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

                           E U R O P E

            Thursday, April 18, 2013, Vol. 14, No. 76

                            Headlines



B U L G A R I A

CORPORATE COMMERCIAL: Moody's Alters Ratings Outlook to Negative


C Y P R U S

* CYPRUS: CB Fails to Regulate Banking System, President Says


F R A N C E

BANQUE PSA: Moody's Cuts Bank Financial Strength Rating to D


I R E L A N D

ALME LOAN: S&P Assigns Prelim. 'B' Rating to Class E Notes


I T A L Y

GRUPPO ESPRESSO: S&P Lowers Cuts Corp. Credit Rating to 'BB-'


K A Z A K H S T A N

HALYK BANK: Fitch Places 'BB-' IDR on Rating Watch Evolving


L U X E M B O U R G

HELLERMANNTYTON ALPHA: S&P Raises Corp. Credit Ratings to 'BB-'
HOLDING BERCY: Fitch Affirms 'B+' Long-Term Issuer Default Rating


M A L T A

* MALTA: Fitch Says Bank System Risks Not Similar to Cyprus


N E T H E R L A N D S

CADOGAN SQUARE: Moody's Affirms Rating on Cl. D Notes at 'Ba3'
CLARE ISLAND: Moody's Cuts Ratings on Two Note Classes to 'B3'
WILLY SELTEN: Declared Bankrupt After Horse Meat Scandal


R U S S I A

FAR-EASTERN SHIPPING: S&P Assigns Prelim. BB- Corp. Credit Rating
FAR-EAST SHIPPING: Fitch Assigns 'B+' LT Issuer Default Rating
GE MONEY: Moody's Affirms 'Ba2' Long-Term Deposit Ratings
GE MONEY: Moody's NSR Reflects 'Ba2' Global Scale Rating
MECHEL OAO: Posts US$1.7-Billion Net Loss in 2012

NET ELEMENT: Incurs US$16.4-Mil. Net Loss in 2012
NOMOS BANK: Moody's Gives 'Ba2' Bank Deposits Rating
NOMOS BANK: Moody's Affirms 'Ba3' Long-Term Deposit Ratings
POLYUS GOLD: S&P Assigns Prelim. 'BB+' Corporate Credit Rating
* STAVROPOL KRAI: S&P Withdraws 'B+' LT Issuer Credit Rating


S P A I N

FTA SANTANDER 2: Moody's Cuts Rating on Class D Notes to 'Caa2'
IM CAJAMAR 5: Moody's Cuts Rating on Class C Notes to 'Caa3'
IM FTGENCAT 3: S&P Affirms 'B-' Rating on Class C Notes
IM GRUPO I: S&P Raises Rating on Class D Notes to 'BB-'
IM SABADELL 1: S&P Lowers Rating on Class C Notes to 'CCC-'

IM SABADELL 5: S&P Raises Rating on Class B Notes to 'BB(sf)'
PESCANOVA SA: Faces Shareholder Ire Over Accounting Failings
PYMES BANESTO 2: Moody's Cuts Rating on Class C Notes to 'Ca'
SANTANDER EMPRESAS 1: S&P Lowers Rating on Class D Notes to CCC+
SANTANDER EMPRESAS 3: S&P Lowers Rating on Class E Notes to 'CCC'


S W E D E N

NORTHLAND RESOURCES: Pays Interest to Bondholders


S W I T Z E R L A N D

PETROPLUS HOLDINGS: Petit-Couronne to Close After Bids Rejected


T U R K E Y

TURKIYE FINANS: Fitch Assigns 'bb-' Viability Rating


U N I T E D   K I N G D O M

HBOS PLC: MPs Demand Inquiry Into Bonuses of Former Bosses
HEALTHCARE LOCUMS: Bleasdale Wants Board to Buy Shares at GBP1.12
LCP PROUDREED: S&P Lowers Ratings on Two Note Classes to 'B'
LEHMAN BROTHERS: LBIE Creditors May Get Full Repayment, PwC Says
TITAN EUROPE 2007-1: S&P Lowers Rating on Class A Notes to 'B-'


U Z B E K I S T A N

AGROBANK: Moody's Cuts Ratings on Deposit Ratings to 'Caa1'


X X X X X X X X

* Upcoming Meetings, Conferences and Seminars


                            *********


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


CORPORATE COMMERCIAL: Moody's Alters Ratings Outlook to Negative
----------------------------------------------------------------
Moody's Investors Service changed the outlook to negative on
Corporate Commercial Bank's (Corpbank's) deposit ratings, which
have been affirmed at Ba3/Not Prime. At the same time, Moody's
has lowered the bank's standalone bank financial strength rating
(BFSR) to E+, equivalent to a baseline credit assessment (BCA) of
b1, from D-/ba3.

The negative outlook and lowering of the bank's BFSR primarily
reflect (1) risks generated by Corpbank's rapid credit expansion
within the context of Bulgaria's challenging operating
environment; (2) modest capitalization buffers compared to peers;
and (3) declining profitability. The affirmation of the deposit
ratings also takes into account the bank's increasing importance
as the fifth-largest bank in Bulgaria, in terms of deposits,
which now results in one notch of uplift from the bank's BCA to
the bank's deposit ratings, based on Moody's assumptions of the
likelihood of systemic support.

Ratings Rationale:

Rapid Credit Expansion In Bulgaria's Challenging Operating
Environment

The primary driver of these actions is Corpbank's rapid credit
expansion within the context of Bulgaria's challenging operating
environment. Corpbank's loan book has grown at an annual average
rate of 39% over 2010-12, compared with the 3% growth rate for
the system over the same period. Moody's says that although the
bank's loan-book quality has been resilient thus far, the loans
are unseasoned and exposed to the effects of subdued
macroeconomic conditions. Moody's expects that GDP will expand by
around 1.9% in 2013, well below pre-crisis levels, as foreign
direct investment remains weak, while high unemployment levels --
which reached 12.4% in December 2012, up from 6.8% in December
2009 -- will also persist.

Modest Capitalization Buffers:

As a result of the rapid expansion in Corpbank's loan book, its
capitalization metrics have weakened, with the Tier 1 ratio
declining to 8.9% as of December 2012 (2011:10.5%) and a capital
adequacy ratio (CAR) of 12.1%, just above the 12% regulatory
minimum. The bank's capital metrics are also below those of its
local peers, with the Bulgarian banking system's Tier 1 ratio at
15.2% as of end-2012. Although the bank plans to raise additional
capital in Q2 2013, Moody's expects that CorpBank's Tier 1 ratio
will remain below the system average and provide limited capacity
to absorb unexpected losses.

Declining Profitability:

The third driver of these actions is the bank's declining
profitability, with the return-on-average assets ratio at around
1.2% at FYE2012, compared with 3.1% in 2010. The reduction in
profitability stems from (1) compressed interest-rate margins,
largely reflecting higher funding costs, as the bank has
diversified and lengthened its funding base; and (2) higher loan-
loss provisioning requirements, which increased to BGN28.2
million in 2012 (2011: BGN8.8 million). Although Corpbank's asset
quality is stronger than those of its peers, the classification
of a few large corporate exposures as non-performing during 2012
led to an increase in provisioning expenses that absorbed 31.4%
of its pre-provision income. Bulgaria's challenging operating
environment indicates that provisioning charges will remain
elevated, sustaining the pressure on the bank's net profits.

Increasing Systemic Importance Results In A One Notch Of Uplift:

Despite the lowering of the bank's standalone BCA, Moody's
affirmed the bank's deposit ratings at Ba3/NP, as they now
incorporate one notch of systemic support uplift, based on
Moody's assumptions of the likelihood of systemic support. The
uplift reflects Moody's view of the bank's increasing systemic
importance as the fifth-largest deposit-taking institution in
Bulgaria, with a 7.3% market share in retail deposits as of
December 2012, according to the Bulgarian National Bank.

What Could Move The Ratings Down/Up:

Downward pressure might develop on the ratings if the bank's
asset quality, capitalization and profitability levels were to
weaken beyond current expectations. Over the near term, upward
pressure on the bank's ratings is limited, as reflected by the
negative outlook.

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

Headquartered in Sofia, Bulgaria, Corpbank reported total assets
of BGN5.6 billion (EUR2.9 billion) according to its 2012
financial statements.



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


* CYPRUS: CB Fails to Regulate Banking System, President Says
-------------------------------------------------------------
Michele Kambas at Reuters reports that Cyprus President Nicos
Anastasiades said in a letter to ECB chief Mario Draghi that the
governor of the company's central bank failed to regulate its
now-crippled banking system effectively.

According to Reuters, deepening a row between the government and
central bank, Anastasiades attacked Panicos Demetriades, who was
appointed as governor last year, for what he said was sustaining
an insolvent bank using a European Central Bank cash lifeline.

The president also said there were damaging delays in resolving
problems in the banking sector, after depositors were slapped
with massive losses to fund a state bailout last month, Reuters
recounts.

Reuters relates that in an April 15 letter to ECB President
Draghi, a copy of which was seen by Reuters, Mr. Anastasiades
speaks of "shortcomings of the Central Bank of Cyprus."

He was responding to a letter from Mr. Draghi last week in which
the ECB president warned that any attempt to effectively sack
Mr. Demetriades could land Cyprus in the European Court of
Justice, Reuters notes.

According to Reuters, Mr. Demetriades, who is under growing
pressure to resign over his handling of the crisis, said on
Sunday he was willing to work with the government to pull the
island out of its economic morass, provided the central bank's
independence was respected.

At issue is how ECB emergency funds continued to be ploughed into
Popular, also known as Laiki, even though by general admission
the bank was insolvent, Reuters says.  The ECB's warning that it
would pull the plug on emergency liquidity assistance to Cyprus's
banks -- for Laiki, some EUR9.5 billion -- tipped Cyprus into
accepting the tough rescue terms, Reuters states.

"I believe that the decision of Governor Demetriades not to annul
the ongoing liquidity assistance provided to Laiki Bank . . .
with the aim of holding elections in February 2013 demonstrates
his failure of effective prudential regulation and supervision of
the banking system," Mr. Anastasiades, as cited by Reuters, said
in the letter.

He was referring to Mr. Demetriades' comment at a news conference
in March that Laiki needed to be sustained because of elections
and a new government which would need to take decisions on the
banking system and a bailout, Reuters notes.

According to Reuters, at the same briefing, Mr. Demetriades
warned that the lack of a legal framework for bank resolution
would have made Cyprus liable for billions in compensation to
insured depositors in the event Laiki went bust, endangering the
state.



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


BANQUE PSA: Moody's Cuts Bank Financial Strength Rating to D
------------------------------------------------------------
Moody's Investors Service downgraded Banque PSA Finance's
standalone Bank Financial Strength Rating (BFSR) to D from D+,
equivalent to a baseline credit assessment (BCA) of ba2 from ba1.

Moody's has also downgraded the bank's long-term debt and deposit
ratings to Ba1 from Baa3, and its short-term debt and deposit
ratings to Not Prime from P-3. The outlook on the BFSR and the
long-term ratings is now stable.

Consequently, the bank's subordinated and junior subordinated
debt program ratings were downgraded to (P)Ba3 from (P)Ba2 and to
(P)B1 from (P)Ba3 respectively and their outlooks revised to
stable. The ratings of subsidiaries of BPF that are fully backed
by BPF have also been downgraded accordingly.

These actions, reflecting the inherent credit linkages within the
group, follow the downgrade of BPF's parent Peugeot S.A. (PSA;
B1, stable) and conclude Moody's review initiated on 19 February
2013, that was triggered by the review on PSA.

The EUR1.2 billion government-guaranteed senior unsecured debt
securities due 2016 are unaffected by these rating actions and
remain rated Aa1, negative. These debt securities benefit from a
guarantee by the French government that complies to a large
extent with the principles of credit substitution described in
"Moody's Identifies Core Principles of Guarantees for Credit
Substitution", November 11, 2010. Therefore, their ratings are
aligned with that of France (Aa1, negative).

Ratings Rationale:

Given the intricate strategic, commercial and financial ties to
its parent, Moody's considers BPF's creditworthiness to be
inherently linked to that of PSA. Nevertheless, Moody's believes
that BPF's standalone credit strength is superior to its
industrial parent and positions the bank's BCA two notches above
PSA's senior debt rating. This reflects a range of mitigating
factors, including good capitalization levels, sound
profitability and a greater degree of asset and liability
matching than those of traditional retail and commercial banks.
Despite the challenges faced by PSA, the bank has been able to
maintain healthy margins, and has successfully limited the impact
of the recent decline in car sales by increasing its penetration
rate. Moreover, Moody's notes that unlike many other vendor
finance companies, BPF has a banking license, and for this reason
it is subject to similar regulatory standards as other credit
institutions and to ongoing supervision. This oversight, together
with access to central bank refinancing facilities, provides a
certain level of protection to creditors.

However, Moody's believes that BPF's rating is eventually
constrained by its lack of business diversification and inherent
credit linkages with its lower-rated industrial parent, as its
activities are exclusively linked to those of PSA. BPF provides
vehicle financing to end-users and car dealers in broad
geographical areas, but its activities are limited to PSA's
brands. As a consequence, volume declines at the manufacturer
have resulted in lower activity levels for the bank. Moody's
believes that a weakening of PSA's sales could also impact the
credit standing of car dealers, a substantial lending exposure
for BPF at 26% of loan book as of year-end 2012. The downgrade
and weakening credit profile of PSA has therefore prompted
Moody's to downgrade BPF's BFSR.

Moody's has also downgraded BPF's long-term debt and deposit
ratings to Ba1 from Baa3. In Moody's view, the support plan
announced by PSA on 24 October 2012 and temporarily approved by
the European Commission on 11 February 2013 demonstrates the
willingness of French authorities to support BPF as a means of
stabilizing the franchise of PSA, given the latter's economic
relevance as a major car manufacturer and employer in France. As
a consequence, Moody's assigned one notch of systemic uplift to
BPF's long-term ratings on 14 November 2012. However, Moody's
believes that there would inevitably be limits on the willingness
of the authorities to support BPF's bondholders, viewing the
limited size and lack of systemic importance of the bank.
Therefore, Moody's sees no reason for introducing a floor to
BPF's supported ratings and has maintained systemic support
constant at one notch. Consequently, BPF's long-term debt and
deposit ratings were downgraded to Ba1 from Baa3.

The outlook on BPF's ratings is stable, reflecting the stable
outlook on PSA's ratings.

Ratings Rationale: For Subordinated and Junior Subordinated Debt

The bank's subordinated and junior subordinated debt program
ratings are notched off the bank's BCA and are positioned one
notch and two notches below the BCA, respectively. Therefore, the
downgrade of BPF's BCA by one notch prompted the downgrade of
these ratings by the same magnitude.

What Could Change the Rating UP/DOWN

An upgrade or downgrade of PSA's long-term ratings would likely
result in a similar rating action on BPF's standalone BFSR, which
could in turn impact the bank's long-term ratings.

The long-term ratings of BPF could also be downgraded in the
event of (1) a deterioration in the bank's financial results; and
(2) a negative development in relation to the European Commission
conditions attached to the definitive support plan for the bank.
Any elements leading Moody's to change its assessment of systemic
support available to BPF could also lead to an upgrade or a
downgrade of the bank's long-term ratings, independently from its
standalone BFSR.

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

List Of Affected Ratings

The following ratings of BPF and related entities were affected
by these rating actions:

- BPF's standalone BFSR was downgraded to D/ba2 from D+/ba1 and
   its outlook was revised to stable

- BPF's long-term debt and deposit ratings were downgraded to
   Ba1 from Baa3 and their outlook was revised to stable

- BPF's short-term debt and deposit ratings were downgraded to
   Not Prime from Prime-3

- BPF's subordinated / Tier III debt MTN program rating was
   downgraded to (P)Ba3 from (P)Ba2 and its outlook was revised
   to stable

- BPF's junior subordinated MTN program rating was downgraded to
   (P)B1 from (P)Ba3 and its outlook was revised to stable

- Peugeot Finance International N.V. (PFI)'s backed long-term
   senior unsecured rating was downgraded to Ba1 from Baa3 and
   its outlook was revised to stable

- SOFIRA SNC's backed commercial paper rating was downgraded to
   Not Prime from P-3.



