TCREUR_Public/130227.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

                           E U R O P E

          Wednesday, February 27, 2013, Vol. 14, No. 41





VMZ SOPOT: Layoffs Set to Begin; Fate Still Uncertain


* Cypriot Pres. Bailout Mandate May Ease Negotiations, Fitch Says


SPOT PARKING: Files for Bankruptcy Despite EUR0.6-Mil. Grant


PEUGEOT SA: Fitch Downgrades LT IDR to 'B+'; Outlook Negative
TEREOS UNION: S&P Affirms 'BB+' Corp. Credit Rating; Outlook Pos.


* Creditors of Iceland's Failed Lenders Face ISK200B Writedown


ALITALIA SA: CEO Steps Down Following EUR280-Mil. Loss
FIAT SPA: Fitch Downgrades IDRs to 'BB-'; Outlook Negative


GSC EUROPEAN II: Moody's Affirms Ratings on Nine Note Classes


RUEN IT: Assets Put Up for Sale; Value Estimated at MKD405-Mil.


SNS REAAL: Top Administrative Court Upholds Nationalization


CENTRAL EUROPEAN: Launches Exchange Offers to Sr. Note Holders


RENAISSANCE CAPITAL: S&P Withdraws 'B-' Counterparty Rating


ABANKA VIPA: Moody's Cuts Long-Term Deposit Ratings to 'Caa3'


ENCE ENERGIA: Moody's Affirms Ba3 CFR Following Refinancing
FONDO DE TITULIZACION: Moody's Cuts Rating on Cl. B Notes to 'B2'


* TURKEY: Corporate Bankruptcies to Rise as Market Shrinks

U N I T E D   K I N G D O M

GLOBAL SHIP: DePrince Has 10.6% Equity Stake as of Dec. 31
MEZZVEST INVESTMENTS: Moody's Affirms Caa3 Rating on Cl. D Notes
TITAN EUROPE: Fitch Lowers Ratings on Two Note Classes to 'CC'


POJSEB TRUSTBANK: Fitch Affirms Long-Term IDRs at 'B-'


* Moody's Outlook on the Global Auto Industry Remains Stable



Moody's Investors Service downgraded to B3 from B2 the ratings for
EUR425 million of senior secured bonds and the EUR350 million
senior secured European Investment Bank loan raised by Ostregion
Investmentgesellschaft Nr.1 S.A. In addition, Moody's has assigned
a negative outlook to the ratings. The rating action concludes the
review process initiated by Moody's on August 24, 2012.

In 2007, Bonaventura Strassenerrichtungs-GmbH ("ProjectCo")
entered into a Concession Agreement ("CA") of 32 years with
Autobahnen-Und Schnellstrassen-Finanzierungs AG (Aaa negative) to
plan, develop, construct and operate a concession route comprising
four motorway sections with a total length of 51.5 km in the north
of Vienna, Austria (the "Project"). To finance the construction
works, the Issuer entered into the EIB Loan and issued the Bonds
and then on-lent the proceeds to ProjectCo. Construction was
completed in January 2010.

Ratings Rationale:

Today's rating action was prompted by (1) Moody's expectation that
the Issuer is unlikely to benefit from a minimum traffic guarantee
from Autobahnen-Und Schnellstrassen-Finanzierungs AG ("Asfinag")
and therefore could be fully exposed to traffic volume risk; (2)
the rating agency's expectation that the Issuer's annual debt
service coverage ratios ("ADSCRs") will remain very weak over the
medium term, possibly below the 1.05x default level; and (3) the
Issuer's dependence on the controlling creditors' willingness to
waive a default given that ADSCR for 2012 was above 1.0x but below
the 1.05x default level.

Following construction completion, actual traffic volume on the
concession route was on average 20% below base-case projections.
In 2011, ProjectCo had new traffic projections prepared by an
independent traffic advisor, who projected (1) shadow toll traffic
revenues approximately 20% below base-case projections; (2) ADSCRs
above 1.05x until 2017; and (3) an average revenue growth rate of
approximately 4.0% per annum for the next four years. Although
actual traffic volumes are now much more in line with the updated
projections, the Project is dependent on continuing growth in
shadow toll revenues of at least 3.9% per annum to maintain its
ADSCRs above the 1.05x default trigger for the next four years.
Total shadow toll revenues for 2012 increased by more than 5.0%
compared to 2011. However, as the Project's operational phase only
started in February 2010, there is only a limited amount of
historical traffic date available and it is therefore premature to
establish a traffic trend. There is therefore a material risk that
future traffic growth rates may underperform the updated 2011
traffic projections leading to weak coverage ratios below the
default level.

The Issuer's capital structure includes a mezzanine facility. As
traffic volume projections are 20% below initial expectations, the
Issuer is unlikely to be able to meet in full its scheduled
payments of mezzanine debt principal and interest over the term of
the CA. Moreover, it could potentially have been declared
insolvent under Austrian law if it were deemed to have been in
permanent negative equity due to over-indebtedness. If ProjectCo
had been declared insolvent, this would have triggered a default
of the Bonds and EIB Loan. However, Moody's understands that,
subject to further approvals from the controlling creditors and
from Asfinag, ProjectCo's shareholders have agreed to sell 90% of
their shares to the mezzanine bond holders. The mezzanine holders
will then accept the deep subordination of the principle and
interest of mezzanine debt; the result will be that, under
Austrian law, ProjectCo can no longer be declared insolvent, due
to it being in permanent negative equity.

The CA provides for a mix of availability and shadow-toll revenues
paid by Asfinag. While traffic risk is borne by the Project,
Asfinag undertakes to compensate ProjectCo for a shortfall in
traffic volume if (1) the ADSCR, as defined in the CA, falls below
a minimum level of 1.05x; and (2) traffic volume falls below
Asfinag's minimum traffic assumptions (defined as Asfinag's "Worst
Case II" assumptions) during any one calendar year, by an amount
by which the shadow toll revenue is below that projected under
Worst Case II (the "Minimum Traffic Guarantee"). Asfinag therefore
does not guarantee a minimum ADSCR of 1.05x -- a ratio below this
level is a necessary condition for payment, but insufficient on
its own. Availability, finance and cost risks remain ProjectCo

The Bonds and the EIB Loan benefit from financial guarantees of
scheduled principal and interest under insurance policies issued
by Ambac Assurance UK Ltd ("Ambac UK", unrated). Following Moody's
downgrade and subsequent withdrawal of Ambac UK's rating, the
Issuer incurred a higher funding cost of 85 basis points per annum
on the EIB Loan. Given that the Minimum Traffic Guarantee does not
cover the Issuer's higher financing costs, the Project is unlikely
to benefit from the Minimum Traffic Guarantee and may therefore be
fully exposed to traffic volume risk.

Under the finance documentation, an ADSCR below 1.05x triggers an
event of default. The Issuer's 2012 ADSCR was below 1.05x,
however, Moody's understands that the controlling creditors (EIB
and Ambac UK) will waive this default. Moody's also believes that
there is currently no economic rationale for controlling creditors
to accelerate on the basis that (1) the company continues to meet
debt payments as they fall due; (2) enforcing security and taking
control off the issuer would not remedy the lack of traffic or, it
seems, otherwise improve the situation; (3) such acceleration
would crystallize a significant mark-to-market loss on the
issuer's super senior swap. We also note that default of ProjectCo
under the Concession Agreement leading to a termination payment
would lead to a loss of at least 20% for the controlling creditors
but also that acceleration of the debt would not, of itself,
result in termination of the CA.

The B3 ratings on the Bonds and the EIB Loan primarily reflect as
strengths (1) the long-term CA with the highly-rated Asfinag; (2)
the majority of revenues, about 70%, are from availability based
payments which are not exposed to traffic risk; (3) significant
protection afforded to senior creditors by the terms and
conditions within the CA; and (4) Moody's expectation that the
risk of the Issuer being declared insolvent under Austrian Law
will be removed. However, the rating is significantly constrained
by (1) ProjectCo's high leverage, with very low ADSCRs, and a
material risk that these ratios could remain below the 1.05x
default level over the medium; (2) the Project's exposure to weak
traffic revenues; and (3) the likelihood that the Project will no
longer benefit from the Minimum Traffic Guarantee and may
therefore be fully exposed to traffic volume risk.

As Ambac UK is no longer rated by Moody's, the ratings do not
factor in the benefit of Ambac UK's financial guarantees.

The negative outlook reflects (1) the material risk that the
Issuer's ADSCRs may remain below the 1.05x default ratio and the
possibility that the controlling creditors may not continue to
waive such defaults, recognizing that this would not currently
appear to be in the interest of the controlling creditors; (2)
high event risk, given that the Issuer's ADSCRs are weak, poor
traffic volumes or higher costs may lead to ADSCRs close to or
below 1.0x.

What Could Change The Rating Up/Down

Moody's could upgrade the Bonds and EIB Loan if (1) shadow toll
revenues and traffic volumes improve, leading to actual and
projected ADSCRs that are well above 1.05x on a sustainable basis;
or (2) costs are in line with base-case projections and ProjectCo
benefits fully from the Minimum Traffic Guarantee.

Conversely, Moody's could downgrade the Bonds and EIB Loan if (1)
the controlling creditors do not approve the deep subordination of
mezzanine in exchange for equity, leading to continued uncertainty
with respect to whether or not the Issuer can be declared
insolvent under Austrian law; and (2) shadow toll revenues are
weaker compared to the updated projections, or costs are higher,
leading to actual and projected ADSCRs close to 1.0x on a
permanent basis.

Principal Methodology

The principal methodology used in this rating was Operational Toll
Roads published in December 2006.

ProjectCo is owned by Alpine Mayreder Bau GmbH (44.4%), Hochtief
PPP Solutions GmbH (44.4%) and Egis Projects S.A. (11.2%). The
Issuer is an orphan company, whose shares are owned by a Dutch
charitable trust (Stichting).


VMZ SOPOT: Layoffs Set to Begin; Fate Still Uncertain
------------------------------------------------------ reports that employees in troubled VMZ Sopot were set
return to work on Feb. 25 after a 12-day paid leave.

Meanwhile, about 300 of them have submitted a request to terminate
their employment in exchange of receiving four monthly salaries, relates.

Layoffs will start at the end of the month or beginning of March, discloses.

According to, a total of 600 have already been
dismissed and the fate of the factory remains unclear.

On Feb. 7, after heated debates, the Bulgarian Parliament decided
to remove the company from the list of privatization bans, discloses.  This means the factory will be taken out
of the restrictive privatizations list, thus it can be sold by the
Privatization and Post-Privatization Control Agency (PPCA) without
any preliminary conditions and clauses, notes.  The
vote was imposed after PPCA terminated the procedure for the sale
of the military plant, recounts.

