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                           E U R O P E

             Friday, April 5, 2013, Vol. 14, No. 67



NIEDERMEYER: Files for Insolvency; To Close 53 Stores


ALFACAM: Seeks New Investors After Banks Cancel Credit Lines


* CYPRUS: New Finance Minister Sworn; Bank Creditors Face Warning


REXEL SA: Fitch Assigns 'BB' Rating to 2 Senior Unsecured Notes


NEWLEAD HOLDINGS: Completes $578-Mil. Balance Sheet Restructuring


B&Q IRELAND: Legal Bid for Shop Leases Adjourned
WAVEBOB LTD: Fails to Find Investor; Faces Liquidation


SOPAF: Finance Police Search Offices in Bankruptcy Probe


EASTCOMTRANS LLP: Moody's Rates Proposed Notes Issuance '(P)B3'


LIEPAJAS METALURGS: On Verge of Insolvency; May Default on Debt


KONINKLIJKE KPN: Moody's Rates New Hybrid Bond Issuance 'Ba1'
SNS REAAL: Netherlands to Seek EU Approval for Bridge Bank


EXILLON ENERGY: S&P Assigns Prelim. 'B' Corp. Credit Rating


NOVA KREDITNA: S&P Cuts Unsolicited Public Info Rating to 'Bpi'
* SLOVENIA: Jazbec Takes Over as New Central Bank Governor


ABENGOA SA: S&P Lowers Corporate Credit Rating to 'B'
MADRID RMBS III: S&P Affirms 'D' Ratings on Three Note Classes
TDA CAM 9: Moody's Lowers Ratings on Two Note Classes to 'Ba3'


BOSPHORUS 1 RE: S&P Assigns Prelim. 'BB+' Rating to Class A Notes
SEKERBANK TAS: Moody's Rates New Eurobond Issue '(P)Ba1'


DTEK FINANCE: Fitch Gives 'B' Sr. Unsec. Rating to $600MM Notes

U N I T E D   K I N G D O M

COVENTRY CITY F.C.: Seeks an Appeal on 10-Point Deduction
DUNFERMLINE FC: Will Face Penalty for Entering Administration
READER'S DIGEST: U.S. Parent Selling Equity in Affiliates
TAYLOR WIMPEY: Moody's Raises Corp. Family Rating to 'Ba3'
THREE QUEENS HOTEL: In Administration Amid Financial Pressure


* EUROPE: Moody's Notes Structural Deficiencies Within CIS States
* BOOK REVIEW: Creating Value through Corporate Restructuring



NIEDERMEYER: Files for Insolvency; To Close 53 Stores
Pressetext reports that Niedermeyer filed for insolvency and made
plans to close almost half its branches, putting 279 jobs at

According to Pressetext, the Association of the Protection of
Creditors of 1870 (Kreditschutzverband von 1870, KSV) said that
the company, which employs 580 people in 98 stores across
Austria, has total liabilities of EUR28.8 million.  It will have
to pay 840 investors a 20% rate within two years, Pressetext

The Niedermeyer balance shows a total debenture of EUR35 million,
Pressetext discloses.

The company, as cited by Pressetex, said losses due to the
current economic contraction and the tight network of
subsidiaries contributed to its financial collapse.

The KSV said the company's total debt already include costs for
the closure of 53 stores, Pressetext notes.

Pressetext relates that company officials have said there are
already negotiations going on with potential investors.

Niedermeyer is an Austrian electrical retailer.


ALFACAM: Seeks New Investors After Banks Cancel Credit Lines
Philip Blenkinsop at Reuters reports that Alfacam Group said on
Wednesday that its bank lenders had decided to cancel its credit
lines, leaving it scrambling to find a new investor.

Alfacam, which was granted creditor protection in October, said
in a statement that its banks had decided not to extend
suspension of debt repayments beyond March 31, Reuters relates.

The company signed a memorandum of understanding in December with
its banks and Indian family-owned conglomerate Hinduja Group,
Reuters recounts.

The preliminary deal was to lead to a EUR24 million (US$31
million) credit facility and Hinduja providing a EUR6 million
equity injection for Alfacam, which breached its financial
covenants a year ago, Reuters notes.

Alfacom said in December that the EUR24 million credit facility
would cover almost all of its debt, according to Reuters.

The size of the stake Hinduja would take is under discussion,
though Alfacam's market capitalization is less than EUR7 million,
Reuters discloses.

According to Reuters, Alfacam said on Wednesday that it is
continuing discussions with Hinduja and other potential investors

The Belgian company sought a three-month extension of creditor
protection on Jan. 25, saying the time was needed to allow
Hinduja to carry out due diligence, Reuters recounts.  A court
granted this the following month, giving it protection until May
5 with a request for the submission of a restructuring plan by
April 15, Reuters discloses.

Alfacam's net assets dropped last year to less than half of the
value of its issued capital, requiring it to hold a meeting of
shareholders to vote on dissolving the company or backing its
proposed remedies, Reuters notes.  That meeting is due on
April 12, Reuters says.

Alfacam Group is a Belgium-based television services company.


* CYPRUS: New Finance Minister Sworn; Bank Creditors Face Warning
Maria Petrakis and Georgios Georgiou at Bloomberg News report
that Cypriot President Nicos Anastasiades swore in a new finance
minister on Wednesday, the second of his six-week old
administration, after the government took more steps to ease
banking restrictions in the island nation.

According to Bloomberg, an e-mailed statement from the
president's office said that Haris Georgiades, 40, a graduate in
economics from the University of Reading and a lawmaker with
Mr. Anastasiades's Disy party, was appointed the new finance
chief at a ceremony in the divided capital of Nicosia.

He succeeds Michael Sarris, a former banker, who resigned on
Tuesday to aid a probe into the collapse of the country's two
biggest lenders, Bloomberg notes.

Mr. Georgiades takes over an economy bearing the euro area's
first capital controls to stem deposit outflows and amid
uncertainty about how Cyprus will recover from the hit to its
reputation as a financial center, Bloomberg states.  His
predecessor's departure came eight days after the government
clinched a bailout to stave off collapse after an initial
abortive attempt to tax all savers at the nation's banks led to
protests and political turmoil, Bloomberg relates.

                    Warning to Bank Creditors

Mary Watkins at The Financial Times reports that unsecured
depositors in Cyprus banks are still seething, but as the dust
settles on the Mediterranean island's EUR10 billion bailout, bond
investors appear to be taking last week's rescue deal in their
stride.  Spreads on senior unsecured bonds have widened for some
peripheral and French banks but elsewhere the bond market
reaction has been relatively muted, the FT relates.

Cyprus has shown that in certain cases depositors could be on the
hook -- bad news for the next country facing a banking crisis,
the FT states.  Bondholders across the capital structure are also
going to be forced to shoulder losses much sooner than some had
expected, the FT says.

With governments increasingly looking for ways to avoid imposing
losses on taxpayers, the impact will be felt by bank creditors,
the FT notes.  A tough regulatory stance to bank rescues may also
exaggerate financial fragmentation in the eurozone, according to
the FT.

Some analysts are now asking whether Cyprus will encourage a
repricing of senior unsecured debt -- the class of debt that has
traditionally been near the bottom of the list that has to
shoulder losses when a bank fails -- and whether the response to
the eurozone's latest bailout will encourage innovation in the
types of debt instruments used by banks, the FT discloses.


REXEL SA: Fitch Assigns 'BB' Rating to 2 Senior Unsecured Notes
Fitch Ratings has assigned Rexel SA's 5.250% US$500 million and
5.125% EUR650 million senior unsecured notes due 2020 a final
rating of 'BB'. The terms of the final documentation are aligned
with the material already reviewed when assigning the expected
ratings on these debt instruments.

Fitch rates Rexel's Long-term Issuer Default Ratings (IDR) at
'BB' with a Stable Outlook. The Short-Term IDR and Commercial
Paper rating are both 'B'.

The proceeds from the bond issuance will be used for general
corporate purposes including the redemption of the 8.25% senior
notes due 2016 (expected corresponding cash outflow of EUR655.6
million including the make-whole premium). The bond refinancing,
together with the refinancing of its existing EUR1.1 billion
senior secured credit facilities by a single revolving credit
facility (RCF) of the same amount maturing in 2018 allow Rexel to
extend its average debt maturity profile by close to three years
(assuming the securitization program is rolled over) while
boosting liquidity.


Pari Passu with other Rexel SA Debt

The bond is unguaranteed, ranking pari passu with the new RCF
which is expected to be undrawn at closing. Moreover, the two
other existing bonds lose their guarantees as a result of the
proposed refinancing, reflecting the move to a simplified capital
structure with most of the debt raised at the holding level
(Rexel SA), unsecured, unguaranteed and ranking pari passu.
Although bondholders will only have a claim to the parent
company, there is cross-default with additional group debt above
a minimum threshold of EUR75 million.

Prior Ranking Debt

Rexel's securitization debt, finance lease obligations and debt
incurred by subsidiaries (together referred to as senior debt)
will continue to rank ahead of debt incurred by Rexel SA.
However, any structural subordination concerns are mitigated by
expected limited senior leverage, measured as senior debt/EBITDA,
below the threshold of 2x considered by Fitch as critical (1.4x
based on FY12's EBITDA). As a result we expect average recovery
prospects for unsecured bondholders in the event of default.
However, should Rexel permanently incur senior indebtedness
exceeding 2x EBITDA (representing around EUR450 million of
incremental debt including availability under securitization
lines) then a one notch downgrade on the senior unsecured rating
may be warranted.

Challenging Environment, Solid Performance

Although FY12 sales declined by 1.8% in organic terms, the
group's reported EBITA margin remained stable at 5.7%. The
decrease in Latam and APAC profitability (together representing
9% of group EBITA before central costs), which are less mature
markets and where the company has a smaller footprint, was
compensated by improvements in Europe and North America, where
the group benefits from continuing cost control and savings
derived from bolt-on M&A activity. Although Rexel is targeting
further EBITA margin expansion (above 6.5% in 2015), the current
rating factors more conservative gains through the economic cycle
(up to 6% by 2015).

Resilient Business Model

"Rexel benefits from adequate geographical diversification,
strong market shares in core markets and increasing presence in
fast-growing emerging countries. We expect Rexel to keep on
gradually improving its profitability, notably by shifting its
sales mix towards higher added value products and services --
part of its 'Energy in Motion' strategic plans -- and by
continuously optimizing its branch network and headcount. The
degree of flexibility in its cost base along with clear focus on
cost efficiency measures has enabled Rexel to increase its EBITA
margin by 80bps between 2008 and 2012," Fitch says.