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I R E L A N D
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ALME LOAN: S&P Assigns Prelim. 'B' Rating to Class E Notes
----------------------------------------------------------
Standard & Poor's Ratings Services assigned its preliminary
credit ratings to ALME Loan Funding 2013-1 Ltd.'s EUR289.10
million floating-rate class A-1, A-2, B, C, D, and E notes.  At
closing, ALME Loan Funding 2013-1 will also issue an unrated
subordinated class of notes.

S&P's preliminary ratings reflect its assessment of the credit
quality of the preliminary collateral portfolio.  The portfolio
at closing is expected to be diversified, primarily comprising
broadly syndicated speculative-grade senior secured term loans
and senior secured bonds.

S&P's ratings also reflect the credit enhancement available to
the rated notes through the subordination of cash flows payable
to the subordinated notes.  S&P subjected the preliminary capital
structure to a cash flow analysis to determine the break-even
default rate for each rated class of notes.

In S&P's analysis, it used the target par amount, the covenanted
weighted-average spread, the covenanted weighted-average coupon,
and the covenanted weighted-average recovery rates.  S&P applied
various cash flow stress scenarios, using four different default
patterns, in conjunction with different interest rate stress
scenarios for each liability rating category.

The ratings assigned to the notes are commensurate with S&P's
assessment of available credit enhancement following its credit
and cash flow analysis.  S&P's analysis shows that the credit
enhancement available to each rated class of notes was sufficient
to withstand the defaults applicable under the supplemental tests
(not counting excess spread) outlined in S&P's corporate
collateralized debt obligation (CDO) criteria.

In S&P's analysis, it considered that the transaction documents'
replacement and remedy mechanisms adequately mitigate the
transaction's exposure to counterparty risk under its 2012
counterparty criteria.

Following the application of S&P's criteria for nonsovereign
ratings that exceed eurozone (European Economic and Monetary
Union) sovereign ratings, it considers the transaction's exposure
to country risk to be sufficiently mitigated at the assigned
rating levels as the concentration of the pool comprising of
assets in countries rated lower than 'A-' is limited to 10% of
the aggregate collateral balance.

The transaction's legal structure is expected to be bankruptcy-
remote, in accordance with S&P's European legal criteria.

ALME Loan Funding 2013-1 is a European cash flow corporate loan
collateralized loan obligation (CLO) securitization of a
revolving pool, comprising euro-denominated senior secured loans
and bonds issued by European borrowers.  Apollo Credit Management
(CLO) LLC is the collateral manager.

          STANDARD & POOR'S 17G-7 DISCLOSURE REPORT

SEC Rule 17g-7 requires an NRSRO, for any report accompanying a
credit rating relating to an asset-backed security as defined in
the Rule, to include a description of the representations,
warranties and enforcement mechanisms available to investors and
a description of how they differ from the representations,
warranties and enforcement mechanisms in issuances of similar
securities.

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

         http://standardandpoorsdisclosure-17g7.com/1476.pdf

RATINGS LIST

ALME Loan Funding 2013-1 Ltd.
EUR334.23 Million Floating-Rate and Subordinated Notes

Class                 Prelim.        Prelim.
                      rating          amount
                                    (mil. EUR)

A-1                   AAA (sf)         195.00
A-2                   AA (sf)           27.00
B                     A (sf)            27.00
C                     BBB (sf)          15.20
D                     BB (sf)           11.90
E                     B (sf)            13.00
Sub                   NR                45.13

NR-Not rated.



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I T A L Y
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GRUPPO ESPRESSO: S&P Lowers Cuts Corp. Credit Rating to 'BB-'
-------------------------------------------------------------
Standard & Poor's Ratings Services said it lowered its long-term
corporate credit rating on Italy-based newspaper and magazine
publisher Gruppo Editoriale L'Espresso SpA (Gruppo Espresso) to
'BB-' from 'BB'.  The outlook is negative.

S&P also lowered its issue rating on Gruppo Espresso's senior
unsecured debt to 'BB-' from 'BB'.  The '3' recovery rating on
this senior unsecured debt is unchanged, indicating S&P'
expectation of meaningful (50%-70%) recovery for debtholders in
the event of a payment default.

The downgrade reflects S&P' view that the glum economic backdrop
in Italy has led to a decline in advertising spending that has
durably weakened Gruppo Espresso's profitability.  Consequently,
S&P anticipates that Gruppo Espresso's credit metrics will weaken
by year-end 2013, with a ratio of Standard & Poor's adjusted debt
to EBITDA at about 4.5x from 3.7x in 2012.  This ratio would come
close to the 2009 range, when Gruppo Espresso's adjusted debt to
EBITDA had spiked to 4.5x-5.0x owing to the steep downturn.

Given the general downward spiral in advertising spending in
Italy, and in the print segment in particular, S&P thinks it
unlikely that Gruppo Espresso's EBITDA margin will quickly return
to historic levels of 15%.  S&P has therefore revised its
assessment of the company's business risk profile to "weak" from
"fair" as S&P sees the EBITDA margin narrowing further this year
to about 10%.  Still, Gruppo Espresso's leading positions in the
Italian newspaper markets, as reflected in its market share of
18%, and its ability to cross sell its content through a variety
of distribution channels continue to support its competitive
position.

"Under our base-case scenario, we anticipate that the Italian
print advertising market will likely decline by low double digits
in 2013, on the back of our forecast -1.4% GDP contraction in
Italy, versus -0.7% GDP previously.  Despite our anticipation of
increasing leverage for the company in 2013, we believe that
Gruppo Espresso will generate marginally positive free operating
cash flow in 2013 in our base case.  In addition, we believe that
even with lower profitability, the company would have the ability
to restore financial metrics to levels below 4.0x, once the
economy improves.  We consequently continue to assess Gruppo
Espresso's financial risk profile as "significant", S&P noted

The negative outlook reflects S&P's view that deterioration in
the domestic advertising market in excess of its current
expectations in the second half of 2013 could further erode
Gruppo Espresso's earnings capacity, and cause its adjusted debt
to EBITDA ratio to increase beyond the level of 4.5x.  S&P also
factors in the risk that the group may not address its upcoming
2014 debt maturities in a timely manner, which could result in
Gruppo Espresso's liquidity falling short of S&P's guidelines for
the current assessment of "adequate" after October 2013.

S&P' could consider lowering the ratings on Gruppo Espresso if it
saw the decline in the Italian advertising market exceeding low-
double-digit levels in the second half of 2013, resulting in the
group's operating performance falling below S&P's projection in
its base-case scenario and leverage exceeding its current
expectations.  S&P could also consider a downgrade if Gruppo
Espresso failed to maintain its liquidity at "adequate."  This
could occur if the group did not proactively address the
refinancing of upcoming debt maturities, or if its liquidity
sources eroded as a result of operational setbacks or other
extraordinary cash outflows.

S&P could revise the outlook to stable if the group at least
maintained its adjusted debt-to-EBITDA ratio in the corridor of
4.0x-4.5x, supported by a stabilizing or recovering advertising
spending trend in Italy.  This would in turn help steady Gruppo
Espresso's operating performance.  Preserving liquidity at
"adequate" is also a key factor for a stable outlook.



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K A Z A K H S T A N
===================


HALYK BANK: Fitch Places 'BB-' IDR on Rating Watch Evolving
-----------------------------------------------------------
Fitch Ratings has taken various rating actions on Kazakh banks
and their subsidiaries' Long-term Issuer Default Ratings (IDRs),
including the following:

- Halyk Bank's 'BB-' IDR placed on Rating Watch Evolving (RWE)

- BTA Bank's IDR upgraded to 'CCC' from 'RD', placed on Rating
   Watch Positive (RWP)

- Kazkommertsbank's (KKB) IDR affirmed at 'B' with a Stable
   Outlook, and its Russian subsidiary, CB Moskommertsbank (MKB),
   downgraded to 'CCC' from 'B-'

- Bank CenterCredit (BCC) and its Russian subsidiary, Bank BCC-
   Moscow (BCCM), affirmed at 'B+' with a Stable Outlook.

KEY RATING DRIVERS - IDRs, VRs and Senior Debt of reviewed Kazakh
banks

Kazakh banks have in general continued to benefit from a steadily
growing economy, which has provided some opportunities for
business growth, supported the quality of recently issued loans
and enabled banks to rebalance funding bases towards domestic
sources. GDP growth was a solid 5% in 2012, and Fitch forecasts
similar rates in 2013-2014.

Real estate market indicators suggest incremental recovery both
in prices and liquidity of residential and commercial property.
This trend has helped banks to achieve some limited improvements
in the performance of their legacy real estate exposures.
However, the stock of excess supply (including of uncompleted
property) still considerably outweighs demand volumes, hampering
any more tangible progress with loan workouts.

Banks' funding bases have benefited from continued inflow of
retail deposits (up by 24% in 2012), which has helped to offset
some volatility in corporate balances. The net loans/deposits
ratio remained close to 100% in 2012, suggesting that the sector
has been sticking to a more sustainable domestically-funded
model. At the same time, funding at some banks (in particular,
KKB, Halyk and BTA) is weakened by significant reliance on
concentrated corporate deposits placed by state-controlled
entities. External debt repayment schedules are currently
comfortable for each of the reviewed banks, with no large near-
term spikes in redemptions.

Internal capital generation has been moderate at most banks, with
the notable exception of Halyk. However, current capital bases
and impairment reserves allow for the absorption of the majority
of currently recognized non-performing and restructured loans.
The extent to which banks can absorb losses on reported and
potential additional problem loans remains a key part of Fitch's
assessments.

Plans to consolidate the private pension system under the aegis
of the National Bank of Kazakhstan would materially affect Halyk
and KKB (managing the largest and the fourth largest funds in the
country). The potential impact on profitability will be more
significant for Halyk, whose asset management fees accounted for
12% of pre-tax profit in 2012 (less than 1% for KKB, based on
9M12 data). However, Fitch does not currently expect any
significant overall negative credit impact for the banks, given
initial reports that these businesses will be bought at a
significant premium to book value, resulting in an upfront boost
to capital.

KEY RATING DRIVERS - BTA's IDRs, VR and Senior Debt

The upgrade of BTA Bank follows the completion of Fitch's review
of the bank, initiated after the completion of its restructuring
in January 2013. The 'CCC' Long-term IDRs reflect BTA's still
weak asset quality, capital, performance, franchise and business
prospects. However, weaknesses in both solvency and profitability
have been considerably reduced as a result of the restructuring.
BTA's reported Basel I Tier 1 and Fitch Core Capital (FCC) ratios
were a solid 33% at end-2012. However, non-performing loans
(NPLs, 90-plus days overdue; 68% of the loan book) and
restructured exposures (22%) still comprised, net of impairment
reserves, 1.4x FCC. Furthermore, 65% of BTA's FCC results from
fair value adjustments (reductions) to the bank's (low rate)
liabilities, which will have to be accrued back through the
income statement in future years, pressuring internal capital
generation.

In Fitch's view, pre-impairment profit, net of interest income
accrued but not received in cash, is likely to be at best
moderately negative in 2013, even if BTA is successful in sharply
reducing operating expenses. The lack of a clear development
strategy makes significant near-term improvements in performance
unlikely, the agency believes, meaning that continued, slow
erosion of capital is our base case expectation.

The RWP on BTA's ratings reflects its potential acquisition by
Halyk, following a proposal made to the latter by the national
welfare fund Samruk Kazyna. Consolidation of BTA by Halyk would
likely result in moderately improved support prospects for BTA,
in Fitch's view. However, considerable uncertainty still exists
as to whether the transaction will take place, how it might be
structured, and to what extent Halyk would be able and willing to
support BTA, should the sale go through.

KEY RATING DRIVERS - Halyk's IDRs, VR and Senior Debt

The RWE on Halyk's ratings reflects (i) Fitch's opinion that the
bank's stand-alone profile has continued to strengthen, to the
extent that this would now warrant a one-notch upgrade to 'BB';
and (ii) the potential negative impact of the proposed
acquisition of BTA, which may result in a significant weakening
of the profile. Halyk will likely be upgraded to 'BB' if the BTA
acquisition does not go through. The rating could be affirmed at
'BB-' if an acquisition of BTA is structured so as to be only
moderately negative for Halyk, or downgraded if an acquisition is
sharply detrimental.

Fitch's assessment of Halyk's stand-alone profile reflects the
bank's strong performance, comfortable liquidity, solid
capitalization and strong franchise. However, the assessment also
considers still sizable asset quality problems and significant
dependence on lumpy corporate deposits.

Profitability has been consistently strong in recent years, with
a pre-impairment return on average assets close to or above 4%
(above 6% relative to average gross loans) underpinned by low
funding costs, sizable commission income and reasonable cost
control. Non-interest income has fully covered operating
expenses, meaning that net interest income is available in its
entirety to absorb credit losses. The quality of interest
revenues is also reasonable, with only 8% accrued, but not
received in cash, in 2012.

The combined volume of NPLs and restructured loans fell to 29% of
the loan book at end-2012 from 36% at end-2011, supported by some
notable recoveries, as well as loan growth. At end-2012, Halyk
could have fully reserved NPLs and restructured loans, and still
reported capital ratios in excess of 10%, Fitch calculates. The
agency believes risks in the performing part of the loan book are
still significant, given some borrowers' weak transparency and
profitability, and the long-term bullet structures of some
exposures. However, in the agency's view, pre-impairment
profitability should provide sufficient capacity to absorb any
further losses without impacting capitalization.

KEY RATING DRIVERS - KKB's IDRs, VR, Senior Debt and Subordinated
Debt

The affirmation of KKB's ratings reflects limited recent changes
in the bank's credit profile. The ratings continue to reflect the
bank's weak asset quality. However they also consider KKB's
significant loss absorption capacity, positive pre-impairment
profitability (net of accrued interest income), manageable
refinancing schedule and currently comfortable liquidity.

Reported NPLs were a high 29% and restructured exposures 19% of
gross loans at end-Q312 (the latest publicly available data). In
addition, Fitch understands that land/real estate exposures not
classified as either non-performing or restructured were also
sizable.

Based on regulatory data, Fitch calculates that KKB could have
increased its impairment reserves to 39% of the loan book, as of
end-2012, before its regulatory capital ratio would have fallen
to the minimum 10% level. This represents significant loss
absorption capacity relative to currently reported NPLs and
restructured loans, but could be insufficient in case of
recognition of further problems. At end-2012, KKB's land
exposures, net of specific reserves, were substantial relative to
regulatory capital, and an eventual exit from these investments,
as well as from some of the real estate loans, is highly
dependent on cooperation with local authorities, in particular in
the city of Almaty.

KKB's regulatory ratios (12.3% Tier 1 and 16.2% total at end-
2012) were significantly below those reported under Basel (Tier 1
18.2%; total 22.0% at end-Q312, the latest publicly available
data) largely as a result of different impairment provisions
calculated in accordance with local GAAP and IFRS requirements.
However, even if KKB decides to increase its IFRS impairment
reserves up to the level currently reported in its statutory
financial statements, Fitch would regard such accounting changes
as credit neutral, as they would not impact the bank's aggregate
IFRS loss absorption capacity, as measured by capital and
reserves combined.

KKB's subordinated debt issues are notched once off its VR.

KEY RATING DRIVERS - BCC's IDRs, VR, Senior Debt and National
Ratings

BCC's ratings reflect its weak performance, asset quality metrics
and capital quality. At the same time, the ratings also consider
BCC's established franchise, robust liquidity and reasonable
overall loss absorption capacity. BCC's risk profile benefits
moderately from oversight by its major shareholder, Korea's
Kookmin Bank (KMB, 'A'/Stable; 42% stake); however Fitch does not
expect KMB to provide significant financial support to BCC prior
to consolidation of a controlling stake. KMB has an option, valid
until 2017, to purchase the IFC's 10% stake, but in Fitch's view
is unlikely to exercise this in the near term.

NPLs and restructured loans combined comprised a significant 22%
of the portfolio at end-2012, although this is lower than at
peers. Fitch calculates that the bank could have almost fully
reserved these exposures while maintaining a Basel total capital
ratio of 10%. However, the quality of capital, which includes
significant non-common equity components, is weak, and at end-
2012 the FCC ratio was a moderate 7.8%.