The sole bidder -- Ruse-based EMKO EOOD -- proposed to trade
unions to eliminate from the collective bargaining agreement the
procedure for laying-off personnel and upon receiving a refusal
withdrew the bid, relates.

During the debates, representatives of the left-wing opposition
Socialist party, BSP, accused the then still-ruling Citizens for
European Development of Bulgaria, GERB, of giving up on the
strategy for the privatization of the weapons factory, noting the
only feasible option was the implementation of a recovery plan and
seeking new orders, discloses.

According to, BSP further voiced suspicions VMZ Sopot
is intentionally pushed towards bankruptcy and will end up being
sold "for pocket change."  GERB countered the factory has been in
deplorable state for many years and only a speedy privatization
will salvage VMZ Sopot from liquidation, notes.

Candidates applying to buy VMZ Sopot were eligible to bid for it
upon proof they have enough funds to cover its mounting debts,
totaling some BGN140 million, according to the strategy for the
privatization of VMZ Sopot adopted by the Bulgarian Parliament in
2011, and the future owner was not to be allowed to lay off
workers in the first three years after buying it,

According to GERB, a new strategy would take 8-9 months and this
would be too long to avoid bankruptcy, notes.

VMZ Sopot's workers, who have not received their wages for months,
started staging strikes in November in the town of Sopot where
tensions have been boiling, recounts.  The strike,
however, was called off by the trade unions on Jan. 25 after news
about the transfer of BGN4 million for the employees' overdue
salaries emerged, relates.

The center-right GERB cabinet, led by now-outgoing Prime Minister,
Boyko Borisov, has claimed that only a significant layoff, to be
followed by privatization, can salvage the works,

Proceedings against the factory by its creditors have already been
started, states.

VMZ Sopot is a Bulgarian State-owned arms manufacturer.


* Cypriot Pres. Bailout Mandate May Ease Negotiations, Fitch Says
The stance of the new Cypriot president-elect and his government
could make the country's negotiations with the Troika for a rescue
package less challenging than under the outgoing president, Fitch
Ratings says. Nicos Anastasiades has stated his intention to
secure "timely financial support," and now arguably has a mandate
to conclude negotiations. He has already been building relations
with leaders of key European partners, including Germany.

However, despite his overwhelming victory in the weekend's
elections he will face the same policy challenges as his
predecessor, and there is still lingering uncertainty about the
timing and details of an EU rescue program.

Fitch says, "We downgraded Cyprus to 'B'/Negative in January,
mainly because we consider that bank recapitalization costs are
likely to be higher than previously thought. But the rating is
supported by our expectation that the authorities will reach
agreement with the Troika on an official financing program in time
to pay a EUR1.4 billion bond redemption on June 3.  The final
details will depend on the Troika and the government's assessment
of debt sustainability, which has not yet been finalized.

"A bailout program is unlikely to include restructuring of Cypriot
sovereign debt, because it would not provide significant debt
relief. It would also weaken the credibility of eurozone policy
makers, who have said that Greece's private sector involvement
(PSI) was an exception, and could create contagion risks for other
eurozone countries. That some of the debt held by foreign
investors is covered by international law could also add to the
costs and uncertainty of PSI.

"We expect the Cypriot government to privatize some state-owned
enterprises as part of a final agreement with the Troika, but
there is uncertainty about how much debt relief this would
achieve. We would expect any restructuring of bank debt to be
restricted to junior debt holders, though banks are mostly deposit
financed, which limits the potential impact. We also think there
is a possibility of mutualization of bank recapitalization costs
with eurozone partners, for example through the European Stability
Mechanism, although this is not our base case."

The previous government had requested official help from their
European partners and the IMF in June 2012, although a Memorandum
of Understanding has yet to be signed. The government has been
shut out from debt markets for almost two years.

A bilateral EUR2.5 billion loan from Russia at the end of 2011
helped with most of the public financing requirements last year.
The Russian government has signaled that it will extend the
maturity of the loan which was due in 2016. According to reports
Mr. Anastasiades has stated that reaching agreement with Russia on
contributing to a rescue will be an "immediate priority", though
it is unclear whether any such deal can be struck.

More recently the authorities have become dependent on issues of
Treasury bills to SOEs and banks and available cash reserves. We
believe a disorderly default stemming from the government running
out of cash before the June bond payment is highly unlikely.


SPOT PARKING: Files for Bankruptcy Despite EUR0.6-Mil. Grant
Baltic Business News, citing Aripaev, reports that SPOT Parking
has filed for bankruptcy, despite having received a grant of
EUR0.6 million from Enterprise Estonia last year.

A year ago Enterprise Estonia decided to financially support SPOT
Parking that was developing Space Parking Optimization Technology
or parking houses where cars are moved on special platforms so
that they take up half a smaller area than in normal parking
buildings, BBN recounts.

Kroot Kilvet, board member of Enterprise Estonia, said now that
the agency is preparing to claim from the company EUR300,000 that
have already been paid out, BBN discloses.

According to BBN, the company's only shareholder Vitali Kipjatkov
said that things turned bad when the company signed German
engineering companies RLE GmbH and Grenzebach GmbH to develop the
prototype and carry out a pilot project.

Mr. Kipjatkov, as cited by BBN, said that although SPOT Parking
paid for the knowhow and prototype, Germans claimed intellectual
rights to the project.

Mr. Kipjatkov claims that he lost three times as much money in
SPOT Parking as Enterprise Estonia, BBN notes.

SPOT Parking is an Estonian developer of parking solutions.


PEUGEOT SA: Fitch Downgrades LT IDR to 'B+'; Outlook Negative
Fitch Ratings has downgraded Peugeot SA's Long-term Issuer Default
Rating (IDR) to 'B+' from 'BB-' and affirmed the senior unsecured
rating at 'BB-' with a Recovery Rating (RR) of 'RR3'. The Outlook
on the Long-term IDR is Negative.

"The downgrade reflects our concerns that operating losses at
PSA's core automotive division and negative free cash flow (FCF)
at group level may not be curbed at the speed and extent assumed
by the company and previously expected by Fitch. We believe that a
return of credit ratios firmly in line with the 'BB' rating
category is subject to material execution risk and could be beyond
the Outlook horizon of the next 12 to 18 months," Fitch says.

"In particular, we are concerned by the continuously adverse
market environment, notably in Europe, from where PSA still
derives a majority of its sales, and which is largely outside of
the company's control. Furthermore, higher sales and operating
margins will also depend on PSA's ability to profitably increase
market shares, which in turn will depend on the customer's
acceptance of the group's upcoming models and product strategy.
PSA's updated strategy may prove long and difficult to implement
and produce effect."

The affirmation of the senior unsecured rating reflects a RR of
'RR3' pointing to recovery prospects between 50% and 70% and a
one-notch uplift from the 'B+' IDR.


Uncertain Timing of Recovery
PSA expects to return to positive automotive profitability and
operating FCF by end-2014. However, Fitch is more cautious than
the group and believes that the poor operating environment, the
potential for durably weak economic conditions and thus depressed
new car sales, as well as notable execution risks in successfully
implementing the group's strategy, are likely to delay PSA's
targets until at least 2015. Fitch is particularly concerned about
the potential for a higher-than-expected sales decline in France
and Germany.

Adverse Environment
"In Europe, we currently expect sales to decline for the sixth
straight year by a further 3% to 4% in 2013, and pricing pressure
to remain intense, especially in PSA's main segments. While we
expect the contribution of non-European markets to increase
steadily in the foreseeable future, both on the top line and on
profitability, competition will intensify in these markets as all
manufacturers target them to mitigate losses in other parts of the
world. High volatility also remains a key characteristic of
emerging markets," Fitch states.

Product Positioning
"PSA recently updated its product strategy to clarify the
positioning of its two brands Peugeot and Citroen. We believe this
strategy makes sense overall but carries substantial execution
risk and could take many years to bear fruit. In particular, we
are concerned that the existence of both entry-level/basic models
and aspiring higher-end products within the two brands will not be
easily understood and accepted by customers. In addition, several
other manufacturers are following the same path and competition
will remain relentless," Fitch says.

Negative Profitability and FCF
"The automotive division posted a material -3.9% operating margin
in 2012, and we expect only a slight improvement to -3.4% in 2013.
Positive results from Faurecia and Banque PSA Finance (BPF) nearly
offset these losses and led to a -1% group operating margin in
2012, which we expect to improve to -0.5% in 2013. Negative FCF
from industrial operations was a significant EUR3.1 billion before
EUR2.4 billion in asset sales and exceptional dividends from BPF
and a EUR1.1 billion capital increase," Fitch says.

Weak Metrics
"We do not expect a material improvement in key credit metrics
before at least end-2014. Fitch believes funds from operations
(FFO) gross adjusted leverage will remain close to 7x at end-2013,
(6.7x at end-2012, up from 3.4x at end-2011); net leverage close
to 4x; and cash from operations/adjusted debt to improve only
slightly to less than 15% at end-2013, from 6% at end-2012. These
ratios are typically commensurate with the 'B' rating category,"
Fitch says.

Progress in Restructuring
In 2012 PSA accelerated its restructuring, with actions worth
EUR1.2 billion including the closure of a factory and
reorganization of another by 2014. This comes on top of existing
material cost reduction. The group is also on track with its cash-
preservation measures such as an improvement in working capital
and a reduction in capex. Expected synergies from the alliance
with GM have been confirmed.

Solid Liquidity
Immediate liquidity issues are not a concern. PSA reported EUR6.8
billion in cash at end-2012, including EUR5.4 billion at
industrial operations, further bolstered by EUR3.2 billion of
total undrawn credit facilities. Refinancing of BPF which is
critical to support the group's sales has been secured by a French
state guarantee for up to EUR7bn.


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

- The group's automotive operating margins becoming positive on
   a sustained basis
- FCF remaining positive, leading in particular to FFO adjusted
   gross leverage below 3x

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

- The environment continuing to deteriorate, leading to further
   revenue decline and continuous negative operating margins
   (actual or expected) at the automotive division
- Further negative FCF in 2015
- Deteriorating liquidity

TEREOS UNION: S&P Affirms 'BB+' Corp. Credit Rating; Outlook Pos.
Standard & Poor's Ratings Services said it revised its outlook on
French sugar and sugar derivatives producer Tereos Union de
Cooperatives Agricoles a Capital Variable (Tereos) to positive
from stable.  At the same time, S&P affirmed its 'BB+' long-term
corporate credit rating on the group.

S&P also affirmed its 'BB+' issue rating on the EUR500 million
senior secured bond due 2014 issued by subsidiary Tereos Europe
S.A.  The '3' recovery rating on the 2014 bond remains unchanged,
indicating S&P's expectation of meaningful (50%-70%) recovery in
the event of a payment default.