Free Cash Flow (FCF) Critical

Pre-dividend FCF to EBITDAR remained above 30% in 2012. Rexel has
demonstrated the ability to remain cash flow generative
throughout the economic cycles, notably thanks to its business
model resilience, low capital intensity and control over working
capital. Despite weak economic prospects for 2013 and a sustained
dividend pay-out, Fitch expects Rexel's positive FCF to remain
above EUR150 million in 2013 and to average c. EUR215 million per
annum to 2016.

Financial Flexibility, M&A Appetite

The high amount of acquisition expenditures in 2012, along with
worsening operating performance in H2, resulted in some
deterioration in credit metrics, notably with funds from
operations (FFO) adjusted net leverage rising to 5.2x at year-end
2012 from 4.2x at year-end 2011. Thanks to its solid FCF
generation capacity and assuming more limited acquisition
spending (EUR200 million annually) Fitch is confident the company
will regain headroom under its 'BB' rating in 2013, reverting to
the lower leverage seen in 2011, below 4.5x, by 2015.


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

- FFO adjusted net leverage below 4.0x on a continuing basis and
   evidence of resilient profitability.

- The continuation of strong cash flow conversion, measured as
   pre-dividend FCF to EBITDAR average for two years consistently
   above 30%.

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

- A large debt-funded acquisition, or a deeper than expected
   economic slowdown with no corresponding increase in FCF
   (notably due to working capital inflow and/or dividend
   reduction) resulting in (actual or expected) FFO adjusted net
   leverage above 5.0x for more than two years.

- A more aggressive shareholder-friendly stance weakening credit
   protection measures could result in a negative rating action
   if the tough economic climate persists.

- Average two-year pre-dividend FCF to EBITDAR at or below the
   25%-30% range combined with weaker profitability.


NEWLEAD HOLDINGS: Completes $578-Mil. Balance Sheet Restructuring
NewLead Holdings Ltd. signed definitive agreements completing its
financial restructuring in late 2012.  Closing of transaction is
subject to certain conditions and was expected to occur by the
end of 2012.

Michael Zolotas, president and chief executive officer of
NewLead, stated, "Almost two years ago, we perceived the market
would be deteriorating for the foreseeable future, so we made the
difficult decision to approach our commercial partners and
commence a voluntary restructuring of our business and balance
sheet.  With the expert advice of Moelis & Company, S. Goldman
Advisors LLC, and Fried, Frank, Harris, Shriver & Jacobson LLP,
we have emerged from this process as a vital and competitive
organization.  I am deeply grateful to the people of NewLead for
their hard work and loyalty during this challenging period."

Michael Zolotas continued, "With the restructuring effectively
complete, we will seek to grow the Company by exploring existing
and new business segments.  With our newly stable balance sheet
and business, we believe that we will be able to profitably
expand our business within a short period of time."

         Post Restructuring Debt and Shares Outstanding

NewLead reduced the amount of debt in its balance sheet by
approximately US$578.3 million to around US$108.0 million.  Of
this amount, US$50 million will be represented by a 4.5%
convertible note due in 2022.  At the option of the Company,
annual interest payments and principal repayment upon the
maturity of the note may be satisfied by issuing additional
shares of common stock.

As of Nov. 30, 2012, NewLead had 309,510,713 shares of common
stock outstanding.  Upon closing of the final phase of the
restructuring, expected during December of 2012, NewLead expects
to have a total of 442,880,573 shares of common stock

NewLead's initial fleet will consist of four vessels under
control.  Management will now focus on leveraging longstanding
shipping relationships to build their fleet in the tanker and dry
bulk sector.

                          Commodity Unit

NewLead has also launched its commodity unit, which seeks to take
advantage of the attractive transportation market for
international commodities and the attractive commodity prices for
the underlying commodities.  Management believes that this
segment will allow them to take advantage of emerging dynamics in
the maritime industry.

Additional information can be found at

                       About NewLead Holdings

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

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

Newlead Holdings's balance sheet balance sheet at June 30, 2012,
showed US$111.28 million in total assets, US$299.37 million in
total liabilities and a US$188.08 million total shareholders'


B&Q IRELAND: Legal Bid for Shop Leases Adjourned
Aodhan O'Faolain and Ray Managh at Irish Examiner report that B&Q
Ireland Ltd.'s legal bid to have several lease agreements for its
shops set aside were adjourned on Wednesday.

The High Court applications brought by B&Q, which has been in
examinership since the end of January, and are part of the
process to secure the company's survival, will now be heard by
the court next Wednesday, Irish Examiner discloses.

The company, which operates nine stores across the country
employing 690 people, entered examinership because it is
insolvent with liabilities of more than EUR17 million to its
parent company, Kingfisher plc, Irish Examiner recounts.

B&Q cited falling revenues and high rents for its difficulties,
Irish Examiner notes.  A loss of some EUR20.5 million is forecast
for the year ended January 2013, Irish Examiner says.

Declan McDonald of PWC was appointed examiner to the company and
is in the process of putting in place a scheme of arrangement
with the firm's creditors, Irish Examiner recounts.  If the
scheme is approved by the High Court the company can continue to
trade as a going concern, Irish Examiner states.

B&Q's store in Waterford will close with the loss of 92 jobs,
Irish Examiner discloses.

Separately, Irish Examiner reports that the B&Q's Athlone branch
has now been saved and will remain open, saving the 45 jobs

The company said that while the Athlone store will now return to
normal trading, this does not affect plans to close the Waterford
store currently underway, Irish Examiner relates.

The Waterford store is scheduled to close on May 4, Irish
EXaminer says.

B&Q Ireland is a DIY chain.

WAVEBOB LTD: Fails to Find Investor; Faces Liquidation
Louise Downing at Bloomberg News reports that Wavebob Ltd. will
be liquidated after failing to raise money and find a strategic
partner to fund its continued development.

According to Bloomberg, Padraig Berry, chairman of Wavebob, said
on Thursday that the company found it impossible to find an
investor or a strategic partner in the past two years.
Mr. Berry, as cited by Bloomberg, said that most recently it
expected to receive a grant from the Sustainable Energy Authority
Ireland that was ultimately declined.  The company had been
seeking to raise EUR10 million (US$13 million) by the end of
March, Bloomberg discloses.

The chairman said that the intellectual property of the wave-
energy machine will be sold and Eugene McLoughlin and Associates
will likely be appointed as the liquidators, Bloomberg relates.
Wavebob's founder was the largest shareholder, owning 40% of the
company, Bloomberg notes.

Wavebob Ltd. is an Irish maker of marine energy technology.  The
Maynooth-based company had 12 employees.


SOPAF: Finance Police Search Offices in Bankruptcy Probe
ANSA reports that finance police searched the offices of Sopaf on
Wednesday as part of a probe into alleged bankruptcy and market
manipulation at the company.

Ex-president Giorgio Magnoni is one of a number of former Sopaf
managers placed under investigation in relation to the probe
after the holding -- formerly quoted on the Milan stock market --
came to the brink of insolvency last year, ANSA discloses.

According to ANSA, investigators have reportedly discovered a
shortfall of almost EUR200 million in company accounts allegedly
due in particular to bad and reckless investments.  The charges
of market rigging instead concern a statement made by Sopaf to
the market, ANSA notes.

Last September, company creditor Unicredit began bankruptcy
proceedings against the holding, which in turn filed for -- and
was granted -- admission to the procedure for composition with
creditors, ANSA recounts.

As reported by the Troubled Company Reporter-Europe on Sept. 4,
2012, Reuters related that Sopaf, which first failed to pay back
debt in November 2011, has net debt of around EUR100 million
(US$129 million).  The Il Messaggero newspaper, as cited by
Reuters, said that Sopaf owes UniCredit and other bank lenders
including Monte dei Paschi and Popolare di Sondrio EUR71.5

Sopaf is an Italian investment holding.


EASTCOMTRANS LLP: Moody's Rates Proposed Notes Issuance '(P)B3'
Moody's Investors Service assigned a provisional rating of (P)B3,
with a loss given default (LGD) assessment of LGD3/46%, and a
stable outlook to the proposed issuance of notes by Eastcomtrans
LLP. The company will pledge its railcars as collateral against
the notes. Eastcomtrans will use the proceeds from the notes
placement to refinance part of its existing debt and finance the
expansion of its fleet.

Ratings Rationale:

The (P)B3 rating assigned to the proposed notes is equivalent to
Eastcomtrans's corporate family rating (CFR), reflecting Moody's
expectation that the notes will hold security over specific
assets, which is the case for the company's other secured and
unsubordinated financial debt. Therefore, Moody's assumes that
the notes will not be subordinated to other secured debt which
currently represents a predominant portion of the company's total

Eastcomtrans's B3 CFR primarily reflects the company's (1) small
size, reflected by revenue of $151 million for 2012 (under
audited IFRS financial statements), which is modest on a global
scale; (2) high industry concentration and, most importantly,
customer concentration, with the company's largest customer,
Tengizchevroil LLP, representing 65% of its total revenue for
2012, which renders Eastcomtrans's business dependent on its
continuing relationships with a single customer; (3) highly
concentrated ownership, which creates the risk of rapid changes
in the company's strategy and development plans, along with the
risk of both a revision of its conservative financial policy and
an increase in shareholder distributions (although this risk is
mitigated by the acquisition of a 6.67% stake in Eastcomtrans by
International Finance Corporation (IFC; Aaa stable), completed in
March 2013, and related improvements in corporate governance);
(4) the potential evolution of Eastcomtrans's business profile --
as the company aims to increase the proportion of railcars in its
own operation as opposed to operating leasing of railcars to
other operators and cargo owners which is currently its main
business -- and uncertainty regarding its future operating and
financial performance under its target business model; and (5)
the company's overall exposure to an emerging market operating
environment with a less developed regulatory, political and legal

However, more positively, the Eastcomtrans's rating also factors
in (1) its solid share of around 9% of the Kazakhstan freight
rail transportation market in terms of railcar fleet; (2) its
modern railcar fleet, the average age of which is four years
(compared with the industry average of 17 years) which confers
economies in terms of repair costs; (3) the company's long-term
relationships and lease contracts until the end of 2015 with its
key customer, Tengizchevroil (although there is no penalty for
pre-term termination of contracts); (4) its high operating
efficiency, reflected by an EBITA margin of above 55% (as
adjusted by Moody's); (5) its sustainable projected financial
metrics, with Moody's expecting the company to maintain leverage
-- measured by debt/EBITDA -- below 4.0x, EBIT/interest above
2.0x and retained cash flow (RCF)/net debt above 20% (all metrics
are as adjusted by Moody's); (6) its adequate liquidity and
manageable foreign currency risk, as most of the company's
contracts with customers are linked to the US dollar; and (7) the
high market value of its own railcar fleet (i.e., excluding the
fleet leased in under financial leasing), at around $530 million,
which comfortably covers the company's debt, which amounts to
$324 million (excluding financial leasing) as of year-end 2012.