After improvement in 2011, BCC's profitability weakened somewhat
in 2012, with the net interest margin shrinking to 2% in 2012 and
pre-impairment results equal to a moderate 1.3% of assets.
However, fee generation is robust, covering 75% of operating
expenses in 2012, and cash interest income slightly exceeded
accruals.

RATING SENSITIVITIES - Kazakhstan-based banks' IDRs, VRs, Senior
Debt, National ratings (where assigned) and Subordinated Debt
(for KKB)

The ratings of each of the four Kazakh banks could be upgraded in
case of substantial progress with work outs of problem loans or
significant recapitalization measures which materially improve
loss absorption capacity. However, Fitch currently views such
developments as unlikely given the deep-seated nature of asset
quality problems and the absence of any capital raising plans at
the banks. A sharp slowdown in the economy driven by an oil price
shock would put downward pressure on the ratings, but this is
also currently not anticipated.

Halyk will likely be upgraded by one notch, to 'BB', if the BTA
acquisition does not go through. The rating could be affirmed at
'BB-' if an acquisition of BTA is structured so as to be only
moderately detrimental for Halyk, or downgraded if an acquisition
is sharply negative for Halyk's credit profile.

BTA could be upgraded if the bank is acquired by Halyk, and in
Fitch's view the new owner would be likely to help repair BTA's
stand-alone profile or to provide support to BTA, in case of
need. However, in considering any potential benefits to BTA,
Fitch will bear in mind that Halyk would probably be a reluctant
acquirer, and any uplift to BTA's ratings may as a result be
limited. If no acquisition takes place, BTA's ratings would
likely be affirmed at their current levels.

Fitch does not expect KKB's ratings to change in the near term,
as reflected by the Stable Outlook. However, any further
deterioration in asset quality or weakening of recovery prospects
on the bank's problem loans would give rise to negative pressure
on the ratings. Any indication from the Kazakh authorities and/or
KKB's major shareholders that creditors might participate in
actions to strengthen the bank's solvency (not the agency's base
case at present) could also result in a downgrade.

BCC's ratings could be upgraded by several notches, potentially
to investment grade, if Kookmin consolidates a majority stake in
the bank and affirms its strategic commitment to BCC.

KEY RATING DRIVERS ANS SENSITIVITIES - Support Ratings and
Support Rating Floors (SRFs) for reviewed Kazakh banks

Halyk (SRF 'B') and KKB's (SRF 'B-') Support Ratings and SRFs
reflect the track record of (moderate) funding and capital
support provided to these banks by the authorities during the
crisis. Halyk's SRF is set one notch higher than KKB's,
reflecting the former's wider retail deposit franchise, limited
wholesale funding and strong political connections. At the same
time, the SRFs remain considerably lower than the sovereign's
Long-Term foreign currency IDR of 'BBB+'. This reflects the
readiness of the authorities to let other leading Kazakh banks
default during the past four years, and public statements in
support of the principle of 'burden sharing' in case of bank
insolvencies.

BTA Bank's '5' Support Rating and 'No Floor' SRF reflect Fitch's
view that sovereign support cannot be relied upon in future
following the bank's repeated default in 2012. BCC's '5' Support
Rating reflects Fitch's opinion that support cannot be relied
upon from either the bank's shareholders or the Kazakh sovereign.

KEY RATING DRIVERS AND SENSITIVITIES - MKB

The downgrade of MKB's Long-term IDR to 'CCC' reflects Fitch's
view that capital support from KKB has become less reliable. This
takes into account the fact that the parent has not provided
capital to MKB in the recent past and has no current plans to do
so in the future, notwithstanding MKB's consistently negative
profitability and weak capital position (11.3% regulatory CAR at
end-2M13). The Russian subsidiary is of low strategic importance
to KKB, and MKB does not qualify as a 'material subsidiary'
either, i.e. its default would not trigger the acceleration of
KKB's eurobonds.

MKB's 'ccc' VR reflects deep-seated asset quality problems (NPLs
and restructured loans of 22% and 20%, respectively, at end-2M13)
and limited loss absorption capacity (statutory reserves were
equal to 21% of the loan book at the same date, but the bank's
capitalization didn't allow for further provisioning). In Q411
the regulator banned MKB from accepting retail deposits and,
although that ban has now been lifted, regulatory risk remains
rather high, in Fitch's view.

MKB's ratings could be downgraded further in case of a further
weakening of asset quality or regulatory intervention. MKB's
ratings could be upgraded if the bank is sufficiently
recapitalized and a viable strategy is implemented.

KEY RATING DRIVERS AND SENSITIVITIES - BCCM

BCCM's IDRs are equalized with those of BCC given the high
operational and management integration of the two entities and
strong track record of capital support. The small size of the
bank (around 3.5% of BCC's assets at end-2012) and its moderate
growth plans limit the cost of potential support, thus also
increasing its probability. The IDRs are likely to move in tandem
with those of BCC; however, reduced operational integration
and/or a weaker track record of support could result in BCCM
being notched off BCC.

The 'b-' VR reflects BCCM's weak performance and asset quality
and limited franchise, but also takes into account the currently
solid capital ratio. Upside to the rating is limited given
current weaknesses. A marked increase in asset impairment could
result in a downgrade.

The ratings actions are:

BTA

Long-Term foreign and local currency IDRs: upgraded to 'CCC'
from 'RD'; RWP

Short-Term foreign and local currency IDRs: upgraded to 'C' from
'RD'; RWP

Viability Rating: upgraded to 'ccc' from 'f'

Support Rating: '5', placed on RWP

Support Rating Floor: affirmed at 'No Floor'

Senior debt rating on old notes: withdrawn at 'C', Recovery
Rating 'RR5'

Senior debt rating on new notes: assigned at 'CCC'/RWP, Recovery
Rating 'RR4'

Subordinated debt rating; withdrawn at 'C'; Recovery Rating
'RR6'

Halyk

Long-term foreign and local currency IDRs: 'BB-', placed on RWE

Short-term foreign and local currency IDRs: affirmed at 'B'

Viability Rating: 'bb-', placed on RWE

Support Rating: affirmed at '4'

Support Rating Floor: affirmed at 'B'

Senior unsecured debt: 'BB-', placed on RWE

KKB

Long-term foreign and local currency IDRs: affirmed at 'B',
Outlook Stable

Short-term foreign and local currency IDRs: affirmed at 'B'

Viability Rating: affirmed at 'b'

Support Rating affirmed at '5'

Support Rating Floor: affirmed at 'B-'

Senior unsecured debt: affirmed at 'B'; Recovery Rating 'RR4'

Subordinated debt: affirmed at 'B-'; Recovery Rating 'RR5'

BCC

Long-term foreign currency IDR: affirmed at 'B+', Outlook Stable

Short-term foreign currency IDR: affirmed at 'B'

Long-term local currency IDR: assigned at 'B+', Outlook Stable

National Long-term Rating: assigned at 'BBB(kaz)', Outlook
Stable

Viability Rating: affirmed at 'b+'

Support Rating affirmed at '5'

Senior unsecured debt affirmed at 'B+'; Recovery Rating 'RR4'

National senior unsecured debt rating: assigned at 'BBB(kaz)'.

MKB

Long-term foreign currency IDR: downgraded to 'CCC' from 'B-'

Short-term foreign currency IDR: downgraded to 'C' from 'B'

National Long-term rating: downgraded to 'B(rus)' from 'BB-
'(rus);

Viability Rating: affirmed at 'ccc'

Support Rating: affirmed at '5'

BCC-Moscow

Long-term foreign and local currency IDRs: affirmed at 'B+';
Outlook Stable

Short-term foreign currency IDR: affirmed at 'B';

Viability Rating: assigned at 'b-'

National Long-Term Rating: affirmed at 'A-(rus)'; Outlook
Stable;

Support Rating: affirmed at '4'



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


HELLERMANNTYTON ALPHA: S&P Raises Corp. Credit Ratings to 'BB-'
---------------------------------------------------------------
Standard & Poor's Ratings Services said it raised its long-term
corporate credit ratings to 'BB-' from 'B+' on Luxembourg-based
cable management solutions provider HellermannTyton Alpha
S.a.r.l. (HTA) and its operating company HellermannTyton Beta
S.a.r.l. (HTB), together HellermannTyton or HT group.  The
outlook is stable.

At the same time, S&P raised its issue rating on the
EUR220 million senior secured floating rate notes issued by
HellermannTyton Finance PLC, a fully owned subsidiary of HTA, to
'BB-' from 'B+'.  S&P's '3' recovery rating on these notes
remains unchanged, indicating S&P's expectation of meaningful
(50%-70%) recovery for noteholders in the event of a payment
default.

The upgrade follows the successful completion of the IPO of
HellermannTyton Group PLC (HT), the new holding company above HTA
and HTB.  The transaction has resulted in public ownership of
about 55% of HT's equity.

"Since the IPO's initial announcement on March 4, 2013, we have
learned that HT raised some limited additional capital that, at
the time of the announcement, we viewed as having no rating
impact.  We also now understand that the group's capital
structure has changed significantly post IPO, which we assess as
a positive for the rating.  Specifically, HT's majority
shareholder, Doughty Hanson, has converted into equity its
shareholder loan (formerly preferred equity certificates) and
cumulative preference shares, which were on HTA's books and which
we treated like debt under our criteria.  These securities
amounted to about EUR218 million and EUR133 million,
respectively.  The conversion has led us to trim our forecast for
HT's Standard & Poor's-adjusted debt by about EUR300 million and
to a marked improvement in credit metrics for 2013 and beyond
compared with estimates in our previous base-case scenario.  We
now forecast that HT's fully-adjusted total debt will be about
EUR230 million on Dec. 31, 2013, versus about EUR540 million
before the IPO.  This translates into our estimate of a ratio of
adjusted debt to EBITDA of about 2.5x at year-end 2013.  We
forecast a ratio of adjusted funds from operations (FFO) to debt
of about 25% by the end of 2013," S&P said.

S&P has consequently revised its assessment of the HT group's
financial risk profile to "significant" from "aggressive," given
the group's stronger credit metrics.  S& has also revised its
assessment of the HT group's financial policy to "moderate" from
"aggressive."  S&P considers the group's financial risk profile
to be less aggressive than in the past, given the lower leverage
ratios and Doughty Hanson's reduced private-equity ownership in
HT, which is now a minority stake.  Still, S&P also factor in
dividend payments representing some 30%-40% of HT's net income
from 2014 and bolt-on acquisitions that S&P thinks will total
about EUR40 million to EUR60 million in 2013.

The ratings are supported by the HT group's business risk
profile, which S&P continues to view at the weak end of its
"fair" category under its criteria.  S&P' assessment reflects the
group's generally strong EBITDA margin of 18% on average over the
past six years, which shows the group's resilience through the
downturn.  S&P expects the HT group will maintain a stable EBITDA
margin at about 18% over 2013 and 2014.  S&P's business risk
assessment is further supported by the group's strong market
position across several countries, with high barriers to entry
thanks to its strong customer base and well-invested asset base.
In addition, S&P anticipates that, globally, the group will
benefit from growth prospects in the electrical and automotive
industry, mainly on technological trends and further
globalization.

These factors are offset, however, by the HT group's exposure to
volatile end markets like the automotive industry and its small
size relative to other companies S&P rates in the sector.

The stable outlook reflects S&P' view that the HT group will
maintain its operating performance, with a reported EBITDA margin
of about 18% in 2013 and 2014.  S&P also take into account its
forecast of continued stable moderate free cash flow generation,
which should help the group maintain an "adequate" liquidity
profile.  S&P considers an FFO-to-debt ratio in the 20%-30% range
as commensurate with the current rating level.  At the same time
S&P expects the group to generate at least neutral discretionary
cash flow in the next couple of years.

Rating upside could arise if S&P was to see the HT group's
business risk profile strengthen, which would simultaneously
improve its generation of sustainable positive discretionary cash
flow.

S&P could lower the rating if the group's credit metrics
deteriorated following a significant shortfall in cash flow
generation compared with its forecasts.  This could be caused by
a severe global recession, leading to a drop in earnings.
Another downside rating risk could arise if the group adopted a
more aggressive financial policy, translating into significant
dividend payments and pronounced spending on acquisitions.  The
group's ensuing higher leverage would likely move the ratio of
FFO to debt to below 20% and lead to negative discretionary cash
flow generation, in turn triggering a downgrade.


HOLDING BERCY: Fitch Affirms 'B+' Long-Term Issuer Default Rating
-----------------------------------------------------------------
Fitch Ratings has affirmed Holding Bercy Investissement SCA's
(HBI) Long-term Issuer Default Rating (IDR) at 'B+' with a Stable
Outlook. HBI is the holding company of France-based contract
foodservices and concession catering operator Elior Group. Fitch
has also affirmed the company's existing EUR1.7 billion senior
secured credit facility at 'BB-'/'RR3' and assigned Elior Finance
& Co. SCA's (Elior Finance) planned EUR300 million senior secured
notes due 2020 an expected senior secured rating of 'BB-(EXP)'.
The final rating is contingent upon the receipt of final
documents conforming to information already received by Fitch.

Elior Finance, a Luxembourg-based special purpose vehicle, is
expected to use the proceeds from the note issuance to fund a
Facility H1 loan advanced to HBI under the senior facilities
agreement (SFA). Through participation as the Facility H1 lender,
Elior Finance is considered a lender under the SFA and payment
commitments to noteholders will rank pari passu with all existing
HBI lenders. Furthermore, the collateral pledged to secure the
obligations of the borrower include those of HBI under the
Facility H1 loan agreement. As such, Elior Finance will share
equally with the other lenders and counterparties with respect to
recoveries from security enforcement. However, Elior Finance's
voting rights will be limited to enforcement instructions and
certain other matters and will not be equal with other lenders
under the SFA. This is not considered a limiting factor to
bondholders' expected recovery prospects and hence we have
assigned the same rating as for the bank loan ('BB-'/RR3). The
net proceeds from the planned note issuance are expected to be
used to partially prepay various tranches of the senior secured
term loans borrowed by HBI and Elior SCA.

KEY RATING DRIVERS

Balanced and Resilient Business Profile
Elior's large scale, broad product offering, strong customer and
business diversification, and high barriers to entry have
resulted in consistent performance through the economic cycle.
The company has a balanced presence in each sub-market it
competes in, both in contract catering and concession catering,
and is benefiting from a long-term secular trend toward
outsourced foodservices. These factors, combined with the
company's high retention rate, strong reputation and expertise,
are expected to support continued sales and profit growth over
the intermediate term.

Strong Cash Flow Conversion
The asset-light nature and low capital intensity of the business
allows Elior to consistently convert operating profits into
strong cash flow before debt service and provides significant
financial flexibility which is viewed to be a key supporting
factor of credit profile of the company. From a business risk
standpoint, Fitch considers Elior has a profile in line with a
'BB' rating. However, the company's financial profile is more in
line with a 'B' rated issuer, thus bringing the rating to 'B+'.

Weak Metrics, Expected Improvement
Elior showed high FFO adjusted leverage of almost 8.0x in FY12
while FFO fixed charge cover was weak at below 2.0x. Although
these ratios are not consistent with the assigned 'B+' IDR,
Elior's credit metrics are projected to show near-term
improvement as recent acquisitions are fully integrated and Elior
benefits from lower taxation resulting from the French CICE staff
cost rebate scheme in FY13. While Fitch expects the capital
structure to remain highly levered over the intermediate term,
pro forma for the planned bond placement, FFO adjusted leverage
is projected to decrease to around 6.8x while FFO fixed charge
cover is expected to increase to around 2.0x with further limited
improvements factored in for FY14 albeit largely depending on
future profit growth.

Adequate Liquidity
Lenders agreed to "amend and extend" Elior's current SFA in April
2013. The agreement pushed the commitment of its RCF to March
2018 and extended the maturity on term loans of c. EUR1.0bn to
March 2019 from June 2017. As such, liquidity and refinancing are
not a rating concern at present. In our view, the company is
projected to have sufficient cash and borrowing capacity to repay
or refinance near-term maturities.