"We assigned our 'BB+' issue rating to Tereos' proposed senior
unsecured bond.  We understand the amount of this bond will be at
least EUR350 million, with a maturity of five years or longer.  We
further understand that Tereos' finance subsidiary Tereos Finance
Groupe I will issue the bond and that Tereos will guarantee it.
We have assigned our '3' recovery rating to this proposed bond,
indicating our expectation of meaningful (50%-70%) recovery in the
event of a payment default," S&P said.

The outlook revision reflects S&P's view of Tereos' improved
credit metrics, namely adjusted leverage (debt to EBITDA) of 2.4x
and funds from operations (FFO) to debt of 32% in fiscal 2012
(year ended Sept. 30, 2012).  S&P also considers that the group
will likely sustain these metrics over the next two years.

S&P's base-case scenario for Tereos in fiscals 2013 and 2014
encompasses the following assumptions:

   -- Lower sugarbeet volumes following a 2012-2013 harvest
      (October 2012 to September 2013) below the 2011-2012 record

   -- Sustained, high sugarbeet prices in fiscal 2013, but some
      decline thereafter.  S&P understands the European
      Commission is likely to facilitate world sugar imports to
      the EU protected sugar market, in order to bring prices
      down and supply up;

   -- Increased sugarcane volumes over the next couple of years,
      reflecting some improvement following 2011/2012's poor
      harvest in Brazil, and

   -- Tereos' investments in capacity and productivity in Brazil,
      and to a far lesser extent, in Mozambique and Reunion

   -- Volatile world sugar prices, which S&P expects, will stay
      at current moderate levels on average;

   -- Increased sales from the cereals division this year
      following Tereos' start-up of its starch facility in
      Brazil. S&P thinks sales will go down slightly thereafter,
      reflecting, among other factors, the decline in European
      ethanol prices following the currently proposed decrease to
      5% from 10% of the mandatory blend of ethanol;

   -- A record adjusted EBITDA margin of 17% in fiscal 2012, but
      then a gradual contraction.  S&P bases its forecast on
      lower sugarbeet volumes and price, which are unlikely to be
      fully offset by higher sugarcane volumes and enhanced

   -- Capital expenditure (capex) will gradually decline and be
      about EUR400 million to EUR500 million annually over the
      next two years, versus the sizable figure of about
      EUR650 million in fiscal 2012, as the group completes its
      capacity and productivity investments; and

   -- Limited acquisitions that would in any case be within the
      group's moderate financial policy aiming to keep net
      reported leverage below 2.5x (equivalent to S&P's adjusted
      ratio of 2.9x or below).

Based on the above, and taking into account the industry's
inherent volatility, S&P anticipates adjusted EBITDA (after price
complements, or payments to farmers under Tereos' cooperative
structure) of EUR850 million-EUR900 million in fiscal 2013 and
just below EUR800 million in fiscal 2014.  S&P projects Tereos'
adjusted leverage in the 2.5x-2.9x range with FFO to debt
remaining in the 25%-30% area in the next two years.  S&P also
projects modestly positive free cash flow generation.

The positive outlook reflects S&P's view that it could upgrade
Tereos if it maintained adjusted debt to EBITDA of about 2.5x and
FFO to debt of about 30% over the next two years, while starting
to generate positive free cash flow.

This could occur if Tereos' posted low single digit revenue growth
this year and an only marginal decline next year, while the
adjusted EBITDA margin remained above 16% and capex decreased to
some EUR450 million annually.

"We could revise the outlook to stable if Tereos didn't sustain
its credit metrics at the levels mentioned above.  This could
occur if sales and margins decline more than we currently
anticipate.  Such decreases might result from a lower-than-
expected harvest in Brazil this year and next year due to, for
example, adverse weather conditions, or from a sharper drop in
sugar prices than we currently project," S&P said.

"We could also revise the outlook to stable if Tereos' current
refinancing was unsuccessful.  We view this scenario remote at
this stage given the progress of the group's negotiations and its
strong operating performance," S&P added.


* Creditors of Iceland's Failed Lenders Face ISK200B Writedown
Omar R. Valdimarsson at Bloomberg News reports that Iceland
central bank Governor Mar Gudmundsson said the creditors of
Iceland's failed lenders will have to write down as much as ISK200
billion (US$1.6 billion) in claims against the three lenders.

According to Bloomberg, the governor said in a parliament hearing
in Reykjavik on Monday that the currency, already under
"considerable" pressure from payments on foreign loans, faces an
additional overhang of krona assets that will be needed to be paid
out to foreign creditors.

The creditors "can take all the foreign exchange, which they claim
from foreign parties, but" the krona assets "will be written down
to a considerable degree," Bloomberg quotes Mr. Gudmundsson as
saying.  "So it may well be that their return on this will not be
great or that it will be very negative."

Iceland imposed capital controls in 2008 after Kaupthing Bank hf,
Glitnir Bank hf and Landsbanki Islands hf all failed within weeks
of each other, defaulting on US$85 billion in debt, Bloomberg
recounts.  The controls are now blocking as much as US$8 billion
from being offloaded, Bloomberg notes.

Iceland refused to bail out its banks to avoid a sovereign
default, Bloomberg says.  Most of the domestic assets were
siphoned into new state-created units and shares in the new banks,
Arion banki hf, Islandsbanki hf and Landsbankinn hf, were then
handed over to the creditors of the failed banks as compensation,
Bloomberg discloses.

"Even though we can calculate that this will be 200 billion
kronur, which will be added to the kronur overhang if this will
all be paid out, we also know that this will never be the case,"
Bloomberg quotes Mr. Gudmundsson as saying on Monday.

Steinunn Gudbjartsdottir, head of Glitnir's winding up committee,
said on Friday she had no knowledge of any plans forcing the
failed lender to write off its kronur assets, Bloomberg relates.


ALITALIA SA: CEO Steps Down Following EUR280-Mil. Loss
Robert Wall at Bloomberg News reports that Alitalia SpA said Chief
Executive Officer Andrea Ragnetti has resigned one year into his
post, as the Italian flag carrier reported its loss quadrupled
last year.

According to Bloomberg, Alitalia said in a statement late on
Sunday the company widened its loss in 2012 to EUR280 million
(US$366 million) from EUR69 million the year earlier.  The company
said Chairman Roberto Colaninno will act as interim CEO until a
permanent replacement is found, Bloomberg relates.

Mr. Ragnetti was named to run Alitalia a year ago to continue a
turnaround effort, Bloomberg recounts.

Alitalia said sales last year rose 3.3% to EUR3.59 billion,
Bloomberg notes.  The airline said it reached break even in the
fourth quarter, Bloomberg discloses.

According to Bloomberg, shareholders on Feb. 22 approved a board
proposal to raise EUR150 million in debt set to expire in 2015.
The company, as cited by Bloomberg, said that shareholders can
subscribe to the bond which can be converted into shares next

Rachel Sanderson at The Financial Times reports that expectations
of a shake-up at the airline have risen since the expiry of a
lock-up of shares held by local investors, led by bank Intesa
Sanpaolo in January.  The FT relates that people familiar with the
matter had said it was thought that Air France-KLM would seek to
increase its stake.  People close to Alitalia and Mr Ragnetti had
denied any move by Air France-KLM was imminent, the FT notes.

Nonetheless, analysts did not rule out that the uncertain outcome
of the Italian election on Monday had accelerated the exit of
Mr. Ragnetti, the FT relates.  According to the FT, they said a
political power vacuum at least temporarily removed government
opposition to a sale of a greater stake in the airline to Air
France-KLM or another competitor.

                          About Alitalia

Alitalia - Compagnia Aerea Italiana has navigated its way through
a successful restructuring.  After filing for bankruptcy
protection in 2008, Alitalia found additional investors, acquired
rival airline Air One, and re-emerged as Italy's leading airline
in early 2009.  Operating a fleet of about 150 aircraft, the
airline now serves more than 75 national and international
destinations from hubs in Fiumicino (Rome), Milan, Turin, Venice,
Naples, and Catania.  Alitalia extends its network as a member of
the SkyTeam code-sharing and marketing alliance, which also
includes Air France, Delta Air Lines, and KLM.  An Italian
investor group owns a majority of the company, while Air France-
KLM owns 25%.

FIAT SPA: Fitch Downgrades IDRs to 'BB-'; Outlook Negative
Fitch Ratings has downgraded Fiat Spa's Long-term Issuer Default
Ratings (IDR) and senior unsecured rating to 'BB-' from 'BB' and
affirmed the Short-term IDR at 'B'. The Outlook on Fiat's Long-
term IDR is Negative.  The agency has also downgraded Fiat Finance
& Trade Ltd, S.A.'s senior unsecured rating to 'BB-' from 'BB'.

The downgrade reflects chiefly the persistent weakness of Fiat's
standalone results, excluding Chrysler, notably in Europe, our
belief that the group's latest strategic plan is subject to
substantial execution risks and will take several years to bear
fruit, provided customers react positively and the probability of
further cash outflows to increase Fiat's stake in Chrysler and be
able to access the latter's cash, still ringfenced.

The Negative Outlook reflects uncertainties regarding the extent
of investment to finance revenue growth and increase Fiat's stake
in Chrysler, as well as how these cash outflows will be financed,
and therefore the impact on key credit metrics.


Revised Strategic Plan
Fiat's revised strategy to reposition its brands more upscale
makes sense according to Fitch but will take time and carries
significant execution risk, particularly in the current extremely
difficult competitive environment where other companies follow the
same route, and given the group's poor track record in its
previous attempts to do so. This strategy entails an acceleration
of capex and R&D expenses in the next couple of years, which will
largely absorb funds from operations (FFO), even if the latter

Poor Cash Generation
Fiat should burn cash in the next two-three years, as Fitch
expects underlying profitability to remain weak. Negative cash
flows in Europe from the adverse environment should, however, be
mitigated by the better performance in Brazil and from other
divisions including luxury and performance brands.

Strong Chrysler, Weak Fiat
Fiat's earnings have become increasingly reliant on Chrysler as
Fiat's standalone results remained weak in 2011 and 2012, hindered
principally by ongoing operating losses of its mass-market brands
in Europe (EUR0.5 billion in 2011, EUR0.7 billion in 2012).
Conversely, Chrysler's operating margin strengthened further to
4.4% in 2012 from 3.6% in 2011 and 1.8% in 2010 (US GAAP).

Earnings Benefit, Not Cash
The current ring-fencing of Chrysler's debt and cash flows limits
the benefit of Chrysler's improvements to Fiat as the latter has
limited access to Chrysler's cash at a time when its standalone
cash generation ability has weakened significantly. Fiat can
receive up to US$500 million dividends under Chrysler's term loan
B and US$500 million + 50% of cumulative net income from
January 1, 2012 under its bond indenture.