The stable outlook on Eastcomtrans's ratings reflects Moody's
expectation that (1) the company's leverage will remain below
4.0x debt/EBITDA, its EBIT/interest above 2.0x, and its RCF/net
debt above 20% on a sustainable basis (all metrics are as
adjusted by Moody's); (2) the company will maintain adequate
liquidity; and (3) it will be able to maintain high fleet
utilization rates, with the bulk of its fleet under contract at
all times.

What Could Change The Rating Up/Down

Moody's could consider Eastcomtrans's ratings for an upgrade if
the company (1) materially improves its customer diversification;
(2) maintains adequate liquidity; and (3) continues to
demonstrate a strong operating performance.

Conversely, negative pressure could be exerted on the ratings if
there is a material deterioration in Eastcomtrans's leverage or
interest coverage metrics, or in the company's liquidity or
market position. The ratings could also come under negative
pressure if any of Eastcomtrans's contracts with Tengizchevroil
is terminated without Eastcomtrans being able to promptly
remarket the released railcars.

Eastcomtrans LLP's ratings were assigned by evaluating factors
that Moody's considers relevant to the credit profile of the
issuer, such as the company's (i) business risk and competitive
position compared with others within the industry; (ii) capital
structure and financial risk; (iii) projected performance over
the near to intermediate term; and (iv) management's track record
and tolerance for risk. Moody's compared these attributes against
other issuers both within and outside Eastcomtrans LLP's core
industry and believes Eastcomtrans LLP's ratings are comparable
to those of other issuers with similar credit risk. Other
methodologies used include Loss Given Default for Speculative-
Grade Non-Financial Companies in the U.S., Canada and EMEA
published in June 2009.

Eastcomtrans is the largest private company specializing in
operating leasing of freight railcars in Kazakhstan. As of year-
end 2012, its fleet comprised 9,782 railcars, which represented
around 9% of the country's total. In 2012, the company derived
81% of its $151 million of revenues from leasing out its railcars
under operating lease agreements, and 19% from providing
transportation and other related services. 93.33% in
Eastcomtrans's share capital is controlled by Mr. Marat Sarsenov
and 6.67% by IFC.


LIEPAJAS METALURGS: On Verge of Insolvency; May Default on Debt
According to The Baltic Times, a report on Liepajas metalurgs'
finances obtained by business show that the
company is on the verge of insolvency.

The company's management points out that if the situation does
not improve or no agreement is made with the largest creditors,
it will not be able to fulfill its liabilities in April, the
Baltic Times says.

The company has received insolvency warning letters from the
state-owned joint-stock power utility Latvenergo, the Baltic
Times relates.  Latvenergo warned that if the company does not
settle its electricity debts by March 28, it will request the
company's insolvency and will stop supplying electricity to the
company, the Baltic Times discloses.

Ernst& Young predicts that depending on various circumstances,
Liepajas metalurgs will lack LVL96.1 million (EUR136.7 million)
at the end of 2013, the Baltic Times relates.  At the moment, the
company lacks net working capital, the Baltic Times states.  At
the end of January, the company's working capital deficit was
LVL17.5 million.  The company's net debt commitments totaled
LVL103.6 million at the end of 2012, including a loan from
UniCredit -- LVL51.7 million, SEB banka and Citadele credit lines
-- LVL22.4 million, a debt to Stemcor -- LVL10.5 million, a debt
to Latvenergo -- LVL8 million, the Baltic Times discloses.

Liepajas metalurgs' management has requested LVL57.6 million aid
from the government, the Baltic Times relates.  According to the
Baltic Times, Liepajas metalurgs wants the government to permit
the company not to pay its electricity bills, give the company
new guarantees, and pay the company's debt to an Italian bank.
The company is also asking the government that a criminal case,
initiated following Liepajas metalurgs co-owner Kirovs Lipmans'
claim, be discontinued, the Baltic Times notes.

The Cabinet of Ministers has made no decision on whether to bail
out the company, noting that it wants to see greater activity
from the shareholders in the crisis, the Baltic Times discloses.

"It is hard to see any solution to LM's problem when there is no
clear business plan or any desire to get involved," the Baltic
Times quotes Finance Minister Andris Vilks as saying.

Shareholders must be prepared to pump their capital into the
company or attract other investors, the Baltic Times notes.

Liepajas metalurgs is a Latvian joint stock metallurgical


KONINKLIJKE KPN: Moody's Rates New Hybrid Bond Issuance 'Ba1'
Moody's Investors Service has assigned definitive Ba1 long-term
ratings to the EUR1.1 billion perpetual capital securities, the
GBP400 million capital securities due 2073 and the US$600 million
capital securities due 2073 (the "hybrid debt") issued by
Koninklijke KPN N.V. The outlook on the ratings is negative. All
other ratings and outlook remain unchanged.

Ratings Rationale:

Moody's definitive ratings on these debt obligations are in line
with the provisional ratings assigned on February 28, 2013 (for
the EUR/GBP tranches) and March 13, 2013 (for the US$ tranche).

The Ba1 rating assigned to the hybrid debt is two notches below
the group's senior unsecured rating of Baa2. The two-notch rating
differential primarily reflects the deeply subordinated nature of
the hybrid debt, which is senior only to ordinary shares and
ranks pari passu with preference shares.

The hybrid debt has the following features: (1) these are
perpetual/60-year securities; (2) KPN has the option to defer
coupons on a cumulative basis and there are payment restrictions
on parity securities and ordinary shares; (3) there is no step-up
prior to year 10, with the first step-up being 25 basis points
(bps) and the second step-up taking effect 20 years after the
first par call date with an incremental 75 bps; and (4) there is
a step-up of 500 bps upon a change-of-control event and all
senior debt gets repaid first upon such event.

Moody's will treat the hybrid entirely as debt until shareholders
approve the EUR3 billion rights issue in the Annual General
Meeting of Shareholders (AGM) of April 10, 2013, since failure to
complete the rights issue would lead to a step-up of 500 bps,
which in Moody's view, represents a high incentive for KPN to
call this instrument. Moody's expectation is that shareholder
approval for the rights issue will be granted, since America
Movil, KPN's largest shareholder with a 29.8% equity stake, has
already backed the rights issue. Once approval for the rights
issue is granted, Moody's expects to assign some equity credit to
the hybrid debt.

KPN intends to use the net proceeds from the hybrid debt issuance
primarily to strengthen its capital structure by reducing net
indebtedness. The EUR3 billion rights issue and issuance of
hybrid debt will allow KPN to reduce its leverage and improve its
liquidity profile. This is in the context of a challenging
operating environment in which KPN's performance will remain
weak, affected by regulation, fierce competition and the weak
macroeconomic environment.

The Baa2 senior unsecured rating is supported principally by
KPN's leading position in the Dutch market and the benefits
derived from its geographical diversification in Germany and
Belgium, where the group operates as a mobile-centric market
challenger. The rating also reflects KPN's expected solid
liquidity profile after the successful completion of its
announced rights issue and hybrid debt issuance. These
considerations are balanced by (1) KPN's relatively weak metrics
for the rating category, with net debt/EBITDA (as adjusted by
Moody's) trending towards 3.0x through the rating horizon; (2)
its track record of declining operating performance and profit
warnings; and (3) its lack of financial flexibility, as it has
run out of internal options to protect its financial profile.

Rating Outlook

The negative outlook on the ratings reflects (1) Moody's
expectation that KPN's credit metrics will be weakly positioned
for the Baa2 rating for a sustained period; (2) the current lack
of visibility due to the rapid deterioration in the group's
operating performance; and (3) the execution risk embedded in the
group's business plan. The rating assumes that the EUR3 billion
rights issue will be successfully completed. Failure to execute
the capital raising as planned would lead to downward pressure on
the rating.

What Could Change the Rating Up/Down

As the hybrid rating is positioned relative to another rating of
KPN, either (1) a change in the senior unsecured rating of KPN or
(2) a re-evaluation of its relative notching could have an impact
on the hybrid rating.

Given the negative rating outlook, Moody's does not currently
anticipate upward rating pressure on KPN's senior unsecured
rating. However, the outlook could revert back to stable if KPN
is able to stabilize its operating performance in the Dutch
market and successfully implement its strategy in Germany and
Belgium, while maintaining a net adjusted debt/EBITDA ratio (as
adjusted by Moody's) sustainably below 3.0x and retained cash
flow(RCF)/net adjusted debt in the 20%-25% range.

Conversely, downward pressure on the rating could result from any
deterioration in KPN's operating performance beyond Moody's
expectations for 2013.

Specifically, the rating could come under negative pressure if
the company's credit protection measures weaken, such that its
RCF/net adjusted debt drops below 20% and its net adjusted
debt/EBITDA (as adjusted by Moody's) does not trend towards 3.0x.
Moody's anticipates a one-off deterioration in KPN's metrics in
2014 following the consolidation of Reggefiber, but also expects
leverage ratios to improve thereafter.

The principal methodology used in this rating was the Global
Telecommunications Industry published in December 2010 and
Updated Summary Guidance for Notching Bonds, Preferred Stocks and
Hybrid Securities of Corporate Issuers published in February

Koninklijke KPN N.V. provides telecommunication services in the
Netherlands. KPN also provides mobile telephony services in
Germany and Belgium through its subsidiaries e-plus and BASE. In
2012, the company generated revenues of EUR12.7 billion and
EBITDA of EUR4.5 billion.

SNS REAAL: Netherlands to Seek EU Approval for Bridge Bank
Aoife White and Maud van Gaal at Bloomberg News report that
regulators said in a letter the Netherlands pledged to seek
European Union approval before setting up a separate bank for
unwinding SNS Reaal NV's property assets.

According to Bloomberg, the European Commission said in the
document published on its Web site on Wednesday that SNS also
pledged not to acquire stakes in any companies or to advertise
its state-ownership in return for temporary EU authorization for
the Dutch takeover of the country's fourth-largest lender in

"The Dutch state informed the commission that it is seriously
considering a bridge bank to completely separate the
problematic property finance portfolio from the remaining
assets," Bloomberg quotes the Brussels-based EU authority as
saying.  The government "indicated that it would only put the
bridge bank in place after having received approval of the

The EU must still grant final approval for a EUR300 million
(US$385 million) recapitalization and a EUR1.1 billion bridge
loan for SNS Reaal as well as a EUR1.9 billion recapitalization
for its SNS Bank unit, Bloomberg notes.