Expected Recovery for Creditors upon Default
Elior's Recovery Ratings reflect Fitch's expectations that the
enterprise value of the company would be maximized in a
restructuring scenario (going concern approach), rather than a
liquidation due to the asset-light nature of the business. Fitch
believes that a 6.0x distressed EV/EBITDA multiple and 25%
discount to EBITDA resulting from unsustainable financial
leverage, possibly as a result of increasingly aggressive
acquisition activity or contract losses, are fair assumptions
under a distress scenario. This results in above-average expected
recoveries (51%-70%) for first lien creditors, including lenders
of the new Facility H1, in the event of default and hence a
rating for both the senior secured bank debt and the planned bond
at 'BB-' one notch above Elior's IDR.

RATING SENSITIVITIES

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

- Additional diversification, by segment and/or geography
- Further deleveraging resulting in FFO adjusted gross leverage
   below 5.0x
- FFO fixed charge coverage above 2.8x
- FCF/total adjusted debt margin above 12%

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

- FFO adjusted gross leverage above 7.0x
- FFO fixed charge coverage below 2.0x
- FCF/total adjusted debt margin below 5%



=========
M A L T A
=========


* MALTA: Fitch Says Bank System Risks Not Similar to Cyprus
-----------------------------------------------------------
The differences between the Maltese and Cypriot banking systems
far outweigh the similarities, meaning the Maltese banking sector
does not present the same level of risk to the sovereign that was
seen in Cyprus, Fitch Ratings says.

Fitch says, "In a special report published April 16, we compare
the size of the Maltese and Cypriot banking sectors, their
funding sources, asset quality, and capitalization. While both
Malta and Cyprus seemingly have large banking sectors that
substantially exceed the size of their economies and that rely to
some degree on funding from non-resident depositors, a closer
examination reveals substantial differences."

Malta's whole banking sector has assets worth 789% of GDP, making
it the eurozone's second largest (after Luxembourg) and
outstripping Cyprus, where total banking assets accounted for
672% of GDP in H112.

However, using the Central Bank of Malta's categorizations,
"international banks" with negligible links to the domestic
economy have assets worth 494% of GDP. "Core domestic banks" that
have strong links with the domestic economy and are considered
systemically important account for 218% of GDP. "Non-core
domestic banks" with smaller operations and links with the
domestic economy account for 77% of GDP.

"We think the government of Malta would support the core domestic
banks, but would be less likely to support non-core domestic
banks and would be very unlikely to support international banks
(where support would come from the parent bank or its home
government). We also believe that for at least one of the core
domestic banks, HSBC Bank Malta, the bulk of support would also
come from the parent," Fitch says.

So the contingent liability that potential bank support places on
the Maltese sovereign -- around 128% of GDP -- is significantly
lower than in Cyprus, where the domestic banking sector,
accounting for 466% of GDP, proved too big for the sovereign to
support.

The Maltese banking system is also less vulnerable to a
destabilizing withdrawal of non-resident deposits than its high
proportion of non-resident deposits suggests (68.8%, compared
with 37% in Cyprus). The majority of these deposits are in
international banks, mostly the deposits of the parent banking
groups, which present a lower risk of capital flight than other
types of foreign deposits (such as deposits of wealthy
foreigners). Only 17% of deposits in Malta's core domestic banks
are from non-residents.

Looking ahead, the possible long-term shift in the stance of the
European (and global) authorities towards offshore financial
centers spells some danger for Malta's financial services
"business model". Financial and insurance activities represented
8% of Maltese value added in 2011 (9% in Cyprus; 5% for the
eurozone on average), but this figure does not take into account
other sectors supporting this activity.

For Fitch's full analysis, see "Malta and Cyprus: Differences
Outweigh Similarities" at www.fitchratings.com.

"We rate Malta 'A+' with a Stable Outlook; Cyprus at 'B' on
Rating Watch Negative," Fitch says.



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


CADOGAN SQUARE: Moody's Affirms Rating on Cl. D Notes at 'Ba3'
--------------------------------------------------------------
Moody's Investors Service upgraded the ratings of the following
notes issued by Cadogan Square CLO B.V.:

EUR33.2M Class B Senior Secured Floating Rate Notes, Upgraded to
Aa2 (sf); previously on Jul 8, 2011 Upgraded to Aa3 (sf)

EUR31.2M Class C Senior Secured Deferrable Floating Rate Notes,
Upgraded to A3 (sf); previously on Jul 8, 2011 Upgraded to Baa1
(sf)

Moody's also affirmed the ratings of the following notes issued
by Cadogan Square CLO B.V.:

EUR185M (current balance is EUR122.8M) Class A-1 Senior Secured
Floating Rate Notes due 2022, Affirmed Aaa (sf); previously on
Jul 8, 2011 Upgraded to Aaa (sf)

EUR120.7M (current balance is EUR80.2M) Class A-2 Senior Secured
Floating Rate Notes due 2022, Affirmed Aaa (sf); previously on
Jul 8, 2011 Upgraded to Aaa (sf)

EUR27.4M Class D Senior Secured Deferrable Floating Rate Notes,
Affirmed Ba1 (sf); previously on Jul 8, 2011 Upgraded to Ba1 (sf)

EUR10.3M Class E Senior Secured Deferrable Floating Rate Notes,
Affirmed Ba3 (sf); previously on Jul 8, 2011 Upgraded to Ba3 (sf)

Cadogan Square CLO B.V., issued in December 2005, is a
Collateralized Loan Obligation ("CLO") backed by a portfolio of
mostly senior secured European loans. The portfolio is managed by
Credit Suisse First Boston Alternative Capital. This transaction
entered its amortization phase in February 2012.

Ratings Rationale:

According to Moody's, the rating actions taken on the notes
result primarily from the amortization of the Class A-1 and A-2
Notes, which have been paid down by approximately 32% of their
original balances, or EUR62.1M and EUR40.5M respectively since
the last rating action in July 2011.

As a result of the delevering of the transaction, the
overcollateralization ratios have improved since the rating
action in July 2011. As of the latest trustee report dated
February 2013, the Class A/B, C, D and E overcollateralization
ratios are reported at 140.84%, 124.41%, 112.85% and 109.04%
respectively compared to May 2011 levels of 131.19%, 120.13%,
111.85% and 109.03% respectively.

In its base case, Moody's analyzed the underlying collateral pool
to have a performing par and principal proceeds balance of EUR
332.75M, defaulted par of EUR 11.4M, a weighted average default
probability of 23.91% (consistent with a WARF ("Weighted Average
Rating Factor") of 3,526), a weighted average recovery rate upon
default of 45.38% for a Aaa liability target rating, a diversity
score of 34 and a weighted average spread of 4.02%. The default
probability is derived from the credit quality of the collateral
pool and Moody's expectation of the remaining life of the
collateral pool. The average recovery rate to be realized on
future defaults is based primarily on the seniority of the assets
in the collateral pool. For a Aaa liability target rating,
Moody's assumed that 87.53% of the portfolio exposed to senior
secured corporate assets would recover 50% upon default, while
the remainder non first-lien loan corporate assets would recover
10%. In each case, historical and market performance trends and
collateral manager latitude for trading the collateral are also
relevant factors. These default and recovery properties of the
collateral pool are incorporated in cash flow model analysis
where they are subject to stresses as a function of the target
rating of each CLO liability being reviewed.

Moody's has also corrected an error in the calculation of WARF
for these notes. The WARF calculation used in the previous rating
action was derived as a weighted average of the default
probability of each asset's rating at its own remaining life,
rather than the weighted average of the rating factor of each
asset combined with the weighted average life of the pool as
called for in the methodology. The rating action reflects the
corrected WARF calculation.

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

Deterioration of credit quality to address the refinancing and
sovereign risks -- Approximately 23.9% of the portfolio is rated
B3 and below with maturities between 2014 and 2016, which may
create challenges for issuers to refinance. The portfolio is also
exposed 12.77% to obligors located in Spain, Italy and Ireland.
Moody's considered the scenario where the WARF of the portfolio
was increased to 4,045 by forcing to Ca the credit quality of 25%
of such exposures subject to refinancing or sovereign risks. This
scenario generated model outputs that were up to one notch lower
than the base case results.

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

Sources of additional performance uncertainties:

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

2) Moody's also notes that 54% of the collateral pool consists of
debt obligations whose credit quality has been assessed through
Moody's credit estimates. Large single exposures to obligors
bearing a credit estimate have been subject to a stress
applicable to concentrated pools as per the report titled
"Updated Approach to the Usage of Credit Estimates in Rated
Transactions" published in October 2009.

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

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

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

The cash flow model used for this transaction, whose description
can be found in the methodology, is Moody's CDOEdge model.

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

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


CLARE ISLAND: Moody's Cuts Ratings on Two Note Classes to 'B3'
--------------------------------------------------------------
Moody's Investors Service downgraded the ratings of the following
notes issued by Clare Island B.V.:

EUR225M Class I Senior Floating Rate Notes, Affirmed Aaa (sf);
previously on Mar 25, 2002 Definitive Rating Assigned Aaa (sf)

EUR110.5M Class II Senior Floating Rate Notes, Affirmed A1 (sf);
previously on Sep 8, 2011 Upgraded to A1 (sf)

EUR15M Class III-A Mezzanine Fixed Rate Notes, Downgraded to Ba2
(sf); previously on Sep 8, 2011 Upgraded to Ba1 (sf)

EUR17M Class III-B Mezzanine Floating Rate Notes, Downgraded to
Ba2 (sf); previously on Sep 8, 2011 Upgraded to Ba1 (sf)

EUR8.3M Class IV-A Mezzanine Fixed Rate Notes, Downgraded to B3
(sf); previously on Sep 8, 2011 Upgraded to B1 (sf)

EUR18.2M Class IV-B Mezzanine Floating Rate Notes, Downgraded to
B3 (sf); previously on Sep 8, 2011 Upgraded to B1 (sf)

Ratings Rationale:

Clare Island B.V., issued in March 2002, is a Collateralized Loan
Obligation ("CLO") backed by a portfolio of high yield European
loans. It is predominantly composed of senior secured loans. The
portfolio is managed by GSO Capital Partners International LLP
since March 2011, replacing AIB Capital Markets plc. This
transaction passed its reinvestment period in March 2010.
However, the manager is able to reinvest some principal proceeds
subject to transaction specific reinvestment criteria.

According to Moody's, the rating actions taken on the notes
result primarily from the deterioration of the collateral
portfolio since the last rating action in 2011. In particular,
according to Moody's, the proportion of assets with a credit
quality consistent with a Caa rating increased from 8.9% to
15.5%. In addition, the Class III and Class IV
overcollateralization ratios calculated by Moody's decreased to
113.47% and 105.1%, respectively, from July 2011 levels of 114.2%
and 106.4%, respectively. The decrease in the
overcollateralization ratios has been slightly mitigated by the
impact of delevering of the deal as the Class I notes have been
paid down by approximately 38% or EUR80 million since the last
rating action

In its base case, Moody's analyzed the underlying collateral pool
to have a performing par and principal proceeds balance of EUR
322.34 million, cash of EUR 41.9 million, defaulted par of EUR
9.1 million, a weighted average default probability of 22.74%
with a weighted average life of 4.03 years, a weighted average
recovery rate upon default of 47.67% for a Aaa liability target
rating, a diversity score of 33 and a weighted average spread of
3.76%. The default probability is derived from the credit quality
of the collateral pool and Moody's expectation of the remaining
life of the collateral pool. The average recovery rate to be
realized on future defaults is based primarily on the seniority
of the assets in the collateral pool. For a Aaa liability target
rating, Moody's assumed that 94.2% of the portfolio exposed to
senior secured corporate assets would recover 50% upon default,
while the remainder non first-lien loan corporate assets would
recover 10%. In each case, historical and market performance
trends and collateral manager latitude for trading the collateral
are also relevant factors. These default and recovery properties
of the collateral pool are incorporated in cash flow model
analysis where they are subject to stresses as a function of the
target rating of each CLO liability being reviewed.

Moody's has also corrected an error in the calculation of WARF
for these notes. The WARF calculation used in the previous rating
action was derived as a weighted average of the default
probability of each asset's rating at its own remaining life,
rather than the weighted average of the rating factor of each
asset combined with the weighted average life of the pool as
called for in the methodology. The rating action reflects the
corrected WARF calculation.

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

(1) Deterioration of credit quality to address the refinancing
and sovereign risks -- Approximately 27% of the portfolio is
rated B3 and below with maturities between 2014 and 2016, which
may create challenges for issuers to refinance. The portfolio is
also exposed 11.7% to obligors located in Ireland and Spain.
Moody's considered the scenario where the WARF of the portfolio
was increased to 3,875 by forcing to Ca the credit quality of 25%
of such exposures subject to refinancing or sovereign risks. This
scenario generated model outputs that were approximately one
notch from the base case results.

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

Sources of additional performance uncertainties:

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

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

3) Moody's also notes that 54.2% of the collateral pool consists
of debt obligations whose credit quality has been assessed
through Moody's credit estimates. Large single exposures to
obligors bearing a credit estimate have been subject to a stress
applicable to concentrated pools as per the report titled
"Updated Approach to the Usage of Credit Estimates in Rated
Transactions" published in October 2009.

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

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

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

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

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

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


WILLY SELTEN: Declared Bankrupt After Horse Meat Scandal
--------------------------------------------------------
The Associated Press reports that a court in the eastern Dutch
city of Den Bosch court declared Willy Selten, a meat processing
plant and wholesaler suspected of mixing undeclared horse meat
with beef, bankrupt on Tuesday.

The company is at the center of a huge recall announced last week
of suspect beef across the European Union, the AP discloses.

A Dutch labor union requested the bankruptcy on behalf of workers
who had not been paid since February and can only claim
unemployment benefits once their employer has been declared
bankrupt, the AP relates.

Last week, the Netherlands Food and Consumer Product Safety
Authority called on 370 companies around Europe and 132 more in
the Netherlands to recall 50,000 tons of meat they bought from
Willy Selten, the AP recounts.



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


FAR-EASTERN SHIPPING: S&P Assigns Prelim. BB- Corp. Credit Rating
-----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB-' preliminary
long-term corporate credit rating to Russian integrated
logistics, rail, and port operator Far-Eastern Shipping Company
PLC (FESCO). The outlook is stable.

At the same time, S&P assigned its preliminary 'BB-' issue rating
to the proposed senior secured notes to be issued by Far East
Capital Limited S.A, a direct subsidiary of FESCO.  The final
amount will depend on market conditions, but S&P anticipates that
it will comprise two tranches of not less than US$300 million
each, noting that the preliminary offering memorandum assumes
gross proceeds from the issuance of the notes of US$800 million.
The preliminary recovery rating on the notes is '4', indicating
S&P's expectation of average (30%-50%) recovery in the event of a
payment default.

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

The rating reflects S&P's assessment of FESCO's business risk
profile as "fair" and its financial risk profile as "aggressive."

Specifically, the ratings reflect S&P's view that FESCO is
exposed to revenue volatility inherent to the freight
transportation industry, which is closely linked to the
volatility of the commodity-dependent Russian economy.  The
rating also reflects some uncertainty connected with the
liberalization of the rail transportation market, which S&P
considers could lead to an increase in competition in the medium
term.

The ratings derive support from FESCO's strong position in Russia
as an integrated rail, port, and logistics operator providing
services along the transportation chain.  Additional strengths
are the company's revenue diversification due to its various
businesses and large customer base, and its track record of
organic growth.

Under S&P's base-case operating scenario for 2013, it anticipates
11%-13% revenue growth, mainly attributable to growing container
volumes and tariff increases in the port segment, which will
offset a likely decline in fleet revenues in the rail business.
S&P forecasts that FESCO's EBITDA margin will improve to about
21% in 2013, as the company benefits from the larger contribution
of the higher-margin port segment following its acquisition of
the Commercial Port of Vladivostok in December 2012, and positive
effects of operational restructuring.

The preliminary issue ratings on the proposed senior secured
notes is 'BB-'.  This is in line with the corporate credit rating
on FESCO.  The preliminary recovery rating on these notes is '4',
indicating S&P's expectation of average (30%-50%) recovery
prospects in the event of a payment default.

S&P's preliminary issue and recovery ratings on the senior
secured notes are underpinned by S&P's valuation of the company
as a going concern.  This is based on the significant value of
the company's assets; the notes' guarantee; and the fair but not
comprehensive security package, which includes share pledges and
hard assets.