Chrysler Stake Increases
Fiat has exercised two 3.3% options to increase its stake from
58.5% but the transaction is dependent on a court judgment
regarding the price of the first option. Fitch expects further
similar stake increases in 2013 and also believes that Fiat will
seek to reach full ownership of Chrysler in 2014 to fully accrue
its earnings and access its cash. However, timing and cost of
future stake increases remain uncertain as well as financing

Weak Credit Metrics
Fiat's key credit metrics are poor on a standalone basis,
excluding the benefit of Chrysler's cash. Fiat's standalone gross
adjusted EBITDA leverage increased further to more than 6x at end-
2012 from 4x at end-2011, while cash from operations/adjusted debt
fell to less than 10%, which are ratios typically more
commensurate with the 'B' rating category. This is mitigated by
better metrics on a net basis, in light of Fiat's solid liquidity.

Sound Liquidity
Fiat follows a conservative financial strategy and has ample
liquidity, even excluding Chrysler, supported by EUR9.1 billion in
cash and equivalents at end-2012, further bolstered by EUR1.95
billion of undrawn committed credit lines. This largely covers
EUR4.4 billion of debt maturing in 2013 (including EUR0.8 billion
from its dealership network in Brazil rolled over at maturity), as
well as the negative free cash flow (FCF) projected by Fitch in
2013. Chrysler has EUR0.4 billion of debt maturing in 2013,
largely covered by EUR8.8 billion in cash and marketable
securities and EUR1 billion of undrawn committed credit lines.
However, future stake increases in Chrysler, financed from
existing cash may weaken the group's liquidity.


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

- Sustained positive FCF
- Higher margins at Fiat auto mass market ex Chrysler, in EMEA
   and at group level
- Full access to Chrysler's cash, without weakening the group's
   capital structure in parallel

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

- Sustained fall in revenue and operating margins
- Mounting liquidity issues, including refinancing concerns
- Consolidated FFO gross adjusted leverage above 3x on a
   sustained basis
- Fiat's standalone (ex-Chrysler) gross adjusted leverage above
   5x on a sustained basis
- Evidence of tangible support to, or major stake increase in
   Chrysler, further weakening the group's capital structure


GSC EUROPEAN II: Moody's Affirms Ratings on Nine Note Classes
Moody's Investors Service upgraded the ratings of the following
notes issued by GSC European CDO II S.A.:

- EUR216M Class A1 Floating Rate Notes (current amount outstanding
EUR100.8M), Upgraded to Aaa (sf); previously on Jul 15, 2011
Upgraded to Aa2 (sf)

- EUR10M Class A2 Zero Coupon Accreting Notes (current amount
outstanding EUR3.8M), Upgraded to Aaa (sf); previously on Jul 15,
2011 Upgraded to Aa2 (sf)

- EUR25M Class B Floating Rate Notes, Upgraded to A1 (sf);
previously on Jul 15, 2011 Upgraded to A3 (sf)

Moody's also affirmed the ratings of the following notes issued by
GSC European CDO II S.A.:

- EUR16.5M Class C1 Floating Rate Notes, Affirmed Ba2 (sf);
previously on Jul 15, 2011 Upgraded to Ba2 (sf)

- EUR11M Class C2 Fixed Rate Notes, Affirmed Ba2 (sf); previously
on Jul 15, 2011 Upgraded to Ba2 (sf)

- EUR16M Class D1 Floating Rate Notes, Affirmed Caa1 (sf);
previously on Jul 15, 2011 Upgraded to Caa1 (sf)

- EUR2M Class D2 Floating Rate Notes, Affirmed Caa1 (sf);
previously on Jul 15, 2011 Upgraded to Caa1 (sf)

- EUR4M Class E1 Floating Rate Notes, Affirmed Ca (sf); previously
on Dec 8, 2009 Downgraded to Ca (sf)

- EUR7.5M Class E2 Fixed Rate Notes, Affirmed Ca (sf); previously
on Dec 8, 2009 Downgraded to Ca (sf)

- EUR4M Combination V Notes, Affirmed Ba2 (sf); previously on Jul
15, 2011 Upgraded to Ba2 (sf)

- EUR5M Combination W Notes, Affirmed Caa2 (sf); previously on Jul
15, 2011 Upgraded to Caa2 (sf)

- EUR10M Combination Y Notes, Affirmed Ca (sf); previously on Dec
8, 2009 Downgraded to Ca (sf)

The ratings of the Combination Notes address the repayment of the
Rated Balance on or before the legal final maturity. For Classes V
and W, the 'Rated Balance' is equal at any time to the principal
amount of the Combination Note on the Issue Date increased by a
Rated Coupon of 0.25% and 1.50% per annum respectively, accrued on
the Rated Balance on the preceding payment date minus the
aggregate of all payments made from the Issue Date to such date,
either through interest or principal payments. For Class Y, 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.

GSC European CDO II S.A., issued in June 2005, is a Collateralized
Loan Obligation backed by a portfolio of mostly high yield
European and US loans. The portfolio is managed by GSCP (NJ), L.P.
This transaction ended its reinvestment period in July 2010. It is
predominantly composed of senior secured loans.

Ratings Rationale:

Moody's notes that the Class A1 and A2 notes have been paid down
by approximately 43.7% or EUR134.6 million since the last rating
action in July 2011, with a current outstanding balance of 104.5
million. As a result of the deleveraging, the
overcollateralization ratios have increased. As of the latest
trustee report dated December 17, 2012, the Class A/B, Class C,
Class D and Class E overcollateralization ratios are reported at
133.26%, 109.93%, 98.62% and 92.54%, respectively, versus June
2011 levels (on which the last rating action was based) of
117.81%, 106.70%, 100.11% and 95.94%, respectively. Reported WARF
has remained stable at 3784 currently compared to 3723 in June

Moody's also affirms the ratings of the Class C, D, E notes and
Class V,W and Y Combination notes given the large exposure of the
deal to assets rated B3 and below, assets exposed to refinancing
risk and increase in the number of defaulted assets since the last
rating action.

In its base case, Moody's analyzed the underlying collateral pool
to have a performing par and principal proceeds balance of
EUR192.4 million, defaulted par of EUR25.4 million, a weighted
average default probability of 30.32% (consistent with a WARF of
4567), a weighted average recovery rate upon default of 43.66% for
a Aaa liability target rating, a diversity score of 25 and a
weighted average spread of 3.39%. 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 84.16% 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

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 52% of the
portfolio are rated B3 and below and maturing between 2014 and
2016, which may create challenges for issuers to refinance.
Approximately 5% of the portfolio are exposed to obligors located
in Italy and Ireland. Moody's considered a model run where the
base case WARF was increased to be 33104 by forcing ratings on 25%
of such exposure to Ca. This run generated model outputs that were
within one notch from the base case results.

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
manager's investment strategy and behavior and (2) divergence in
legal interpretation of CDO documentation by different
transactional parties due to embedded ambiguities.

Sources of additional performance uncertainties are described

(1) Portfolio Amortization: The main source of uncertainty in this
transaction is the pace of amortization of the underlying
portfolio. Pace of amortization could vary significantly subject
to market conditions and this may have a significant impact on the
notes' ratings. In particular, amortization could accelerate as a
consequence of high levels of prepayments in the loan market or
collateral sales by the Collateral Manager or be delayed by rising
loan amend-and-extent restructurings. Fast amortization would
usually benefit the ratings of the notes.

(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

(3) Moody's also notes that around 73% of the collateral pool
consists of debt obligations whose credit quality has been
assessed through Moody's credit estimates. Further information
regarding specific risks and stresses associated with credit
estimates are available in 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.


RUEN IT: Assets Put Up for Sale; Value Estimated at MKD405-Mil.
SeeNews, citing daily Utrinski Vesnik, reports that the assets of
bankrupt Ruen IT will be put up for sale.

According to SeeNews, the daily related that the decision was made
last week by a court in Kocani, adding that the value of the
business is estimated at MKD405 million (US$8.6 million/EUR6.6

The sale procedure will be conducted in four stages, SeeNews
discloses.  The company's buildings and equipment will be put up
for sale during the first stage while finished product and raw
materials will go on sale in the second round, SeeNews says.  The
plant's vehicles and the waste materials will be put up for sale
in the third and the fourth rounds, respectively, SeeNews notes.

SeeNews relates that court-appointed administrator Dragi Dimovski
said Macedonia's NLB Tutunska Banka is Ruen IT's biggest creditor
with claims adding up to 35% of the company's total debt of over
MKD453 million.

Ruen IT is a Macedonian car parts producer.


SNS REAAL: Top Administrative Court Upholds Nationalization
Maud van Gaal at Bloomberg News reports that the Netherlands' top
administrative court upheld the government's seizure of SNS Reaal
NV's shares and subordinated loans after real-estate losses
brought the bank to the brink of collapse.

According to Bloomberg, the Council of State in The Hague said in
a statement on its Web site on Monday that without Dutch Finance
Minister Jeroen Dijsselbloem's intervention, SNS would probably
have gone bankrupt.

Bloomberg notes that while the court didn't return investors'
securities, it refused to block their right to seek compensation
for losses in the future.

Bloomberg relates that the Council of State said the minister was
entitled to conclude that the stability of the financial system
faced a "serious and immediate threat," a condition for
intervening under legislation adopted last year.

Mr. Dijsselbloem on Feb. 1 also blocked future claims against SNS
Reaal, saying he considered it unacceptable for investors to seek
compensation for losses caused by wrongful conduct by SNS
Reaal or its managers, Bloomberg recounts.  The Council of State
wiped out this part of his decree, possibly allowing the case to
drag on for years through various European courts, Bloomberg

"We have our right back to seek damages from those responsible,
which is of immense importance," Bloomberg quotes Jan Maarten
Slagter, chairman of Dutch investor group VEB, as saying.  "This
gave us something to fight for again."

Mr. Slagter said that the VEB represented about 6,000 SNS
investors, Bloomberg relates.  The group will study whether there
are grounds to fight the expropriations at the European Court of
Human Rights, Bloomberg discloses.

Following [Mon]day's ruling, which makes the nationalization
irrevocable, Mr. Dijsselbloem will make an offer for compensation
within seven days, Bloomberg says.  He has already said he sees
that value at zero, Bloomberg states.  The Enterprise Chamber of
the Amsterdam Court of Appeal will rule on whether his offer is
adequate, Bloomberg discloses.

"I see absolutely no reason at this stage to assume that the
Enterprise Chamber will revise the compensation upwards," the
finance minister, as cited by Bloomberg, said in a Feb. 1 letter
to Parliament.  "In the event of a bankruptcy, the expropriated
parties would also have lost their investment."

