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        T R O U B L E D   C O M P A N Y   R E P O R T E R

                           E U R O P E

          Wednesday, February 20, 2013, Vol. 14, No. 36

                            Headlines



B U L G A R I A

DSK BANK: Moody's Downgrades Deposit Ratings to 'Ba1'


E S T O N I A

NORFOLIER BALTIC: Struggles to Pay Employees' Wages


F R A N C E

ALCATEL-LUCENT: S&P Affirms 'B' Corp. Rating; Outlook Negative
CLINICAL LABORATORY: S&P Assigns B+ Corp. Rating; Outlook Stable
KUKA AG: Moody's Upgrades Corporate Family Rating to 'B1'
LOXAM SAS: S&P Assigns 'BB-' Corp. Credit Rating; Outlook Stable
PSA PEUGEOT-CITROEN: Moody's Reviews 'Ba3' Ratings for Downgrade


G E R M A N Y

ADAM OPEL: GM Expresses Concern Over EU Car Industry Volumes
BUILDING COMFORT: Moody's Withdraws 'Ba2' Rating on Cl. F Notes
FHB MORTGAGE: Moody's Lowers Rating on Covered Bonds to 'Ba3'
* Gov.'t Policy Changes, Weak Demand to Hit Utilities Sector


H U N G A R Y

MALEV ZRT: Hungary Strikes Vneshekonombank's Suit Over Bankruptcy


I R E L A N D

HARVEST CLO: Fitch Affirms 'B' Ratings on Two Note Classes
ANGLO IRISH: Arthur Cox Takes Lead Role in Bank's Liquidation
ANGLO IRISH: Ireland May Face Lawsuits Over Liquidation
LOMBARD STREET: Moody's Affirms Ba1 Rating on EUR23MM Cl. D Notes


I T A L Y

BANCA POPOLARE: Moody's Lowers Long-Term Deposit Rating to Caa2
MEDIOLEASING FINANCE: Moody's Cuts Rating on Class B Notes to B3


L I T H U A N I A

UKIO BANKAS: Central Bank Declares Lender Insolvent
UKIO BANKAS: Siauliu Bankas to Take Over Operations


N E T H E R L A N D S

CICCOLELLA HOLDING: Files for Creditor Protection


P O L A N D

EINDHOVEN PROPERTIES: Two Properties Sold in Bankruptcy Tender


P O R T U G A L

BANCO COMERCIAL: S&P Cuts Issue Ratings on Preferred Stock to 'C'
CAIXA GERAL: S&P Cuts Issue Ratings on Preferred Stock to 'C'


R O M A N I A

* Paint Sector Faces Insolvency-Related Challenges


R U S S I A

GLOBALTRANS INVESTMENT: Fitch Assigns 'BB' Issuer Default Rating
IMONEYBANK: Moody's Affirms 'E+' Standalone BFSR; Outlook Stable
OTP BANK: Moody's Affirms Ba2 Deposit Ratings; Outlook Negative
UNITED ELECTRIC: S&P Raises Long-Term Corp. Credit Rating to 'BB'


S P A I N

LICO LEASING: Moody's Downgrades Deposit Ratings to 'Ca'
* Fitch Comments on Limiting Investor Losses Under Bail-in


U N I T E D   K I N G D O M

ADAM SMITH: High Court Winds Up Three 'Ambulance Chasing' Firms
MELBRY EVENTS: To Appoint FRP Advisory as Voluntary Liquidators
MOTH COMMUNICATIONS: Wound Up Over Bogus Advertising Scam
PITTVILLE HOTEL: Calls in Joint Administrators Duff & Phelps
SEYMOUR PIERCE: WH Ireland Buys Private Wealth Management Unit


X X X X X X X X

* EUROPE: Draghi Proposes Common Fund for Failing Bank Rescue
* EUROPE: Investor Optimism Across Sectors, Fitch Survey Shows
* EUROPE: Fitch Says US Sequestration No Big Threat for A&D Firms


                            *********


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


DSK BANK: Moody's Downgrades Deposit Ratings to 'Ba1'
-----------------------------------------------------
Moody's Investors Service downgraded the local and foreign-
currency deposit ratings of DSK Bank PLC in Bulgaria to Ba1/NP
from Baa3/Prime-3. The outlook on the ratings is negative.

This rating action follows the conclusion of Moody's review of the
bank's Hungarian parent bank, OTP Bank NyRt.

Ratings Rationale:

The downgrade of DSK's deposit ratings to Ba1/NP is prompted by
the weakened capacity of OTP Bank NyRt to provide support to its
Bulgarian subsidiary, as indicated by the lowering of OTP Bank's
standalone ratings to D/ba2, negative from D+/ba1, on review for
downgrade. OTP's reduced capacity to provide support has prompted
Moody's to remove its assumption of parental support, which
previously led to a one notch uplift in the bank's deposit
ratings. DSK's deposit ratings continue to incorporate one notch
of uplift based on Moody's expectation of systemic support from
the Bulgarian authorities, which reflects DSK's importance as the
largest retail deposit-taking institution in Bulgaria, with a
market share estimated at 15% as of December 2012, according to
the Bulgarian National Bank.

The negative outlook on DSK's ratings reflects pressures on its
standalone credit assessment, as indicated by: (1) asset-quality
challenges (despite some recent improvements in the last two
quarters) stemming from Bulgaria's weak economic environment,
which is affected by the economic slowdown in the euro area -- an
important trading partner -- and (2) the bank's high provisioning
requirements that absorb a sizeable portion of its pre-provision
income.

What could move the ratings up/down

Continued weak operating conditions in Bulgaria, impacting the
bank's performance, could exert downward pressure on the ratings.
Although upwards pressure on the ratings is currently limited, a
continuation of the recent improvements in asset-quality metrics,
if sustained, could lead to a stabilization of the ratings.

List of affected ratings

- Long-term local and foreign-currency deposit ratings downgraded
to Ba1 from Baa3, outlook negative

- Short-term local and foreign-currency deposit ratings downgraded
to Not-Prime from Prime-3

- Standalone bank financial strength rating (BFSR) of D
(equivalent to a standalone credit assessment of ba2), remains
unchanged with a negative outlook

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

Headquartered in Sofia, Bulgaria, DSK Bank reported total assets
of BGN8.73 billion (EUR4.46 billion), as of end December 2012,
according to the data published by Bulgarian National Bank.


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E S T O N I A
=============


NORFOLIER BALTIC: Struggles to Pay Employees' Wages
---------------------------------------------------
Baltic Business News, citing Aripaev, reports that the Estonian
plant of Norfolier Baltic, subsidiary of Norwegian manufacturing
giant Norfolier Group, is struggling to pay its 70 employees wages
and has sent them for two weeks on collective leave.

According to BBN, the company's employees told Aripaev that the
company has not paid wages almost for six months, it has tax
arrears and supplier payables.  "At the same time no employment
contracts have been terminated nor the bankruptcy proceedings
launched," BBN quotes the employees as saying.

It is claimed that one of the largest creditors of Norfolier is
transport company Itella Logistics, BBN discloses.  The company's
CEO Meelike Paalberg said that they have held negotiations with
representatives of Norfolier and that the company was owing money
also to other partners, BBN relates.

BBN relates that Evelin Kivimaa from the labor dispute committee
said tens of employees of Norfolier Baltic have already filed an
application to the labor dispute committee, claiming overdue
wages, contractual benefits and overtime fee.

Norfolier Baltic was founded in 2004 and produced polyethylene
film and other plastic products, mainly plastic bags.


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


ALCATEL-LUCENT: S&P Affirms 'B' Corp. Rating; Outlook Negative
--------------------------------------------------------------
Standard & Poor's Ratings Services said it affirmed its 'B' long-
term corporate credit ratings on French telecommunications
equipment supplier Alcatel-Lucent and its subsidiary Alcatel-
Lucent USA Inc.  The outlook is negative.

S&P also is affirming the 'B' short-term rating on Alcatel-Lucent.

At the same time, S&P is affirming its 'BB-' issue rating on the
group's senior secured term facilities, which were recently issued
by Alcatel-Lucent USA.  The recovery rating on these facilities is
'1' indicating S&P's expectation of very high (90%-100%) recovery
for debtholders in the event of a payment default.

S&P is also affirming its issue rating on the group's existing
unsecured debt instruments at 'CCC+'.  The recovery rating on
these debt instruments is '6' reflecting S&P's expectation of
negligible (0%-10%) recovery for debtholders in the event of a
payment default.

Furthermore, S&P is affirming its 'CCC' issue rating on the
preferred stock issued by Alcatel-Lucent USA.

S&P is removing the corporate credit ratings and all issue ratings
from CreditWatch with negative implications, where it placed them
on Dec. 21, 2012.

The affirmation primarily reflects S&P's view that the positive
impact of the issue of EUR2.0 billion (equivalent) senior secured
facilities on the group's liquidity, and cash balances that were
somewhat higher than S&P expected at year-end 2012, are largely
offsetting its expectations of continued significant cash losses
in 2013.  In addition, S&P expects the group to use these issue
proceeds primarily to refinance significant near-to-medium-term
debt maturities, which total about EUR2.1 billion over the next 24
months.  Nevertheless, S&P is concerned that the group's solid
cash balances of EUR4.9 billion, excluding the new issue proceeds,
as of Dec. 31, 2012, could decline substantially over the next two
years if Alcatel-Lucent is unable to significantly contain its
cash flow losses and, at the same time, prepays a large part of
its debt maturities beyond January 2015. This  assumes, however,
no sizable asset disposals and proceeds from the announced
monetization of the group's patent portfolio.

On Jan. 30, 2013, Alcatel-Lucent announced that it had upsized the
amount of the senior secured facilities issued by its subsidiary
Alcatel-Lucent USA by about EUR0.4 billion to about EUR2.0 billion
(equivalent), and reduced the pricing on the debt by an average of
about 90 basis points, thanks to strong investor demand.  The
group has also said the financial maintenance covenant has been
removed.

The negative outlook reflects the possibility of a downgrade over
the next 12 months if the group's currently adequate liquidity
becomes "less than adequate" under S&P's criteria due to continued
significant negative free operating cash flow (FOCF) prospects,
including negative FOCF above EUR0.7 billion in 2013, and
substantial redemptions of debt maturities beyond 2015.

Furthermore, a one-notch rating downgrade is likely if S&P revises
its assessment of the group's business risk profile to
"vulnerable" from "weak."  S&P might take this action if it don't
see a clear trajectory showing the group's operating margins--as
adjusted by Alcatel-Lucent and on a last 12 months basis--
improving gradually toward about 3% during 2013.

S&P could revise the outlook to stable, if Alcatel-Lucent was able
to significantly reduce its cash losses in 2013 and achieve about
break-even FOCF thereafter on a sustainable basis.  S&P would also
expect the group to maintain an adequate liquidity position.


CLINICAL LABORATORY: S&P Assigns B+ Corp. Rating; Outlook Stable
----------------------------------------------------------------
Standard & Poor's Ratings Services said that it assigned its 'B+'
long-term corporate credit rating (CCR) to France-based clinical
laboratory operator Cerba European Lab SAS (Cerba).  The outlook
is stable.

At the same time, S&P assigned its 'B+' issue rating to Cerba's
EUR365 million senior secured notes due 2020.  The recovery rating
on the notes is '4', indicating S&P's expectation of average (30%-
50%) recovery in the event of a payment default.

The ratings on Cerba reflect S&P's view of the company's
relatively aggressive capital structure through its ownership by
private equity group PAI Partners.

S&P assess Cerba's financial risk profile as "highly leveraged"
under S&P's criteria.  Cerba is raising EUR365 million of notes to
refinance its bank debt.  S&P estimates that Cerba's Standard &
Poor's-adjusted net debt-to-EBITDA ratio will be about 10x by
Dec. 31, 2013.  S&P's estimate includes financial debt of
EUR417 million and about EUR398 million in the form of preference
shares, convertible bonds, and other debt-like instruments such as
shareholder loans.

S&P estimates that Cerba will achieve adjusted EBITDA of about
EUR84 million in 2013.  This will cover by 2.8x annual cash
interest payments of about EUR30 million, supported by positive
free operating cash flow (FOCF), which is in line with what S&P
considers commensurate with the current rating.

S&P assess Cerba's business risk profile as "fair" under S&P's
criteria.  S&P bases its view on Cerba's position as a leading
operator of clinical laboratory testing services in France,
Belgium, and Luxembourg.

S&P views Cerba's revenue diversification and its growing size as
an advantage in the fragmented, highly regulated, and price-
competitive environment.  This enables the company to exploit cost
advantages through common procurement and overhead optimization.
These benefits are reflected in comparatively high operating
margins.  S&P estimates that Cerba's EBITDA margins will remain in
the low- to mid-twenties, which compares favorably with the
margins of the company's larger international peers.

In S&P's view, despite the potentially negative effects of
European public spending cuts on health care, Cerba will sustain
positive underlying revenue growth of at least low single digits
while successfully integrating new acquisitions and at least
maintaining its operating performance momentum.