In order to determine recoveries, S&P simulates a hypothetical
default scenario.  S&P's scenario contemplates a default in 2016,
assuming a severe and prolonged slowdown of economic conditions,
particularly in Russia and Asia, resulting in lower-than-
anticipated growth in spending, and a significantly reduced
volume
of activities in all of FESCO's divisions.  Assuming these key
factors occur, FESCO's margins would suffer and, in S&P's view,
the company would be unable to meet the interest and amortization
repayment obligations under its OpCo facility A term loan.

At default, S&P assumes about $1 billion senior secured debt
outstanding, comprising the senior secured notes, the OpCo
facility A, various pre-existing loans, and six months of
prepetition interest.  Consequently, the recovery rating on the
senior secured notes is '4', indicating S&P's expectation of
average (30%-50%) recovery for noteholders in the event of a
payment default.

The stable outlook reflects S&P's anticipation that FESCO will
gradually deleverage in the short to medium term, based on S&P's
forecast of growth in the port business and the benefits of
operational restructuring over the next 12 months.  S&P also
believes that the company's operating resilience will enable it
to maintain an "adequate" liquidity position under S&P's
criteria.

S&P could take a negative rating action if the company's
anticipated earnings growth does not materialize such that debt
to EBITDA is more than 4x by year-end 2013.

S&P views the likelihood of a positive rating action as unlikely
in the next year given its views on the rate at which the company
will deleverage.


FAR-EAST SHIPPING: Fitch Assigns 'B+' LT Issuer Default Rating
--------------------------------------------------------------
Fitch Ratings has assigned Far-East Shipping Company PLC (FESCO)
a Long-term foreign currency Issuer Default Rating (IDR) of 'B+'
and an expected foreign currency senior unsecured rating of
'B+(EXP)' with a Recovery Rating of 'RR4'. The Outlook on the
Long-term IDR is Stable.

The ratings reflect FESCO's position as one of the leading
transportation and logistics companies in Russia with a growing
focus on its port operations in the Russian Far East and niche
market positions in rail. However, despite some diversification,
FESCO is likely to remain subject to volume and pricing
volatility, and in a sector of increased market consolidation,
its rail business potentially faces greater competition from its
larger rail transportation peers. Despite forecast improvement,
credit metrics are also considered weak.

In December 2012, the controlling shareholder of Summa Group and
one of the principal shareholders of the GHP Group indirectly
acquired 49.99% and 23.76% of FESCO's shares, respectively. TPG
subsequently acquired an indirect economic ownership interest of
17.5% in FESCO from the 49.99% interest held by the Summa Group's
controlling shareholder. These acquisitions were funded by a
mixture of equity and debt, including a US$400 million
acquisition-related OpCo loan raised at FESCO. The company
intends to issue bonds in two tranches of not less than US$300
million each, noting that the preliminary offering memorandum
assumes, for illustrative purposes, gross proceeds from the
issuance of the notes of US$800 million to refinance part of the
debt related to the acquisition financing and part of existing
indebtedness. This is expected to lead to FFO net adjusted
leverage in excess of 3.0x and FFO fixed charge cover of around
2.5x in the short term.

The expected senior secured notes have been assigned a senior
unsecured rating in line with company's IDR despite security
provided as part of the terms of the note agreements. This is due
to the agency's assessment of possible limitations realizing
collateral granted for the benefit of the noteholders.

The final ratings are subject to receipt of final documents
conforming materially to information already received including a
clearly defined back-up liquidity plan to ensure all short-term
maturities can be met.

KEY RATING DRIVERS

- Port Key to Business Profile

In March 2012, FESCO obtained full operational control over the
Commercial Port of Vladivostok, one of the largest ports in the
Russian Far East, albeit small in the context of global peers.
Combined with the disposal of a large proportion of the company's
loss-making shipping business in December 2012, this favorably
increases the company's exposure to higher-growth, higher-
margined businesses. Whilst not immune to cyclicality, the
company's Port business benefits from around 50% of origin and
destination volumes, which tend to be less subject to competition
given the terminal's proximity to the point of consumption and
distribution. Growth and margins in the Port division should
further benefit from increased integration between various
stevedoring companies and terminals within the Commercial Port of
Vladivostok, which until now has been operated as separate legal
entities, often competing with each other.

- Vladivostok a Gateway to Asia

Vladivostok port is geographically key in the importing of
consumer goods and exporting of commodities between Russia and
Asia with a population of approximately 400 million within a
1,000km radius. FESCO's market shares in the Russian Far East
region included 35% of all container handling and 15% of all bulk
cargos. Whilst the port is not dominant relative to other ports
in the Far East Basin, the Port of Vladivostok serves a large
proportion of regional domestic markets, given its more developed
rail networks, convenient access to the Trans-Siberian Railway
and regularly-scheduled cabotage lines.

- Intermodal and Niche Rail Operations

FESCO is one of the few Russian transportation companies to have
a full presence across the entire logistics chain, a key
differentiator to peers. Whilst peers are also intensifying their
focus in this respect, they tend to lack a presence in either
port or shipping operations, which puts them at a competitive
disadvantage. FESCO is one of the top 10 private railcar
operators in Russia by number of railcars, with a market share of
more than 40% in the Yakutia region, an area accounting for
approximately 50% of Russia's total coal reserves. In addition,
FESCO operates one of the largest fleet in the Ukraine.

- GDP to Drive Growth

FESCO's growth is expected to be driven by continued moderate to
high GDP growth rates in both Russia and Asia, as well as the
continuing trend towards further containerization of cargo flows.
Railroads are also expected to remain the main means of cargo
transportation. Fitch forecasts that Russia and China's GDP
should continue to grow at around 3.2% and 8.0%, respectively in
FY13, and these levels should ensure relatively strong demand for
Russian commodities and exports in the near term as well as the
imports of consumer and industrial goods to the Russian Far East.
The growth of rail freight turnover has on average tended to be
around 1% below that of real GDP since 2002, whilst the Russian
container market has witnessed growth of around 3x GDP since the
2009 crisis due to Russia's relatively low containerization
levels.

- Cyclicality Remains a Risk

Whilst GDP growth is forecast to continue in the medium term, the
volatility of FESCO's earnings remains a key risk. Towards the
end of 2012, growth in Russian container volumes slowed. Rail
tariffs are also expected to be weaker relative to the higher
levels in FY12. Fitch emphasizes that further deceleration of the
global economy could translate into tangibly reduced railway
transportation and container throughput volumes at the Port of
Vladivostok.

- Diversified but Commodity Exposure

FESCO is relatively well-diversified in terms of cargo types,
facilitated by its balanced and flexible fleet portfolio, but in
common with some of its rail peers, commoditized goods including
coal, iron ore and construction materials dominate its rail
division, comprising around 77% of total volumes transported by
rail. FESCO's Port and Liner and Logistics divisions provide the
group with greater exposure to higher-value goods, as well as
diversity in terms of geographical markets. Although bulk cargo
is skewed towards exports, given Asia's demand for raw materials,
trade flows in terms of container throughput are relatively well-
balanced.

- Moderate Customer Diversification

Although FESCO's customer base is relatively broad (around 1,500
customers spanning a variety of industries and of relatively good
quality) it exhibits greater concentration relative to peers,
particularly in the rail division where the five largest direct
clients of the Rail Division accounted for around 38% of the
division's revenues.

- Rail Market Consolidation a Threat

Fitch expects competition in the rail sector to intensify due to
further market consolidation in the coming years as economies of
scale become more important and expansion demands greater capital
expenditure. Relative to its rail peers, FESCO has a smaller
fleet, limited rail container terminals and given its niche
focus, its rail network is also less extensive. With greater
competition this could lead to erosion of FESCO's rail market
shares and margins in bulk and general cargo operations. However,
its current stake in TransContainer is a partial mitigant to
this.

- Potential Competition to Vladivostok Port

Growth in the trade flows between Russia and Asia is expected to
lead to increased capacity in the region, including significant
expansion by Vostochnaya Stevedoring Company (VSC), Vladivostok's
main competitor with 30% of regional container volumes.
Vladivostok's own market share in terms of container traffic
flows decreased to 34.6% in FY12 from 39.2% in FY10, and VSC's
plans to quadruple capacity to TEU2.2 billion compared with
Vladivostok's intentions to increase capacity to 650,000 TEU may
place further pressure on this. However, unlike Vladivostok,
VSC's volumes are primarily focused on serving international
cargo flows, with the majority of its import volumes transported
to the central and western regions of Russia, including Moscow, a
less captive market for Vladivostok.

- Credit Metrics Major Rating Constraint

Net FFO adjusted leverage and FFO fixed charge cover are
currently considered weak on account of the issuance of the
bonds, which will be used to partially refinance the Consortium's
acquisition of FESCO. In FY13, leverage is forecast to be around
4.2x and FFO fixed charge cover is expected to be around 2.0x,
considerably weaker than rail transportation peers. However, the
agency recognizes the marginally stronger business profile of the
Port business and due to strong forecasted cash flows, expects
these metrics to strengthen to more commensurate levels of around
3.5x leverage and around 2.5x FFO fixed charge cover by FY14.
However, cash flows are contingent on continued high growth
rates, substantial cost-efficiencies, particularly in the Port
division, and moderate capex levels.

Management has confirmed its intention to delever to below 2.5x
net debt/EBITDA over the next 18 months and does not intend to
distribute dividends in the medium term. FESCO has been
historically acquisitive in the past but has used disposal
proceeds to partially fund these.

- Senior Secured Notes Rated as Unsecured

The senior secured notes have been assigned an expected senior
unsecured rating in line with company's IDR despite security
provided as part of the terms of the note agreements. This is due
to the agency's assessment of possible limitations realizing
collateral in Russia granted for the benefit of the noteholders.
Fitch's view of recovery upon default is reflected in the 'RR4'
Recovery Rating.

The senior secured notes will rank pari passu to all existing and
future secured debt, benefit from cross-default provisions
(within a threshold set at US$30 million) and be guaranteed by
the majority of the company's operating companies. The Commercial
Port of Vladivostok is expected to accede as a guarantor shortly
after the issuance of the bonds.

Security comprises an expected US$560 million of hard asset
security including railcars, buildings and containers (exact
constituents of the hard asset security package to be defined
within 180 days of bond issue date) as well as share pledges over
various holdings in the group including the company's main
operating subsidiaries. Fitch highlights that debt issued at
entities that do not act as guarantors will be structurally
senior to the notes. Structurally senior debt is expected to
total US$69 million but has been taken into consideration in
Fitch's recovery analysis.

LIQUIDITY & DEBT STRUCTURE


- Adequate Liquidity

Short-term maturities as at FY12 amounted to US$219 million. Of
this amount, up to US$120 million of debt will be funded by the
proposed bond issuances, ensuring that US$99 million will be more
than sufficiently covered by FY12 cash and cash equivalents of
US$232 million. FESCO is expected to have undrawn committed
credit facilities of approximately US$10 million. However, US$8.4
million is forecast to expire in FY13.

Where FESCO raises funds closer to US$600 million, liquidity
headroom will be tighter, although Fitch expects cash and
positive free cash flow generation would remain sufficient to
cover short-term debt including the US$120 million of debt that
was to have been funded by the bond issuances. Fitch understands
that proceeds raised by the bond issuances will first and
foremost be used to refinance the US$400 million HoldCo loan.

- Covenant Headroom under OpCo Loan

Headroom in the cash flow cover covenant under the acquisition-
related OpCo Loan in FY15 and FY16 is tight. This is given
continually high interest payments and a tightening in the cash
flow covenant to exclude cash and cash equivalents. Adherence to
this covenant will be dependent on the company's ability to
generate strong cash flows and delever to keep interest payments
to a minimum. However, Fitch considers headroom under the net
debt/ EBITDA and interest cover financial covenants to be
sizeable.

Financial covenants per the acquisition-related OpCo Loan also
restrict dividend payments until the company delevers to 2.5x net
debt/EBITDA. This provides noteholders with some comfort over the
company's intention and ability to delever, although Fitch
emphasizes that the acquisition-related OpCo Loan matures in
December 2017 before the maturities of the notes and FESCO has
the option to repay the acquisition-related OpCo Loan early.
Amendments have already been made to the cash flow covenant to
ensure this was not breached in FY13 and FY14.

RATING SENSITIVITIES

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

- A sustainable improvement in FFO net adjusted leverage to
   below 3.0x and FFO fixed charge cover trending towards 3.0x.

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

- A deterioration in FFO net adjusted leverage to around 4.0x
   and FFO fixed charge cover consistently below 2.0x given lower
   than expected growth and/or efficiency-savings in the port
   division and/or material debt-funded acquisitions or
   dividends.

- Failure to raise bonds proceeds of at least US$600 million or
   to provide a well-defined back-up liquidity management plan

- Signs of increased competition or greater volatility of
   earnings in the port and/or rail business.

FULL LIST OF RATINGS

-- Long-term foreign currency IDR: B+/Stable
-- Long-term local currency IDR: B+/Stable
-- National Long-Term Rating: A(rus)/Stable
-- Expected foreign currency senior unsecured rating: 'B+(EXP)'
-- Local currency senior unsecured rating: 'B+'


GE MONEY: Moody's Affirms 'Ba2' Long-Term Deposit Ratings
---------------------------------------------------------
Moody's Investors Service affirmed the Ba2 long-term local- and
foreign-currency deposit ratings of GE Money Bank CJSC (Russia),
as well as the standalone bank financial strength rating (BFSR)
of E+, equivalent to a baseline credit assessment (BCA) of b1.
The bank's Not Prime short-term local- and foreign-currency
deposit ratings were also affirmed. The outlook on the bank's
standalone BFSR and its long-term ratings is stable.

Moody's assessment is primarily based on GE Money Bank CJSC's
unaudited financial statements at year-end 2012 prepared under
IFRS, audited financial statements for 2011 prepared under IFRS,
its unaudited financial statements for full-year 2012 prepared
under Russian Accounting Standards (RAS), and public information.

Ratings Rationale:

Moody's affirmation of GE Money Bank CJSC's E+ standalone BFSR
takes into account the bank's concentrated business model
(focusing on higher-risk retail lending), significant exposure to
the risk of strategic fit to the parent, which is amplified by
the bank's significant dependence on parental funding. At the
same time, the standalone BFSR is supported by the bank's
adequate risk appetite, good capitalization, strong liquidity
profile and reasonable profitability.

GE Money Bank CJSC is a consumer finance bank that has a market
share of less than 1% of Russian system retail loans, with the
main focus on personal loans (65% of the total loan portfolio at
year-end 2012) and credit cards (23%). Moody's notes that such
concentration of business exposes the bank to the performance of
the retail segment which is becoming increasingly competitive and
is highly susceptible to crisis events as was demonstrated during
the 2008-09 financial crisis. GE Money Bank CJSC funds its loan
book primarily via parental funding and equity, which together
funded approximately 70% of total assets.

The rating agency also observes that GE Money Bank CJSC's
appetite for credit growth has been limited compared to its many
Russian peers (some with growth rates above 100% per annum), as
reflected in a compound annual growth rate of around 10%-11%
since year-end 2009. GE Money Bank CJSC's modest risk appetite is
established and controlled by the parent, therefore the bank does
not operate at a high leverage, as reflected a total capital
ratio at 20% at year-end 2012 (historically over 20% during the
past three years).

GE Money Bank CJSC's liquidity management has historically been
strong, and benefits from strong and stable parental funding. The
bank's short-term assets (less than three months) plus unused
committed lines from the parent cover over 90% of the bank's
third-party liabilities.

Given the increase in risk costs due to deteriorating lending
conditions on the Russian market, GE Money Bank CJSC's
profitability declined in 2012 compared to 2011, when it reported
a return on average assets (RoAA) of 10%. At the same time,
profitability has been adequate as a result of GE Money Bank
CJSC's high-margin business (net interest margin above 20% in
2012), which enabled the bank to achieve a high 4% RoAA in 2012
according to internal accounts. Moody's expects GE Money Bank
CJSC to maintain reasonable RoAA -- at above 2% in 2013 -- given
(1) the modest expansion plans, which will enable the bank to
contain its cost base; and (2) the recent tightening of
underwriting standards which would prevent significant increase
in costs of risk.