The government says the bailout of SNS Reaal will cost taxpayers
EUR3.7 billion (US$4.9 billion) in write-offs and capital
injections, and the state is also providing another EUR6.1 billion
in loans and guarantees, Bloomberg notes.  According to Bloomberg,
Mr. Dijsselbloem has said that the expropriation of subordinated
creditors reduced the rescue costs for the state by about EUR1

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

Dutch Finance Minister Jeroen Dijsselbloem took control of SNS
Reaal on Feb. 1 after real estate losses brought the bank to the
brink of collapse.  The nationalization included shares and
subordinated bonds in SNS Reaal NV and SNS Bank NV.


CENTRAL EUROPEAN: Launches Exchange Offers to Sr. Note Holders
Central European Distribution Corporation on Feb. 25 disclosed
that the Company and its subsidiary CEDC Finance Corporation
International, Inc. have launched exchange offers to holders of
their outstanding Convertible Senior Notes due 2013 and Senior
Secured Notes due 2016.  The exchange offers are part of a
financial restructuring that contemplates a reduction of senior
note debt by more than US$750 million.

The exchange offers were prompted in part by the impending
March 15, 2013 maturity of the Convertible Senior Notes.
Moreover, the Company believes that a successful restructuring of
both the Convertible Senior Notes and the Senior Secured Notes
will improve its financial strength and flexibility and enable it
to focus on maximizing the value of its strong brands and market
position.  The Company is engaged in ongoing and constructive
discussions with representatives of its major stakeholders about
the terms of the exchange offers.

Separately, the Company has been informed that a committee of
holders of the 2016 Senior Secured Notes and Roust Trading Ltd.
(RTL), a major CEDC investor, have proposed an alternative to the
Company's exchange offers.  The alternative proposal has not been
formally presented to the CEDC Board of Directors, and the Board
therefore has taken no position on it.  However, the terms of the
alternative proposal are summarized in the same Offering
Memorandum that the Company is providing to Note holders to
describe the Company's exchange offers.

Under the Company's exchange offers, which expire at 11:59 PM, New
York City Time, on March 22, 2013:

-- Holders of the outstanding 3% Convertible Senior Notes Due 2013
issued by CEDC will receive in exchange for each US$1,000
principal amount of their notes 8.86 new shares of CEDC common

-- Holders of the outstanding 9.125% Senior Secured Notes due 2016
issued by CEDC Finance Corporation International, Inc. will
receive in exchange for each US$1,000 principal amount of their
notes 16.52 new shares of CEDC common stock and US$508.21
principal amount of 6.5% Senior Secured Notes due 2020.

-- Holders of the outstanding 8.875% Senior Secured Notes due 2016
issued by CEDC Finance Corporation International, Inc. will
receive in exchange for each EUR1,000 principal amount of their
notes 22.18 new shares of CEDC common stock and $682.37 principal
amount of 6.5% Senior Secured Notes due 2020.

Holders of both the Dollar and Euro classes of Senior Secured
Notes are being solicited, subject to the same deadline, to
approve certain amendments to the indenture governing their Notes,
and holders of both the Convertible Senior Notes and the Senior
Secured Notes are being solicited, again subject to the same
deadline, to approve a back-up Chapter 11 Plan of Reorganization.

Assuming 100% participation in the exchange offers, holders of the
Senior Secured Notes collectively would receive 65% of the common
stock in CEDC.  The Senior Secured Notes, with a current
outstanding principal balance of approximately $957 million
(assuming an exchange rate of US$1.3427 to EUR1.00), would be
replaced with US$500 million aggregate principal amount of new
6.5% Senior Secured Notes due 2020 referred to above.  Holders of
the Convertible Senior Notes, with a current outstanding principal
balance of approximately US$258 million, and RTL, which is owed
US$20 million in unsecured notes, together would share pro rata in
10% of CEDC's common stock.  A separate US$50 million secured
credit facility provided by RTL would be converted into 20% of
CEDC's common stock.

CEDC's recent business performance has been positive, and the
Company is optimistic about future results.  However, current
enterprise value is insufficient to cover the debt and hence
distributions to creditors will not be enough to pay them in full.
CEDC nevertheless has structured a proposal that affords an
opportunity for its shareholders to participate in the upside of
the Company's turnaround.  Accordingly, existing shareholders are
being offered a 5% stake in the reorganized Company.

The final direction of the restructuring will be based on the
outcome of the solicitation process.  If sufficient Notes are
tendered in the exchange and shareholders approve the plan, CEDC
will consummate the exchange offers.  Alternatively, the Company
may choose to effectuate the restructuring through a fall-back,
pre-packaged Plan of Reorganization through a filing in the U.S.
Bankruptcy Court for the District of Delaware.  Absent requisite
support for the Plan, the Company may be forced to explore other
immediate alternatives.

If the Company decides to make a bankruptcy filing to effectuate
its Plan of Reorganization, it is not expected to affect CEDC's
operations in Poland, Hungary, Russia or Ukraine.  The Company
will have sufficient cash and resources on hand to ensure that its
business will continue as usual and all obligations to employees,
vendors, and providers of credit support lines in Poland, Hungary,
Russia and Ukraine will be honored in the ordinary course of

The exchange offers are subject to the satisfaction or waiver of
certain conditions set forth in the Offering Memorandum, dated
February 25, 2013, including but not limited to a minimum tender
condition.  Subject to applicable law, CEDC may amend, extend or
waive conditions to, or terminate, the exchange offers.  Full
details of the terms and conditions of the exchange offers are
described in the Offering Memorandum and the Letter of Transmittal
for each of the Convertible Notes and the Senior Secured Notes,
which are being sent to the respective holders of such Notes.  As
mentioned above, the Offering Memorandum also contains a summary
of key terms of the alternative proposal being put forward by the
committee of 2016 Senior Secured Notes holders and RTL.

CEDC on Feb. 25 filed a Tender Offer Statement on Schedule TO,
together with the Offering Memorandum and related Letters of
Transmittal that are exhibits to the Tender Offer Statement on
Schedule TO, with the Securities and Exchange Commission.  Each
such document, as well as any amendments, supplements or
additional exhibits thereto, are available, free of charge, from
the SEC's Web site at

Note holders are encouraged to read these documents, as they
contain important information regarding the tender offer.

Requests for the Offering Memorandum and other documents relating
to the Exchange Offers may be directed to Garden City Group, the
information and exchange agent for the exchange offers, at (800)
878-1684 (toll-free North America) or (614) 763-6110 (direct-dial
toll international).

                            About CEDC

Mt. Laurel, New Jersey-based Central European Distribution
Corporation is one of the world's largest vodka producers and
Central and Eastern Europe's largest integrated spirit beverages
business with its primary operations in Poland, Russia and

Ernst & Young Audit sp. z.o.o., in Warsaw, Poland, expressed
substantial doubt about Central European's ability to continue as
a going concern, following the Company's results for the fiscal
year ended Dec. 31, 2011.  The independent auditors noted that
certain of the Company's credit and factoring facilities are
coming due in 2012 and will need to be renewed to manage its
working capital needs.

The Company's balance sheet at Sept. 30, 2012, showed
US$1.98 billion in total assets, US$1.73 billion in total
liabilities, US$29.44 million in temporary equity, and US$210.78
million in total stockholders' equity.


The Company's Convertible Senior Notes are due on March 15, 2013.
The Company has said its current cash on hand, estimated cash from
operations and available credit facilities will not be sufficient
to make the repayment of principal on the Convertible Notes and,
unless the transaction with Russian Standard Corporation is
completed the Company may default on them.  The Company's cash
flow forecasts include the assumption that certain credit and
factoring facilities coming due in 2012 would be renewed to manage
working capital needs.  Moreover, the Company had a net loss and
significant impairment charges in 2011 and current liabilities
exceed current assets at June 30, 2012.  These conditions, the
Company said, raise substantial doubt about its ability to
continue as a going concern.

                           *     *     *

As reported by the TCR on Aug. 10, 2012, Standard & Poor's Ratings
Services kept on CreditWatch with negative implications its 'CCC+'
long-term corporate credit rating on U.S.-based Central European
Distribution Corp. (CEDC), the parent company of Poland-based
vodka manufacturer CEDC International sp. z o.o.

"The CreditWatch status reflects our view that uncertainties
remain related to CEDC's ongoing accounting review and that
CEDC's liquidity could further and substantially weaken if there
was a breach of covenants which could lead to the acceleration of
the payment of the 2016 notes, upon receipt of a written notice
of 25% or more of the noteholders," S&P said.

As reported by the TCR on Jan. 16, 2013, Moody's Investors Service
has downgraded the corporate family rating (CFR) and probability
of default rating (PDR) of Central European Distribution
Corporation (CEDC) to Caa3 from Caa2.

"The downgrade follows CEDC announcement on the 28 of December
that it had agreed with Russian Standard a revised transaction to
repay its $310 million of convertible notes due March 2013 which,
in Moody's view, has increased the risk of potential loss for
existing bondholders", says Paolo Leschiutta, a Moody's Vice
President - Senior Credit Officer and lead analyst for CEDC.


Standard & Poor's Ratings Services said that it has raised its
long-term corporate credit rating on Russia-based electricity
distribution utility Interregional Distributive Grid Co. JSC of
Center (IDGC of Center) to 'BB' from 'BB-', and the Russia
national scale rating on the company to 'ruAA' from 'ruAA-'.  S&P
removed these ratings from CreditWatch, where they were placed
with positive implications on Nov. 30, 2012.  S&P affirmed the 'B'
short-term rating.  The outlook is stable.

The rating action reflects S&P's view that IDGC of Center's
improved credit metrics will remain adequate for the stand-alone
credit profile (SACP) over at least the next two years, supported
by new regulatory tariffs effective 2012-2017.  S&P has revised
its assessment of the SACP to 'bb-' from 'b+'.

In November 2012, the Federal Tariff Service of Russia, which
regulates tariffs for Russian electricity distribution network
entities, established a tariff structure for IDGC of Center for

IDGC of Center will have to invest about Russian ruble (RUB) 113
billion (about US$3.8 billion), including value-added tax (VAT),
in 2012-2017, as agreed with the regulator.  In S&P's base-case
scenario, it anticipates that free operating cash flow (FOCF)
generation will be moderately negative in those years at
RUB3 billion-RUB6 billion.  S&P considers projected debt leverage
to be manageable for the company: S&P's base-case scenario shows
the debt-to-EBITDA ratio not exceeding 2.5x in the next few years.