S&P views adjusted EBITDA cash interest coverage of 2.5x at all
times and positive FOCF generation as commensurate with the 'B+'
rating.  S&P could take a negative rating action if adjusted
EBITDA interest coverage drops to less than 2.5x, or if Cerba is
not able to generate positive FOCF.  This would most likely occur
if operating margins deteriorate due to an inability to profitably
integrate newly acquired operations.

A positive rating movement is unlikely over the next two years, in
S&P's view, due to Cerba's already high adjusted leverage.
However, S&P would likely take a positive rating action if the
company sustains adjusted debt to EBITDA of less than 5x.


KUKA AG: Moody's Upgrades Corporate Family Rating to 'B1'
---------------------------------------------------------
Moody's Investors Service upgraded KUKA AG's corporate family and
the probability of default ratings to B1 and B1-PD from B2 and B2-
PD respectively. Concurrently, the rating on the company's senior
secured notes due 2017 was upgraded to B2 from B3. The rating
outlook remains positive.

Ratings Rationale:

"The rating upgrade has been driven by KUKA's strong earnings and
cash flow performance as well as significantly improving credit
metrics in 2011 and 2012." says Rainer Neidnig, a Moody's Vice
President - Senior Analyst. On a preliminary basis and before
Moody's adjustments KUKA reported EBIT of EUR110 million in 2012
(+51% compared to 2011) and Free Cash Flow of EUR77 million after
EUR7 million in 2011.

The positive outlook reflects that credit metrics are strong even
for the B1 rating category and would qualify for a higher rating
if they can be achieved on a sustainable basis. Based on
preliminary results Moody's estimates debt/EBITDA of around 2.5x
(last twelve months ended Q3 2012: 2.7x), net debt/EBITDA of
around 1x (last twelve months ended Q3 2012: 1.7x), EBITA/interest
around 3.5x (last twelve months ended Q3 2012: 3.3x) and an EBITA-
margin close to 7% (last twelve months ended Q3 2012: 7.1%).

While Moody's cautions that 2012 results were supported by
favorable industry dynamics in the company's main end-markets,
i.e. the global automotive industry, Moody's believes KUKA will be
able to broadly maintain current metrics in the foreseeable
future. Although the book-to-bill ratio fell to 0.85x in the
second half of 2012 (full year 1.09x), new orders were still ahead
of prior year and the order backlog was at a very solid level of
EUR 909 million at year end (equaling 6 months of revenues).
Moreover, Moody's believes that underlying market conditions
remain overall positive as light vehicle production in emerging
markets should grow further and because of an ongoing trend
towards automated work processes. Furthermore, the group is
developing business opportunities with other sectors such as the
aerospace, healthcare or logistics industry which should help
reduce KUKA's reliance on the automotive industry. Last but not
least, Moody's believes the company has achieved notable
efficiency gains in recent quarters which should help defend
earnings and profit margins in future. Still, a key risk remains
KUKA's vulnerability to the inherent cyclicality of the automotive
industry which can cause volatile operating profits through the
economic cycle. In addition, the group will need to maintain a
tight grip on cost efficiency and working capital in a competitive
environment.

The B1 Corporate Family Rating is supported by KUKA's leading
competitive position in its relevant markets with, according to
KUKA, a no. 1 position in robotics for the automotive industry
worldwide and a no. 2 position in systems (body-in-white) in
Europe and the US. The rating also reflects a high level of
innovation and technology leadership as well as long-standing
customer relationships. The B1 rating is supported by the
company's adequate liquidity profile and adequate financial
covenant headroom under its EUR200 million syndicated facility
agreement.

The rating remains constrained by KUKA's high level of customer
concentration, with limited diversification both in terms of
industry as well as geography, leaving the company strongly
reliant upon the automotive industry and very strong and powerful
competitors in its markets, e.g. ABB. Moreover, the rating
considers the high cyclicality of KUKA's business which had
historically resulted in periods of weak earnings and negative
free cash flow generation.

Triggers for upgrade/downgrade

The ratings could be upgraded if KUKA maintains an EBITA-margin
above 6% (2012: 7% based on preliminary figures) and achieves
leverage ratios of debt/EBITDA below 3.0x. Moreover, Moody's would
expect positive free cash flow generation through the cycle as
well as EBIT/interest expense to remain sustainably around 3.0x.

The ratings could be downgraded if the company's leverage
increases notably above 3.5x or if EBIT/interest fell below 2x.
Likewise a structural deterioration in profitability such as
EBITA-margins falling below 5% for a prolonged period of time
could result in a downgrade.

The principal methodology used in this rating was the Global Heavy
Manufacturing Rating Methodology published in November 2009. Other
methodologies used include Loss Given Default for Speculative-
Grade Non-Financial Companies in the U.S., Canada and EMEA
published in June 2009.

Headquartered in Augsburg, Germany, KUKA AG focuses on robot-
supported automation of manufacturing processes and is active in
the mechanical and plant engineering sector. The company operates
under two divisions: KUKA Robotics (approximately 40% of group
revenues) and KUKA Systems (approximately 60% of group revenues).
In 2012, KUKA generated revenues of EUR 1.7 billion. KUKA is
publicly listed with Grenzebach Maschinenbau GmbH, Germany, being
its largest shareholder with a 24.4% stake.


LOXAM SAS: S&P Assigns 'BB-' Corp. Credit Rating; Outlook Stable
----------------------------------------------------------------
Standard & Poor's Ratings Services said that it had assigned its
'BB-' long-term corporate credit rating to France-based equipment
rental firm Loxam SAS (Loxam).  The outlook is stable.  At the
same time, S&P assigned its 'B' issue rating and '6' recovery
rating to Loxam's EUR300 million, seven-year bond issue.  The '6'
recovery rating indicates S&P's expectation of negligible (0%-10%)
recovery in the event of a payment default.

The current ratings on Loxam are at the same level as the
preliminary ratings S&P assigned on Jan. 15, 2013, mainly
reflecting its view of its broadly unchanged financial risk
profile under its final capital structure.  As part of its
refinancing plan and in addition to the EUR300 bond issue, a
syndicate of banks granted Loxam a EUR75 million revolving credit
facility (RCF).

The rating on Loxam reflects S&P's views of the company's business
risk profile as "fair" and financial risk profile as
"significant," as S&P's criteria define these terms.

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

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

As of Dec. 31, 2012, and including the EUR300 million bond issue,
S&P expects Loxam to have about EUR1.05 billion in adjusted debt,
including Standard & Poor's adjustments for operating leases,
pension deficits, and surplus cash.  Fully-adjusted funds from
operations (FFO) to debt should then stand at about 23% and debt
to EBITDA at 3.7x.

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

S&P' thinks that Loxam will be able to maintain its credit ratios
within the range that S&P considers as commensurate with a
significant financial risk profile, including adjusted FFO to debt
in the middle of the 20%-30% range and adjusted debt to EBITDA
below 4x.  S&P also expects the company to sustain break-even FOCF
through the cycle and to regularly extend the maturity of its
committed bilateral lines so as to maintain adequate liquidity.

S&P might raise the rating if Loxam achieved stronger credit
metrics on a sustainable basis, substantially reduced its debt in
absolute amounts, and showed some moderation in terms of
acquisitions.

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


PSA PEUGEOT-CITROEN: Moody's Reviews 'Ba3' Ratings for Downgrade
----------------------------------------------------------------
Moody's Investors Service placed the Ba3 ratings for PSA Peugeot-
Citroen and its guaranteed subsidiaries (PSA) on review for
downgrade.

"We are placing PSA's ratings on review for downgrade because the
group reported preliminary results for the full year 2012 which
fell short of Moody's previous expectations due to the challenging
automotive market in Europe," says Rainer Neidnig, a Moody's Vice
President - Senior Analyst.

Ratings Rationale:

This rating action was triggered by PSA's weaker-than-expected
preliminary financial and operating results for the full year 2012
as a result of the continued challenging operating conditions in
the European automotive market, which suffers from weak demand and
high price competition.

The review for downgrade of PSA's Ba3 rating reflects (1) the
group's weak operating performance, evidenced by a 17% decline in
its global unit sales in 2012 compared with the previous year
(including completely knocked down vehicles) and an operating loss
before restructuring charges and impairments of -EUR576 million
(including the EUR391 million operating profit of PSA's financial
services business); (2) negative free cash flow of EUR3.3 billion
before asset disposals, equity raised and cash flow generated by
PSA's financial services business; and (3) the challenge the group
faces in successfully turning around its operating and financial
performance in a continued challenging market environment.

Moody's notes that the ratings of the bonds without any notching
continues to assume that PSA will put in place a guarantee by GIE
PSA Tresorerie that will benefit PSA bondholders.

Should the review be concluded with a downgrade, this would likely
be limited to one notch.

Focus of the review

The focus of Moody's rating review will be (1) a detailed analysis
of PSA's 2012 results; (2) the progress of PSA's restructuring
efforts; and (3) a reassessment of Moody's expectations for the
group's performance over the next several years, including free
cash flow generation.

Moody's review of the rating will also consider measures being
taken by PSA to adjust costs, upcoming product launches and the
group's co-operation with GM, which could result in additional
synergies in the medium to longer term. Moody's notes that PSA
managed to maintain reported net debt on a group basis close to
EUR3.1 billion at year-end 2012 by successfully executing asset
disposals, raising additional equity and making substantial
progress in its previously announced cost reduction plan.
Moreover, PSA says that its restructuring efforts are on track and
that it aims to (1) halve its cash burn in 2013 compared with
2012; and (2) achieve positive free cash flow by the end of 2014.

What could change the ratings down/up

Moody's could downgrade PSA's ratings if the rating agency
concludes that the group's turn-around initiatives are likely to
fall short of yielding its targeted results, including a clear
path towards break-even operational free cash flow by end 2014.
Increasing concerns that PSA will not be able to limit negative
free cash flow (excluding restructuring costs) at -EUR1.2 billion
in 2013 or a deteriorating liquidity profile could also result in
a downgrade. In addition, Moody's could downgrade the ratings if
PSA (1) is unable to limit the recurring operating losses before
restructuring provisions in its industrial division to EUR500
million or less in 2013; and (2) fails to stabilize its market
shares in Europe given the renewal of key volume models.

Moody's considers that an upgrade over the short to medium term is
unlikely. However, the ratings could come under upward pressure
over the medium term if there were to be a faster-than-anticipated
and sustained recovery in the operating performance and cash
generation of PSA's automotive business. This recovery would be
reflected by a significant improvement in profitability and free
cash flow, with a solidly positive EBIT margin and free cash flow
by 2014 and beyond.

The principal methodology used in these ratings was the Global
Automobile Manufacture Industry published in June 2011. Other
methodologies used include Loss Given Default for Speculative-
Grade Non-Financial Companies in the U.S., Canada and EMEA
published in June 2009.

Peugeot S.A., headquartered in Paris, is Europe's second-largest
maker of light vehicles with its two main brands Peugeot and
Citroen. The group's other industrial operations include Faurecia,
one of Europe's leading automotive suppliers in which PSA holds a
57% interest. The group also provides financing to dealers and
end-customers through its wholly owned finance subsidiary, Banque
PSA Finance. In 2012, PSA generated revenues of EUR54 billion.


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


ADAM OPEL: GM Expresses Concern Over EU Car Industry Volumes
------------------------------------------------------------
Robert Wright at The Financial Times reports that General Motors'
finance director has admitted to "concern" over European car
industry volumes after it reported a sharp deepening of losses in
the troubled continent in its full-year results.

However, Dan Ammann said there was currently no change in the
company's plan to deal with the slump in the market, where car
registrations fell 8.2% year-on-year last year, the FT relates.

GM has announced jointly with France's PSA Peugeot Citroen -- with
which it is forming an alliance -- plans to close two large
factories in Europe, the FT discloses.  GM, which operates mainly
under the Opel and Vauxhall brands in Europe, is also launching
new products -- including the Opel Adam and Mokka models -- to
refresh its antiquated European range, the FT relates.

GM's adjusted earnings before interest and tax (Ebit) in Europe
deepened from US$700 million in 2011 to Us$1.8 billion to 2012,
the FT discloses.

"We feel concern about some of the things we cannot control, the
most obvious being the volumes and overall industry measures," the
FT quotes Mr. Ammann as saying of the European market.  "The plan
has not changed. If we need to adjust because of unforeseen market
developments, we have a pretty clear path to what we need to do."

Mr. Ammann acknowledged that GM expected the overall European
market to shrink further this year and that its margins in North
America would be flat as it spent on new vehicle launches, the FT
notes.

As reported by the Troubled Company Reporter-Europe on Jan. 11,
2013, Bloomberg News related that GM's losses in Europe since 1999
have totaled US$17.3 billion.  The Detroit-based carmaker has a
target of bringing the operations to break-even by 2015, Bloomberg
said.  Sales by Opel and its U.K. sister brand Vauxhall have
fallen faster than European industrywide deliveries have
contracted, cutting the divisions' combined market share to 6.7%
in the first 11 months of 2012 from 8.4% for all of 2007,
Bloomberg disclosed.  Opel will stop producing cars at its 3,100-
employee plant in Bochum, Germany, in 2016 in the first shutdown
of an auto plant in the country since World War II, Bloomberg
said.  GM closed a factory in Antwerp, Belgium, in 2010 and is
selling a transmission plant in Strasbourg, France, that employs
about 1,000 people, according to Bloomberg.