SNS Reaal said last week that the EU wouldn't allow it to make
the next interest payment, scheduled for April 15, on EUR400
million of subordinated bonds due 2041, Bloomberg recounts.

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.


EXILLON ENERGY: S&P Assigns Prelim. 'B' Corp. Credit Rating
Standard & Poor's Ratings Services said that it had assigned its
'B' preliminary corporate credit rating to Exillon Energy Plc., a
Russia-based oil exploration and production company.  The outlook
is stable.

At the same time, S&P assigned a 'B' preliminary issue rating to
Exillon's proposed US$300 million Eurobond.  The '3' preliminary
recovery rating on this bond indicates S&P's expectation of
meaningful (50%-70%) recovery in the case of a payment default.

The corporate credit rating and the issue rating both are
conditional on the placement of the Eurobond.

The rating reflects S&P's assessment of Exillon's business risk
profile as "vulnerable" and its financial risk profile as

Exillon is a small player in a cyclical commodity industry, with
relatively limited diversification and a short track record of
operations.  The company has an ambitious plan to increase its
production and reserves severalfold, implying high capital-
expenditure needs and potential execution risks in the short

The key factors supporting our rating on Exillon are the
company's good-quality reserves, a track record of ramping up
production in recent quarters, and currently low debt.

The stable outlook reflects S&P's expectation that Exillon will
continue investing heavily to achieve its ambitious production
growth plans.  S&P expects the company will focus on investing in
the core business and refrain from any shareholder distributions
in the next several years and also expect it will avoid any
further increase in debt above US$300 million.  S&P expects the
company will stick to arms-length relationships with the key

In the mid-to-long term, ratings upside will depend on the
company's ability to deliver on its production growth plans.

Ratings downside could materialize if the company increases debt
well above its current guidance on shareholder distributions and


NOVA KREDITNA: S&P Cuts Unsolicited Public Info Rating to 'Bpi'
Standard & Poor's Ratings Services said that it had lowered its
unsolicited public information (pi) rating on Slovenia-based Nova
Kreditna Banka Maribor (NKBM) to 'Bpi' from 'BBpi'.  S&P
generally do not have outlooks or modifiers (+ and -) for pi

The downgrade reflects increasing pressure on NKBM's solvency
following the announcement of the 2012 financial results showing
a huge loss of about EUR200 million.  A surge in credit losses,
especially in the fourth quarter of 2012, largely explains these
weak results, but operating performance showed weaknesses, as
well, notably in falling margins and volumes.

Capital has always been one of NKBM's main rating weaknesses.
Following its failure to pass the European Banking Association
stress-tests at midyear 2012, the bank embarked on a series of
capital-raising initiatives, including the sale of its insurance
operations, buyback of its own debt, a subordinated loan from the
Slovenian state, and intense deleveraging.  S&P believes that in
the weak environment and because of the highly leveraged
corporate sector (notably the construction one), NKBM will
continue to accumulate problem loans in 2013, and S&P cannot rule
out that the nonperforming loan ratio could converge toward 30%
in 2013. Therefore, reserving needs and falling volumes will
further burden NKBM's profitability and S&P expects the bank to
be loss making again in 2013, the third year in a row.  Despite
the announced conversion of the EUR100 million hybrid loan from
the state into equity by midyear 2013, a transaction S&P
considers highly likely to happen, it believes that:

   -- Capital ratios after the conversion will remain very weak,
      and S&P expects additional support measures from the
      Slovenian state to come, either via further equity
      injections or sale of bad loans to a defeasance structure.

   -- NKBM's capacity to build up capital internally is very

   -- The conversion of a state subordinated loan into equity
      forces NKBM to submit a restructuring plan to the European
      Commission.  It is too early to assess what concessions the
      bank will likely have to make, but S&P believes its
      universal banking model may be weakened if the bank is
      obliged to sell some assets. NKBM already sold its
      insurance operations in 2012.  S&P now holds a more
      negative view on the bank's future business position, while
      it was a neutral factor previously.  This reflects S&P's
      view that the bank business focus is narrowing following
      crisis remedies.

S&P's 'Bpi' rating factors in expected extraordinary support from
the Slovenian state, as NKBM is a bank of "high" systemic
importance (with market shares exceeding 10% in both loans and
deposits), majority owned by the state and its satellites.  The
stand-alone credit profile is in the 'ccc' category, in S&P's

* SLOVENIA: Jazbec Takes Over as New Central Bank Governor
Boris Cerni and Agnes Lovasz at Bloomberg News report that
Slovenia's new central bank governor inherits a financial system
rife with bad debt that is threatening to push the country into
becoming the sixth euro member to ask for an international

Bostjan Jazbec, a 43-year-old International Monetary Fund expert,
was approved by lawmakers in Ljubljana on Tuesday to take the
helm of Banka Slovenije from Marko Kranjec when his mandate
expires in mid-July, Bloomberg relates.  He will also assume
Kranjec's seat on the European Central Bank's Governing Council,
Bloomberg discloses.

According to Bloomberg, Mr. Jazbec needs to restore public
confidence at home and investors' faith abroad in Slovenia's
banks as the economy struggles with its second recession since
2009, sparking a rash of corporate bankruptcies that have saddled
lenders with a pile of bad debts.

Worries that the two-week-old government of Prime Minister Alenka
Bratusek will fail to implement a EUR4 billion (US$5.1 billion)
plan to prop up banks and lose access to financing abroad boosted
borrowing costs at a time when the Alpine nation is looking to
tap bond markets, Bloomberg notes.

Bloomberg relates that outgoing governor Mr. Kranjec said on
Tuesday that the government must "show it's serious" and give
details on its plan to salvage the economy and stabilize banks to
avoid having to follow in the footsteps of Cyprus, Greece,
Portugal, Ireland and Spain and ask for an international bailout.

Slovenian banks such as Nova Ljubljanska Banka d.d. and Nova
Kreditna Banka Maribor d.d. have been hit by the recession and
the collapse of the construction industry, the pre-crisis driver
of growth, Bloomberg discloses.  Bad loans account for about a
fifth of economic output, Bloomberg notes.

According to Bloomberg, Mr. Kranjec said that while none of
Slovenia's banks have required emergency liquidity assistance,
local banks have borrowed "a lot" from the ECB, without giving
further details.  He said that the central bank will act if its
sees that urgent capital is needed, Bloomberg relates.

                        Cyprus Comparisons

Meanwhile, James Fontanella-Khan at The Financial Times reports
that Slovenia's new prime minister said Slovenia is no Cyprus.
The statement came days after Cyprus agreed to an onerous bailout
that forced it to shut a national bank and downsize its biggest
lender, the FT relates.

"Slovenia's predicament is nowhere near as severe as Cyprus or
other countries forced into the hands of the troika [of bailout
lenders from the European Central Bank, International Monetary
Fund and European Commission]," the FT quotes Gavan Nolan,
director of credit research at Markit, as saying.  "The
mishandling of the Cyprus situation and the subsequent shambolic
communication from various European officials has fuelled
contagion and Slovenia is under intense scrutiny as a result."

Citigroup said that a comparison with Cyprus was unjustified,
given the difference in size of the two countries' banking
sectors -- the prime cause of the crisis on the small
Mediterranean island, the FT relates.  Cyprus's financial system
was about eight times the size of the country's gross domestic
product, while Slovenia's is just 1.4 times larger than GDP, the
FT discloses.

Nevertheless, investors' concerns are not entirely misplaced, the
FT notes.  The first post-communist country to join the eurozone
has over the past four years gone from being one of Europe's most
vibrant economies to one of its worst performing, the FT states.

According to the FT, of greatest concern is the deteriorating
state of Slovenia's banking sector, which was deeply hit during
the global financial crisis.  Its bad debts have consistently
risen, with non-performing loans moving above 20%, according to
international lenders, the FT discloses.

The FT relates that the IMF said the country's three largest
banks urgently require to be recapitalized to the tune of about
EUR1 billion.  Meanwhile, Slovenian banks have a hole in their
combined balance sheets of about EUR4 billion, the FT says,
citing to Petra Lesjak, head of asset management for
institutional investors at Ljubljana-based KD Funds.

The poor management of the country's banks -- many of which are
state-owned -- and the slowdown suffered by the construction
sector has been blamed for fuelling the domestic crisis, the FT

"Weak governance in public banks, and a credit boom financed
externally and directed in significant part towards construction
companies and management buyouts and corporate takeovers, are at
the root of the problems," the FT quotes said the IMF as saying.

Slovenia's political instability has also aggravated the current
situation, the FT notes. Ms. Bratusek has been in the job for
barely a month after the failure of the previous conservative
government to fix the country's economic troubles, the FT


ABENGOA SA: S&P Lowers Corporate Credit Rating to 'B'
Standard & Poor's Ratings Services said it lowered its long-term
corporate credit ratings on Abengoa S.A. and its indirectly-
controlled subsidiary Befesa Zinc S.A.U. to 'B' from 'B+'.
S&P also affirmed its 'B' short-term corporate credit rating on
Abengoa.  The outlooks on the long-term ratings are negative.

At the same time, S&P removed the ratings on Abengoa and Befesa
from CreditWatch, where it placed them with negative implications
on Dec. 27, 2012.

S&P lowered its issue ratings on Abengoa S.A.'s and Abengoa
Finance S.A.U.'s rated senior unsecured debt instruments
(guaranteed by Abengoa S.A.) to 'B' from 'B+', in line with S&P's
corporate credit rating on Abengoa.  The recovery rating on these
instruments remains '4', reflecting S&P's expectation of average
(30%-50%) recovery in the event of a payment default.

Furthermore, S&P lowered to 'B' from 'B+' its issue rating on the
EUR300 million senior secured notes issued by orphan special-
purpose vehicle Zinc Capital S.A., in line with the corporate
credit rating on Befesa.  The recovery rating on the proceeds
loan is unchanged at '3', indicating S&P's expectation of
meaningful (50%-70%) recovery in the event of payment default.

In addition, S&P has assigned its assessment of 'b+' to Befesa's
stand-alone credit profile (SACP), based on its view of its
"weak" business risk profile and "aggressive" financial risk
profile.  S&P equalizes the corporate credit rating on Befesa,
however, with the rating on its parent company Abengoa,
reflecting its full ownership and effective control over Befesa.

