fitch Ratings has assigned Kelda Finance (No.2) Limited (Kelda;
'BB'/Stable) and Kelda Finance (No.3) plc a final senior secured
rating of 'BB+'. The agency has also assigned FinCo's GBP200
million 5.75% fixed rate senior secured bond issue, which is
unconditionally guaranteed by Kelda and Kelda Finance (No.1)
Limited, a final senior secured rating of 'BB+'.

The proceeds of the bond issuance are expected to refinance all
or some of the existing bank debt at Kelda, the intermediary
holding company of FinCo. Kelda's bank debt and, through the
guarantee, FinCo's bond creditors totaling GBP265 million and an
undrawn GBP30 million facility, rank pari passu with each other.

Kelda relies upon dividends from its regulated subsidiary,
Yorkshire Water Services Limited (YWS or OpCo), a regulated water
and wastewater company (WASC) in England. YWS's financing
structure is rated 'A' for the class A debt and 'BBB+' for the
class B debt with Stable Outlooks.

KEY DRIVERS

- Rating Constrained by Subordination:

Kelda's bank debt and FinCo's guaranteed bondholders are
subordinated to the rights of YWS's bondholders as reflected in
the assigned ratings. Additionally, YWS's covenanted financing
structure could limit the dividends it upstreams and there is a
statutory (and contractual) limitation on the pledging of its
assets to any creditors.

- Sole Cash Flow Source:

Kelda and FinCo's debt service relies upon dividends from YWS.
OpCo's dividends could be constrained by higher-than-covenanted
OpCo leverage, low annual RPI used to index revenue and the
regulated asset value (thereby constraining debt capacity to pay
dividends) and general cash flow demands such as capex.

- Low-Risk Regulatory Business Profile of YWS:

YWS operates in a low-risk regulated environment and has a stable
cash flow profile. In addition, the regulatory framework for the
current price-control period (AMP5) has removed volume risk by
allowing WASCs to recover tariff-basket revenue shortfalls due to
lower volumes on a net-present value-neutral basis in the next
price-control period. However, the probability of changes to the
regulatory framework is embedded in YWS's current business risk
profile.

- Supportive Financial Profile:

Fitch expects consolidated net adjusted debt (including Kelda's
holding company and FinCo's guaranteed debt) to remain to end-
Match 2015 (remainder of the current price-control period) below
90% of YWS' regulatory asset value (RAV). We expect the dividend
cover (distributions from YWS relative to Kelda's debt service)
to average 3.3x for the remainder of AMP5. The expected credit
metrics are in line with rating guidelines for the assigned IDR
and thus support the Stable Outlook on Kelda's IDR.

LIQUIDITY

Sufficient Liquidity: Should dividends from YWS be disrupted,
Kelda has a committed GBP30 million revolving credit facility
dedicated to Kelda's and FinCo's debt service, representing 18
months' interest. The debt maturity of Kelda's bank debt is 2017
and the bond maturity is expected to be in 2020.

RATING SENSITIVITY GUIDANCE:

Positive: Structural subordination embedded in the financing
structure of Kelda and the level of leverage at YWS limits the
potential for any positive rating action over the rating horizon.

Negative: Future developments that could lead to negative rating
action include:

YWS Downgrade: downgrade of YWS's financing structure could
result in a negative rating action for Kelda.

Additionally, a fall in the dividend cover ratio below 2.5x and
an increase in consolidated net debt to RAV ratio to above 90%
would likely result in a negative rating action.


MOBILEWAVE GROUP: Portman Estates' Winding-Up Petition Withdrawn
----------------------------------------------------------------
The Board of Mobilewave Group PLC informed shareholders that the
winding up petition initiated by The Portman Estates, the
landlords of 71 Gloucester Place, was withdrawn in the High Court
in London on Monday, February 4, 2013.

MobileWave Group Plc, formerly Fieldbury plc, is a holding
company.  The Company is engaged in offering a consumer facing
downloadable application (the app) for mobile phones, designed to
integrate social networking, loyalty, market research, sales and
promotion through an ongoing digital dialogue between brand and
consumer.


* UK: MPs Express Concerns Over Controversial Pre-Pack Deals
------------------------------------------------------------
Louisa Peacock at The Telegraph reports that controversial
pre-pack administration deals have been called into question by
MPs over their lack of transparency.

According to the Telegraph, a report by the Department for
Business select committee, published on Wednesday, has warned
that there are "concerns" with pre-packs and calls for greater
openness and higher levels of compliance to make sure rules are
not being abused.