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


BUILDING COMFORT: Moody's Withdraws 'Ba2' Rating on Cl. F Notes
---------------------------------------------------------------
Moody's Investors Service withdrew the following rating issued by
Building Comfort 2008-1:

EUR14.75M F Notes, Withdrawn (sf); previously on Sep 30, 2008
Assigned Ba2 (sf)

Ratings Rationale:

Moody's has withdrawn the rating for its own business reasons.

The withdrawal is at the transaction manager's request and on
behalf of the noteholders' agreement. Prior to this rating
withdrawal all other remaining notes in the transaction were fully
redeemed and the transaction has now been terminated.

The Building Comfort 2008-1 transaction transferred the credit
risk linked to a reference portfolio of German residential
mortgage loans originated by Unicredit Bank AG (formerly
HypoVereinsbank AG) to investors through the issuance of credit-
linked notes.


FHB MORTGAGE: Moody's Lowers Rating on Covered Bonds to 'Ba3'
-------------------------------------------------------------
Moody's Investors Service downgraded to Ba3 from Ba1 the ratings
on the covered bonds issued by FHB Mortgage Bank (deposits B2
negative; bank financial strength rating (BFSR) E+/baseline credit
assessment (BCA) b3, negative). This rating action is prompted by
the downgrade of the issuer rating to B2 from Ba3 on review for
downgrade. This rating action concludes the review of these
covered bonds initiated on December 14, 2012.

At the same time, Moody's confirmed the Baa3 ratings on the
covered bonds issued by OTP Mortgage Bank (local currency bank
deposits Ba1 negative; BFSR D/BCA ba2, negative). The confirmation
of the covered bond rating follows the confirmation of the long-
term senior unsecured rating of the parent bank, OTP Bank NyRt
(long-term senior unsecured debt Ba1 negative; BFSR D/BCA ba2,
negative). This rating action concludes the review of these
covered bonds initiated on December 14, 2012.

Ratings Rationale:

This rating action on FHB Mortgage Bank's covered bonds was
prompted by Moody's downgrade of FHB's issuer ratings to B2 from
Ba3 on February 14, 2013.

The confirmation of OTP Mortgage Bank's (OTP) covered bonds at
Baa3 follows Moody's confirmation of OTP NyRt's Ba1 long-term
senior unsecured rating on February 14, 2013. While the issuer of
the covered bonds is OTP, Moody's uses the long-term senior
unsecured rating of OTP Bank NyRt, the parent bank of OTP, as the
"issuer rating" for its covered bond analysis as OTP NyRt provides
a full, irrevocable and unconditional guarantee of OTP's
obligations.

A downgrade of an issuer's senior unsecured ratings negatively
affects the covered bond ratings through its impact on both the
timely payment indicator (TPI) framework and the expected loss
method.

Both covered bond programs are assigned a TPI of "Very
Improbable". Moody's TPI framework indicates a maximum rating
range of Baa1-Baa3 for OTP's and Ba1-Ba3 for FHB's covered bonds.
Therefore, the upper bounds of the TPI ranges do not constrain the
ratings of both covered bond programs.

The covered bondholders' significant exposure to both refinancing
and foreign-exchange risk is the primary driver of the limited
rating uplift of the covered bonds above the issuer ratings. Both
covered bond programs have material amounts of foreign-exchange
denominated assets and covered bonds. More precisely, 47.4% of the
assets in OTP's cover pool (Swiss franc, Japanese yen and Euro)
and 45.8% in FHB's cover pool (Swiss franc and Euro) are foreign-
exchange denominated. Foreign-exchange denominated covered bonds
account for 37.9% of OTP's cover pool and 12.0% for FHB.

In this context, Moody's believes that recoveries for covered
bondholders may be threatened by political and economic factors,
such as devaluation, redenomination and a foreign-exchange debt
moratorium, particularly in the event of a Hungarian government
default. In this scenario, both covered bond issuers may not be in
the position to fulfill their obligations on their covered bonds,
and in particular the foreign-exchange denominated covered bonds.

Moody's have considered these uncertainties in Moody's timely
payment analysis. This risk therefore constrains the rating of
FHB's covered bonds at two notches above the issuer rating. In the
case of OTP's covered bonds, which are rated one notch above
Hungary's Ba1 government rating, the material share of foreign-
exchange denominated covered bonds constrains the covered bond
rating at one notch above the issuer rating.

Key rating assumptions/factors

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

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

The cover pool losses for OTP's mortgage covered bonds are 50.6%.
This is an estimate of the losses Moody's currently models if OTP
defaults. Cover pool losses can be split between market risk of
33.6% and collateral risk of 17.0%. Market risk measures losses as
a result of refinancing risk and risks related to interest-rate
and currency mismatches (these losses may also include certain
legal risks). Collateral risk measures losses resulting directly
from the credit quality of the assets in the cover pool.
Collateral risk is derived from the collateral score, which for
this programs is currently 25.3%.

The over-collateralization (OC) in the cover pool is 19.3%, of
which OTP provides 0% on a "committed" basis. The minimum OC level
that is consistent with the Baa3 rating target is 0%.

The cover pool losses for FHB's mortgage covered bonds are 41.4%.
This is an estimate of the losses Moody's currently models if FHB
defaults. Cover pool losses can be split between market risk of
28.7% and collateral risk of 12.7%. Market risk measures losses as
a result of refinancing risk and risks related to interest-rate
and currency mismatches (these losses may also include certain
legal risks). Collateral risk measures losses resulting directly
from the credit quality of the assets in the cover pool.
Collateral risk is derived from the collateral score, which for
this programs is currently 18.9%.

The OC in the cover pool is 22.9%, of which FHB provides 13.0% on
a "committed" basis. The minimum OC level that is consistent with
the Ba3 rating target is 0%.

For OTP all numbers in this section are based on the most recent
Performance Overview as per September 30, 2012. For FHB all
numbers in this section are based on the most recent modeling
based on data as per September 30, 2012.

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

Sensitivity analysis

The robustness of a covered bond rating largely depends on the
issuer's credit strength.

The TPI Leeway measures the number of notches by which the
issuer's rating may be downgraded before the covered bonds are
downgraded under the TPI framework.

The TPI assigned to OTP's and FHB's covered bonds programs is
"Very Improbable". The TPI Leeway for both programs is limited,
and thus any downgrade of the issuer ratings may lead to a
downgrade of the covered bonds.

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

Rating methodology

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


* Gov.'t Policy Changes, Weak Demand to Hit Utilities Sector
------------------------------------------------------------
Changes to government energy policy and weak demand for
electricity will weigh on the performance of German utilities'
power generation arms for the next three to five years, Fitch
Ratings says.

Generous subsidies over the last couple of years have driven a
surge in renewable energy, which now accounts for 36% of installed
capacity and about 25% of electricity produced in Germany. As
renewable energy always has priority of dispatch, this trend has
compressed the competitive part of the electricity market,
contributing to a fall in wholesale prices and together with cheap
carbon dioxide and expensive natural gas, relegating gas-fired
power stations to a rarely-used backup source.

Fitch says, "Along with the phasing-out of nuclear power, this
trend is one of the fundamental changes in the industry
highlighted in our report "Structural Pressures in German Power
Generation," published on February 18.

"Sluggish demand is likely to remain because of weak economic
growth and increasing energy efficiency by consumers. This
exacerbates the base-load overcapacity in Germany, which may
persist for years. New net capacity will contribute to margin
erosion in generation, while the full auctioning of carbon dioxide
certificates from the start of 2013 will be a further drag on
profitability as utilities will probably not be able to pass on
the full cost to end-customers.

"In this environment, the mix of energy sources and the age and
quality of a utility's generation fleet will be a key
differentiating factor. RWE is well placed among the major
utilities thanks to its low-cost lignite-fired generation fleet,
which remains profitable even in the prevailing weak pricing
conditions. However, lignite's advantage may be taken away by a
political change such as minimum carbon pricing or the
introduction of a tax on coal as seen in other countries.

E.ON's fleet is more reliant on nuclear power plants that have a
remaining life of about seven years and which could be difficult
to replace given the market dynamics (lacking commercial
incentives) and the level of public opposition to green field
projects. EnBW is also reliant on nuclear power, but with slightly
longer remaining life, and more contribution from hydro assets,
which keep production costs down.


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


MALEV ZRT: Hungary Strikes Vneshekonombank's Suit Over Bankruptcy
-----------------------------------------------------------------
Balazs Penz at Bloomberg News, citing the MTI news service,
reports that a Hungarian court struck down a lawsuit by Russia's
state-owned Vneshekonombank over the bankruptcy of the defunct
Malev Zrt. airline.

According to Bloomberg, MTI, citing a statement by Magyar Nemzeti
Vagyonkezelo Zrt., said that the Budapest court in its first-
degree ruling issued Feb. 13 rejected a request by VEB, a minority
owner in Malev, to void the purchase of two of the airline's
former subsidiaries by MNV, a Hungarian state asset management
company.

MTI said that the verdict hasn't yet been delivered and can be
appealed within 15 days of reception, Bloomberg notes.

As reported by the Troubled Company Reporter-Europe on Feb. 16,
2012, MTI-Econews, citing gazdasag.hu, related that the Municipal
Court of Budapest ordered to put Malev under liquidation.  MTI
said that the liquidation procedure was initiated on Feb. 1, 2012.
The court appointed state-owned Hitelintezeti Felszamolo Nonprofit
Malev's liquidator and Jeno Varga the bailiff for the company, MTI
disclosed.

Malev is Hungary's former national carrier.



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


HARVEST CLO: Fitch Affirms 'B' Ratings on Two Note Classes
----------------------------------------------------------
Fitch Ratings has affirmed Harvest CLO IV Plc as:

Class A-1A (ISIN XS): affirmed at 'AAAsf'; Outlook Stable
Class A-1B (ISIN XS): affirmed at 'AAsf'; Outlook Stable
Class A-2 (ISIN XS): affirmed at 'AAsf'; Outlook Stable
Class B-1 (ISIN XS): affirmed at 'Asf'; Outlook Stable
Class B-2 (ISIN XS): affirmed at 'Asf'; Outlook Stable
Class C (ISIN XS): affirmed at 'BBBsf'; Outlook revised to Stable
from Negative
Class D-1 (ISIN XS): affirmed at 'BBsf'; Outlook revised to Stable
from Negative
Class D-2 (ISIN XS): affirmed at 'BBsf'; Outlook revised to Stable
from Negative
Class E-1 (ISIN XS): affirmed at 'Bsf'; Outlook Negative
Class E-2 (ISIN XS): affirmed at 'Bsf'; Outlook Negative
Class M combination notes (ISIN XS): 'AAAsf' withdrawn

The affirmation reflects the transaction's stable performance
since the last surveillance review in February 2012 and the level
of CE commensurate with the current ratings.

Fitch has withdrawn the ratings of the class M combination notes
as they have been exchanged for their component notes and
subsequently cancelled.

All over-collateralization tests except the reinvestment test are
currently in compliance and have been passing since February 2012.
A breach of the reinvestment test during the reinvestment period
triggers, at the manager's discretion, the use of up to 50% of
available interest proceeds to reinvest in additional collateral
or to pay down the notes in order of seniority. The transaction's
reinvestment period finishes in July 2013.

The Negative Outlook on the class E-1 and E-2 notes reflect their
vulnerability to a clustering of defaults due to the low credit
enhancement available for these notes. The Outlook on the class C
and D notes has been revised to Stable from Negative to reflect
the favorable maturity profile of the pool with no significant
concentration in assets maturing in 2013 and 2014, totaling 1.46%
and 7.06%, respectively.

In its analysis, the agency considered the sensitivity of the
notes' ratings to the exposure to countries where Fitch has
imposed a country rating cap lower than the ratings on any notes
in the transaction. These countries are currently Greece, Italy,
Portugal and Spain, but may include additional countries in case
of sovereign rating migration. Fitch believes that the current
notes' ratings will not face a material negative impact for
exposure of up to 15%, under the same average portfolio profile
and assuming that the current ratings on the UK and eurozone are
stable.

Harvest CLO IV Plc is a securitization of senior secured leveraged
loans managed by 3i Debt Management Investments Ltd., which closed
in June 2006. The reinvestment period continues until July 2013,
following which the manager can reinvest unscheduled principal
proceeds. The final legal maturity is July 2021.


ANGLO IRISH: Arthur Cox Takes Lead Role in Bank's Liquidation
-------------------------------------------------------------
Alex Newman at legalweek.com reports that Irish firm Arthur Cox
has taken the lead role on the liquidation of Anglo Irish Bank,
following the failure of a series of measures to rescue the
troubled lender.