The downgrade of Abengoa reflects S&P's view that the company's
credit metrics are no longer commensurate with the 'B+' rating
level.  This is because of marked deterioration of Abengoa's
margins and weaker cash generation at both Abengoa's corporate
and consolidated levels in 2012.  These factors point to a
deterioration, in S&P's view, of Abengoa's business risk profile,
which S&P assess as "fair."  This deterioration, coupled with the
company's sizable capital program, has led to a considerable
increase of its debt at year-end 2012.  The ratio of adjusted
debt to EBITDA stood at 11x at the end of last year, which
exceeds S&P's maximum guideline that S&P views as commensurate
with the 'B+' rating level.  Under S&P's baseline scenario, it
now anticipates much slower deleveraging over the next two years,
versus its previous assumptions.

The 'b+' SACP on Befesa reflects its perceived adequate
geographic diversity and the above-average stability of its
business activities, illustrated by consistent EBITDA margins of
above 30% in the past few years, despite challenging
macroeconomic conditions in Europe.  These positives are offset
by the limited size and scope of the company overall, its
exposure to the volatile steel industry, and its aggressive
growth strategy, which in S&P's view could lead to negative free
operating cash flow (FOCF) in 2013 and increase of adjusted debt
to EBITDA to about 4x, up from 3.1x at year-end 2012.

The negative rating action on Befesa reflects S&P's equalization
of Befesa's long-term rating with the long-term rating on its
full owner, Abengoa, in line with S&P's rating methodology for
parent and subsidiaries.

The negative outlook on Abengoa's long-term rating reflects a
one-in-three chance of a downgrade.  This could occur:

   -- If the company's currently "adequate" liquidity weakens,
      This could occur, for instance, due to material unwinding
      of the sizable working capital deficit.

   -- If S&P do not sees a substantial reduction in negative
      consolidated free cash flow from 2014 onward, helped by a
      significant reduction in capital expenditures, and/or if
      Abengoa does not deleverage to below 9x adjusted debt to
      EBITDA by mid-2014, and gradually thereafter, for example
      if proceeds from asset sales or other nondebt sources are
      not largely used for debt repayment.  The deleveraging
      could follow the completion of its investment plan and
      entry into full operation of projects currently in
      construction or early-stage operations.

   -- If S&P was to reassess Abengoa's business risk profile to
      "weak," for example as a consequence of sales of mature
      assets or deterioration in profitability or market
      conditions at its key profit contributors (E&C, bio-energy,
      solar, and the Befesa divisions).

S&P could revise the outlook to stable if Abengoa reduced its
capex and negative free cash flow materially over 2014-2015,
together with continued "adequate" liquidity and progress on
deleveraging.  S&P would also take a positive view if Abengoa
decided to use proceeds from sales of assets for sustainable debt

The negative outlook on Befesa reflects that on Abengoa.  S&P
equalizes the long-term rating with that on Abengoa, given its
100% ownership of Befesa.

MADRID RMBS III: S&P Affirms 'D' Ratings on Three Note Classes
Standard & Poor's Ratings Services has affirmed and removed from
CreditWatch negative its 'A- (sf)' credit ratings on MADRID RMBS
III, Fondo de Titulizacion de Activos' class A2 and A3 notes.  At
the same time, S&P has affirmed its 'D (sf)' ratings on the class
C, D, and E notes due to interest shortfalls.  S&P has also
lowered its rating on the class B notes for performance reasons.

The rating actions follow S&P's assessment of counterparty risk
and its review of the transaction's performance.

On Nov. 5, 2012, S&P placed on CreditWatch negative its 'A- (sf)'
ratings on the class A2 and A3 notes due to the remedy actions to
be taken in relation to the swap and options contract provider,
Banco Bilbao Vizcaya Argentaria S.A. (BBVA; BBB-/Negative/A-3).

The swap documents have since then been modified in line with
S&P's 2012 counterparty criteria.  The Royal Bank of Scotland PLC
(RBS; A/Stable/A-1) has now replaced BBVA as the swap provider.
S&P now considers that swap counterparty risk does not constrain
its ratings on the class A2 and A3 notes due to the new downgrade
provisions and the long-term rating on RBS as the replacement
swap counterparty.

On behalf of MADRID RMBS III, the trustee has entered into a swap
agreement with RBS--the new swap provider since March 2013.  This
swap protects against adverse interest rate resetting and
movements.  MADRID RMBS III pays RBS 12-month EURIBOR (Euro
Interbank Offered Rate) multiplied by the balance of the
performing loans (including loans up to 90 days in arrears) plus
a margin of 6.25 basis points (bps).  MADRID RMBS I receives
three-month EURIBOR on the performing balance of the loans
(including loans up to 90 days in arrears).

In addition to the swap contract, the trustee entered into an
options contract with BBVA on behalf of MADRID RMBS III since
some of the loans are referenced to the IRPH index (Indice de
Referencia de Prestamos Hipotecarios).  The options contract
guarantees a margin of 70 bps for the IRPH-linked loans.  Under
the transaction documents' downgrade provisions, BBVA is not
considered to be an eligible counterparty.  Therefore, BBVA is in
breach of the options contract.  S&P has conducted its credit,
cash flow, and structural analysis without giving benefit to the
options contract.  S&P's analysis shows that the class A2 and A3
notes can support higher ratings than the long-term 'BBB-' issuer
credit rating on the options contract counterparty, BBVA.
Therefore, under S&P's 2012 counterparty criteria, its ratings on
the class A2 and A3 notes are de-linked from the rating on the
options contract counterparty.

In addition to S&P's counterparty risk analysis, it has reviewed
the transaction's performance.  S&P has conducted its credit and
cash flow analysis and analyzed the transaction's structural
features, using the latest available portfolio and structural
features information.

Although MADRID RMBS III had significantly recovered from the
delinquencies it experienced in 2008 and 2009, all arrears
buckets have continued to deteriorate since Q4 2010.  The level
of delinquencies between November 2010 and November 2011 was more
severe than the delinquencies experienced between December 2011
and December 2012.  Madrid RMBS III has always performed below
S&P's Spanish residential mortgage-backed securities (RMBS)
index, but has generally followed the same performance trend.

The transaction's deteriorating performance, which has always
been below the market average, and the continuous reserve fund
draws affect S&P's ratings on the notes.  The reserve fund was
fully depleted on May 2008 and it has not been replenished since.

Since RBS has replaced BBVA as the transaction's swap provider,
S&P considers that swap counterparty risk no longer constrains
its rating on the class A2 and A3 notes, which now reflects the
transaction's performance.  Despite the transaction's
deteriorating performance, in S&P's view, the class A2 and A3
notes still have sufficient credit enhancement to support a 'A-
(sf)' rating.  S&P has therefore affirmed and removed from
CreditWatch negative its 'A- (sf)' rating on the class A2 and A3

S&P's credit and cash flow analysis shows that the credit
enhancement available to the class B is commensurate with a lower
rating.  In S&P's opinion, the class B notes are unable to
maintain the currently assigned rating because the notes'
interest deferral trigger may be hit over the next 12 to 18
months, if transaction performance continues to deteriorate.  S&P
has therefore lowered to 'CCC+ (sf)' from 'B- (sf)' its rating on
the class B notes.

The class C, D, and E notes' deferral interest triggers have
already been hit.  Consequently, the interest on these notes is
postponed in the priority of payments.  On the most recent
payment date (February 2013), the class C, D, and E notes'
interest was not paid.  S&P has therefore affirmed its 'D (sf)'
ratings on the class C, D, and E notes.

Madrid RMBS III is a Spanish residential mortgage-backed
securities (RMBS) transaction that securitizes a portfolio of
first-ranking mortgage loans granted to Spanish residents to buy
residential properties. Bankia S.A. originated the loans.


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

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



Class             Rating
            To               From

MADRID RMBS III, Fondo de Titulizacion de Activos
EUR3 Billion Mortgage-Backed Floating-Rate Notes

Rating Affirmed and Removed From CreditWatch Negative

A2          A- (sf)           A- (sf)/Watch Neg
A3          A- (sf)           A- (sf)/Watch Neg

Rating Lowered

B           CCC+ (sf)          B- (sf)

Ratings Affirmed

C           D (sf)
D           D (sf)
E           D (sf)

TDA CAM 9: Moody's Lowers Ratings on Two Note Classes to 'Ba3'
Moody's Investors Service upgraded the rating of one senior note
and downgraded the ratings of four junior and five senior notes
in four Spanish residential mortgage-backed securities (RMBS)
transactions: TDA CAM 2, FTA; TDA CAM 4, FTA; TDA CAM 6, FTA; TDA
CAM 9, FTA. At the same time, Moody's confirmed the ratings of
one securities in TDA CAM 2, FTA.

This rating action concludes the review of one note placed on
review on July 2, 2012, following Moody's downgrade of Spanish
government bond ratings to Baa3 from A3 on June 13, 2012. This
rating action also concludes the review of ten notes placed on
review on November 23, 2012, following Moody's revision of key
collateral assumptions for the entire Spanish RMBS market.

List of Affected Ratings:

Issuer: TDA CAM 2 Fondo de Titulizacion de Activos

EUR1072.8M A Notes, Confirmed at A3 (sf); previously on Jul 2,
2012 Downgraded to A3 (sf) and Placed Under Review for Possible

EUR27.2M B Notes, Downgraded to Ba2 (sf); previously on Nov 23,
2012 Downgraded to Baa2 (sf) and Remained On Review for Possible

Issuer: TDA CAM 4 Fondo de Titulizacion de Activos

EUR1952M A Notes, Downgraded to Baa2 (sf); previously on Nov 23,
2012 Downgraded to Baa1 (sf) and Remained On Review for Possible

EUR48M B Notes, Downgraded to B2 (sf); previously on Nov 23, 2012
Downgraded to Ba1 (sf) and Remained On Review for Possible

Issuer: TDA CAM 6 Fondo de Titulizacion de Activos

EUR155M A2 Notes, Upgraded to A3 (sf); previously on Nov 23, 2012
Downgraded to Baa2 (sf) and Remained On Review for Possible

EUR752M A3 Notes, Downgraded to Ba1 (sf); previously on Nov 23,
2012 Downgraded to Baa2 (sf) and Remained On Review for Possible

EUR50M B Notes, Downgraded to Ca (sf); previously on Nov 23, 2012
Downgraded to Caa2 (sf) and Remained On Review for Possible

Issuer: TDA CAM 9 Fondo de Titulizacion de Activos

EUR250M A1 Notes, Downgraded to Ba3 (sf); previously on Nov 23,
2012 Downgraded to Ba2 (sf) and Remained On Review for Possible

EUR943.5M A2 Notes, Downgraded to Ba3 (sf); previously on Nov 23,
2012 Downgraded to Ba2 (sf) and Remained On Review for Possible

EUR230M A3 Notes, Downgraded to Ba3 (sf); previously on Nov 23,
2012 Downgraded to Ba2 (sf) and Remained On Review for Possible

EUR48M B Notes, Downgraded to Ca (sf); previously on Nov 23, 2012
Downgraded to Caa1 (sf) and Remained On Review for Possible

Ratings Rationale:

This downgrade action primarily reflects the insufficiency of
credit enhancement to address sovereign risk. Moody's also
confirmed the ratings of securities whose credit enhancement and
structural features provided enough protection against sovereign
and counterparty risk. Finally Moody's upgraded the rating for
Class A2 in TDA CAM 6, FTA given the guarantee provided by Credit
Agricole (A2/ P-1). The guarantee can be used by the issuer to
meet the repayment requirement under Class A2 with a maximum
drawable amount of EUR130M currently covering 100% of the
outstanding balance of Class A2.