Supported Rating

GE Money Bank CJSC's global local currency (GLC) deposit rating
of Ba2 is based on the bank's BCA of b1 and two notches of
parental support uplift from GE Capital (A1 stable). Moody's
assesses a moderate probability of support to GE Money Bank CJSC
from GE Capital in case of need, based on the former's full
integration into the parent's operations, its limited size and
reputation considerations.

What Could Change the Ratings Up/Down

Positive rating actions will depend on GE Money Bank CJSC's
success in business diversification and achieving economies of
scale, while at the same time keeping credit risks, liquidity and
operating costs under control. Sound capitalization and sustained
profitability could also have positive rating implications. The
long-term ratings could also be upgraded if GE Capital's
strategic commitment towards GE Money Bank CJSC is significantly
strengthened.

A further significant decline in profitability (as already
witnessed in 2012) could have downward rating implications as
would any significant deterioration in GE Money Bank CJSC's
capitalization, liquidity profile or asset base. A significant
loss of market share or material contraction in business volumes
would also weaken the bank's franchise, possibly triggering
negative rating actions. Signs of weaker strategic commitment
from GE Capital will lead to a decrease of parental support
uplift. Any notches of parental support uplift from GE Capital
will be fully eliminated if the shareholder disposes of its
controlling stake in GE Money Bank CJSC.

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

Domiciled in Moscow, Russia, GE Money Bank CJSC reported -- as at
December 31, 2012 -- total preliminary IFRS (unaudited) assets of
approximately $960 million and total equity of approximately
US$300 million. The bank's net income amounted to approximately
US$30 million for 2012.


GE MONEY: Moody's NSR Reflects 'Ba2' Global Scale Rating
--------------------------------------------------------
Moody's Interfax Rating Agency affirmed the long-term national
scale credit rating (NSR) of GE Money Bank CJSC (Russia) at
Aa2.ru.

Moody's Interfax's assessment is primarily based on GE Money Bank
CJSC's unaudited financial statements at year-end 2012 prepared
under IFRS, audited financial statements for 2011 prepared under
IFRS, its unaudited financial statements for full-year 2012
prepared under Russian Accounting Standards (RAS), and public
information.

Ratings Rationale:

GE Money Bank CJSC's Aa2.ru NSR maps to the Ba2 global scale
long-term local-currency rating assigned by Moody's Investors
Service. GE Money Bank CJSC's global local currency (GLC) deposit
rating of Ba2 is based on the bank's BCA of b1 and two notches of
parental support uplift from GE Capital (A1 stable). Moody's
assesses a moderate probability of support to GE Money Bank CJSC
from GE Capital in case of need, based on the former's full
integration into the parent's operations, its limited size and
reputation considerations.

Moody's Interfax's affirmation of GE Money Bank CJSC's rating
takes into account the bank's concentrated business model
(focusing on higher-risk retail lending), significant exposure to
the risk of strategic fit to the parent, which is amplified by
the bank's significant dependence on parental funding. At the
same time, the rating is supported by the bank's adequate risk
appetite, good capitalization, strong liquidity profile and
reasonable profitability.

GE Money Bank CJSC is a consumer finance bank that has a market
share of less than 1% of Russian system retail loans, with the
main focus on personal loans (65% of the total loan portfolio at
year-end 2012) and credit cards (23%). Moody's notes that such
concentration of business exposes the bank to the performance of
the retail segment which is becoming increasingly competitive and
is highly susceptible to crisis events as was demonstrated during
the 2008-09 financial crisis. GE Money Bank CJSC funds its loan
book primarily via parental funding and equity, which together
funded approximately 70% of total assets.

The rating agency also observes that GE Money Bank CJSC's
appetite for credit growth has been limited compared to its many
Russian peers (some with growth rates above 100% per annum), as
reflected in a compound annual growth rate of around 10%-11%
since year-end 2009. GE Money Bank CJSC's modest risk appetite is
established and controlled by the parent, therefore the bank does
not operate at a high leverage, as reflected a total capital
ratio at 20% at year-end 2012 (historically over 20% during the
past three years).

GE Money Bank CJSC's liquidity management has historically been
strong, and benefits from strong and stable parental funding. The
bank's short-term assets (less than three months) plus unused
committed lines from the parent cover over 90% of the bank's
third-party liabilities.

Given the increase in risk costs due to deteriorating lending
conditions on the Russian market, GE Money Bank CJSC's
profitability declined in 2012 compared to 2011, when it reported
a return on average assets (RoAA) of 10%. At the same time,
profitability has been adequate as a result of GE Money Bank
CJSC's high-margin business (net interest margin above 20% in
2012), which enabled the bank to achieve a high 4% RoAA in 2012
according to internal accounts. Moody's expects GE Money Bank
CJSC to maintain reasonable RoAA -- at above 2% in 2013 -- given
(1) the modest expansion plans, which will enable the bank to
contain its cost base; and (2) the recent tightening of
underwriting standards which would prevent significant increase
in costs of risk.

What Could Change the Ratings Up/Down

Positive rating actions will depend on GE Money Bank CJSC's
success in business diversification and achieving economies of
scale, while at the same time keeping credit risks, liquidity and
operating costs under control. Sound capitalization and sustained
profitability could also have positive rating implications. The
NSR could also be upgraded if GE Capital's strategic commitment
towards GE Money Bank CJSC is significantly strengthened.

A further decline in profitability (as already witnessed in 2012)
could have downward rating implications as would any significant
deterioration in GE Money Bank CJSC's capitalization, liquidity
profile or asset base. A significant loss of market share or
material contraction in business volumes would also weaken the
bank's franchise, possibly triggering negative rating actions.
Signs of weaker strategic commitment from GE Capital will lead to
a decrease of parental support uplift. Any notches of parental
support uplift from GE Capital will be fully eliminated if the
shareholder disposes of its controlling stake in GE Money Bank
CJSC.

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

Domiciled in Moscow, Russia, GE Money Bank reported -- as at
December 31, 2012 -- total preliminary IFRS (unaudited) assets of
approximately US$960 million and total equity of approximately
US$300 million. The bank's net income amounted to approximately
US$30 million for 2012.

Moody's Interfax Rating Agency's National Scale Ratings (NSRs)
are intended as relative measures of creditworthiness among debt
issues and issuers within a country, enabling market participants
to better differentiate relative risks. NSRs differ from Moody's
global scale ratings in that they are not globally comparable
with the full universe of Moody's rated entities, but only with
NSRs for other rated debt issues and issuers within the same
country. NSRs are designated by a ".nn" country modifier
signifying the relevant country, as in ".ru" for Russia.


MECHEL OAO: Posts US$1.7-Billion Net Loss in 2012
-------------------------------------------------
Mechel OAO on April 15 reported financial results for the full
year 2012.

The net revenue in 2012 decreased by 10.1% and amounted to
US$11.3 billion compared to US$12.5 billion in 2011.  The
operating loss amounted to US$897.9 million or -8% of the net
revenue, compared to the operating income of US$1,840.1 million
or 14.7% of the net revenue in 2011.

In 2012 Mechel's consolidated net loss attributable to
shareholders of Mechel OAO comprised US$1.7 billion compared to
the net income of US$727.9 million in 2011.  Excluding the
effects of impairment of long-lived assets and goodwill, loss
from discontinued operations and provision for amounts due from
related parties (net of deferred taxes related to non controlling
interests) the adjusted net profit amounts to US$23.0 million in
2012.

                        Financial Position

Capital expenditure on property, plant and equipment and
acquisition of mineral licenses for the FY2012 amounted to
US$1,028.8 million, of which US$612.2 million was invested in the
mining segment, US$360.6 million was invested in the steel
segment, US$46.3 million was invested in the ferroalloy segment
and $9.7 million was invested in the power segment.

As of December 31, 2012, total debt was US$9.4 billion. Cash and
cash equivalents amounted to US$295 million and net debt amounted
to US$9.1 billion (net debt is defined as total debt outstanding
less cash and cash equivalents) at end of 4Q 2012.

Evgeny Mikhel, Mechel OAO's Chief Executive Officer, commented on
the 2012 financial results:

"Last year the Group operated as key markets for mining products
continued to weaken against a background of general world
economic volatility.  This is reflected in the worsening of the
financial results of our main activities, as well as the need to
book reserves and make several significant write-offs.  At the
same time, with respect to most of our key operational indicators
Mechel demonstrated positive dynamics in 2012.  Last year we also
managed to do much for further improvement going forward.  It is
important that despite negative pricing trends our efforts at
optimizing our sales and product mix as well as working capital
management lead to a record operating cash flow of more than $1.3
bn, which allowed to finance our entire CAPEX at the same time
repaying some debt.

"In line with the renewed strategy, aimed at deleveraging, we
have already sold a large number of those assets that had the
most negative impact on our financial results.  We continue talks
on selling the remainder of our non-strategic assets.  We were
also successful in improving our debt structure and continue
working on it by decreasing the share of short-term debt.  We are
sure that the steps we are undertaking with a focus on maximizing
shareholder value, will have their positive effect very shortly."

A copy of Mechel's earnings release for the full year ended
December 31, 2012 is available for free at http://is.gd/SZcLdA

                       Waivers & Amendments

As reported by the Troubled Company Reporter on April 8, 2013,
Mechel on April 4 disclosed that it reached an agreement
with an international syndicate of lender banks on getting
approval for waivers and amendments to certain major credit
facilities.  Mechel's talks with over 25 leading international
and Russian banks regarding some financial covenants its
subsidiary Mechel Mining expected to breach under its US$1
billion pre-export
facility due to uncertain market conditions and a period of
decline in market prices for its products, were successfully
completed in a very short time.

                          About Mechel OAO

Based in Moscow, Russia, Mechel -- http://www.mechel.com-- is
one of the leading Russian companies.  Its business includes four
segments: mining, steel, ferroalloy and power.  Mechel unites
producers of coal, iron ore concentrate, steel, rolled products,
ferroalloys, hardware, heat and electric power.  Mechel products
are marketed domestically and internationally.

                            *     *     *

As reported by the Troubled Company Reporter-Europe on March 20,
2013, Moody's Investors Service downgraded Mechel OAO's corporate
family rating and probability of default rating to B3 and B3-PD
from B2 and B2-PD, respectively, and changed the outlook on the
rating to negative from stable.  "We have downgraded Mechel's
ratings to B3 and changed the outlook to negative because of the
group's high leverage, its impending breach of financial
covenants and uncertainties surrounding their renegotiation, as
well as low coking coal prices and the challenges this presents
for the group given its limited liquidity and high level of
refinancing risk," says Denis Perevezentsev, a Moody's Vice
President and lead analyst for Mechel.  "The downgrade and
outlook change also reflect our understanding that Mechel's
metrics are likely to be under pressure over the next 12-18
months, and that it will take some time for the group to
implement its strategy regarding the
disposal of non-core assets given the challenging market
conditions."


NET ELEMENT: Incurs US$16.4-Mil. Net Loss in 2012
-------------------------------------------------
Net Element International, Inc., filed on April 12, 2013, its
annual report on Form 10-K for the year ended Dec. 31, 2012.

BDO USA, LLP, in Miami, expressed substantial doubt about Net
Element International, Inc.'s ability to continue as a going
concern, citing the Company's recurring losses from operations
and use of substantial amounts of cash to fund its operating
activities.

The Company reported a net loss of US$16.4 million on US$1.4
million of revenues in 2012, compared with a net loss of US$24.9
million on US$183,179 of revenues in 2011.

The Company's balance sheet at Dec. 31, 2012, showed US$28.4
million in total assets, US$11.4 million in total liabilities,
and stockholders' equity of US$17.0 million.

A copy of the Form 10-K is available at http://is.gd/dHslrE

Net Element International, Inc. (NASDAQ: NETE) is a global
technology-driven group specializing in electronic commerce and
mobile payments.  The Company owns and operates a mobile payments
company, TOT Money, as well as several popular content
monetization verticals.  Together with its subsidiaries, Net
Element International enables ecommerce and content-management
companies to monetize their assets in ecommerce and mobile
commerce environments.  Its global development centers and high-
level business relationships in the United States, Russia and
Commonwealth of Independent States strategically position the
company for continued growth.  The company has U.S. headquarters
in Miami and international headquarters in Moscow.


NOMOS BANK: Moody's Gives 'Ba2' Bank Deposits Rating
----------------------------------------------------
Moody's Interfax Rating Agency affirmed the Aa3.ru national scale
rating (NSR) of Nomos Bank. The NSRs carry no specific outlooks.

Ratings Rationale:

The affirmation of Nomos Bank's ratings takes into account (1)
the bank's established position in the corporate segment and
strong presence in some Russian regions; (2) good asset quality;
and (3) sound profitability metrics.

However, these positive rating drivers are somewhat offset by
Nomos Bank's (1) high single- and related-party exposures; (2)
modest core capital buffer; and (3) high reliance on market
sources for funding.

The rating affirmation also reflects the planned merger between
Nomos Bank and Otkritie Commercial Bank (not rated), a core asset
of Otkritie Financial Corporation (not rated). The latter will
likely become Nomos Bank's controlling shareholder by YE2013.

Key Rating Drivers

With total assets (under audited IFRS) of RUB900 billion ($29.5
billion) at YE2012, Nomos Bank ranks among the top 10 banking
groups in Russia with a 2% market share (based on total assets).
This, along with its entrenched position in Khanty-Mansiysk
region, recognized brand name and approximately 300 branches
nationwide, underpins the bank's franchise and enables it to
attract major corporate clients, whilst preserving a high net
interest margin and low (compared to Russian peers) operating
expenses.

Nomos Bank reported a strong pre-provision income in 2012, with
return on average assets of 1.9% and return on average equity of
18.1%. Moreover, Nomos Bank's high profitability would allow the
bank to absorb potential credit and market losses as estimated
under Moody's central scenario.

At YE2012, the level of Nomos Bank's problem loans(defined in the
bank's financial report as "doubtful" in the corporate segment,
and 90+ days overdue in the retail segment) was one of the lowest
in the banking sector and stood at 3.1% of gross loans (2011:
3.3%; 2010: 4.5% and 2009: 8.0%). Moody's Interfax expects that
problem loans will moderately increase in 2013, as the bank's
loan book starts to season following its rapid growth in 2011 and
2012 .

Moody's Interfax regards Nomos Bank's Basel I Tier 1 capital
adequacy ratio (CAR) of 10.8% as rather low in the context of
high single- and related-party exposures. At YE2012, related-
party loans totaled RUB32.4 billion ($1.5 billion), or 37% of the
bank's Tier 1 capital. In addition, Nomos Bank's 20 largest
credit exposures exceeded 200% of Tier 1 capital, with some of
the largest loans provided to companies active in acquisitions,
project finance, and to the real estate and construction sectors.

As at YE2012, the loan-to-deposits ratio was 125%, while over 40%
of the bank's total funding was attracted from the market (`due
to banks', bond issuance, subordinated debt and promissory
notes). Moody's notes that high reliance on wholesale funding
renders the bank vulnerable to refinancing risk or to tightening
liquidity conditions in the sector.

Merger Plans With Otkritie Commercial Bank

Moody's Interfax believes that Nomos Bank will moderately benefit
from the planned merger with Otkritie Commercial Bank, as 'post-
merger' Nomos Bank might achieve (1) a somewhat higher
diversification of its funding profile due to decreased reliance
on wholesale funding; (2) a marginally higher Tier 1 CAR; (3) a
stronger net interest margin; and (4) increased business(towards
retail and SME) and geographical diversification as Otkritie
Commercial Bank will add around 200 branches to Nomos Bank's
network.

At the same time, the credit-positive aspects could be offset by
shareholder-related risks and operational challenges for Nomos
Bank. In particular, Moody's Interfax sees potential risks that
Nomos Bank might be directly exposed to prospective majority
shareholder, Otkritie Financial Corporation, a highly leveraged
group of companies with a low 6.7% equity-to-assets ratio as at
YE2011. The rating agency considers that in case Otkritie
Financial Corporation encounters financial difficulties, they
might negatively affect the financial profile of Nomos Bank. The
merger will also expose the bank to high operational risks
typical for M&A activities in Russia.

In light of the risks and challenges involved with a merger that
will position the new entity as one of the leading banks in
Russia, Moody's Interfax will continue to closely monitor the
conditions under which this project will be carried out in the
months to come.