According to the report, the firm advised the Irish state and its
Department of Finance on the liquidation and replacement of
EUR28 billion (GBP24 billion) in promissory notes in the bank,
known as Irish Bank Resolution Corp (IBRC) since 2011, with long-
term Government bonds.

legalweek.com relates that this is intended to ease Ireland's
short-term financing needs, reduce its need to borrow over the
next 10 years and improve its ability to re-enter the bond
markets.

The Arthur Cox team was led by former managing partner
Padraig O'Riordain -- padraig.oriordain@arthurcox.com -- with
support from corporate partners Rob Cain --
robert.cain@arthurcox.com, Tom Courtney --
tom.courtney@arthurcox.com -- and Maura McLaughlin --
maura.mclaughlin@arthurcox.com --, as well as insolvency partner
John Donald -- john.donald@arthurcox.com --, debt capital markets
partner Cormac Kissane -- cormac.kissane@arthurcox.com -- and
litigation partner Isabel Foley -- isabel.foley@arthurcox.com --
legalweek.com discloses.

The bank's board -- which was previously advised by Freshfields
Bruckhaus Deringer when the Irish Government split the bank into
separate funding and asset recovery arms in 2010 -- was replaced
by accountancy firm KPMG during the liquidation, the report notes.

"The exchange of the promissory notes for more efficient, long-
term financing in tandem with the liquidation of what was Anglo
Irish Bank and Irish Nationwide Building Society, are final
milestones in the reorganisation and stabilisation of the Irish
banking system," legalweek.com quotes Mr. O'Riordain as saying.
"The initiative was named Project Dawn and, in terms of Ireland
now moving on from our banking crisis, this could not be more
apt."

Anglo Irish Bank was an Irish bank headquartered in Dublin from
1964 to 2011.  It went into wind-down mode after nationalization
in 2009.  In July 2011, Anglo Irish merged with the Irish
Nationwide Building Society, with the new company being named the
Irish Bank Resolution Corporation.


ANGLO IRISH: Ireland May Face Lawsuits Over Liquidation
-------------------------------------------------------
Robin Wigglesworth, Jamie Smyth and Michael Steen at The Financial
Times report that Ireland faces a raft of potential lawsuits and a
possible constitutional challenge over its decision to liquidate
one of its failed banks as part of a deal to restructure EUR28
billion in bank debts.

The Irish parliament earlier this month passed emergency
legislation to wind down Irish Bank Resolution Corporation, and
for the Central Bank of Ireland and the National Asset Management
Agency, the country's "bad bank", to take over most of IBRC's
assets, the FT recounts.

IBRC's unsecured creditors -- which include trade suppliers, local
credit unions, external accountants and lawyers, investors and
potentially even some depositors -- face big losses, and could
even be wiped out, the FT notes.

Some may end up suing the Irish authorities over the alleged
undervaluing of the bank's assets when they were taken over by the
Central Bank of Ireland, the FT says.

The most valuable of these assets -- promissory notes, in effect
government IOUs -- had been used as collateral for borrowing from
the central bank, the FT discloses.  Following the liquidation
they have been seized by the CBI and replaced by longer term, low
coupon government bonds, the FT states.

But the central bank took over the promissory notes at their face
value of EUR25 billion, while IBRC had valued the IOUs at almost
EUR28 billion by the end of June last year, the FT relates.  The
market value was arguably even higher when the liquidation
legislation was passed, given the rally in Irish bonds since mid-
2012, the FT states.

According to the FT, anticipating challenges, the government's
legislation placed an "immediate stay" on all legal proceedings
against the bank, but allows KPMG, the bank's special liquidator,
to proceed with legal cases IBRC has taken against individuals who
owe it money.

Nonetheless, brokerages have started to offer IBRC creditor claims
to hedge funds, some of which are considering buying them and
taking on the Irish authorities in court to extract a better deal,
the FT discloses.

Anglo Irish Bank was an Irish bank headquartered in Dublin from
1964 to 2011.  It went into wind-down mode after nationalization
in 2009.  In July 2011, Anglo Irish merged with the Irish
Nationwide Building Society, with the new company being named the
Irish Bank Resolution Corporation.


LOMBARD STREET: Moody's Affirms Ba1 Rating on EUR23MM Cl. D Notes
-----------------------------------------------------------------
Moody's Investors Service has taken the following rating actions
on the notes issued by Lombard Street CLO I P.L.C.

EUR19.25M Class B Deferrable Secured Floating Rate Notes due 2023,
Upgraded to Aa2 (sf); previously on Jul 1, 2011 Upgraded to Aa3
(sf)

EUR18.2M Class C Deferrable Secured Floating Rate Notes due 2023,
Upgraded to A2 (sf); previously on Jul 1, 2011 Upgraded to A3 (sf)

EUR10M Class T Combination Notes due 2023, Upgraded to A1 (sf);
previously on Jul 1, 2011 Upgraded to A2 (sf)

EUR7M Class W Combination Notes due 2023, Upgraded to A3 (sf);
previously on Jul 1, 2011 Upgraded to Baa2 (sf)

Moody's also affirmed the ratings of the Class A, Revolving Loan
Facility, Class D and Class E notes.

EUR166.25M (currently EUR160.89M outstanding) Class A Senior
Secured Floating Rate Notes due 2023, Affirmed Aaa (sf);
previously on Jul 1, 2011 Upgraded to Aaa (sf)

EUR70M (currently EUR60.94m outstanding), Revolving Loan Facility
Notes, Affirmed Aaa (sf); previously on Jul 1, 2011 Upgraded to
Aaa (sf)

EUR23.8M Class D Deferrable Secured Floating Rate Notes due 2023,
Affirmed Ba1 (sf); previously on Jul 1, 2011 Upgraded to Ba1 (sf)

EUR18.375M (currently EUR15.28m outstanding), Class E Deferrable
Secured Floating Rate Notes due 2023, Affirmed Ba3 (sf);
previously on Jul 1, 2011 Upgraded to Ba3 (sf)

Moody's withdrew the rating of the Class S combination notes due
to cancellation:

EUR25M Class S Combination Notes due 2023, Withdrawn (sf);
previously on Nov 23, 2012 Aaa (sf) Placed Under Review for
Possible Downgrade

The ratings of the Combination Notes address the repayment of the
Rated Balance on or before the legal final maturity. For ClassW,
the 'Rated Balance' is equal at any time to the principal amount
of the Combination Note on the Issue Date increased by the Rated
Coupon of 0.25% per annum, 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 T, 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.

Lombard Street CLO I P.L.C., issued in December 2006, is a multi
currency Collateralized Loan Obligation backed by a portfolio of
mostly European loans. The portfolio is managed by Avoca Capital
Holdings (originally managed by KBC Financial Products UK
Limited). This transaction will reach the end of its reinvestment
period on 28 February 2013. It is composed of 94% senior secured
loans and 6% CLO securities.

Ratings Rationale:

According to Moody's, the rating actions taken on the notes are
primarily a result of an improvement in the credit quality of the
collateral pool. In addition, the imminent end of the reinvestment
period is also credit positive given the transaction will start to
benefit from portfolio amortization.

The improvement in credit quality is observed through a better
average credit rating of the portfolio (as measured by the
reported weighted average rating factor "WARF"), a decrease in the
proportion of securities from obligors with a credit quality
consistent with a Caa1 rating and below. The transaction also
benefited from an increase in the weighted average spread ("WAS")
of the collateral pool since the last rating action in July 2011.

As of the latest trustee report dated December 2012, securities
rated Caa1 and below make up 6.18% of the underlying portfolio
versus 13.69% in the April 2011 report, on which the last rating
action was based. The reported WARF has improved to 2722 in the
December 2012 from 2830 in the April 2011 and the WAS has
increased to 3.64% from 2.95%.

The overcollateralization ratios have increased since the last
rating action in July 2011. As of the latest trustee report dated
December 2012, the Class A, Class B, Class C, Class D and Class E
overcollateralization ratios are reported at 144.71%, 133.15%,
123.81%, 113.40% and 107.59% respectively, versus April 2011
levels of 143.47%, 131.82%, 122.43%, 111.99% and 106.17%
respectively.

In its base case, Moody's analyzed the underlying collateral pool
to have a performing par and principal proceeds balance of EUR
316.83 million, a defaulted par of EUR 20.18 million, a weighted
average default probability of 19.42% (consistent with a WARF of
2,873), a weighted average recovery rate upon default of 48.75%
for a Aaa liability target rating, a diversity score of 32 and a
weighted average spread of 3.64%. 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 94% 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:

Deterioration of credit quality to address the refinancing and
sovereign risks -- Approximately 34.50% of the portfolio are rated
B3 and below and maturing between 2014 and 2016, which may create
challenges for issuers to refinance. Approximately 10% of the
portfolio is exposed to obligor located in Ireland, Italy and
Spain. Moody's considered the scenario where the WARF of the
portfolio was increased to 3,263 by forcing to Ca the credit
quality of 25% of such exposures subject to refinancing or
sovereign risks. 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
collateral manager's 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:

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) The transaction has significant exposure to non-EUR denominated
assets. Volatilities in foreign exchange rate will have a direct
impact on interest and principal proceeds available to the
transaction, which may affect the expected loss of rated tranches.
As of the last trustee report in December 2012, the transaction
exhibits an asset liability mismatch for non-EUR denominated
assets which results in some liabilities not being naturally
hedged by assets in their respective currency. Moody's has taken
into account this mismatch in the modeling analysis.

4) Moody's also notes that around 50% 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. The cash flow model used for this transaction is
Moody's EMEA Cash-Flow model.

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.

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.


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


BANCA POPOLARE: Moody's Lowers Long-Term Deposit Rating to Caa2
---------------------------------------------------------------
Moody's Investors Service downgraded Banca Popolare di Spoleto's
(BP Spoleto) long-term deposit rating to Caa2 from B3; at the same
time, the bank's standalone bank financial strength rating (BFSR)
of E was remapped to a standalone baseline credit assessment (BCA)
of ca from caa2.

The Caa2 deposit rating remains on review with direction
uncertain, while the E BFSR now carries a stable outlook.

Ratings Rationale:

Moody's says that the downgrade of BP Spoleto's standalone BCA was
triggered by the intervention of the Bank of Italy, that on
February 12, 2013 put the bank under extraordinary administration.

In Moody's opinion, the regulatory action likely indicates that BP
Spoleto's actual capital level may be significantly weaker than
the relatively weak reported Core Tier 1 ratio of 7.2% as of
September 2012. The bank planned a capital increase of Eur30
million in 2012, which was postponed by the Bank of Italy until
completion of its inspection; following the conclusion of the
inspection, BP Spoleto was put under extraordinary administration.

At the same time, the rating agency cautions that BP Spoleto's
internal capital generation is weak, with net profit averaging
less than 0.3% of average risk-weighted assets in the past three
years.

The combination of these factors indicates that the likelihood
that BP Spoleto will need external support in the next 12 months
is very high, resulting in a BCA of ca.

The downgrade to Caa2 of the bank's long-term deposit rating
reflects BP Spoleto's weakened standalone creditworthiness as
reflected in the ca BCA, as well as Moody's assumptions of low
systemic support, resulting in two notches of uplift from the BCA
from the Italian government, rated Baa2, negative outlook. The
deposit rating remains on review with direction uncertain. This
reflects the uncertainty regarding the outcome of the bank's
administration and possible levels of support for the deposit
rating thereafter. Moody's noted that the review could result in
an upgrade in the event that the bank is recapitalized or acquired
by a stronger parent.

What could change the ratings up/down

Upward pressure could be exerted on the bank's standalone ratings
as a result of a significant strengthening of capital adequacy,
profitability and asset quality, which is unlikely to happen
without external support. An upgrade of the standalone credit
assessment, or the acquisition of BP Spoleto by a larger and
stronger banking group, or clear evidence of systemic support,
could lead to an upgrade of the deposit rating.

Downward pressure on BP Spoleto's ratings could be triggered by a
decision by the regulator to put the bank into liquidation.

Principal methodology

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


MEDIOLEASING FINANCE: Moody's Cuts Rating on Class B Notes to B3
----------------------------------------------------------------
Moody's Investors Service downgraded the rating of the Class B
notes of Medioleasing Finance S.r.l. by five notches to B3(sf)
from Ba1(sf). This rating action follows Moody's recent downgrade
of the transaction's liquidity guarantor, Banca delle Marche
S.p.A. to B3 (from Ba1 on review for downgrade) on January 25,
2013. Medioleasing Finance S.r.l is an Italian lease ABS
transaction.

Issuer: Medioleasing Finance S.r.l

EUR105.4M B Certificate, Downgraded to B3 (sf); previously on
January 10, 2013 Ba1 (sf) Placed on Review for Downgrade

Ratings Rationale:

This rating action reflects the downgrade to B3 from Ba1 of Banca
delle Marche's long-term debt and deposit ratings on 25 January
2013. Banca delle Marche is the liquidity guarantor for the
transaction.