The determination of the applicable credit enhancement driving
these rating actions reflects the introduction of additional
factors in Moody's analysis to better measure the impact of
sovereign risk on structured finance transactions.

- Additional Factors Better Reflect Increased Sovereign Risk

Moody's has supplemented its analysis to determine the loss
distribution of securitized portfolios with two additional
factors, the maximum achievable rating in a given country (the
local currency country risk ceiling) and the applicable portfolio
credit enhancement for this rating. With the introduction of
these additional factors, Moody's intends to better reflect
increased sovereign risk in its quantitative analysis, in
particular for mezzanine and junior tranches.

The Spanish country ceiling, and therefore the maximum rating
that Moody's will assign to a domestic Spanish issuer including
structured finance transactions backed by Spanish receivables, is
A3. Moody's Individual Loan Analysis Credit Enhancement (Milan
CE) represents the required credit enhancement under the senior
tranche for it to achieve the country ceiling. By lowering the
maximum achievable rating for a given Milan, the revised
methodology alters the loss distribution curve and implies an
increased probability of high loss scenarios.

- Revision of Key Collateral Assumptions

Moody's has maintained its lifetime loss expectation (EL)
assumption in all four transactions. Moody's has reassessed the
Milan CE in TDA CAM 9.

Expected Loss:

Expected loss assumptions remain at 1.03% for TDA CAM 2, 1.66%
for TDA CAM 4, 7.4% for TDA CAM 6 and 9.0% for TDA CAM 9.

Milan CE:

The Milan CE assumptions remain at 10.0% for TDA CAM 2, 12.5% for
TDA CAM 4, 22.2% for TDA CAM 6. The Milan CE assumptions was
adjusted to 23.0% from 20.4% for TDA CAM 9. Moody's has assessed
the loan-by-loan information to determine Milan CE. Moody's
updated the Milan CE in TDA CAM 9 due to the Minimum Expected
Loss Multiple EL, one of the two floors defined in Moody's
updated methodology for rating EMEA RMBS transactions as well as
to account for increased risks associated with increased share of
loans in negative equity.

- Exposure to Counterparty Risk

The conclusion of Moody's rating review also takes into
consideration the exposure to CECABANK S.A. (Ba1 under review for
possible downgrade/NP), which still acts as swap counterparty for
all four TDA CAM transaction. Moody's notes that, following the
breach of the second rating trigger, the swap does not comply
with Moody's de-linkage criteria. The rating agency has assessed
the probability and effect of a default of the swap counterparty
on the ability of the issuer to meet its obligations under the
transaction. Additionally, Moody's has examined the effect of the
loss of any benefit from the swap and any obligation the issuer
may have to make a termination payment. In conclusion, these
factors will not negatively affect the rating on the notes.

- Other Developments May Negatively Affect the Notes

In consideration of Moody's new adjustments, any further
sovereign downgrade would negatively affect structured finance
ratings through the application of the country ceiling or maximum
achievable rating, as well as potentially increased portfolio
credit enhancement requirements for a given rating.

As the euro area crisis continues, the ratings of structured
finance notes remain exposed to the uncertainties of credit
conditions in the general economy. The deteriorating
creditworthiness of euro area sovereigns as well as the weakening
credit profile of the global banking sector could further
negatively affect the ratings of the notes.

Moody's describes additional factors that may affect the ratings
in "Approach to Assessing Linkage to Swap Counterparties in
Structured Finance Cashflow Transactions: Request for Comment".

Principal Methodology

The principal methodology used in these ratings was "Moody's
Approach to Rating RMBS Using the Milan Framework", published in
March 2013. Other factors used in these ratings are described in
"The Temporary Use of Cash in Structured Finance Transactions:
Eligible Investment and Bank Guidelines", published in March

In reviewing these transactions, Moody's used its cash flow
model, ABSROM, to determine the loss for each tranche. The cash
flow model evaluates all default scenarios that are then weighted
considering the probabilities of the lognormal distribution
assumed for the portfolio default rate. In each default scenario,
Moody's calculates the corresponding loss for each class of notes
given the incoming cash flows from the assets and the outgoing
payments to third parties and noteholders. Therefore, the
expected loss for each tranche is the sum product of (1) the
probability of occurrence of each default scenario and (2) the
loss derived from the cash flow model in each default scenario
for each tranche.

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

In the context of the rating review, the transactions have been
remodeled and some inputs have been adjusted to reflect the new
approach. In addition, for TDA CAM 4, FTA Moody's corrected the
input for the provisioning mechanism i.e. the Principal
Deficiency Ledger. For TDA CAM 4, FTA, the input for Class A
margin, for TDA CAM 6, FTA, the input for the Class A3 and Class
B margin and for TDA CAM 9, FTA, the input for the Class A1, A2
and A3 margin have been corrected as well.


BOSPHORUS 1 RE: S&P Assigns Prelim. 'BB+' Rating to Class A Notes
Standard & Poor's Ratings Services said that it assigned its 'BB+
(sf)' preliminary issue credit ratings to the dollar-denominated
series 2013-1 class A notes to be issued by Bosphorus 1 Re Ltd.,
sponsored by Turkish Catastrophe Insurance Pool (TCIP), the
ceding insurer.

The notes will be exposed to earthquakes affecting the Istanbul
region within Turkey between April 2013 and April 2016, as
modeled by Risk Management Solutions Inc.  This is the first time
S&P has rated a transaction using RMS's Europe Earthquake Model
for Turkey.

The funds in the collateral account will be invested in a money
market fund managed by MEAG MUNICH ERGO Kapitalanlagegesellschaft

The preliminary rating is based on the lower of the rating on the
catastrophe risk ('BB+'), the principal stability fund rating on
the assets in the collateral accounts ('AAAm'), and the risk of
nonpayment by the ceding insurer.  As the TCIP is unrated, it
will fund a periodic payment deposit account--initially with 190
days' worth of premium--to mitigate the risk of nonpayment of the
quarterly premium payment.  The deposit account will ensure that
scheduled interest can be paid even if the transaction terminates
early because the ceding insurer has failed to pay its
reinsurance premium.

SEKERBANK TAS: Moody's Rates New Eurobond Issue '(P)Ba1'
Moody's Investors Service assigned a first-time provisional
(P)Ba1 foreign-currency senior unsecured debt rating to the US
dollar-denominated Eurobond (the notes) to be issued by Sekerbank
T.A.S. (Sekerbank). The outlook on the (P)Ba1 rating is stable.

Ratings Rationale:

The provisional rating of the notes and its outlook is aligned
with Sekerbank's Ba1 global local-currency deposit rating.

The debt issuance is being offered under Rule 144A, Regulation S.
The terms and conditions of the notes include (amongst other
things) a negative pledge and a cross-default clause. The notes
constitute unconditional, unsubordinated and unsecured
obligations, and will rank pari passu with all of Sekerbank's
other senior unsecured obligations.

What Could Change the Ratings Up/Down

Currently, Moody's says that there is no upwards pressure on the
rating, reflected by the stable outlook.

A downgrade of Sekerbank's long-term GLC deposit rating as a
result of a i) notable weakening of the bank's standalone credit
profile; and/or ii) Moody's re-assessment of systemic support
considerations could exert downwards pressure on the long-term
foreign-currency debt rating.

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


DTEK FINANCE: Fitch Gives 'B' Sr. Unsec. Rating to $600MM Notes
Fitch Ratings has assigned DTEK Finance plc's 7.875% coupon
US$600 million notes due in 2018 a final senior unsecured rating
of 'B' and Recovery Rating of 'RR4'. DTEK Finance plc is a wholly
owned subsidiary of DTEK Holdings B.V. (DTEK, 'B'/Stable),
Ukraine's leading integrated power utility company. The notes
benefit from guarantees and sureties from DTEK and its
subsidiaries and structured as senior unsecured obligations of

The proceeds from the notes issuance are expected to be used to
repay US$300 million of the existing US$500 million notes due in
2015 and to fund DTEK's capex, working capital, new acquisitions
and for other general corporate purposes.


- Ukraine's Leading Private Utility

DTEK's ratings reflect its leadership in coal mining, power and
heat generation, electricity distribution and sales among
Ukraine's ('B'/Stable) utility companies. With installed electric
capacity of over 18 gigawatts (GW) at end-2012, DTEK ranks among
the largest Fitch-rated CIS power utilities. Fitch believes that
DTEK's UAH5 billion M&A program has been completed, and does not
anticipate significant new acquisitions over the medium term.

- Post-Acquisition Profitability Deteriorated in 2012

As a result of acquisitions, in 2012 DTEK reported a significant
increase in its operating and financial results across all
segments. Its 2012 gross revenue, including subsidies, more than
doubled to UAH82.6 billion from UAH39.6 billion in 2011 and
EBITDA -- to UAH16.8 billion from UAH10.4 billion. However,
DTEK's EBITDA margin dropped to 20.4% in 2012 from 26.3% in 2011
due to the large profitability decline in its power generation
segment and a higher proportion of its less profitable power
distribution segment in the total profit composition. Fitch
assumes that the operating margins will not recover to pre-M&A
levels during our forecast period of 2013-2016.

- Ukrainian Power Market Constrains DTEK's Profitability

The Ukrainian power sector, which accounted for over 90% of
DTEK's consolidated revenue in 2012, is heavily regulated.
Changes in Ukraine's power consumption correlated well with its
GDP growth, which the agency forecasts at 2.5% in 2012 and 3.5%
in 2013. Fitch believes that while the expected deregulation of
the Ukrainian power sector may help DTEK improve its
profitability in the future, significant increases in electricity
demand and prices are unlikely given the vulnerable state of the
national economy.