The Russian government has a controlling stake in IDGC of Center.
S&P therefore considers IDGC of Center to be a government-related
entity (GRE).  According to S&P's GRE criteria, the ratings on
IDGC of Center incorporate S&P's view of a "moderate" likelihood
of timely and sufficient extraordinary state support in the event
of financial stress.  This is based on S&P's view of IDGC of

   -- "Important" role for the state (at least for several
      regional governments) as a provider of essential
      infrastructure services in its areas of operation; and

   -- "Limited" link to the state, given the state's indirect
      majority ownership of the company and the existence of a
      number of minority shareholders, which increase s
      uncertainty about the timeliness and mechanism of any
      extraordinary support.

IDGC of Center's SACP of 'bb-' is based on S&P's assessments of
its "fair" business risk profile and "aggressive" financial risk
profile.  The main constraints include the company's aging
operating assets, lack of track record of operations under the new
tariff regime and past government attempts to manually control
tariffs, an aggressive financial profile, significant reliance on
new debt in the implementation of its investment program, and a
concentrated customer base.

These constraints are mitigated by IDGC of Center's role as the
major distribution grid operator in its service areas, its
dominant market position with an 82% market share, and its
relatively stable cash flows from regulated power distribution.

The stable outlook reflects S&P's opinion that the risks related
to IDGC of Center's negative FOCF generation, sizable investment
program, ability to collect receivables, and cost overruns will be
mitigated by the company's moderate projected leverage, adequate
liquidity management, and state support.  S&P assumes the company
will maintain both adequate liquidity and debt maturity profiles
on a sustained basis.  The outlook also reflects S&P's
expectations that the company will remain largely state-controlled
over the medium term and that its strategic importance to the
local governments it serves will not diminish.

To be in line with an SACP of 'bb-', S&P expects IDGC of Center'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.

RENAISSANCE CAPITAL: S&P Withdraws 'B-' Counterparty Rating
Standard & Poor's Ratings Services lowered its long-term
counterparty credit rating on Renaissance Capital Holdings Ltd.
(RCHL) to 'B-' from 'B' and affirmed the 'C' short-term
counterparty credit rating.  S&P subsequently withdrew all ratings
at the issuer's request.  The outlook at the time of the
withdrawal was negative.

The downgrade reflects S&P's view that, due to the changes in the
Renaissance Group's structure, the issuer no longer benefits from
the earnings streams of several operating companies within the
Renaissance Financial Holdings Ltd. (RFHL) group, which it
formerly owned.  S&P believes this could put pressure on RCHL's
financial flexibility.

S&P is withdrawing the ratings on RCHL at the issuer's request.
Only very limited public information on RCHL is available to S&P,
therefore it is unable to conduct timely surveillance on the
company.  With more information, S&P could have made further
adjustments to the ratings.

The outlook at the time of the withdrawal was negative, reflecting
S&P's uncertainty over the company's future revenues and financial
profile in the context of the Renaissance Group's recent
organizational changes.


ABANKA VIPA: Moody's Cuts Long-Term Deposit Ratings to 'Caa3'
Moody's Investors Service downgraded Abanka's long-term local and
foreign-currency deposit ratings to Caa3 from Caa1 and preferred
stock non-cumulative rating to C(hyb) from Ca(hyb).

The downgrades were prompted by Moody's assessment that Abanka's
credit profile has been further weakened by (i) a failure to carry
out its planned capital increase as announced in the press release
issued by Abanka on 19th of February, (ii) ongoing material losses
undermining its already weak capital base, and (iii) the lack of
immediate prospects of restoring profitability.

Concurrently, Abanka's standalone E bank financial strength rating
(BFSR) has been affirmed. However, Moody's now maps the E BFSR to
ca on the long-term rating scale from caa2 previously.

Abanka's Non-Prime short-term deposit rating is unaffected by this
rating action.

Ratings Rationale:

Moody's says that the downgrades primarily reflect the failure of
the bank to raise capital in its latest attempt to shore up its
capital ratios. On 19th February Abanka made an announcement that
following the third round of capital raising the bank has failed
to successfully complete the planned total recapitalization of
EUR50 million.

This development should be taken in the context of already weak
capital position of Abanka with on-going losses. The bank expects
to post EUR76 million losses for FYE 2012. As a result Moody's
estimates that Abanka's capital ratios will be challenged to
remain above minimum regulatory requirements in 2013 and Moody's
said that it believes that the bank will require major structural

Moody's added that the repositioning of the standalone credit
assessment to one of the lowest levels of the rating range at ca
reflects these risks of structural changes, and likely need for
support for the bank, in a very unfavorable operating environment,
as well as and the prospect of further losses.

Moody's maintains a one-notch uplift for Abanka's long-term
deposit rating of Caa3 due to systemic support assumptions. This
assumption is based on (i) the government's on-going liquidity
support for the bank, (ii) the government's 26% indirect
ownership, and (3) Abanka's position as the third largest bank in
Slovenia with a 10% market share. However, given the government's
passive role in the recapitalization of the bank, without any
tangible public plans for the future in this respect, Moody's has
assigned a negative outlook to the deposit rating.

What Could Move The Ratings Up/Down

Upwards pressure might develop on Abanka's standalone rating if
the bank (i) successfully strengthens its capital, bringing its
capital buffers to a level sufficient to absorb possible future
losses (Abanka made an announcement that it intends to propose at
the next General meeting raising EUR90 million with the exclusion
of the pre-emptive rights of existing shareholders); (ii) reverses
the rapidly declining asset-quality trends and (iii) shows
evidence that it can return to profitability within a reasonable
timescale. In terms of the deposit ratings, evidence of support
from the government in the recapitalization process could be
conducive to change in assumptions regarding systemic support for
the bank and thus lead to an upward pressure on the ratings.

At the current very low level of the standalone ratings of ca,
Moody's does not expect any further downwards pressure. On the
deposit ratings however, downwards pressure on Abanka's debt
ratings could be triggered by rising uncertainty regarding the
likelihood of systemic support with the recapitalization of the

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


ENCE ENERGIA: Moody's Affirms Ba3 CFR Following Refinancing
Moody's assigned a definitive Ba3 corporate family rating and Ba3-
PD probability of default rating to ENCE Energia y Celulosa, SA
(ENCE) following the successful execution of the group's
refinancing exercise and review of final credit documentation.
Concurrently, Moody's has assigned a definitive B1 (LGD 4, 62%)
rating to the EUR250 million senior secured notes issued by ENCE.
The stable outlook remains unchanged.

Ratings Rationale:

Moody's definitive ratings are in line with the provisional
ratings assigned on January 21, 2013.

The assigned Ba3 corporate family rating is supported by (i)
ENCE's leading position in the production of hardwood pulp in
Europe, with a solid focus on the rather stable tissue end market;
(ii) assumed cost competitiveness compared to Latin American peers
on a total cost basis, despite higher domestic wood costs; (iii)
increasing contribution from renewable energy production,
balancing the volatile pulp exposure and providing for increasing
stability and visibility of revenues and operating profitability.
The rating also considers positively the solid financial risk
profile with a moderate leverage profile as indicated by Moody's
adjusted Debt/EBITDA of below 3x based on preliminary 2012
results. Moody's notes that ENCE owns sizeable forestland holdings
in Iberia with a book value covering more than 55% of total
reported debt.

The rating is constrained by (i) the fairly small scale when
compared to peers as indicated by sales of EUR828 million in 2012
and limited geographic diversification; (ii) a highly focused
product portfolio with pulp production generating about 70% of
group sales; (iii) the inherent volatility of the industry with
pulp being one of the most volatile commodities in the forest
products industry in terms of demand and pricing. Moody's expects
market conditions to deteriorate over 2013, largely reflecting
significant new pulp capacity currently under construction and
scheduled to ramp up over 2013-2015. This will in Moody's view
likely result in pricing pressure for pulp due to at least
temporary oversupply. In addition, tax charges related to reforms
of the Spanish energy sector will reduce profitability of the
group's energy operations, although we note that ENCE targets to
at least partly mitigate these charges by additional cost savings.
Lastly, the rating also considers the track record of negative
free cash flow generation over the past years resulting from the
group's significant expansion activity to grow its energy

ENCE's liquidity profile is assessed as solid. Key internal cash
sources are cash available of EUR48 million as of yearend 2012 as
well as internal cash flow generation. In addition, ENCE has
access to a revolving credit facility amounting to EUR90 million
and maturing in February 2018. Lending arrangements do not include
any maintenance financial covenants but only debt incurrence
tests. These sources should be sufficient to cover operational
cash needs such as working capital and capex spending. Next
material debt maturity is in 2018, when the currently undrawn RCF

A higher rating would require ENCE to build a track record of
resilient credit metrics through the cycle on the back of benefits
from a leaner cost structure supporting continued cost
competitiveness as well as benefits from its growing energy
operations. It would also require a period of positive free cash
flow generation following significant spending in an effort to
grow the group's pulp and energy footprint. Quantitatively,
Moody's would consider a positive rating action if Debt/EBITDA
were to remain materially below 3 times through the cycle with
RCF/Debt in the high teens and EBIT/Interest expense above 2x

Negative pressure would build should market conditions for pulp
deteriorate to levels worse than currently expected as a result of
more severe pricing pressure or demand erosion as exemplified by
Debt/EBITDA staying above 3.5x on a Moody's adjusted basis with
RCF/Debt trending towards the low teen percentages. A negative
rating action could also be triggered by a weakening liquidity
profile or adverse newsflow regarding alternative energy

The B1 rating assigned to the EUR250 million senior secured notes
is one notch below the group's corporate family rating. The rating
on this instrument reflects its junior ranking behind the sizeable
EUR90 million super senior RCF and trade payables. The RCF and the
senior secured notes share the same collateral package, consisting
of a pledge over certain assets (share pledges in most operating
companies, pledges of intercompany loans and pledges over
receivables and accounts) as well as upstream guarantees from most
of the group's operating subsidiaries, representing more than 80%
of aggregate assets and EBITDA. However, RCF lenders benefit from
priority treatment in a default scenario as that their claims
would be discharged before any remaining proceeds would be
distributed to the holders of the senior secured notes.


Issuer: ENCE Energia y Celulosa, S.A.

-  Probability of Default Rating, Assigned Ba3-PD

-  Corporate Family Rating, Assigned Ba3

- Senior Secured Regular Bond/Debenture Feb 15, 2020, Assigned B1

- Senior Secured Regular Bond/Debenture Feb 15, 2020, changed to a
range of LGD4, 62 % from a range of LGD4, 63 %

The principal methodology used in this rating was the Global Paper
and Forest Products Industry published in September 2009. Other
methodologies used include Loss Given Default for Speculative-
Grade Non-Financial Companies in the U.S., Canada and EMEA
published in June 2009.

With sales of EUR828 million in 2012, ENCE, headquartered in
Spain, is a leading European producer of hardwood pulp and also
has sizable alternative energy operations in Spain.