The Class B notes benefit from cash flows generated by the
securitized assets and from a liquidity guarantee from Banca delle
Marche. Moody's considered that given (1) the quality and observed
performance of the pool; (2) the limited credit enhancement
available to the Class B notes; and (3) the potential
ineffectiveness of the early amortization triggers, the cash flow
generated by the assets are not sufficient to enhance the credit
quality of the Class B notes above the guarantor's rating. As a
result, the rating of the Class B notes are in line with the
guarantor's rating (B3/N-P).

Moody's revised the mean default assumption for the pool in
December 2012 at 18% of the current balance, while the rating
agency set the recovery rate at 45% and coefficient of variation
at 42%. Although the credit enhancement to the Class B notes
provided by the reserve fund is high to date (14.7%), it should
mostly benefit to the Class A notes as it will not be available
anymore once Class A notes are fully repaid.

Finally, Moody's did not rely on the performance triggers designed
to mitigate the potential pool deterioration during the remaining
four years of the revolving period through April 2017. Indeed,
while one purchase termination event occurred (as a consequence of
the successive downgrades of Banca delle Marche below Baa2 in May
2012 down to B3 in January 2013), the transaction maintained its
revolving capacity as, in accordance with the transaction
documentation, a purchase termination notice shall be served if so
requested by the majority of the noteholders, and such request has
not been issued at the date of each notice.

The methodologies used in this rating were Moody's "Approach to
Rating Multi-Pool Financial Lease-Backed Transactions in Italy"
published in June 2006 and Moody's "Approach to Rating CDOs of
SMEs in Europe", published in February 2007.


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


UKIO BANKAS: Central Bank Declares Lender Insolvent
---------------------------------------------------
Agence France-Presse reports that the Lithuanian central bank on
Feb. 18, 2013, declared Ukio Bankas insolvent and opened talks on
transferring the lender's assets to the Baltic state's smaller
Siauliu Bankas.

AFP, citing a statement, relates that after a board meeting on
Monday evening, the central bank also authorized Ukio's temporary
administrator "to begin negotiations with Siauliu bankas regarding
the transfer of the assets, rights, transactions, and
liabilities."

According to the news agency, Central bank authorities said Monday
the asset transfer "would better protect the confidence of the
shareholders in the stability and reliability of the banking
system."

AFP relates that the temporary administrator said Monday that the
asset transfer option was also chosen to avoid burdening the state
with paying out LTL2.7 billion (EUR0.78 billion) in insured
deposits.

                         About Ukio Bankas

Ukio Bankas AB is a Lithuania-based commercial bank, which is
involved in the provision of banking, financial, investment, life
insurance and leasing services to individuals and companies.  It
is Lithuania's sixth-largest lender by assets.


UKIO BANKAS: Siauliu Bankas to Take Over Operations
---------------------------------------------------
Bryan Bradley at Bloomberg News reports that the Bank of Lithuania
said Ukio Bankas AB, Lithuania's fourth-largest lender by deposits
until its operations were suspended last week, will be sold to a
rival.

According to Bloomberg, Bank of Lithuania chief Vitas Vasiliauskas
said the central bank decided on Feb. 18 that Ukio's administrator
should sell it to Siauliu Bankas AB, as the least costly and
fastest way to resolve the problems posed by the insolvent lender.

Bloomberg relates that Mr. Vasiliauskas said successful transfer
of Ukio's assets, rights and liabilities to Siauliu Bankas, after
removing the bad loans, would mean the insurance fund will only
have to pay out about LTL800 million (US$309 million).  He said
that in case of bankruptcy, it would face charges of LTL2.7
billion, Bloomberg notes.

"We think negotiations should be concluded this week so that
already next week we could talk about gradual renewal of
operations," Bloomberg quotes the central banker as saying.  This
approach "would better protect the confidence of the shareholders
in the stability and reliability of the banking system, as well as
other public interests, rather than liquidation."

Siauliu, whose biggest shareholder is the European Bank for
Reconstruction with a 19.6 percent stake, said last week that it
had begun negotiations with Ukio's administrator, Bloomberg
recounts.  At the same time, the EBRD said it was ready to provide
subordinated debt to strengthen Siauliu for a deal on Ukio,
Bloomberg discloses.

According to Bloomberg, Vasiliauskas said it was not clear whether
Siauliu would agree to acquire any of the foreign assets that
Ukio's majority owner Vladimir Romanov, or companies related to
him, had pledged to the bank as loan security.  He said that those
included assets related to Edinburgh soccer club Heart of
Midlothian, the Birac AD alumina producer in Bosnia and
Herzegovina, real estate in Moscow and other things, Bloomberg
notes.

The central banker, as cited by Bloomberg, said that unhealthy
assets would be split off and, if recovered, distributed to Ukio
creditors.

Temporary administrator Adomas Audickas' report on Ukio found that
the bank's liabilities exceeded its assets by about LTL1.1
billion, Bloomberg discloses.

                    Independent Valuation

Mr. Audickas said that in order to proceed quickly, that
preliminary estimate would be the basis for negotiations with
Siauliu, Bloomberg discloses.  He said that an independent
appraiser would then value the property in detail, and any
differences would be settled between the parties later, Bloomberg
relates.

Separately, Bloomberg's Mr. Bradley reports that Scandinavian
banks SEB AB and DNB ASA said they aren't interested in acquiring
Ukio Bankas.

"There's not enough information or time" for SEB to assess the
value of any of Ukio's business, the Swedish lender's Lithuanian
spokesman Arvydas Zilinskas, as cited by Bloomberg, said on
Monday.  Andrius Vilkancas, DNB's Lithuanian spokesman, said the
Norwegian bank "won't participate in this process, Bloomberg
relates.

Lithuania's central bank said Feb. 15 that Siauliu Bankas AB and
three other banks it didn't identify were interested in acquiring
some of the lender's assets, Bloomberg notes.  According to
Bloomberg, Baltic News Service named the other potential bidders
as SEB AB, DNB ASA and the Finasta investment-banking unit of
Lithuania's defunct Snoras Bankas AB.

Finasta Director General Andrius Barstys said the company is
considering making an offer for some of Ukio's assets, Bloomberg
relates.

The Central bank suspended Ukio's operations on Feb. 12 and said
the lender was insolvent after risky lending to related companies.
The Bank of Lithuania on Feb. 14 said that it was seeking to avoid
the bankruptcy of Ukio to limit the potential impact on public
finances, Bloomberg disclosed.

                         About Ukio Bankas

Ukio Bankas AB is a Lithuania-based commercial bank, which is
involved in the provision of banking, financial, investment, life
insurance and leasing services to individuals and companies.  It
is Lithuania's sixth-largest lender by assets.  The Central Bank
suspended Ukio Bankas' operations on Feb. 12, 2013, after it was
established the lender had been involved in risky activities.  A
majority 64.9% of Ukio Bankas had been owned by Russian born-
businessman Vladimir Romanov.


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


CICCOLELLA HOLDING: Files for Creditor Protection
-------------------------------------------------
DutchNews.nl, citing Financieele Dagblad, reports that Ciccolella
Holding has filed for court protection from creditors.

According to DutchNews.nl, the paper said that the company, with
annual turnover of EUR230 million, has debts of EUR50 million.
The paper said that the company's financial troubles threaten to
damage some 100 suppliers, including transport firms, staffing
agencies, subcontractors and IT firms who together are owed
millions of euros, DutchNews.nl relates.

The Netherlands is the world's biggest grower of plants and
flowers but traders have been hit by falling margins pushed
through by major retailers, DutchNews.nl discloses.  The paper
said that in addition, the Dutch market is highly fragmented,
DutchNews.nl notes.

Aalsmeer-based Ciccolella Holding, the third biggest flower
trading group on the Dutch market.  It is owned by Italy's
Ciccollela Spa.


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


EINDHOVEN PROPERTIES: Two Properties Sold in Bankruptcy Tender
--------------------------------------------------------------
PropertyEU reports that a fund managed by Griffin Real Estate has
acquired Philips House and Batory Office Building I, two modern
office buildings located in suburban Warsaw, in a court bankruptcy
public tender.

The financial details were not disclosed, PropertyEU notes.

Philips Polksa sold the Philips House in 2006 in a sale-and-
leaseback transaction to Eindhoven Properties, a real estate
company managed by Guardian Managers, which was declared insolvent
in 2012, PropertyEU recounts.

Batory Office Building I was developed by Leibrecht & Wood in 2000
and sold in 2008 to Eindhoven Properties, PropertyEU relates.

Colliers International acted on behalf of WestImmo, the primary
claimant in the bankruptcy proceeding, brokering the deal between
the lender and Griffin Real Estate, PropertyEU discloses.


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


BANCO COMERCIAL: S&P Cuts Issue Ratings on Preferred Stock to 'C'
-----------------------------------------------------------------
Standard & Poor's Ratings Services said it had lowered to 'C' from
'CCC-' its issue ratings on preferred stock (ISIN: XS0194093844
and ISIN: XS0231958520) guaranteed by Banco Comercial Portugues
S.A. (B+/Negative/B) and issued by its subsidiary BCP Finance Co.
The outstanding amounts on the two issues areEUR99 million and
EUR72 million respectively.  Due to an error, S&P did not lower
the ratings on these two issues when the dividend payments were
skipped on June 9, 2012, and Oct. 13, 2012 respectively.

RATINGS LIST

Downgraded
                                        To                 From
BCP Finance Co.
Preference Stock*                      C                  CCC-

*Guaranteed by Banco Comercial Portugues S.A.


CAIXA GERAL: S&P Cuts Issue Ratings on Preferred Stock to 'C'
-------------------------------------------------------------
Standard & Poor's Ratings Services lowered to 'C' from 'CCC-' its
issue ratings on preferred stock (ISIN: XS0195376925 and ISIN:
XS0230957424) guaranteed by Portugal-based Caixa Geral de
Depositos S.A. (BB-/Negative/B) and issued by subsidiary Caixa
Geral Finance Ltd.  The outstanding amounts on the two issues are
EUR66 million and EUR45 million respectively.  Due to an error,
S&P did not lower the ratings on these two issues when the
dividend payments were skipped on Dec. 28, 2012, and Dec. 30, 2012
respectively.

RATINGS LIST

Downgraded
                                        To                 From
Caixa Geral Finance Ltd.
Preference Stock*                      C                  CCC-

*Guaranteed by Caixa Geral de Depositos S.A.


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


* Paint Sector Faces Insolvency-Related Challenges
--------------------------------------------------
Andreea Neferu at Ziarul Financiar reports that Aurel Koeber,
Piatra-Neamt-based businessman who controls Koeber, one of the
largest players on the Romanian varnish and paint market, says one
of the biggest challenges in his sector is insolvency-related as a
lot of companies have sought shelter against debtors by filing for
insolvency in the last few years.



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


GLOBALTRANS INVESTMENT: Fitch Assigns 'BB' Issuer Default Rating
----------------------------------------------------------------
Fitch Ratings has assigned Globaltrans Investment PLC a Long-term
foreign currency Issuer Default Rating (IDR) of 'BB'.  The Outlook
is Stable.

GLTR's ratings reflect its solid business and financial profile,
but also considering its exposure to cyclical commodity industries
and ambitious opportunistic investment program (subject to market
conditions). Compared to UCL Rail B.V. ('BB+'/Positive), GLTR is
smaller, but with a younger fleet, and its customer base is more
concentrated, but with a focus on higher margin cargoes. GLTR's
group structure is complex and most of its debt is raised by key
operating companies. However most loans include cross default
provisions mitigating the structural subordination of GLTR's
creditors. As such, and given the modest consolidated leverage,
the IDR reflects the overall group profile without any notching
for subordination.

KEY DRIVERS

Second Largest Private Operator
GLTR is the second largest private freight rail transportation
group in Russia responsible for about 7% of overall Russian
freight rail turnover at the end of October 2012 (including
volumes transported by engaged fleet). In February 2013 GLTR
acquired 100% of OOO MMK-Trans, the captive freight rail operator
of MMK Group, with 3,558 units of rail fleet at end-Q312. GLTR's
strategy anticipates further growth through selective acquisitions
and organic growth. The envisaged increase of market share in
terms of fleet numbers and therefore transported volumes and
revenue allow for greater efficiency and customer diversification,
without deterioration of credit metrics which supports the
ratings.

Cash Generative Profile
The company's financial profile is supported by a healthy EBITDA
margin of 43.1% on average during 2008-2011, adjusted for pass-
through costs. GLTR's funds flow from operations (FFO) adjusted
leverage at end-2011 slightly decreased to 1.8x from 2.2x at end-
2010. Fitch forecasts GLTR to report positive cash flow from
operations (CFO) in 2012-2015. However, free cash flow (FCF) is
likely to be negative for 2012, driven by substantial capex, but
is likely to turn positive in 2013. For 2012, Fitch estimates
negative FCF of about US$0.3 billion.