- 2x Leverage and Negative FCF Expected

DTEK is planning to spend nearly UAH56 billion (US$7 billion) on
its capital investment programs between 2013 and 2016. The agency
expects that DTEK's capex program, although flexible, will be
partially debt funded. This new debt, combined with acquisition
debt that DTEK raised in 2011-2012, will result in steady
leverage over the medium term, in Fitch's view. The agency
forecasts that DTEK's gross funds from operations (FFO) adjusted
leverage will not exceed 2x during 2013-2016. The agency expects
that DTEK's free cash flow (FCF) will be negative over the
forecast period due to its large capex program.


- Adequate Liquidity

Fitch views DTEK's debt maturity profile and liquidity as
adequate. At 31 December 2012, DTEK had gross adjusted debt of
about UAH26.7 billion including finance lease and off balance
sheet obligations, of which short-term debt was UAH3.4 billion.
The company had UAH5.4 billion of cash and cash equivalents on
that date, which was sufficient to cover its short-term
maturities despite the expected negative FCF.

- Cyprus Exposure

Fitch assesses the risks stemming from the financial situation in
Cyprus for DTEK as fairly limited as it maintains insignificant
cash balances and has had minimal transactions through Cyprus or
accounts with Cypriot banks abroad.

- Comfortable Maturities

A large portion of debt, including the US$500 million Eurobonds
due in 2015 fall due over 2014-2016.

- Borrowings in Foreign Currencies

Fitch notes that over 90% of DTEK's borrowings at December 31,
2012 were denominated in RUB, EUR or USD. As such, the company is
exposed to foreign exchange risk. Most borrowings were unsecured
at 31 December 2012.


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

- Ratings Capped by Sovereign's

DTEK's Long-Term foreign currency IDR is constrained by Ukraine's
Country Ceiling at 'B'. Fitch would need to upgrade Ukraine
before upgrading DTEK's Long-Term foreign currency IDR to its
unconstrained level of 'B+'/Stable.

"We currently view the upgrade potential of DTEK's Long-Term
local currency IDR as limited due to the limitations of its
operational environment and our expectations for its credit
metrics," Fitch says.

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

- Significant Hryvnia Devaluation
   A large, sustained hryvnia softening against the US dollar
   would weaken DTEK's credit ratios and could put pressure on
  its ratings.

- FFO Gross Adjusted Leverage of 3x

DTEK's ratings might come under pressure if its FFO gross
adjusted leverage increases to 3x.

DTEK Holdings B.V.

-- Long-term foreign currency IDR: 'B'; Outlook Stable
-- Short-term foreign currency IDR: 'B'
-- Long-term local currency IDR: 'B+'; Outlook Stable
-- Short-term local currency IDR: 'B'
-- National Long-term Rating: 'AA+(ukr)'; Outlook Stable
-- Foreign currency senior unsecured: 'B'

DTEK Finance B.V.

-- Foreign currency notes guaranteed by DTEK and its
    subsidiaries and structured as senior unsecured obligations
    of DTEK: 'B'
-- Recovery Rating: 'RR4'

DTEK Finance plc

-- Foreign currency notes guaranteed by DTEK and its
    subsidiaries and structured as senior unsecured obligations
    of DTEK: 'B'
-- Recovery Rating: 'RR4'

U N I T E D   K I N G D O M

COVENTRY CITY F.C.: Seeks an Appeal on 10-Point Deduction
Drew Williams of The Independent reports that Coventry City
Football Club has launched an appeal against their 10-point
deduction imposed by the Football League on the club for entering

The Sky Blues was hit last Thursday, March 28, with the penalty
by the League in accordance with their rules and regulations,
effectively ending the npower League One club's hopes of a play-
off place, The Independent relates.

Coventry has been given one week in which to appeal the decision
and they have opted to do so, the report relays.

The Independent notes that a released statement read: "Coventry
City Football Club (Holdings) Ltd has submitted an appeal to the
Football League to have the 10 points deducted last week

DUNFERMLINE FC: Will Face Penalty for Entering Administration
Heraldscotland reports chief executive David Longmuir has
confirmed that the Scottish Football League will be launching
disciplinary proceedings against Dunfermline Football Club.

The report notes that Dunfermline FC has been granted interim
administration in a bid to stave off a winding-up order launched
by Her Majesty's Revenue and Customs.

Dunfermline FC owe the taxman GBP134,000 and also has further
debts worth around GBP8.5 million outstanding to majority
shareholder Gavin Masterton and other companies, according to the

But by entering into administration, the club now faces points
penalty from the SFC, heraldscotland relays.

Administrator Bryan Jackson has already pleaded for leniency,
claiming a severe punishment could impede his ability to save the
club, heraldscotland relates.

Mr. Longmuir has stressed he would discuss the matter with the
experienced trouble-shooter from accountants PKF before
initiating the disciplinary procedures, heraldscotland discloses.

READER'S DIGEST: U.S. Parent Selling Equity in Affiliates
RDA Holding Co. and its affiliates seek authority to enter into a
purchase and sale agreement for the sale of equity interests in
non-Debtors Selection Du Reader's Digest, S.A., Oy Valitut Palat
-- Reader's Digest AB, and Reader's Digest AB.

The Debtors want to sell Reader's Digest's indirect interest in
the equity securities of Selection du Reader's Digest S.A. (RDA
France) pursuant to a Purchase and Sale Agreement dated as of
March 29, 2013, to Cil Inversiones, S.L., and Sociedad Anonima de
Promocion y Ediciones (SAPE) as purchaser and
Uitgeversmaatschappij The Reader's Digest B.V., as licensor.

In addition, the Debors seek approval of a private sale of
Reader's Digest's direct interest in (i) the equity securities of
Oy Valitut Palat -- Reader's Digest ab (RDA Finland) and Reader's
Digest AB (Aktiebolag) pursuant to the terms in the SAPE Purchase

In light of declines in its international operations, prior to
the Petition Date, the Debtors began an extensive marketing
process to solicit potential purchasers, licensees, and other
strategic partners for transactions to divest themselves of
certain of their international operations.  As a result of that
solicitation process, the Debtors have secured a purchaser for
their operations in France, French-speaking Belgium, Sweden,
Finland, and certain other Nordic countries where RDA has

The SAPE Purchase Agreement will result in significant benefits
to the Debtors' estates, including up-front cash payments
totaling approximately US$5,800,000 and royalty income from
securing a long-term license stream for use of certain RDA
trademarks and copyrights in connection with the local editions
of Reader's Digest and other products published in the
territories covered by the Acquired Companies.  The structure of
the proposed transaction allows the Debtors to expatriate cash in
the form of the upfront cash payment that -- given the liquidity
concerns of certain of the Acquired Companies -- the Debtors
might otherwise be unable to access.  The transaction will
eliminate the Debtors' exposure to ongoing losses from operating
certain of the Acquired Companies and the risk that the Debtors
would be forced to immediately shut down one or more of the
Acquired Companies, which would likely result in (a) the
commencement of foreign insolvency proceedings for certain of the
Acquired Companies, (b) the Debtors incurring significant wind-
down and severance expenses on account of required terminations
of employees of the Acquired Companies, and (c) potential
litigation for the Debtors that may ultimately delay their
emergence from chapter 11.

The Debtors have extensively marketed the Acquired Companies with
potential purchasers and have reviewed and evaluated all
proposals received.  In addition, due to the rapidly declining
value of certain of the Acquired Companies, and the Debtors'
continued exposure to further costs, liabilities and losses
related those Acquired Companies, the Debtors believe in the
exercise of their business judgment that the appropriate course
of action to maximize value for the Debtors' estates and all
parties in interest is to consummate the Sale in accordance with
the timeframe described herein.  Moreover, the Debtors submit
that, besides jeopardizing timely consummation of the Sale, which
is critical to the successful implementation of the Debtors'
business plan, any auction process would be duplicative of the
Debtors' extensive marketing efforts, and give rise to
unnecessary administrative expenses.

Judge Robert D. Drain has already approved the hearing of the
motion on an expedited basis.  As a result, the hearing on the
motion is set on April 11, 2013, at 10:00 a.m.

                     About Reader's Digest

Reader's Digest is a global media and direct marketing company
that educates, entertains and connects consumers around the world
with products and services from trusted brands. For more than 90
years, the flagship brand and the world's most read magazine,
Reader's Digest, has simplified and enriched consumers' lives by
discovering and expertly selecting the most interesting ideas,
stories, experiences and products in health, home, family,
food, finance and humor.

RDA Holding Co. and 30 affiliates (Bankr. S.D.N.Y. Lead Case No.
13-22233) filed for Chapter 11 protection on Feb. 17, 2013 with
an agreement with major stakeholders for a pre-negotiated
chapter 11 restructuring. Under the plan, the Debtor will issue
the new stock to holders of senior secured notes.

RDA Holding Co. listed total assets of US$1,118,400,000 and total
liabilities of US$1,184,500,000 as of the Petition Date.

Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the
Debtors. Evercore Group LLC is the investment banker.  Epiq
Bankruptcy Solutions LLC is the claims and notice agent.

Reader's Digest, together with its 47 affiliates, first sought
Chapter 11 protection (Bankr. S.D.N.Y. Case No. 09-23529)
Aug. 24, 2009 and exited bankruptcy Feb. 19, 2010.

TAYLOR WIMPEY: Moody's Raises Corp. Family Rating to 'Ba3'
Moody's Investors Service upgraded Taylor Wimpey plc.'s corporate
family rating to Ba3 from B1 and its probability of default
rating to Ba3-PD from B1-PD. Concurrently, Moody's has upgraded
the instrument rating on the company's GBP250 million of 10.375%
senior unsecured notes due 2015 to Ba3 from B1, with a loss given
default assessment of LGD4 (unchanged). The outlook on all
ratings is positive.

Ratings Rationale:

"The upgrade of Taylor Wimpey's CFR to Ba3 reflects the company's
stronger operating performance and improved financial strength
metrics," says Lynn Valkenaar, a Moody's Vice President - Senior
Analyst and lead analyst for Taylor Wimpey.

The upgrade incorporates the growth in the company's sales (+12%)
and improved profitability in 2012, which led to a 41% increase
in EBIT and a 54% increase in funds from operations, despite the
absence of GDP growth and flat demand for new homes in the UK.
Taylor Wimpey's improved profit margins are the result of actions
taken to change its product mix, reduce operating costs and
manage its order book to optimize pricing risk. The company has
also modified operating guidelines and management incentives to
ensure that maintaining margins has priority over sales volumes.
This has led to better interest coverage, as measured by adjusted
EBIT/interest expense, which more than doubled to 4.7x in 2012
compared with 2.2x in 2011.