What Could Change The Ratings Up/Down

Nomos Bank's ratings could be downgraded in case of a material
increase in exposure to Otkritie Financial Corporation and its
affiliated companies.

Nomos Bank's current strategy to merge with Otkritie Commercial
Bank and to diversify into SME and retail segments may positively
impact the bank's standalone financial strength if associated
with sound financial fundamentals and healthy capital adequacy.

Principal Methodology

The methodologies used in this rating were Moody's Consolidated
Global Bank Rating Methodology published in June 2012, and
Mapping Moody's National Scale Ratings to Global Scale Ratings
published in October 2012.

Moody's carries these ratings on Nomos Bank:

LT Bank Deposits (Foreign); Ba3
LT Bank Deposits (Domestic); Ba3
Senior Unsecured (Foreign); Ba3
Senior Unsecured (Domestic); Ba3
Subordinate (Foreign); B1

Domiciled in Moscow, Russia, Nomos Bank reported total assets of
RUB900 billion ($29.6 billion) at YE2012 under IFRS (audited), up
36% compared to YE2011. The bank's net profit totaled RUB15.0
billion ($494 million) in 2012, a 24% increase compared to 2011.

Moody's Interfax Rating Agency's National Scale Ratings (NSRs)
are intended as relative measures of creditworthiness among debt
issues and issuers within a country, enabling market participants
to better differentiate relative risks. NSRs differ from Moody's
global scale ratings in that they are not globally comparable
with the full universe of Moody's rated entities, but only with
NSRs for other rated debt issues and issuers within the same
country. NSRs are designated by a ".nn" country modifier
signifying the relevant country, as in ".ru" for Russia.


NOMOS BANK: Moody's Affirms 'Ba3' Long-Term Deposit Ratings
-----------------------------------------------------------
Moody's Investors Service affirmed the Ba3 long-term local- and
foreign-currency debt and deposit ratings of Nomos Bank (Russia),
as well as the standalone bank financial strength rating (BFSR)
of D-, equivalent to a baseline credit assessment (BCA) of ba3.
The bank's Not Prime short-term local- and foreign-currency
deposit and the B1 foreign currency subordinated debt ratings
were also affirmed. The outlook on the bank's BFSR and the long-
term ratings is stable.

Ratings Rationale:

Moody's affirmation of Nomos Bank's ratings takes into account
(1) the bank's established position in the corporate segment and
strong presence in some Russian regions; (2) good asset quality;
and (3) sound profitability metrics.

However, these positive rating drivers are somewhat offset by
Nomos Bank's (1) high single- and related-party exposures; (2)
modest core capital buffer; and (3) high reliance on market
sources for funding.

The rating affirmation also reflects the planned merger between
Nomos Bank and Otkritie Commercial Bank (not rated), a core asset
of Otkritie Financial Corporation (not rated). The latter will
likely become Nomos Bank's controlling shareholder by YE2013.

Key Rating Drivers

With total assets (under audited IFRS) of RUB900 billion ($29.5
billion) at YE2012, Nomos Bank ranks among the top 10 banking
groups in Russia with a 2% market share (based on total assets).
This, along with its entrenched position in Khanty-Mansiysk
region, recognized brand name and approximately 300 branches
nationwide, underpins the bank's franchise and enables it to
attract major corporate clients, whilst preserving a high net
interest margin and low (compared to Russian peers) operating
expenses.

Nomos Bank reported a strong pre-provision income in 2012, with
return on average assets of 1.9% and return on average equity of
18.1%. Moreover, Nomos Bank's high profitability would allow the
bank to absorb potential credit and market losses as estimated
under Moody's central scenario.

At YE2012, the level of Nomos Bank's problem loans(defined in the
bank's financial report as "doubtful" in the corporate segment,
and 90+ days overdue in the retail segment) was one of the lowest
in the banking sector and stood at 3.1% of gross loans (2011:
3.3%; 2010: 4.5% and 2009: 8.0%). Moody's expects that problem
loans will moderately increase in 2013, as the bank's loan book
starts to season following its rapid growth in 2011 and 2012 .

Moody's regards Nomos Bank's Basel I Tier 1 capital adequacy
ratio (CAR) of 10.8% as rather low in the context of high single-
and related-party exposures. At YE2012, related-party loans
totaled RUB32.4 billion ($1.5 billion), or 37% of the bank's Tier
1 capital. In addition, Nomos Bank's 20 largest credit exposures
exceeded 200% of Tier 1 capital, with some of the largest loans
provided to companies active in acquisitions, project finance,
and to the real estate and construction sectors.

As at YE2012, the loan-to-deposits ratio was 125%, while over 40%
of the bank's total funding was attracted from the market (`due
to banks', bond issuance, subordinated debt and promissory
notes). Moody's notes that high reliance on wholesale funding
renders the bank vulnerable to refinancing risk or to tightening
liquidity conditions in the sector.

Merger Plans with Otkritie Commercial Bank

Moody's believes that Nomos Bank will moderately benefit from the
planned merger with Otkritie Commercial Bank, as 'post-merger'
Nomos Bank might achieve (1) a somewhat higher diversification of
its funding profile due to decreased reliance on wholesale
funding; (2) a marginally higher Tier 1 CAR; (3) a stronger net
interest margin; and (4) increased business(towards retail and
SME) and geographical diversification as Otkritie Commercial Bank
will add around 200 branches to Nomos Bank's network.

At the same time, the credit-positive aspects could be offset by
shareholder-related risks and operational challenges for Nomos
Bank. In particular, Moody's sees potential risks that Nomos Bank
might be directly exposed to prospective majority shareholder,
Otkritie Financial Corporation, a highly leveraged group of
companies with a low 6.7% equity-to-assets ratio as at YE2011.
The rating agency considers that in case Otkritie Financial
Corporation encounters financial difficulties, they might
negatively affect the financial profile of Nomos Bank. The merger
will also expose the bank to high operational risks typical for
M&A activities in Russia.

In light of the risks and challenges involved with a merger that
will position the new entity as one of the leading banks in
Russia, Moody's will continue to closely monitor the conditions
under which this project will be carried out in the months to
come.

What Could Change The Ratings UP/DOWN

Nomos Bank's ratings could be downgraded in case of a material
increase in exposure to Otkritie Financial Corporation and its
affiliated companies.

Nomos Bank's current strategy to merge with Otkritie Commercial
Bank and to diversify into SME and retail segments may positively
impact the bank's standalone financial strength if associated
with sound financial fundamentals and healthy capital adequacy.

Principal Methodology

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

Domiciled in Moscow, Russia, Nomos Bank reported total assets of
RUB900 billion (US$29.6 billion) at YE2012 under IFRS (audited),
up 36% compared to YE2011. The bank's net profit totaled RUB15.0
billion (US$494 million) in 2012, a 24% increase compared to
2011.


POLYUS GOLD: S&P Assigns Prelim. 'BB+' Corporate Credit Rating
--------------------------------------------------------------
Standard & Poor's Ratings Services said that it assigned its
preliminary 'BB+' long-term corporate credit rating to Russia-
based gold miner Polyus Gold International Ltd.  The outlook is
positive.

At the same time, S&P assigned its preliminary 'BB+' issue rating
to Polyus' proposed senior unsecured notes.  The preliminary
recovery rating on the notes is '3', indicating S&P's expectation
of meaningful (50%-70%) recovery in the event of a payment
default.

The ratings are based on the draft documents S&P has received,
and are subject to its review of the final terms and conditions.
Any material changes to these terms and conditions could affect
the ratings.

The ratings on Polyus reflect S&P's assessment of the company's
"fair" business risk profile and "significant" financial risk
profile, as S&P's criteria define these terms.

S&P's assessment of Polyus' "fair" business risk profile reflects
its view of the company's position as the eighth-largest gold
producer in the world and the largest gold miner in Russia, with
production of 1.7 million ounces (Moz) of gold in 2012 across six
mines and alluvial operations.  Further strengths are Polyus'
long reserves life of more than 20 years and prevailing strong
gold prices.

These strengths are partially mitigated by Polyus' exposure to a
single commodity; country risk, because all of Polyus' assets are
concentrated in Russia; and its unit cash cost of about $700 per
ounce, which puts it in a median position on the global cash cost
curve.  The rating is further constrained by execution risk at
the Natalka gold mine.  S&P believes this asset should improve
Polyus' competitive position and strengthen its cash flow
generation once it is commissioned.  However, S&P sees risks of
delays, further cost overruns, and eventually a higher unit cash
cost than it currently assumes.  These risks stem from the scale
of the project and the remote location of the mine in the far
east of Russia.

S&P's assessment of Polyus' "significant" financial risk profile
reflects the company's current net debt position.  Polyus has low
debt, and it forecasts that it will maintain Standard & Poor's-
adjusted debt to EBITDA at between 0.5x and 1.0x in the coming
years.  This is in line with Polyus' financial policy that
targets debt to EBITDA of less than 1.5x, and S&P's view of its
ability to scale back capital expenditure (capex) from 2014 to
protect free operating cash flow (FOCF).  In S&P's view, after
factoring in the notes that Polyus is planning to issue in the
coming weeks, the company should have sufficient liquidity
sources to bridge 2013 and 2014, even under a conservative gold
price assumption of $1,200 per ounce.

These factors are offset by S&P's forecast of substantially
negative FOCF in 2013 due to high capex in the Natalka mine, and
the risk of additional negative FOCF in case of delays or cost
overruns in this project.  S&P also sees the risk of Polyus
adopting a more aggressive dividend and financial policy in the
future following recent changes in ownership.

There is a one-in-three possibility of S&P raising the rating in
the coming 12-18 months if:

   -- Polyus successfully starts operations at the Natalka mine
      in the summer of 2014, with a second-quartile unit cash
      cost.

   -- Polyus continues to adhere to a moderate financial policy
      and demonstrates its ability to generate positive FOCF and
      broadly neutral discretionary cash flow after operations
      start up at the Natalka mine.

S&P could revise the outlook to stable in the event of material
delays and cost overruns in the Natalka project, leading to
additional significant negative FOCF.  S&P could also stabilize
the outlook if the company's financial policy becomes more
aggressive due to high dividends or capex.  Finally, rating
upside will likely disappear if gold prices decline substantially
below S&P's short-term price assumptions of $1,500-$1,400 per
ounce, or if Polyus' cash cost position deteriorates
substantially.  However, S&P do not currently anticipates these
outcomes.


* STAVROPOL KRAI: S&P Withdraws 'B+' LT Issuer Credit Rating
------------------------------------------------------------
Standard & Poor's Ratings Services said that it had affirmed its
'B+' long-term issuer credit and 'ruA+' Russia national scale
ratings on Russian region Stavropol Krai.  S&P subsequently
withdrew the ratings.  At the time of withdrawal, the outlook was
stable.

S&P withdrew the ratings due to a lack of sufficient forward-
looking information on management's strategies and liquidity for
its ongoing surveillance.

The affirmation reflected S&P's view of Stavropol Krai's low
financial flexibility and predictability because of its reliance
on federal decisions and uncertainties related to Russia's
developing and unbalanced institutional framework, as well as the
lack of reliable medium-term financial planning.

The ratings were also constrained by the krai's "weak" liquidity
owing to relatively high refinancing needs.

The ratings were supported by the krai's modest contingent
liabilities and S&P's expectation that the gradually growing debt
burden would remain low over the next three years.

S&P viewed Stavropol Krai's liquidity position as a "negative"
rating factor.  S&P expected that throughout 2013, the average
amount of cash on the krai's accounts would be lower than its
debt service falling due in the next 12 months, and that the
krai's debt service coverage ratio would remain volatile
throughout 2013.

At the time of withdrawal, the outlook was stable.  It reflected
S&P's view that, in 2013-2015, Stavropol Krai would continue to
be exposed to refinancing due to a modest accumulation of direct
debt, but that its liquidity position would not deteriorate
thanks to a gradual shift to medium-term borrowings and
improvement of the debt maturity profile.



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


FTA SANTANDER 2: Moody's Cuts Rating on Class D Notes to 'Caa2'
---------------------------------------------------------------
Moody's Investors Service downgraded the ratings of four senior,
four mezzanine and one junior notes in four Spanish residential
mortgage-backed securities (RMBS) transactions: FTA SANTANDER
HIPOTECARIO 2; FTA SANTANDER HIPOTECARIO 3; FTA SANTANDER
HIPOTECARIO 6; FTA SANTANDER HIPOTECARIO 7. At the same time,
Moody's confirmed the ratings of two securities in FTA SANTANDER
HIPOTECARIO 6 and one security in FTA SANTANDER HIPOTECARIO 7.

This rating action concludes the review of five 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 seven notes placed on
review on November 23, 2012, following Moody's revision of key
collateral assumptions for the entire Spanish RMBS market.

Ratings Rationale:

The downgrade action primarily reflects the insufficiency of
credit enhancement to address sovereign risk as well as the lack
of available information on some of the borrowers
characteristics. Moody's confirmed the ratings of securities
whose credit enhancement and structural features provided enough
protection against sovereign and counterparty.

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 FTA SANTANDER HIPOTECARIO 2, FTA SANTANDER
HIPOTECARIO 3 and FTA SANTANDER HIPOTECARIO 6.

Expected Loss:

Expected loss assumptions remain at 4.01% for FTA SANTANDER
HIPOTECARIO 2, 10.15% for FTA SANTANDER HIPOTECARIO 3, 12.0% for
FTA SANTANDER HIPOTECARIO 6 and 10.0% for FTA SANTANDER
HIPOTECARIO 7.

MILAN CE:

The MILAN CE assumptions remain at 30% for FTA SANTANDER
HIPOTECARIO 7. The MILAN CE assumption was adjusted to 25% from
17% for FTA SANTANDER HIPOTECARIO 2 and to 30% from 23% for FTA
SANTANDER HIPOTECARIO 3 and to 32.0% from 30.0% for FTA SANTANDER
HIPOTECARIO 6. Moody's has assessed the loan-by-loan information
to determine MILAN CE. Moody's updated the MILAN CE in FTA
SANTANDER HIPOTECARIO 6 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. The MILAN CE was updated in FTA SANTANDER
HIPOTECARIO 2 and FTA SANTANDER HIPOTECARIO 3 to reflect the
uncertainty around the correctness of information such as type of
borrower, origination channel and property values.

Exposure to Counterparty Risk:

The conclusion of Moody's rating review also takes into
consideration the exposure to Banco Santander S.A. (Baa2/P-2),
which still acts as swap counterparty for all four FTA SANTANDER
HIPOTECARIO 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",
published on July 2, 2012.

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
2013.

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
scenarios.

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 FTA SANTANDER HIPOTECARIO 2, FTA and
FTA SANTANDER HIPOTECARIO 3, FTA Moody's corrected the input for
the amortization mechanism i.e. the Turbo repayment on the notes.
For FTA SANTANDER HIPOTECARIO 3, FTA, the input for Class A
margin and for FTA SANTANDER HIPOTECARIO 7, FTA, the input for
the Class C margin have been corrected as well.