Modern Fleet, Higher-priced Cargo Dominate
GLTR's ratings benefit from its competitive position compared to
its Russian peers as it owns a relatively modern railcar fleet
with an average age of about seven years at end-H112. As a result
GLTR's maintenance and fleet renewal costs are a smaller burden on
cash flow. Also, the company's ratings benefit from the dominance
of higher-priced cargo transportation, including oil products and
oil and metallurgical cargoes, that accounted for 74% of total
freight rail turnover making 80% of total revenue adjusted for
pass-through costs in H112.

Customer Concentration, Short-term Contracts
GLTR's rating is constrained by customer concentration as its top
six customers accounted for about 58% of net revenue from
operation of rolling stock in H112 and primarily one-year-term
transportation agreements under which the company operates.
Although customer concentration is higher compared to rated peers,
it is mitigated by the counterparties' market position and credit
profile, and prepayment terms under the majority of transportation
agreements. In order to increase its cash flow visibility GLTR
entered into a three-year-term service contract with JSC Holding
Company Metalloinvest (Metalloinvest, 'BB-'/Stable) in May 2012
and a five-year-term service contract with OJSC Magnitogorsk Iron
& Steel Works (MMK; 'BB+'/Negative) in February 2013. These
contracts secure a significant portion of GLTR's non-oil fleet. In
addition, GLTR has an intention to diversify its customer base by
increasing the number of mid- and small size clients. Possible
introduction of longer-term agreements with other large customers
may further increase the company's cash flow visibility.

Lease Adjusted Ratios
GLTR's leased-in rail fleet fluctuated between 9%-25% of total
owned and leased-in rail fleet in 2008-H112. Fitch expects the
share of leased-in rail fleet to be below 10% in 2013-2015. Fitch
treated operating lease rentals as a debt-like obligation and
applied a 5x multiple to capitalize the related costs as it
expects that part of the operating lease agreements will be
maintained over the long-term period. Under its conservative
assumptions, Fitch expects FFO adjusted net leverage to peak in
2012 around 2.2x and to decrease to below 2.0x in 2013 and remain
below this level. This leverage expectation and FFO fixed charge
coverage of around 4.0x support the ratings.

Ambitious But Discretionary Capex
GLTR has ambitious capex program for acquiring rail fleet in 2013-
2015, however it is subject to market conditions. We view the
plans, together with 30% dividend payout policy, as potentially
aggressive despite its conditionality.

Elevated Volume Risks
Similarly to its peers, GLTR's strengths are partially offset by
the company's exposure to cyclical commodity industries. Fitch
assesses GLTR's volume risk as elevated, although this is
mitigated by a comparatively low share of fixed costs in the
company's cost structure and recently signed long-term contracts
with Metalloinvest and MMK.

Moderate market expectations
In Russia, railroads remain the main method of cargo
transportation, accountable for as much as 85% of total freight
turnover (excluding pipelines). The growth of rail freight
turnover has been on average 1% below that of real GDP since 2002.
The agency expects real GDP to grow by around 3.8% on average in
2013-2014, and rail freight turnover is likely to increase by 1%-
2% yoy, assuming limitations of existing railroad infrastructure.

Traffic May Curb Growth
Further growth of the market may be constrained by a reduction in
the efficiency of the Russian railway infrastructure, which
remains in full control of the state through JSC Russian Railways
('BBB'/Stable). The rising numbers of wagons (at points beyond the
system's capacity) spurred by market liberalization and rising
demand for cargo transport have resulted in congestion and reduced
average speed, limiting potential organic volume growth. Fitch
believes that this could affect GLTR's future growth prospects,
although its growth plans are focused primarily on M&A.

RATING SENSITIVITY GUIDANCE:

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

- Sustained stronger economic growth and infrastructure
   improvements leading to transportation volumes and revenue
   increasing more strongly than Fitch anticipates, without
   significant deterioration of GLTR's credit metrics.

- Substantial increase of GLTR's market share in terms of fleet
   number and therefore transported volumes and revenue generated
   allowing greater efficiency and margins, without significant
   deterioration of credit metrics.

- Lengthening of contracts duration with volume visibility with
   key customers.

- A sustained decrease in FFO lease-adjusted net leverage below
   1.0x and FFO fixed charge coverage of above 5.0x.

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

- A sustained rise in FFO lease-adjusted net leverage above 2.0x
   would be negative for the ratings, and may lead to further
   review and ratings implications due to complex corporate
   structure.

- Sustained slowdown of the Russian economy leading to decrease
   of transportation volume needs and therefore to decrease of
   revenue.

- Unfavorable changes in Russian legislative framework for the
   railway transportation industry, which continues to be
   reformed.

LIQIDITY AND DEBT STRUCTURE

Adequate Liquidity
Fitch views GLTR liquidity at end-H112 as adequate, consisting of
US$90 million of cash and cash equivalents and considering gross
second public offering proceeds of US$400 million received in July
2012. This compares to short-term maturities of US$278 million.
The US$250 million acquisition of MMK-Trans (total cash
consideration assuming net debt and working capital of MMK-Trans
of about US$84.5 million) is to be funded with a US$190 million
loan from Sberbank ('BBB'/Stable) and own funds. Fitch notes that
at end-H112 GLTR had US$98 million of committed and US$25 million
of uncommitted available credit facilities.

Secured Bank Debt
GLTR's outstanding debt at end-H112 amounted to US$1.5 billion.
The bank loans of US$999 million are secured by the pledge of the
rail fleet (about 47% of total fleet number). A potential rating
of GLTR's senior unsecured debt would take into consideration
overall leverage and the level of unencumbered assets compared to
senior unsecured debt. Leverage of above 2.0x and low level of
unencumbered assets may result in different recovery expectations
and lower rating for the senior unsecured debt.

The rating actions are:

-- Long-term foreign currency IDR of 'BB' with a Stable Outlook
-- Long-term local currency IDR of 'BB' with a Stable Outlook
-- Short-term foreign currency IDR of 'B'
-- Short-term local currency IDR of 'B'
-- National long-term rating of 'AA-(rus)' with Stable Outlook


IMONEYBANK: Moody's Affirms 'E+' Standalone BFSR; Outlook Stable
----------------------------------------------------------------
Moody's Investors Service affirmed the standalone bank financial
strength rating of iMoneyBank (Russia) at E+, equivalent to a
standalone credit assessment of b3, as well as the B3 long-term
local and foreign currency deposit ratings. The bank's Not Prime
short-term local- and foreign-currency deposit ratings were also
affirmed. The outlook on the bank's BFSR and its long-term ratings
is stable.

Ratings Rationale:

Moody's affirmation of iMoneyBank's ratings takes into account the
bank's established retail-deposit-taking franchise that results in
a diversified and relatively stable deposit base and an
established car loans distribution platform, which, in the current
operating environment, enables the bank to benefit from strong
loan origination gains. However, these negative rating drivers are
offset by iMoneyBank's low level of capital adequacy, the monoline
nature of the bank's operations, and risks associated with
aggressive loan growth targets.

Established loan distribution platform in car loans

The diversified mix of iMoneyBank's partner-based distribution
channels provides access to a wide client base and improves
customer reach and territorial coverage, enabling the origination
of a large number of loans while minimizing operating expenses.
Currently, the bank is able to originate a much higher volume of
loans than it can finance as the result of its limited capital and
funding base. This results into currently strong gains and pre-
provision profits.

Monoline nature of operations and rapid loan growth

In accordance with iMoneyBank's unaudited IFRS report, at end-
September 2012 car loans accounted for almost two thirds of the
total gross loans, and this segment was the major revenue
contributor. The bank's new strategy -- introduced in September
2012 -- targets (1) the development of the car loans brokerage
segment via utilizing its excessive loan origination capacities;
(2) a material increase in the loan portfolio in 2013; (3) a
material increase in the volume of loans sold to other banks; and
(4) a significant rise in profits related to car loan origination
activities. Moody's considers that although such strategy, if
successfully implemented, may yield healthy profits in periods of
rapid car loan growth and strong consumer demand, any
deterioration in the operating environment combined with a
significant reduction in car sales may exert significant pressure
on the bank's overall credit profile, as a decline in car sales
may materially impair the bank's revenues and operating
efficiency, while deterioration in economic environment might
exert negative pressure on asset quality and capital.

Low capital adequacy

iMoneyBank's low capital adequacy is the key negative rating
driver. The bank's regulatory capital ratio was 10.87% at YE2012,
which is just above the 10% regulatory minimum capital ratio. The
bank's practice is to sell a portion of its loans to other Russian
banks with recourse rights, thus recording a profit under local
accounting standards and reducing risk-weighted assets (in
contrast with IFRS, sold loans with a recourse rights are not
reflected in risk-weighted assets under the local accounting
standards). Meanwhile, under unaudited IFRS as at end-September
2012, the bank reported an equity-to-assets ratio of 6.1%
(YE2011:5.7%). In 2013, Moody's expects the bank's capital
adequacy to remain low due to its strategy of very rapid loan
growth and, therefore, the rating agency believes that the bank's
capital position will remain highly fragile given the volatile
Russian operating environment.

Granular funding base supported by a high proportion of retail
deposits

Retail deposits represent the core of iMoneyBank's funding base.
At end-September 2012, the bank's liquidity cushion (cash and cash
equivalents) accounted for 7.4% of total assets (unaudited IFRS)
but it was sufficient to cover 12.2% of customer deposits that
considerably exceed their average monthly volatility. At the same
time, Moody's believes that this cushion might be insufficient in
the event of significant market turbulence -- as was the case in
late 2008.

What could change the ratings up/down

iMoneyBank's ratings could be upgraded if the bank demonstrates a
sustainable track record under its new business model whilst also
improving its capital adequacy and profitability.

Downward pressure could be exerted on iMoneyBank's ratings by any
material adverse changes in the bank's risk profile, or in case of
any impairment of its capital and liquidity profile, or failure to
maintain control over asset quality.

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

Based in Moscow, Russia, iMoneyBank reported total unaudited IFRS
assets (as at end-September 2012) of RUB19.3 billion ($626
million) and total shareholders' equity of RUB1.2 billion ($38
million), and booked a net profit of RUB269 million (2011: net
loss of RUB55 million).


OTP BANK: Moody's Affirms Ba2 Deposit Ratings; Outlook Negative
---------------------------------------------------------------
Moody's Investors Service confirmed the long-term local- and
foreign-currency deposit ratings of OTP Bank (Russia) OJSC (OTP
Russia) at Ba2 with a negative outlook. The other global scale
ratings of the bank remained unchanged.

The rating action follows the recent confirmation of the long-term
local- and foreign-currency deposit ratings of Hungary's OTP Bank
NyRt (parent of OTP Russia) at Ba1 and Ba2, respectively, and the
downgrade of the parent's standalone bank financial strength
rating (BFSR) to D/ba2 from D+/ba1. All the above-mentioned
ratings carry a negative outlook.

This rating action concludes the review initiated on December 13,
2012 for OTP Bank (Russia) OJSC (the Russian subsidiary of OTP
Bank NyRt).

Ratings Rationale:

Moody's says the confirmation of OTP Russia's Ba2 long-term
deposit ratings takes into account the rating agency's assessment
of a high probability of parental support from OTP Bank NyRt.
Moody's assessment of a high probability of parental support is
based on (1) OTP Russia's significant operational integration with
its parent; (2) the strong strategic fit of OTP Russia within the
OTP Bank Group, as Russia is one of three strategic foreign
markets for the group; and (3) the parent's demonstrated
willingness to provide ongoing capital and liquidity support. The
support considerations results in a one-notch uplift to the
deposit ratings from OTP Russia's standalone credit profile of
ba3.

Moody's adds that OTP Russia's deposit ratings carry a negative
outlook given continuous pressure on OTP Bank NyRt's standalone
credit assessment, and thus its ability to provide capital and
liquidity support to its Russian subsidiary going forward.

What could move the ratings up/down

At this stage, upwards pressure on the ratings is limited, as
indicated by the negative outlook. Downwards pressure on OTP
Russia's deposit ratings could stem from: (1) a weakening of
parental capacity to provide support, as indicated by a downgrade
of the parent's ratings; and/or (2) weakening of the bank's
strategic fit within the OTP Bank Group. On a standalone basis,
OTP Russia's BFSR could face pressure from greater-than-expected
asset quality deterioration that would require extra provisioning
and thus damage the health of its profitability and its capital
adequacy.

List of affected ratings

- Long-term local and foreign-currency deposit ratings of Ba2,
confirmed with a negative outlook

- Short-term local and foreign-currency deposit ratings of Not-
prime, remain unchanged

- Standalone BFSR of D- (equivalent to a standalone credit
assessment of ba3), remains unchanged with a stable outlook

The principal methodology used in these ratings was Moody's
Consolidated Global Bank Rating Methodology, published in June
2012.


UNITED ELECTRIC: S&P Raises Long-Term Corp. Credit Rating to 'BB'
-----------------------------------------------------------------
Standard & Poor's Ratings Services said that it has raised its
long-term corporate credit rating to 'BB' from 'BB-', and its
Russia national scale rating to 'ruAA' from 'ruAA-' on Russia-
based electricity distribution utility Moscow United Electric Grid
Co. JSC (MOESK).  The outlook is stable.  S&P has removed all
ratings from CreditWatch, where they were placed with positive
implications on Nov. 30, 2012.