Pre-pack administrations involve the sale of a business and its
assets being agreed before it enters insolvency proceedings, the
Telegraph discloses.  The practice is controversial because
creditors are wiped out by the administration and the buyers are
sometimes directors of the company or connected parties, the
Telegraph notes.

In 2011, the Insolvency Service estimated that 25% of the 2,808
companies that entered administration that year used the pre-pack
procedure; and that nearly 80% of pre-pack sales were to
connected parties, the Telegraph says.

According to the Telegraph, the BIS select committee report said
that despite efforts to make the pre-pack process more
transparent in recent years, administrations of these kind
"remain a controversial practice".

In written evidence to the BIS committee, the Association of
British Insurers criticized pre-packs extensively, warning that
they are being actively marketed by restructuring advisers as a
convenient way in which to "dump debt" and start afresh free of
troublesome creditors, the Telegraph discloses.  The BIS report
recommends stronger penalties by way of larger fines and stronger
measures of enforcement, the Telegraph says.  The report also
suggests that creditors should be given greater help
understanding their rights, the Telegraph states.



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


* EUROPE: S&P Withdraws Rating on 9 Synthetic CDO Tranches
----------------------------------------------------------
Standard & Poor's Ratings Services withdrew its credit ratings on
nine European synthetic collateralized debt obligation (CDO)
tranches.

S&P has withdrawn its ratings on these tranches for different
reasons, including:

   -- The issuer has fully repurchased and cancelled the notes;

   -- The early redemption of the notes;

   -- The ratings were withdrawn at issuers request, but prior to
      the withdrawal we removed them from CreditWatch negative as
      they were passing SROC (synthetic rated
      overcollateralization) at the current rating level; and

   -- The principal amount of the notes has been reduced due to
      losses.

The table below provides the transaction names, ratings, and
rating withdrawal reasons for the affected tranches.

Issuer       Issue Description     Rating to  Reason for
                                              Withdrawal

Argon        EUR5 mil. Variable        NR     The issuer has
Capital Plc  return principal                 fully repurchased
             protected notes                  and cancelled the
             series 53                        notes

Astir BV     EUR80 mil limited-         D     The principal
             recourse variable-rate           amount of the notes
             notes series 21                  has  been reduced
             (Pearl CDO 1)                    due to losses

Credit       US$19.903 mil. Class A     NR    The early
Default      portfolio unfunded credit        redemption
Swap         default-swap between             of notes
             (Deutsche Bank AG and
             Mitsui Marine and Fire
             Insurance Co. Ltd.)

Credit       EUR15 mil. Unfunded    CCC+srp   The ratings were
Default      credit default swap              withdrawn at
Swap         between (Deutsche Bank           issuers request,
             AG and Coriolanus Ltd.           but prior to the
                                              withdrawal S&P
                                              removed them from
                                              Creditwatch
                                              negative as they
                                              were passing SROC
                                              (synthetic rated
                                           overcollateralization)
                                              at the current
                                              rating level

dbInvestor   EUR100 mil                 NR    The early
Solutions    variable long-term               redemption of the
PLC          secured notes                    notes
             Series 4

dbInvestor   EUR200 mil                 NR    The early
Solutions    variable long-term               redemption of the
PLC          secured notes                    notes
             series 5

Galaxy       ILS150 mil                 NR    The issuer has
Capital      limited-recourse                 fully repurchased
PLC          secured inflation-               and cancelled the
             linked notes                     notes
             series 4

Helix        EUR30,000,000              NR    The issuer has
Capital      Power tranche                    fully repurchased
(Jersey)     Mezzanine                        and cancelled the
Ltd          Managed Synthetic                notes
             CDO Notes
             Series 2006-4

Jupiter      US$50 mil floating-        NR    The early
Finance      rate portfolio                   redemption of notes
Ltd          credit-linked notes
             Series 2005-1

"We have lowered to 'D (sf)' and subsequently withdrawn our
rating on one tranche.  The downgrade to 'D (sf)' follows
confirmation that losses from credit events in the underlying
portfolio exceeded the available credit enhancement levels.  This
means that the noteholders did not receive full principal on the
early termination date for this tranche.  The rating lowered
to 'D (sf)' will remain at 'D (sf)' for a period of 30 days
before the withdrawal becomes effective.

          STANDARD & POOR'S 17G-7 DISCLOSURE REPORT

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

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

            http://standardandpoorsdisclosure-17g7.com


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

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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