FONDO DE TITULIZACION: Moody's Cuts Rating on Cl. B Notes to 'B2'
Moody's Investors Service downgraded to Ba3(sf) and B2(sf),
respectively, the ratings on the Class A and B notes issued by
Fondo de Titulizacion de Activos Santander Publico 1. The rating
action reflects deterioration in the credit quality of the
portfolio backing the notes, which consists of Spanish public
sector loans, following the downgrade of the Government of Spain
(Baa3/(P)P-3, not on watch) on June 13, 2012. This rating action
concludes the review for downgrade initiated by Moody's on July 2,

Issuer: Fondo de Titulizacion de Activos Santander Publico 1

- EUR1813M A Notes, Downgraded to Ba3 (sf); previously on Jul 2,
2012 Baa3 (sf) Placed Under Review for Possible Downgrade

- EUR37M B Notes, Downgraded to B2 (sf); previously on Jul 2, 2012
Ba2 (sf) Placed Under Review for Possible Downgrade

Ratings Rationale:

The rating action reflects the deteriorating credit quality of the
portfolio underpinning the Class A and B notes, as a result of the
Spanish sovereign downgrade in June 2012. This, in turn, led to a
worsening of the credit quality of several Spanish sub-sovereign
entities, such as universities and city councils, which directly
affected the credit quality of the Santander Publico 1
transaction. Low levels of credit enhancement within the
transaction could not offset this deterioration in portfolio
credit quality and resulted in a downgrade of the Class A and B
notes to Ba3(sf) and B2(sf), respectively.

Portfolio Credit Quality

Moody's has assessed the current credit quality of the portfolio
as being equivalent to a Ba3 rating, which compares unfavorably
with the Baa3 average credit quality as per the rating agency's
last review on April 11, 2012. This average credit quality is
derived from recently updated credit estimates (for the top nine
exposures accounting for 38% of the portfolio) and Q scores for
the remaining part of the portfolio. In cases where neither credit
estimates nor Q Scores were available (13.4% of the pool), Moody's
assumed a proxy rating equivalent of Ba2 for universities, Ba3 for
county councils and B1 for city councils. The rating agency
derived these assumptions from the observations on the pool where
Q scores or credit estimates (CE) were available.

As credit estimates and Q scores do not carry credit indicators,
such as ratings reviews and outlooks, Moody's performed several
stress tests. In the rating agency's central scenario, it
downgraded by two notches the credit estimates of the six largest
borrowers with individual exposures in excess of 3% individually
and 30% collectively of the portfolio, which resulted in an
average adjusted credit quality of Ba3 assuming a 2.8 year
weighted average life (corresponding to a 9% default probability).
Moreover, the sub-sovereign profile of the bulk of the debtors,
who are all domiciled in Spain, leads to a 100% correlation
assumption in Moody's model. The rating agency assumed a 45% fixed
recovery rate on defaulted assets, in order to model the possible
restructuring of defaulted loans. Moody's also took into
consideration the fact that the borrower concentration in the
portfolio has increased significantly with an effective number of
44 loans now, from 50 in April 2012. The top 16 exposures now
account for 50% of the volume of the pool. Among the largest six
borrowers, which collectively account for 30% of the volume of
loans of the pool, are (1) two universities, which represent 6.9%
and 3%, of the pool volume, respectively; (2) a province and a
region representing 5.6% and 5.3%, respectively; and (3) two city
councils, which represent 4.5% and 4.4%, respectively.

In the application of the "Updated Approach to the Usage of Credit
Estimates in Rated Transactions" (October 2009), Moody's performed
a number of sensitivity analyses, including "jump-to-default"
tests. When downgrading either of the two senior exposures to
Caa2, the rating agency concluded that the model output for the
senior tranche would not be affected by more than one notch
compared to the central scenario, thus indicating the resiliency
of its rating to standard stress.


This transaction is a static securitization of a portfolio of
loans to Spanish public entities, which closed in December 2004.
The closing loan portfolio of EUR1,850 million has substantially
amortized to its current size of EUR280 million. The Class A and B
notes benefit from credit enhancement of approximately 8.7% and
4.3%, respectively, including a EUR12.1 million reserve fund. The
reserve fund has amortized down to its minimum level on the back
of the transaction's good performance to date, but suffered a draw
on the January interest payment date (IPD).


Although the performance of Santander Publico 1 has historically
been very good in terms of 90+ day delinquencies and defaults
(delinquency levels had never exceeded 0.3% prior to Q1 2011),
Moody's has noted a deterioration in the performance from Q1 2011
onwards. Indeed, 90+ day delinquencies reached 0.8% of the
outstanding pool balance as of Q1 2013.

Principal Methodology

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


* Corporate Bankruptcies in Turkey to Rise as Market Shrinks
Hurriyet Daily News reports that the head of the Ankara Chamber of
Industry (ASO), Nurettin Ozdebir, has said the number of firms
going bankrupt will increase after March due to a shrinkage in the
markets and interim payments.

According to Hurriyet, Mr. Ozdebir said at a press event on
Feb. 24 many companies have already gone bankrupt because of a
market contraction, adding that there were other factors that were
creating pressure in the markets.

Hurriyet relates that Ozdebir also said he expected many more
firms would declare bankruptcy beginning in March.

U N I T E D   K I N G D O M

GLOBAL SHIP: DePrince Has 10.6% Equity Stake as of Dec. 31
In an amended Schedule 13G filing with the U.S. Securities and
Exchange Commission, DePrince, Race & Zollo, Inc., disclosed that,
as of Dec. 31, 2012, it beneficially owns 5,059,997 shares of
Class A Common Stock of Global Ship Lease, Inc., representing
10.66% of the shares outstanding.  DePrince previously reported
beneficial ownership of 4,871,738 Class A shares or a 10.26% of
the shares outstanding.  A copy of the amended filing is available
for free at

                     About Global Ship Lease

London, England-based Global Ship Lease (NYSE: GSL, GSL.U and
GSL.WS) -- is a containership
charter owner.  Incorporated in the Marshall Islands, Global Ship
Lease commenced operations in December 2007 with a business of
owning and chartering out containerships under long-term, fixed
rate charters to world class container liner companies.

Global Ship Lease owns 17 vessels with a total capacity of 66,297
TEU with a weighted average age at June 30, 2010, of 6.3 years.
All of the current vessels are fixed on long-term charters to CMA
CGM with an average remaining term of 8.6 years.  The Company has
contracts in place to purchase two 4,250 TEU newbuildings from
German interests for approximately $77 million each that are
scheduled to be delivered in the fourth quarter of 2010.  The
Company also has agreements to charter out these newbuildings to
Zim Integrated Shipping Services Limited for seven or eight years
at charterer's option.

As reported in the Dec. 1, 2012, edition of the TCR, Global Ship
Lease disclosed that it had entered into an agreement with its
lenders to waive until Nov. 30, 2012, the requirement under its
credit facility to conduct loan-to-value tests.  The credit
facility requires that loan-to-value, which is the ratio of
outstanding borrowings under the credit facility to the aggregate
charter-free market value of the secured vessels, cannot exceed

The Company's balance sheet at Sept. 30, 2012, showed US$907.84
million in total assets, US$549.46 million in total liabilities
and US$358.38 million in total stockholders' equity.

MEZZVEST INVESTMENTS: Moody's Affirms Caa3 Rating on Cl. D Notes
Moody's Investors Service upgraded the ratings of the following
notes issued by Mezzvest Investments I Limited:

- EUR290M Class A1 Secured Floating Rate Facilities, due 2023
(currently EUR32.6M outstanding), Upgraded to Aa2 (sf); previously
on Apr 25, 2012 Upgraded to A2 (sf)

- EUR105M Class A2 Secured Floating Rate Variable Funding
Facilities, due 2023 (currently EUR4.95M outstanding), Upgraded to
Aa2 (sf); previously on Apr 25, 2012 Upgraded to A2 (sf)

- EUR50M Class B Secured Floating Rate Facilities, due 2023,
Upgraded to Baa3 (sf); previously on Apr 25, 2012 Upgraded to Ba1

Moody's also affirmed the ratings of the following notes issued by
Mezzvest Investments I Limited:

- EUR55M Class C Secured Deferrable Floating Rate Facilities, due
2023, Affirmed B3 (sf); previously on Apr 25, 2012 Upgraded to B3

- EUR75M Class D Secured Deferrable Floating Rate Variable Funding
Facilities, due 2023 Notes, Affirmed Caa3 (sf); previously on Mar
26, 2010 Downgraded to Caa3 (sf)

Mezzvest Investments I Limited, issued in July 2007, is a
Collateralized Loan Obligation ("CLO") backed by a portfolio of
European mezzanine and second lien loans. The portfolio is managed
by Mezzvest. It is predominantly composed of loans that pay some,
or all, of their interest in kind (PIK). The performing pool is
non-granular, currently referencing eight separate issuers, with a
diversity score of 6.1. The reinvestment period ended in July

Ratings Rationale:

According to Moody's, the rating actions taken on the notes result
primarily from the amortization of the Class A Notes, which have
been paid down by approximately 70%, or EUR84 million, since the
last rating action in April 2012. The actions also take into
account the uncertainties generally related to the performance of
mezzanine and second lien debt collateral.

As a result of this deleveraging, the overcollateralization ratios
(or "OC ratios") have increased since the rating action in April
2012. As of the latest trustee report dated 31 January 2013, the
Class A/B, Class C and Class D OC ratios are reported at 241.9%,
148.6% and 121.2% respectively, versus February 2012 levels of
170.6%, 129.2% and 113.1%, respectively. All OC tests are
currently in compliance.

In its base case, Moody's analyzed the underlying collateral pool
to have a performing par and principal proceeds balance of EUR 214
million, defaulted par of EUR118.4 million, a weighted average
default probability of 31.3% with a weighted average life of 3.76
years and a variable mean recovery rate upon default of 20%.

Moody's supplemented its base case analysis by modeling a range of
variable mean recovery rates, from 0% to 20%, as well as a
scenario assuming a zero recovery value to the current defaulted
assets. These scenarios generated model outputs that were
approximately within 2 notches from the base case results.

Moody's notes that the transaction's performance is highly
sensitive to the credit performance of a few large obligors, as
the two largest obligors constitute 43.6% of the performing pool.
As a result, the rating of the notes could be subject to more
volatility than typically more diversified CLO structures. Moody's
also ran a sensitivity scenario to assess the ratings impact of a
jump-to-default of the largest obligor. This scenario generated
model outputs that were 1-3 notches from the rating actions taken

Moody's notes that this transaction is subject to a high level of
macroeconomic uncertainty, as evidenced by uncertainties of credit
conditions in the general economy. CLO notes' performance may also
be impacted by 1) the manager's investment strategy and behavior
and 2) divergence in legal interpretation of CDO documentation by
different transactional parties due to embedded ambiguities.