The rating action reflects S&P's view of MOESK's improved
liquidity and liquidity management, and S&P's expectations that
its credit metrics will remain adequate for the stand-alone credit
profile (SACP) in at least the next two years, supported by new
tariff decisions effective for 2012-2017.  S&P now views the
company's liquidity as "adequate" versus "less-than-adequate"
previously, and it has revised its assessment of the SACP to 'bb-'
from 'b+'.

In November 2012, the Federal Tariff Service of Russia, which sets
allowed tariffs for Russian electricity distribution network
entities, established a tariff structure for MOESK for 2012-2017.
The rate of return on the existing asset base approved for MOESK
ranges from 5.5% to 11% for the period, which is somewhat higher
than for most other Russian regulated electricity distribution
companies.  For new investments, the rate of return was set at 11%
during the entire period.  S&P understands the revised tariffs
came into force on Nov. 1, 2012, which, in S&P's view, reduces
regulatory uncertainty.

Nevertheless, S&P notes that implementation of the tariffs remains
subject to political intervention, and S&P continues to see a risk
that the government may attempt to adjust tariffs downward in the
future to reach social goals.

The stable outlook reflects S&P's view that MOESK's strong
competitive position, currently low financial leverage, and
demonstrated access to capital markets should offset the risks
associated with an ambitious capital expenditure program and
projected negative cash flow generation.  S&P also assumes MOESK
will maintain both an adequate liquidity and debt maturity profile
on a sustained basis.

To be in line with an SACP of 'bb-', S&P expects MOESK's Standard
& Poor's-adjusted debt-to-EBITDA ratio to be less than 3.0x on a
sustainable basis with very temporary deviations of up to 3.5x.

Rating upside might arise if the company manages to keep its
leverage under 2.0x on the constant basis while maintaining
adequate liquidity and maturity profiles.  S&P would also need to
see evidence that the system of regulatory tariffs is operating
without significant changes or political intervention.

S&P might consider a negative rating action if it observes a more
aggressive financial policy or regulatory actions that would
result in higher debt levels than S&P currently anticipates.  S&P
might also consider such an action if the company starts to rely
excessively on short-term financing, if its liquidity deteriorates
to less-than-adequate levels, or if the company's profitability
significantly decreases, weakening financial metrics.

S&P might downgrade the long-term rating to the level of the SACP
if it revises the likelihood of extraordinary state support to
"limited."  That is likely to happen if S&P sees signs that
MOESK's role for the government has diminished, with weakening
control and focus on the company as a result of state-owned
stake privatization, for instance.

S&P's view on the likelihood of extraordinary state support would
need to be raised at least to "high" for S&P to consider an
upgrade, provided that there was no change in the company's SACP.
An increase in government ownership in the company or
implementation of formal policies to support the entity might
be factors that lead to such a revision.


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


LICO LEASING: Moody's Downgrades Deposit Ratings to 'Ca'
--------------------------------------------------------
Moody's Investors Service downgraded the long and short-term
deposit ratings of Lico Leasing, S.A. (Lico) to Ca/NP from Ba3/NP.
The downgrade reflects Moody's view that the bank is very likely
to require external support to remain a going concern, based on
the significant pressures on (1) the bank's core business; (2)
consequently, on its profitability with minimal short-term
prospects for a turn-around; and (3) asset quality, against the
backdrop of a further expected economic contraction in Spain
during 2013. The downgrade also incorporates the high reliance on
its shareholders for business generation, funding and capital, at
a time when most of its shareholders -- former savings banks --
are under restructuring.

This rating action concludes the review for downgrade, which
Moody's initiated on October 24, 2012.

Ratings Rationale:

Decline in business volume and profitability

Moody's says that the downgrade of Lico's deposit ratings reflects
the negative prospects for the bank's business in the short to
medium term. In light of the ongoing economic crisis, Lico's
revenues and levels of new business have dropped very
significantly: its total lending volume has reduced by almost 60%
since 2007 to end-2011, as companies' investments and the need for
financial leases have declined sharply since the inception of the
economic crisis.

Moody's forecast of a decline in Spain's GDP of -1.4% for 2013
points to a further lending contraction, which could further erode
the bank's earnings generation capacity and eventually challenge
the viability of its leasing franchise. The business decline is
being fuelled by the current restructuring of former savings
banks, which constitute the bulk of Lico's shareholders and have
traditionally acted as providers of around two thirds of Lico's
total business. For 2013, Lico's profitability will remain under
tremendous pressure unless activity recovers, which is an unlikely
scenario under the present circumstances in Spain.

Asset quality and capital under pressure

Lico's level of non-performing loans (NPLs) has climbed to a high
level that is substantially above the average of the banking
system; however Moody's notes that the high NPL level also
reflects the fact that the loan portfolio has contracted
substantially. The need for Lico to recognize asset impairments
(provisions and write-offs) led the parent company (Lico
Corporation) to provide support in the form of a subordinated debt
-- as a substitute for provisions -- given that Lico's current
profitability was not sufficient to cover expected losses in its
loan portfolio. Although Lico is compliant with regulatory capital
requirements, the bank's ability to absorb additional stresses in
its loan portfolio is actually limited; this is exacerbated by the
high likelihood that negative net profitability in 2013 will again
erode Lico's capital base.

Weak funding position

Lico's credit strength is undermined by its high reliance on
unsecured -- and to a large extent short-term -- funding obtained
from its shareholders (mainly interbank deposits and commercial
paper). Moody's believes that this funding profile poses a
material credit risk, in light of the fragile financial situation
of Lico's shareholders.

Moody's understands that Lico intends to increase its reliance on
structured funding, with the maturity of liabilities matching
those of assets. However, the rating agency believes that this
will not result in a significant change of Lico's funding profile
in the short to medium term.

Support considerations

Lico has historically benefited from uplift incorporated into its
deposit ratings based on Moody's assumption of a high likelihood
of support from its shareholders. However, Moody's has removed the
ratings uplift because of changes to the shareholders' structure.
Notably, around 50% of Lico's capital is owned by institutions
that are subject to restructuring according to the Memorandum of
Understanding agreed between Spain and the Eurogroup last July
2012. In addition, another 20% of the capital was owned by savings
banks that stronger peers have acquired, and whose investment
commitments in Lico are subject to uncertainty, in Moody's view.
These factors explain the rating agency's decision to reduce the
probability of shareholders' support to Lico to a level that no
longer warrants any uplift.

Lico's Ca deposit rating is consistent with Moody's view that the
institution would likely face the risk of default, absent the
support of its shareholders or the Spanish government.

What could move the rating up/down

As the downgrade to Ca indicates, Moody's does not see any
prospect for a short-term recovery for Lico in the absence of
external support.

The downgrade of Lico's ratings to C could be prompted by the
bank's default, with little prospects for recovery of principal or
interest. The default of the bank could be the result of (1) a
worsening of operating conditions beyond Moody's current
expectations, i.e., a broader economic recession beyond Moody's
current GDP forecast of -1.4% for 2013; (2) Lico's failure to
replace former savings banks as business providers with other
sources, in order to attract customers; and (3) the inability of
Lico to replace any of its funding sources, which may specially
affect those which are unsecured.

The principal methodology used in this rating was Finance Company
Global Rating Methodology published in March 2012.


* Fitch Comments on Limiting Investor Losses Under Bail-in
----------------------------------------------------------
A possible trend toward limiting losses for retail customers who
acquired preference shares and subordinated debt subject to bail-
in under bank restructuring procedures in Spain could lead to
redress costs, Fitch Ratings says. This highlights the value of
client franchise and the increasing importance of conduct risks
for banks.

Fitch says, "Any actions to make banks with capital shortfalls
under official stress tests (Group 1 and Group 2 banks) redress
the mis-selling of these products would be likely to increase
recapitalization costs for the Spanish state. Acquirers of
troubled banks may decide to compensate preference shares and
subordinated debt investors for any losses suffered as part of
bail-in proceedings in an effort to win their loyalty. We would
assess any expected compensation of retail preference shares and
convertible bonds in our analysis of the affected banks' credit
profile.

"We estimate that such compensation for recapitalized banks should
be only around 20% of the value of instruments subject to burden-
sharing. We believe EUR15 billion in preference shares and
subordinated debt is potentially subject to burden-sharing.
Redress risk is higher for instruments issued more than five years
ago, as procedures for sales and documentation have since
tightened.

"Potential claims will most likely arise from investors in
subordinated debt and preference shares of the Group 1 and Group 2
institutions and their subsidiaries. These securities are subject
to losses as part of the recapitalization process agreed between
Spain and the rest of the Eurogroup. For example, last week
Spain's restructuring fund, FROB, announced that investors in
preference shares and subordinated debt in the nationalized Banco
de Valencia will suffer losses of 85%-90%.

"A significant proportion of Spanish bank preference shares were
sold to branch customers. Following agreement of arbitration
processes at some banks, retail clients will be able to request
compensation in proceedings to be led by the Bank of Spain and the
Spanish stock-market supervisory agency.

"Other Spanish banks not subject to recapitalization by
international authorities via the FROB also took measures in 2012
to preserve their retail client base. They offered voluntary
exchanges of preference shares and subordinated debt into other
instruments such as shares or mandatory convertible bonds. These
transactions were generally conducted without the retail investor
taking a significant hit, if any at all, and allowed the
conversion of hybrid instruments into more liquid instruments.

"Another example of a bank taking steps to protect its retail
customer franchise is Banco Popular Espanol, a Group 3 bank, which
addressed the capital shortfall under the official stress test
privately. The bank changed its definition of distributable profit
in its preference shares documentation to include distributable
reserves, making it less likely that coupons on preference shares
will be deferred by an accounting loss in one year.

"Group 1 banks are the weakest, and are controlled by the FROB.
Group 2 banks had capital shortfalls under the official stress
test that needed to be met by international authorities via the
FROB. Group 3 banks are or have been able to recapitalize
themselves privately."


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


ADAM SMITH: High Court Winds Up Three 'Ambulance Chasing' Firms
---------------------------------------------------------------
The High Court, on grounds of public interest, has wound up three
connected companies that misled directors of insolvent companies
by promising they could help them walk away from their
responsibilities.

The orders follow investigations by Company Investigations of The
Insolvency Service. Directors of ailing companies were misled into
believing they could limit their civil and criminal liability,
while creditors were misled as to the formal status of the
insolvent company.

The three companies, Adam Smith Business Development Limited,
Company Corporate Transfer Limited and Genesys 2000 Limited acted
together in this deception through a service called 'Corporate
Company Transfer' or 'CCT'.

In addition the investigation uncovered evidence that:

   -- ASBD was paid 'marketing fees' by insolvency practitioners
      for the introduction of insolvency work contrary to the
      Insolvency Code of Ethics, further calling into question
      the integrity of the CCT process.

   -- Assets were invariably valued at amounts that would just
      cover the fees charged, leaving nothing for creditors.

Graham Horne, the Deputy Chief Executive of The Insolvency
Service, said:

"This is a shocking abuse of the insolvency regime, where
directors are duped into thinking they can just ignore their
liabilities and walk away, leaving creditors without any chance of
recovering what they were owed.

"Directors should be aware that there is no escaping their
responsibilities and they will still have to settle with their
creditors in the right and proper way.

"I am pleased we have removed these companies from the business
environment so that they cannot cause any more harm to the public.
We want to send a strong message to any company that is tempted to
abuse the insolvency regime by indulging in such 'ambulance
chasing' operations that we will get them.

"We will liaise with the professional regulators of any authorised
persons that are found to be involved in such schemes and are
already doing so in this case."

The Insolvency Service said the typical CCT service involved new
directors being parachuted in to take over the troubled company.
These new directors would then arrange the sale of the company
assets at a much reduced price to a new company ('Newco') set up
and controlled by the former directors of the insolvent company.
The old company would then go into company voluntary liquidation
with few or no assets, with creditors losing out.

The investigation showed that the process whereby the assets were
valued and sold to the Newco was flawed and was deliberately
arranged to put it outside the safeguards of the statutory
insolvency regime. In some cases, the sale value of a company's
assets had been agreed before a proper valuation had been carried
out.

Almost invariably, the assets were sold for an amount that would
just cover the various fees charged for the CCT service and a
subsequent liquidation. Having transferred the assets to the Newco
the CCT service arranged for what was on occasions described as a
'NQA' (No Questions Asked) liquidation.

The petitions to wind up the companies were presented in the High
Court of Justice on Nov. 14, 2012, under the provisions of section
124A of the Insolvency Act 1986 following confidential enquiries
by Company Investigations under section 447 of the Companies Act
1985, as amended.  The petitions against ASBD, CCTL and Genesys
were heard unopposed and the winding up orders were made on Feb.
13, 2013.