In addition, the company paid down debt and leverage, as measured
by adjusted debt/total capitalization, improved for the fourth
consecutive year to 20.8% in 2012 (2011: 21.6%). Note all
financial ratios are calculated using data that has been adjusted
by Moody's.

Taylor Wimpey's Ba3 CFR primarily reflects the company's solid
competitive position and scale, as measured by number of houses
sold, total revenues and tangible net worth. Its operations
benefit strongly from economies of scale; it is one of the top
three homebuilders in the UK (based on completions) with national
coverage, operating from 24 regional offices, and the second-
largest in terms of revenues. The rating is further underpinned
by the company having produced positive free cash flow in all but
one of the years from 2006 through 2012, with a notable
improvement in credit metrics to date.

The rating also reflects the company's exposure to economic
cyclicality because homebuilding revenues and profitability are
correlated to economic growth. Moody's revised GDP growth
forecast for the UK, published February 12, 2013, indicates an
improvement from almost no growth in 2012, to a range of 0.5%-
1.5% for 2013, and for 2014 to a range of 1.5%-2.5%.

Moody's assessment of Taylor Wimpey's liquidity risk indicates
that the company may rely sporadically on its revolving credit
facilities for seasonal shifts in working capital as the business
expands and engages in land acquisitions, but the company has
adequate sources of funds to meet cash outflows over the next 12
to 18 months. In addition, there is currently good headroom under
the company's financial covenants.


The positive outlook on the ratings reflects Moody's expectation
that the company's revenues and profitability will continue to
improve in light of the UK homebuilding industry showing signs of
nascent growth. Although mortgage lending remains at stubbornly
low levels, the UK government's initiatives to encourage first-
time homebuyers are having a positive effect. Moody's expects the
company's gross margins and positive cash flow generation to
improve, thereby enhancing its ability to finance growth from
internal sources.

The current ratings and outlook assume that Taylor Wimpey will
maintain an adequate liquidity profile, including ample covenant
headroom at all times, but do not factor in any transformational

What Could Change The Ratings Up/Down

Positive pressure could be exerted on the ratings if Taylor
Wimpey's profitability continues to ameliorate on the back of
supportive industry conditions, thereby improving its credit
metrics (as adjusted by Moody's) with, inter alia, adjusted
debt/total capitalization remaining sustainably below 35% and
interest coverage (EBIT/interest expense + capitalized interest)
rising sustainably above 4.5x.

Conversely, although not currently expected, negative pressure on
the ratings could arise if the company fails to maintain an
adequate liquidity risk profile, or experiences operating
underperformance or negative free cash flow generation for an
extended period of time such that adjusted debt/total
capitalization trends above 45% or interest coverage falls below

A stabilization of the outlook could occur if the company
sustains a weakening in operating momentum such that prospects
for adjusted debt/total capitalization trending below 35% and
interest coverage rising sustainably above 4.5x do not

The principal methodology used in this rating was the Global
Homebuilding Industry published in March 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.

Taylor Wimpey plc., headquartered in High Wycombe,
Buckinghamshire, England, is a UK-focused homebuilder that also
has operations in Spain. The company reported consolidated
revenues and net income of GBP2.02 billion and GBP231 million,
respectively, for the financial year ending December 31, 2012.

THREE QUEENS HOTEL: In Administration Amid Financial Pressure
Burton Mail reports that Three Queens Hotel has been plunged into
receivership after being unable to cope with the financial
pressures following a GBP1 million revamp.

Staff were left in floods of tears after bosses at the Three
Queens Hotel, in Bridge Street, revealed that the current
economic climate and a recent massive investment forced them to
take the difficult decision, according to Burton Mail.

The report relates that Nottingham-based administrators RSM Tenon
are now working to find a buyer for the site but staff have been
told that there will be no job cuts.

Dilip Dattani, joint administrator from RSM Tenon, said: "I can
confirm that The Three Queens Hotel Limited has been placed into
administrative receivership . . . .  This has happened as a
result of the current economic climate and the recent extensive
investment at the site. . . .  The owner put the firm into
administration voluntarily and all staff have now been told about
the situation. . . .  The hotel will continue to trade as normal
and a buyer is being sought to purchase the hotel as a going
concern. . . .  We are in the process of engaging agents and
making sure supplies lines are secure . . . .  There are no plans
for staff cuts."


* EUROPE: Moody's Notes Structural Deficiencies Within CIS States
The sovereign ratings of countries within the Commonwealth of
Independent States (CIS) are constrained by persistent structural
deficiencies such as the lack of economic diversification and
weak institutions, but also carry limited downside risks in 2013,
says Moody's Investors Service in a new report entitled "CIS 2013
Sovereign Outlook: Structural Challenges Overshadow Relatively
Healthy Fiscal Stance."

This is reflected in the mostly stable rating outlooks for the
CIS region, with exceptions such as the B3 ratings of Belarus and
Ukraine that face elevated downside risks, which are reflected in
their negative rating outlooks and high susceptibility to event
risk factor scores. The report notes that CIS countries share
risk exposure to economic developments in the EU and to commodity
prices but have differing individual shock-absorption capacity,
which accounts for the relatively large spectrum of ratings (from
B3 to Baa1).

The purpose of the report is to provide a comparative analysis of
the four key factors (Economic Strength, Institutional Strength,
Government Financial Strength, Susceptibility to Event Risk) that
Moody's uses to assess a sovereign's creditworthiness.

Moody's expects economic growth in the CIS region to improve
slightly in 2013, reflecting a gradual strengthening in the G-
20's growth prospects, continued high commodity prices as well as
more or less unchanged growth in the EU. However, economic growth
in the CIS region will remain well below pre-crisis levels, with
significant downside risks resulting from the low economic
diversification and high dependence on external developments.

Sovereign credit ratings in the CIS will remain constrained by
persistently low institutional strength, which Moody's measures
on the basis of the rule of law, government effectiveness and
corruption (as defined by the World Bank). This weakness, in
turn, adversely affects the business and investment climate in
most CIS countries, although less so in Georgia, which has a
stronger record in this respect. While improvements of laws,
rules and regulations may be formally legislated in the short to
medium term, actual implementation and adoption will take many

Declining fiscal deficits, combined with low to moderate debt-to-
GDP levels and high debt affordability, imply a rather healthy
fiscal outlook compared to rating peers. However, in Armenia,
Belarus and Ukraine, the debt-to-GDP level has significantly
increased compared with pre-crisis levels, as reflected by the
negative outlook on their sovereign ratings. Moody's notes that
funding sources of fiscal and current account deficits among non-
investment-grade CIS countries will remain a concern given that
they do not have fiscal buffers and depend on opportunistic
market access and/or international support. Tight external
liquidity is a key credit risk in Ukraine and Belarus, neither of
which has been able to agree on a program with the IMF.

Susceptibility to event risks is assessed as moderate or low in
most countries. Only Belarus and Ukraine have a high
susceptibility to event risk factor score. Event risks in the
region mainly stem from country-specific domestic and external
political risks, the dependence on commodities as well as the
high dollarization of the banking sector.

* BOOK REVIEW: Creating Value through Corporate Restructuring
Author: Stuart C. Gilson
Publisher: Wiley
Hardcover: 516 pages
List Price: $79.95
Review by David M. Henderson

Buy a copy for yourself and one for a colleague on-line at:
Most business books fall into two categories. The first is very
important.  It is like that stuff you have to drink before you
have a colonoscopy.  You keep telling yourself, this is very
good for me, while you would rather be at the beach reading
Liar's Poker or Barbarians at the Gate.

Stuart Gilson, of the Harvard Business School, has managed to
write a book important to everybody in the distressed market
that is also quite enjoyable.  His prose is fluid and succinct
and a pleasure to read.  But don't take my word for it.  The
dust jacket endorsements come from Jay Alix, Martin Fridson,
Harvey Miller, Arthur Newman, and Sanford Sigoloff. At a
collective gazillion dollars a billing hour, that's a lot of

Be advised that this is designed as a text book.  The case study
format might be off-putting to some.  The effect can be jarring
as you read the narrative history of the case and suddenly
confront the financial statements without any further clue as to
what to do, but this must be what it is like for the turnaround
manager.  Even after reading several of the cases, when I got to
the financials I had that sinking feeling of, what do I do now?
If you read carefully, clues to the solutions are in the

The book is divided into three "modules", bizspeek for sections:
Restructuring Creditors' Claims, Restructuring Shareholders'
Claims, and Restructuring Employees' Claims.  The text covers 13
corporate restructurings focusing on debt workouts, vulture
investing, equity spinoffs, tracking stock, assete divestitures,
employee layoffs, corporate downsizing, M & A, HLTs, wage
givebacks, employee stock buyouts, and the restructuring of
employee benefit plans.  That's a pretty comprehensive survey,
wouldn't you say?

Dr. Gilson's chapter on "Investing in Distressed Situations" is
an excellent summary of the distressed market and a good
touchstone even for seasoned vultures.

Even in the two appendices on technical analysis, this book is
marvelously free of those charts and graphs that purport to show
some general ROI of distressed investing.  Those are cute,
aren't they? As Judy Mencher has famously said, "You can buy
the paper at 50 thinking it's going to 70, but it can just as
easily go to 30 if you are not willing to act on it."  Therein
lies the rub and the weakness, if inevitable, of this or any
book on corporate restructurings.  As Dr. Gilson notes, no two
are alike, and the outcome is highly subjective, in our out of
Court, but especially in Chapter 11.  Is the Judge enthralled by
Jack Butler as Debtor's Counsel or intimidated by Harvey Miller
as Debtor's Counsel? Are you holding "secured" paper only to
discover that when it was issued the bond counsel forgot to
notify the Indenture Trustee of the most Senior debt? Is
somebody holding Junior paper that you think is out of the money
only to have Hugh Ray read the fine print and discover that the
"Junior" paper is secured? This is the stuff of corporate
reorganizations that is virtually impossible to codify into a

That said, this is an especially valuable text for anybody
working in the distressed market.  As a Duke grad, I tend to be
disdainful of all things Harvard, but having read Dr. Gilson's
book, I am enticed to encamp by the dirty waters of the Charles
long enough to take his course, appropriately entitled,
"Creating Value Through Corporate Restructuring."


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

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

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

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


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

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

Copyright 2013.  All rights reserved.  ISSN 1529-2754.

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

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

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

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