Sources of additional performance uncertainties are described

1) Recovery upon asset default: The pool is exposed to a large
proportion of mezzanine loans, the recoveries on which are subject
to a high degree of volatility in the event of default.

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

3) Moody's also notes that 100% 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.

TITAN EUROPE: Fitch Lowers Ratings on Two Note Classes to 'CC'
Fitch Ratings has downgraded Titan Europe 2007-1 (NHP) Limited's
B, C, D and E notes and removed them from RWN.

Key Rating Drivers

The downgrades are driven by the substantial deterioration in
performance, with occupancy falling to 83% as well as material
deferred maintenance resulting in significant declines in property
values. Consequently, the loan-to-value ratios (LTVs) of all Fitch
rated classes are well above 100% (even if credit is given by
valuing HC-One on a WholeCo basis). The transaction benefits from
a tail period of just under four years with legal final maturity
of the notes in January 2017, leaving some time for the
performance to stabilize, and a sale/refinancing solution to be
found. However, assuming a reasonable amount of time for this to
be arranged, performance will need to improve quickly for the
notes' prospects to improve.

The performance of the securitized care homes has declined
further, with EBITDAR deteriorating by 20.6% from GBP102.5 million
(December 2011) to GBP81.3 million (December 2012). Additionally,
cash flow is currently insufficient to cover the interest on the
class B, C, D, and E notes and further funds are expected to be
withheld at the borrower level to fund necessary 'catch-up' capex
investments (ca. GBP54 million is expected to be withheld over
FY13-15) on top of the GBP30 million already withheld in 2012.
This means that further servicer advance facility drawings
(GBP14.5 million as of January 2013) will be necessary in order to
avert a note event of default.

In addition, under the current HC-One business plan, as a result
of both the weaker performance and capex requirements, cash flow
is forecast to be insufficient to meet the interest payments on
the class B, C, D and E notes in all years to legal final
maturity. All are therefore expected to defer further, with total
deferrals estimated at around GBP141.3 million by legal final
maturity (GBP10.3 million due to deferred interest on classes B,
C, D, E and GBP131 million due accruals on the swap ranking senior
to those tranches in the priority of payments).

In terms of a possible sale or refinancing, the restructuring of
the business with the incorporation of HC-One as part of the
borrower group is viewed as a credit positive with the interests
of the Propco and HC-One (as largest Opco/tenant) largely aligned.
The transfer of the 249 homes from the dismissed Southern Cross
removes considerable execution risk for a later refinancing of the
whole care home company.

Under the current market valuation, the LTVs have increased to
very high levels, with all rated classes over 100% i.e. 135%,
143%, 154% and 165% for the B, C, D and E notes, respectively
(taking into account the senior ranking swap mark-to-market (MtM)
of currently GBP183.7 million). The senior ranking swap MtM is
expected to decline when getting closer to maturity (assuming no
further material declines in interest rates) which should benefit
the refinancing/disposal chances. However, this is expected to be
offset to some extent by further accruals on the Fitch rated notes
and the swap so that a default is expected to remain a real
possibility for all classes. A material improvement in HC-One's
operating performance over and above the company's business plan
would certainly mitigate such concerns. However, forecasting the
care homes' performance remains challenging due to continued lack
of visibility in combination with HC-One's short operating history
and the state of repair of the portfolio. Furthermore, HC-One's
exposure to local authority (LA) funding (around 80% of its homes
are LA funded) and geographic concentration in the north of the UK
(33% north of England, 14% in Scotland) pose an additional
challenge to a swift recovery.

Rating Sensitivities

Moving closer to legal final maturity without having arranged an
appropriate refinancing solution or property disposal could lead
to further downgrades. Upgrades could be possible if
refinancing/disposal arrangement progressed in combination with
material performance/value improvement making a successful
repayment of the Fitch rated debt by legal final maturity more

Titan Europe 2007-1 (NHP) is a securitization of 294 nursing homes
and three residential properties owned by NHP, which are let on
long leases to third-party operators active in the UK healthcare
sector (in particular HC-One, which accounts for 84% of the
estate). Notably, the transaction remains in standstill, currently
until 12 April 2013.

The rating actions are as:

-- GBP42.15m class B secured floating-rate notes due 2017:
    downgraded to 'CCC' from 'BB'; off RWN

-- GBP42m class C secured floating-rate notes due 2017:
    downgraded to 'CCC' from 'B+'; off RWN

-- GBP58m class D secured floating-rate notes due 2017:
    downgraded to 'CC' from 'B-'; off RWN

-- GBP60m class E secured floating-rate notes due 2017:
    downgraded to 'CC' from 'CCC'


POJSEB TRUSTBANK: Fitch Affirms Long-Term IDRs at 'B-'
Fitch Ratings has affirmed Uzbekistan-based POJSEB Trustbank's
Long-term Issuer Default Ratings (IDRs) at 'B-' with Stable


TB's Long-term IDRs are driven by its Viability Rating. The
affirmation of the IDRs reflects Fitch's current assessment of
some weaknesses in the Uzbekistan operating environment, foreign
currency regulations in particular, TB's limited franchise and
high reliance on related parties' funding, and its currently rapid
loan growth that translates into largely unseasoned nature of its
loan book (CAGR for 2011-2012 was 35.1%).

TB's revenue-generating capacity and funding continue to
significantly rely on the funds of Uzbek Commodities Exchange
(UCE) and other related parties. The latter accounted for 68% of
the total non-equity funding at end-9M12 (end-H111: 51%) and was
highly concentrated by name, requiring TB to maintain a solid
liquidity cushion. At end-2012 TB's total available liquidity net
of total potential cash uses comfortably covered 82% of its
customer accounts.

TB's capital has been supported by its sound internal capital
generation of 31% for 2012 (to a significant extent from fees
earned on settlements and trade finance operations) and consistent
fresh equity injections (UZS4 billion in 2012 and the similarly
moderate injection planned for 2013). At end-1M13 TB reported the
total regulatory capital adequacy ratio (CAR) at 20.6%, which
allowed the bank to reserve up to 28% of its total loan book
without breaching the regulatory minimum of 10%. However, the
bank's capitalization level should be considered in the context of
its concentrated credit and significant interbank exposures
(equivalent to 2.3x of the bank's equity at end-2012, most of them
were within the local banks).

TB's foreign currency IDR also continues to be capped by
limitations of foreign exchange regulation in Uzbekistan, which
constraint the bank's ability to service foreign currency
obligations, including but not limited to documentary business in
foreign currencies. The volume of foreign currency letters of
credit and guarantees without appropriate collateral was reported
at 38% of the bank's equity at end-Q312, representing a moderate
conversion risk for the bank.


An upgrade is not currently expected, although TB's credit profile
would benefit from diversification of its funding base and
moderation in growth, while maintaining acceptable asset quality
and profitability. An upgrade of the Long-term foreign currency
IDR would additionally require a liberalization of foreign
exchange regulations.

The bank's IDR could be downgraded in the event of sudden
withdrawal of UCE's operations from the bank, which would
adversely affect its liquidity, operating efficiency and
profitability. However, this is not Fitch's current expectation,
as reflected in the Stable Outlook on TB's Long-Term IDR.
Significant increase in risk appetite or marked deterioration of
the credit quality could also result in a downgrade of the VR.


TB's SRF of 'No Floor' and its '5' Support Rating reflect its
relatively limited scale of operations rendering extraordinary
support from Uzbek authorities unlikely. The ability of TB's
shareholder to provide support cannot be reliably assessed. Fitch
does not expect any revision of TB's SRF or Support Rating in the
foreseeable future.

The rating actions are:

-- Long-term foreign currency IDR: affirmed at 'B-', Outlook
-- Short-term foreign currency IDR: affirmed at 'B'
-- Long-term local currency IDR: affirmed at 'B-', Outlook
-- Short-term local currency IDR: affirmed at 'B'
-- Viability Rating: affirmed at 'b-'
-- Support Rating: affirmed at '5'
-- Support Rating Floor: affirmed at 'NF'


* Moody's Outlook on the Global Auto Industry Remains Stable
Despite current slowing demand, driven by weaker-than expected
sales in Europe, light vehicles sales could rise in 2014, boosted
by the improving global economy, says Moody's in its latest auto
industry update entitled "Global Automaker Demand Trends Continue
to Improve, Despite Weakness in Europe". As a result, the outlook
for the global automotive manufacturing industry is stable.

Moody's outlook for the global auto industry has been stable since
September 2011.

Compared with Moody's expectation in September 2012 of a 3%
decline in the current year, the rating agency now expects
European light vehicles sales to shrink by 5% in 2013. This is
mainly due to weaker-than-expected demand in northern European
countries, especially Germany and the UK, and the absence of a
recovery in southern Europe.

In contrast, for 2014, Moody's believes that western European
light vehicle demand could be up by 5% as a result of the pent-up
demand in key European markets after six consecutive years of
decline. However, as the rating agency's macroeconomic forecast
does not support a stark increase in car sales, visibility on the
anticipated recovery is low.

"We have revised our forecast for 2013 demand growth to 2.3%, from
2.9% last September, but expect a more normal pace of global
demand growth to resume next year if the global economy continues
to improve," says Falk Frey, a Senior Vice President in Moody's
Corporate Finance Group and author of the report.

Moody's anticipates the recovery of light vehicle demand to
continue in the US, fuelled by a gradual recovery of the housing
market. This will contribute to increasing consumer wealth and a
growing ability to replace the relatively old vehicles on the
road, which at present average more than 11 years of use. In line
with its 2013 GDP growth forecast, Moody's forecasts light vehicle
demand in China to grow by 7.0% in the current year, slightly
lower than the rating agency's 8.5% growth forecast of September
2012, and by 7.0% again in 2014.

In addition, Moody's expects that Japanese demand will normalize
in 2013. Sales rebounded last year after the slowdown caused by
the tsunami and the earthquake in 2011. The rating agency believes
a normalized level to be around 4.7 million units and anticipates
demand in calendar year 2013 to fall by 11% to 4.7 million units
and broadly remain at that level in 2014 (up 1% to around 4.75

Moody's would consider revising the outlook to positive if global
light vehicle growth was forecast to exceed 5% in the next two
years and assuming that capacity did not outgrow demand, that
utilization rates improved (especially in Europe) and pricing
remained firm.

Conversely, Moody's would revise the outlook to negative if global
volume growth fell below 2%, net pricing declined and capacity
utilization rates deteriorated, or if it expected operating
profits to decline for any other reason.


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

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

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

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


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

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

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of the same firm for the term of the initial subscription or
balance thereof are US$25 each.  For subscription information,
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