MELBRY EVENTS: To Appoint FRP Advisory as Voluntary Liquidators
---------------------------------------------------------------
Matthew Hemley at thestage.co.uk reports that performers hired to
play Christmas characters in grottos around the UK have been left
hundreds of pounds out of pocket, after Melbry Events, the events
management company they worked for, collapsed.

thestage.co.uk relates that the company's director Melanie Hurley
has written to performers to inform them that the organisation has
ceased trading and has instructed restructuring firm FRP Advisory
Ltd to "assist in placing the company into creditors' voluntary
liquidation,".

According to the report, a spokesman for FRP Advisory said it had
been "instructed by the director to assist in placing the company
into creditors' voluntary liquidation with the liquidation taking
place on Feb. 25, 2013".

Melbry Events specialized in creating Christmas grottos for
shopping centres and department stores, and hired performers to
play Santa and elves as part of its activities.


MOTH COMMUNICATIONS: Wound Up Over Bogus Advertising Scam
---------------------------------------------------------
Moth Communications Ltd, a Blackburn-based company which
pressurised small business owners into paying bogus advertising
debts has been wound-up in the public interest by the High Court,
Manchester District Registry. This follows an investigation by
Company Investigations of The Insolvency Service.

The Insolvency Service said in a statement: "Business owners
received cold-calls from the company demanding payment for overdue
internet advertising fees that had not been incurred in the first
place. The demands, made to small companies, included threats that
county court judgments had been obtained in relation to the
allegedly overdue invoices and that bailiffs would be sent to
recover the debts.

"In one example, a small business owner received a telephone call
demanding GBP4,953 for an internet listing subscription and was
told that payment would need to be made within an hour to avoid
bailiffs attending and removing goods to this value.

"The caller threatened that the debt would increase to GBP12,000
if bailiffs had to attend, but would be reduced to GBP3,700 if
immediate payment was made. The business owner, concerned about
the escalating costs, immediately paid GBP3,700 to the company.

"Those business owners who made payment subsequently discovered
that they had no liability for the debt demanded by the telephone
caller and that no county court judgments had been entered against
them.

"When business owners challenged the telephone caller to send
documentation evidencing the debt, the company provided falsified
invoices which pre-dated the existence of the company and which
contained terms and conditions downloaded and copied from a
legitimate company's website."

The investigation found that amounts in excess of GBP370,000 were
received into the company's bank account between December 2011 and
October 2012, of which some GBP338,000 had been withdrawn in cash
immediately after receipt. No accounting records were provided to
explain the company's transactions.

The investigation also found that the company used a number of
trading styles when demanding payment including: Business
Directory; Business Directory Pages; Business Directory UK; UK
Business Directory; No 1 Business Directory; In the Red Debt
Collection; Door Step Collections.
Commenting on the case, Colin Cronin, Investigation Supervisor
said,

"Moth Communications Ltd fraudulently and aggressively demanded
payment from small businesses for debts that never were.

"The threatening telephone calls made by those acting for the
company meant that hard-working business owners felt they had to
pay off the debts or be visited by bailiffs. The Insolvency
Service will take firm action against companies and their
directors who operate in this way.

"I would urge any small business owners who encounter similar
tactics to require the caller to provide full documentation
evidencing the debt being claimed and to seek immediate advice if
not satisfied that the debt is genuine."


PITTVILLE HOTEL: Calls in Joint Administrators Duff & Phelps
------------------------------------------------------------
Laura Churchill at Gloucestershire Echo reports that the Pittville
hotel has called in joint administrators Duff & Phelps.

"All staff have been told and we are carrying on business as
usual. . . . We are still taking bookings and are thought to be
carrying on indefinitely at the moment," the report quoted an
unnamed hotel manager as saying.

The 12-room Evesham Road hotel was put on the market via Colliers
International, according to the report.

The report notes that Peter Brunt, from the estate agents,
confirmed the high-end boutique hotel had been struggling during
the recession.

"The joint administrators were appointed as the company has
experienced a downturn in trading performance due to the current
economic climate. . . . This, in turn, impacted on the business'
cash flow," the report quoted Mr. Brunt as saying.

In a statement, the report relays Matt Bond --
matthew.bond@duffandphelps.com -- of Duff & Phelps said: "We, the
joint administrators, will continue to trade the hotel on a
business as usual basis while seeking a buyer for the hotel which
remains open and looking forward to a busy Festival week."

The business was trading under the name HTLP Limited after it was
taken over in 2008 by Benjamin Bowen, the report adds.


SEYMOUR PIERCE: WH Ireland Buys Private Wealth Management Unit
--------------------------------------------------------------
Vanessa Kortekaas at The Financial Times reports that WH Ireland
has bought the private wealth management business of Seymour
Pierce, days after most of the lossmaking broker's assets were
purchased from administrators by Cantor Fitzgerald.

The Aim-traded stockbroker and wealth manager paid GBP25,000 for
the division, which WH Ireland said was "slightly opportunistic"
but fit into their strategy of expanding their private client
business, the FT relates.

The deal has boosted WH Ireland's assets under management by 15%
or GBP270 million, the FT says.

Richard Killingbeck, WH Ireland's chief executive, said talks with
Grant Thornton -- the recently appointed administrators of Seymour
Pierce -- only lasted three days before the purchase was agreed,
the FT notes.

As reported by the Troubled Company Reporter-Europe on Feb. 11,
2013, the Financial Times related that that Seymour Pierce had
been rescued by Cantor Fitzgerald in a last-minute deal just hours
after it was placed in administration.  Seymour Pierce on Feb. 8
signed a "pre-pack" agreement with Cantor, after being locked in
talks with its fellow broker since Feb. 6, the FT disclosed.  The
purchase, for an undisclosed sum, saves the 130-year-old name
Seymour Pierce from disappearing, the FT said.  However, the deal
is likely to leave creditors and debtors of Seymour Pierce unable
to recoup their money, the FT noted.  The broker's search for
funding was sparked by UK regulators' recent refusal to allow
Ukrainian businessman Denis Gorbunenko from injecting cash into
the broker, the FT recounted.  He had already lent Seymour Pierce
about GBP3 million when the Financial Services Authority blocked
his proposed additional investment, according to the FT.

Seymour Pierce is a London-based investment bank and stockbroker
focused on advising companies and raising finance for them.  It is
one of the city's oldest stockbrokers.


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


* EUROPE: Draghi Proposes Common Fund for Failing Bank Rescue
-------------------------------------------------------------
Rebecca Christie at Bloomberg News reports that European Central
Bank President Mario Draghi said the European Union needs a common
fund as part of the plan to establish a banking supervisor.

Mr. Draghi's vision, outlined to European lawmakers in Brussels on
Monday, contrasts with EU Financial Services Commissioner Michel
Barnier's proposal to rely on national funds, rather than a
central European resource, for a resolution authority agreed upon
by EU leaders.

"Only a single resolution authority will ensure timely and
impartial decision-making focused on the European dimension,"
Bloomberg quotes Mr. Draghi as saying in the European Parliament.
"A single resolution authority would help to break the vicious
bank-sovereign nexus."

The EU is in the process of creating a single supervisory
mechanism at the ECB and has pledged to begin work this year on a
framework for restructuring failing banks, Bloomberg discloses.
Under Mr. Draghi's plan, investors would absorb costs ahead of
taxpayers if a bank has to be shut down or restructured, Bloomberg
states.  He said that the centralized system would aim to avoid
coordination problems and national conflicts of interest,
Bloomberg notes.

Mr. Draghi, as cited by Bloomberg, said that a common fund with a
public backstop will be required, augmented by industry fees
collected in advance of any crisis.  Even if European authorities
ultimately recoup their costs from the financial industry, making
the fund "fiscally neutral" over time, they need to be prepared to
fund short-term needs from their own resources, Bloomberg says.

The single resolution authority "should therefore have a European
resolution fund at its disposal, which should be financed by the
private sector via risk-based ex-ante levies," Bloomberg quotes
Mr. Draghi as saying.  "The European resolution fund should be
backed by a public backstop mechanism, the support of which would
need to be recouped via special ex-post levies on the private
sector."

Mr. Draghi, as cited by Bloomberg, said that as an interim
measure, the EU needs to continue work on current proposals to
spell out which creditors are in line to absorb losses when a bank
runs into trouble.

Mr. Barnier has said he aims to wrap up that legislation by June,
Bloomberg relates.


* EUROPE: Investor Optimism Across Sectors, Fitch Survey Shows
--------------------------------------------------------------
European fixed-income investors were swept up on a wave of New
Year enthusiasm in Fitch Ratings' latest quarterly investor
survey.

Respondents turned much more positive on the prospect for eurozone
sovereigns as well as for banks. Sentiment was more muted on non-
financial corporates. Investors voted the high-yield sector their
most favored investment choice, while simultaneously signaling
significant concerns about fundamental credit conditions.

Survey participants are not expecting a rapid rise in the
inflation rate. This stance is reflected in respondents' views on
the direction and pace of evolution of bond yields. Yields are at
historical lows and for the first time in history, the safest core
country government bonds have had prolonged negative real yields
along the curve to 10 years. This reflects low inflation
anticipation, monetary easing (US, UK and Japan) and the overall
risk-off environment during most of the last three years, fuelling
flight to quality.

Only a small minority of 8% expect a shock correction driven by
flow reversal, credit deterioration and significant repricing of
interest rates. The majority 57% believe the change will be
gradual, as interest rates normalize incrementally. The remaining
35% said yields will remain stable or even decrease.

The Q113 survey was conducted between January 4 and January 31 and
represents the views of managers of an estimated US$7.6trn of
fixed-income assets. The full report, entitled "European Senior
Fixed- Income Investor Survey Q113", covers all major sectors.
Please also see "Credit Fund Strategies for 2013", which explores
the cost of yield normalization for credit portfolios.


* EUROPE: Fitch Says US Sequestration No Big Threat for A&D Firms
-----------------------------------------------------------------
Fitch Ratings believes that the threat of sequestration in the US
looms over the defense sector once again, but that it's unlikely
that large European defense contractors will face an immediate
significant deterioration in their operating performance or
negative rating pressure in the event that it comes into effect.

This assessment applies to all European-based aerospace and
defense (A&D) corporates regardless of the scale of their
operations in the US, and is based on three key factors:
relatively small exposure to the US defense spending, likely
limited immediate cut to procurement spending and A&D companies'
solid track-record in preserving cash flows in the face of
changing demand dynamics.

Firstly, European A&D companies' overall exposure to US defense
spending is relatively small in the context of their total
respective activities. In the event of sequestration, we believe
that defense spending could decline by as much as US$45 billion in
2013, or around 7% of the Department of Defence's (DoD) total
operating budget on an annualized basis. However, most of the six
largest European defense contractors rated by Fitch derive around
10% or less of their revenue from the US DoD, and sequestration
would likely lead to a 2013 revenue loss of less than 1%. Even for
BAE Systems, which derives around 30% of its revenue from the US
DoD, sequestration would reduce 2013 revenue by no more than 2%.

All large European A&D companies rated by Fitch possess relatively
well geographically diversified businesses. The portion of revenue
derived from emerging markets among the six ranges from high-teens
(Finmeccanica) to low 40's (EADS), and Fitch expects these to grow
as emerging countries, not facing the same fiscal pressures as
developed markets, continue to modernise and expand their defense
capabilities.

Secondly, whilst it remains highly uncertain which accounts will
be cut in the event of sequestration (other than military
personnel, for example, which will be unaffected), Fitch believes
that procurement spending, that part of the defense budget most
affecting contractors, is unlikely to be significantly reduced in
2013. Long lead times on defense programs mean that in many cases
spending must be committed up to three years in advance in order
for companies to make the necessary investment in development and
tooling. While certain program production could be curtailed
beyond 2013, Fitch believes it is non-essential service work which
is likely to bear the larger brunt of immediate cuts made. In this
respect, most European defense contractors do not face significant
exposures.

Thirdly, European A&D companies have historically shown a
capability to preserve their cash flow margins in the face of
shifting demand dynamics through timely and sufficient
restructuring measures. The sector is characterized by cash flow
margins whose broad stability is chiefly threatened by program
cost overruns or delays, not changes in spending patterns of key
customers.

This, coupled with buoyant commercial markets, from which most
companies derive a significant portion of their revenue, and
rating profiles which are, for the most part, within the expected
ranges of the current ratings, means that any revenue and margin
pressure resulting from sequestration over the coming 12 - 18
months is likely to be relatively mild for European A&D companies
and unlikely to have a negative rating impact in itself.

The six largest western European companies rated by Fitch in the
A&D sector are:

* Rolls-Royce Holdings plc ('A'/Stable)

* European Aeronautic Defence and Space Company N.V.
   ('BBB+'/Positive)

* BAE Systems plc ('BBB+'/Stable)

* Thales SA ('BBB+'/Negative)

* MTU Aero Engines AG ('BBB-'/Stable)

* Finmeccanica SpA ('BBB-'/Rating Watch Negative)


                            *********

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

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

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

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


                            *********


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

Troubled Company Reporter-Europe is a daily newsletter co-
published by Bankruptcy Creditors' Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA.
Valerie U. Pascual, Marites O. Claro, Rousel Elaine T. Fernandez,
Joy A. Agravante, Psyche A. Castillon, 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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