List of Affected Ratings:

Issuer: FTA SANTANDER HIPOTECARIO 2

EUR1801.5M A Notes, Downgraded to Baa2 (sf); previously on Jul 2,
2012 Downgraded to A3 (sf) and Remained On Review for Possible
Downgrade

EUR51.8M B Notes, Downgraded to Ba2 (sf); previously on Nov 23,
2012 Downgraded to Baa1 (sf) and Remained On Review for Possible
Downgrade

EUR32.3M C Notes, Downgraded to B1 (sf); previously on Nov 23,
2012 Downgraded to Baa2 (sf) and Remained On Review for Possible
Downgrade

EUR49.8M D Notes, Downgraded to Caa2 (sf); previously on Nov 23,
2012 Downgraded to Caa1 (sf) and Remained On Review for Possible
Downgrade

Issuer: FTA SANTANDER HIPOTECARIO 3

EUR613M A1 Notes, Downgraded to B2 (sf); previously on Nov 23,
2012 Downgraded to B1 (sf) and Remained On Review for Possible
Downgrade

EUR1540M A2 Notes, Downgraded to B2 (sf); previously on Nov 23,
2012 Downgraded to B1 (sf) and Remained On Review for Possible
Downgrade

EUR420M A3 Notes, Downgraded to B2 (sf); previously on Nov 23,
2012 Downgraded to B1 (sf) and Remained On Review for Possible
Downgrade

Issuer: FTA SANTANDER HIPOTECARIO 6

EUR871.5M A Notes, Confirmed at A3 (sf); previously on Jul 2,
2012 Downgraded to A3 (sf) and Remained On Review for Possible
Downgrade

EUR63M B Notes, Confirmed at A3 (sf); previously on Jul 2, 2012
Downgraded to A3 (sf) and Remained On Review for Possible
Downgrade

EUR52.5M C Notes, Downgraded to Baa1 (sf); previously on Jul 2,
2012 Downgraded to A3 (sf) and Placed Under Review for Possible
Downgrade

Issuer: FTA SANTANDER HIPOTECARIO 7

EUR1440M A Notes, Confirmed at A3 (sf); previously on Jul 2, 2012
Downgraded to A3 (sf) and Remained On Review for Possible
Downgrade

EUR360M B Notes, Downgraded to Baa3 (sf); previously on Nov 23,
2012 Downgraded to Baa1 (sf) and Remained On Review for Possible
Downgrade


IM CAJAMAR 5: Moody's Cuts Rating on Class C Notes to 'Caa3'
------------------------------------------------------------
Moody's Investors Service downgraded the ratings of 12 junior and
5 senior notes in five Spanish residential mortgage-backed
securities (RMBS) transactions: IM Cajamar 1, IM Cajamar 3, IM
Cajamar 4, IM Cajamar 5 and IM Cajamar 6.

Insufficiency of credit enhancement to address sovereign risk and
deterioration in collateral performance has prompted the action.

The rating action concludes the review of 3 notes placed on
review on July 2, 2012, following Moody's downgrade of Spanish
government bond ratings to Baa3 from A3 on June 2012 . This
rating action also concludes the review of 7 notes placed on
review on November 23, 2012, following Moody's revision of key
collateral assumptions for the entire Spanish RMBS market.

Ratings Rationale:

The rating action reflects primarily the insufficiency of credit
enhancement to address sovereign risk. The rating action on IM
Cajamar 3 and IM Cajamar 5 also reflects the recent deterioration
in collateral performance.

The determination of the applicable credit enhancement that
drives the 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 revised its lifetime loss expectation (EL) assumption
in IM Cajamar 3 and IM Cajamar 5 because of worse-than-expected
collateral performance since the last review of the Spanish RMBS
sector in November 2012. In IM Cajamar 3, loans more than 90 days
in arrears as of current portfolio balance increased to 1.23% of
current portfolio balance in December 2012 up from 0.79% as of
March 2012. In IM Cajamar 5, loans more than 90 days in arrears
increased to 1.94% of current portfolio balance in December 2012
up from 1.03% a year earlier. Moody's has increased the EL to
2.8% and 5.2%of original pool balance in IM Cajamar 3 and IM
Cajamar 5 respectively. Expected loss assumptions remain
unchanged at 1.04% for IM Cajamar 1, 2.31% for IM Cajamar 4 and
5.24% for IM Cajamar 6.

In all five affected transactions, Moody's maintained the current
MILAN CE assumptions. The MILAN CE assumptions remain at 10.0%
for IM Cajamar 1, 12.5% for IM Cajamar 3, 12.5% for IM Cajamar 4,
17.5% for IM Cajamar 5 and 20% for IM Cajamar 6.

- Exposure to Counterparty

Moody's rating analysis also took into consideration the exposure
to the treasury account held at Banco Popular Espanol (Ba1/NP on
review for downgrade) in IM Cajamar 1 and held at Banco Santander
(Baa2/P2) in IM Cajamar 3, IM Cajamar 4, IM Cajamar 5 and IM
Cajamar 6, as well as the exposure to the reinvestment account
held at Bank of Spain in all 5 transactions. The revised ratings
in IM Cajamar 1, IM Cajamar 3 and IM Cajamar 4 were negatively
affected by the current exposure to these counterparties.

The conclusion of Moody's rating review also takes into
consideration the exposure to Cajamar, now part of Cajas Rurales
Unidas, acting as swap counterparty for the IM Cajamar 5 and IM
Cajamar 6 transactions and to Banco Cooperativo (Ba1/NP) acting
as swap counterparty in IM Cajamar 1. Moody's notes that,
following the breach of the second rating trigger, all three
swaps do not reflect Moody's de-linkage criteria. The rating
agency has assessed the probability and effect of a default of
the swap counterparties on the ability of the issuer to meet its
obligations under the transactions. 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 increase 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.

Additional factors that may affect the ratings are described in
"Approach to Assessing Linkage to Swap Counterparties in
Structured Finance Cashflow Transactions: Request for Comment",
published on 2 July 2012.

Principal Methodologies

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
2013.

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

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

In the context of the rating review, the transactions have been
remodeled and some inputs have been adjusted to reflect the new
approach.

List of Affected Ratings

Issuer: IM CAJAMAR 1 FONDO DE TITULIZACION DE ACTIVOS

EUR353.3M A Notes, Downgraded to Baa1 (sf); previously on Jul 2,
2012 Downgraded to A3 (sf) and Remained On Review for Possible
Downgrade

EUR9.3M B Notes, Downgraded to Ba1 (sf); previously on Nov 23,
2012 Downgraded to Baa1 (sf) and Remained On Review for Possible
Downgrade

EUR4.1M C Notes, Downgraded to Ba3 (sf); previously on Jul 2,
2012 Baa2 (sf) Placed Under Review for Possible Downgrade

EUR3.3M D Notes, Downgraded to B2 (sf); previously on Jul 2, 2012
Ba2 (sf) Placed Under Review for Possible Downgrade

Issuer: IM CAJAMAR 3 FONDO DE TITULIZACION DE ACTIVOS

EUR1155M A Notes, Downgraded to Baa3 (sf); previously on Nov 23,
2012 Downgraded to Baa1 (sf) and Remained On Review for Possible
Downgrade

EUR28.8M B Notes, Downgraded to B1 (sf); previously on Nov 23,
2012 Downgraded to Baa2 (sf) and Remained On Review for Possible
Downgrade

EUR6M C Notes, Downgraded to B3 (sf); previously on Jun 8, 2012
Baa3 (sf) Placed Under Review for Possible Downgrade

EUR10.2M D Notes, Downgraded to Caa1 (sf); previously on Jun 8,
2012 B3 (sf) Placed Under Review for Possible Downgrade

Issuer: IM CAJAMAR 4 FONDO DE TITULIZACION DE ACTIVOS

EUR961.5M A Notes, Downgraded to Baa2 (sf); previously on Nov 23,
2012 Downgraded to Baa1 (sf) and Remained On Review for Possible
Downgrade

EUR25M B Notes, Downgraded to B1 (sf); previously on Nov 23, 2012
Downgraded to Baa2 (sf) and Remained On Review for Possible
Downgrade

EUR5M C Notes, Downgraded to B3 (sf); previously on Dec 16, 2011
Ba2 (sf) Placed Under Review for Possible Downgrade

EUR8.5M D Notes, Confirmed at Caa1 (sf); previously on Dec 16,
2011 Caa1 (sf) Placed Under Review for Possible Downgrade

Issuer: IM Cajamar 5 Fondo de Titulizacion de Activos

EUR962M A Notes, Downgraded to Ba1 (sf); previously on Nov 23,
2012 Downgraded to Baa2 (sf) and Remained On Review for Possible
Downgrade

EUR11.5M B Notes, Downgraded to B3 (sf); previously on Jun 8,
2012 Baa3 (sf) Placed Under Review for Possible Downgrade

EUR12M C Notes, Downgraded to Caa3 (sf); previously on Jun 8,
2012 B2 (sf) Placed Under Review for Possible Downgrade

Issuer: IM CAJAMAR 6 Fondo de Titulizacion de Activos

EUR1836.2M A Notes, Downgraded to Baa3 (sf); previously on Nov
23, 2012 Downgraded to Baa2 (sf) and Remained On Review for
Possible Downgrade

EUR31.2M B Notes, Downgraded to B2 (sf); previously on Jun 8,
2012 Baa2 (sf) Placed Under Review for Possible Downgrade

EUR19.5M C Notes, Downgraded to Caa1 (sf); previously on Jun 8,
2012 Ba2 (sf) Placed Under Review for Possible Downgrade


IM FTGENCAT 3: S&P Affirms 'B-' Rating on Class C Notes
-------------------------------------------------------
Standard & Poor's Ratings Services took various credit rating
actions on all classes of notes in IM FTGENCAT Sabadell 3, Fondo
de Titulizacion de Activos.

Specifically, S&P has:

   -- raised to 'A+ (sf)' from 'A- (sf)' its rating on the class
      A2(G) notes;

   -- lowered to 'BBB- (sf)' from 'A- (sf)' its rating on the
      class B notes: and

   -- affirmed its 'B- (sf)' rating on class C notes.

The rating actions follow the application of S&P's updated
criteria for European collateralized loan obligations (CLOs)
backed by small and midsize enterprises (SMEs), the application
of S&P's 2012 counterparty criteria and its nonsovereign ratings
criteria, as well as S&P's assessment of the transaction's
performance using the latest available investor report and
portfolio data from the servicer.

                          CREDIT ANALYSIS

S&P has applied its updated European SME CLO criteria to
determine the scenario default rates (SDRs) for this transaction.

"Our qualitative originator assessment is moderate because of the
lack of data provided by the originator, Banco de Sabadell S.A.
Taking into account Spain's Banking Industry Country Risk
Assessment (BICRA) of 6, we have applied a one-notch downward
adjustment to the archetypical European SME average credit
quality assessment.  We further applied a portfolio selection
adjustment of minus three notches based on the transaction's
performance, which has recently deteriorated.  As a result, our
average credit quality assessment of the portfolio is 'ccc',
which reflects the originator not providing us with the data we
require," S&P said.

The originator did not provide S&P with internal credit scores,
therefore it assumed that each loan in the portfolio had a credit
quality that is equal to its average credit quality assessment of
the portfolio.  S&P then used CDO Evaluator to determine the
portfolio's 'AAA' SDR, which is 86.92%.

S&P has reviewed historical originator default data, and has
assessed the effect of macroeconomic conditions and developments,
changes in country risk, and the way these factors are likely to
affect the loan portfolio's creditworthiness.

As a result of this analysis, S&P's 'B' SDR is 6%.

The SDRs for rating levels between 'B' and 'AAA' are interpolated
in line with S&P's European SME CLO criteria.

                      RECOVERY RATE ANALYSIS

At each liability rating level, taking into account the observed
historical recoveries, S&P assumed a weighted-average recovery
rate (WARR) by taking into consideration the asset type, its
seniority, and the country recovery grouping.

As a result of this analysis, S&P's WARR assumptions in 'A',
'BBB', and 'BB' scenarios were 40.25%, 45.11%, and 54.86%,
respectively.

                        CASH FLOW ANALYSIS

S&P subjected the capital structure to various cash flow
scenarios, incorporating different default patterns and interest
rate curves, to determine each tranche's passing rating level
under its European SME CLO criteria.  In addition, S&P did not
give benefit to the swap agreement in its analysis at rating
levels above the rating on the swap provider.

                         SUPPLEMENTAL TESTS

The application of S&P's supplemental tests, in particular the
largest obligor default test, constrained its rating on the class
A2(G) notes to 'A+ (sf)'.

                         COUNTERPARTY RISK

As swap counterparty, Banco de Sabadell S.A. (BB/Negative/B)
covers basis risk and ensures a determined yield in the
transaction.  S&P has reviewed the swap counterparty's downgrade
provisions in the swap documentation, which comply with its 2012
counterparty criteria.  Nevertheless, under the documentation,
the swap counterparty is no longer eligible to remain in the
transaction (due to its current rating) and it has not taken the
remedy actions covenanted in the documents in the specified
timeframe.  Therefore, when S&P conducted its scenario analysis
at ratings above 'BB', it analyzed the transaction without giving
benefit to the swap counterparty.

IM FTGENCAT Sabadell 3 relies more on the swap's support than
other Spanish SME CLO transactions that S&P rates.  The issuer
pays all of the interest received to the swap counterparty.  In
turn, the swap counterparty pays to the issuer the weighted-
average coupon of the notes plus a margin of 40 basis points over
a notional amount, which is the outstanding balance of the notes.
Given the pool factor (the percentage of the pool's outstanding
aggregate balance) of 22.10%, the transaction has deleveraged
considerably, which has subsequently increased the level of
available credit enhancement.  However, this increase does not
mitigate the loss of payments from the swap when no credit is
given to the swap, given the recent deteriorating credit quality
of the assets and the transaction's structural features.  As of
December 2012, the level of defaults over the outstanding balance
of the assets had increased to 9.60% from 7.46% in December 2011.

                            COUNTRY RISK

Given that S&P's long-term rating on the Kingdom of Spain is
'BBB-', according to S&P's nonsovereign ratings criteria, the
maximum rating the notes in this transaction can achieve is 'AA-
(sf)'.  At their current rating levels, S&P's application of its
nonsovereign criteria does not constrain its ratings in IM
FTGENCAT Sabadell 3.

Based on the application of S&P's updated European SME CLO
criteria and its 2012 counterparty criteria, and due to its
deleveraging, it has raised to 'A+ (sf)' from 'A- (sf)' its
rating on the class A2(G) notes.

At the same time, S&P has lowered to 'BBB- (sf)' from 'A- (sf)'
its rating on the class B notes and affirmed its 'B- (sf)'
rating on the class C notes, due to the application of its
updated European SME CLO criteria and the transaction's recent
deteriorating performance.

IM FTGENCAT Sabadell 3 is a cash flow CLO transaction that
securitizes a portfolio of SME loans that Banco de Sabadell
originated in the Catalonian region of Spain.  The transaction
closed in December 2007.

          STANDARD & POOR'S 17G-7 DISCLOSURE REPORT

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

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

            http://standardandpoorsdisclosure-17g7.com

RATINGS LIST

Class       Rating            Rating
            To                From

IM FTGENCAT Sabadell 3, Fondo de Titulizacion de Activos
EUR350 Million Floating-Rate Notes

Rating Raised

A2          A+ (sf)           A- (sf)

Rating Lowered

B           BBB- (sf)         A- (sf)

Rating Affirmed

C           B- (sf)


IM GRUPO I: S&P Raises Rating on Class D Notes to 'BB-'
-------------------------------------------------------
Standard & Poor's Ratings Services took various credit rating
actions on all classes of notes in IM GRUPO BANCO POPULAR FTPYME
I, Fondo de Titulizacion de Activos.

Specifically, S&P has:

   -- Lowered to 'A+ (sf)' from 'AA- (sf)' its rating on the
      class A5(G) notes and lowered to 'A (sf)' from 'AA- (sf)'
      and removed from CreditWatch negative its rating on the
      class B notes;

   -- Raised to 'BBB+ (sf)' from 'BBB (sf)' its rating on the
      class C notes and to 'BB- (sf)' from 'B+ (sf)' its rating
      on the class D notes; and

   -- Affirmed its 'AA- (sf)' rating on the class A4 notes and
      its 'D (sf)' rating on the class E notes.

The rating actions follow the application of S&P's updated
criteria for European collateralized loan obligations (CLOs)
backed by small and midsize enterprises (SMEs) and its 2012
counterparty criteria, as well as its assessment of the
transaction's performance using the latest available trustee
reports and portfolio data.

On Jan. 17, 2013, when S&P updated European SME CLO criteria
became effective, it placed on CreditWatch negative its rating on
the class B notes.

                          CREDIT ANALYSIS

Based on S&P's review of the current pool and since its previous
review in July 2011, the pool has experienced further defaults
and the obligor concentration risk to the pool has further
increased due to the further deleveraging of loans.  The interest
on the class E notes continues to be deferred as of the March
2013 interest payment date report.

The underlying pool is highly seasoned with a pool factor (the
percentage of the pool's outstanding aggregate principal balance
in comparison with the closing date) of less than 19.00%.  Loans
originated in 2005 and 2006 now represent the highest proportion
of the current outstanding pool.  According to the January 2013
trustee report, 12+ months cumulative defaults account for 4.54%
of the closing pool balance (compared with 3.70% at our July 2011
review).  The level of 12+ months cumulative defaults observed
for 2006 and 2007 vintages (6.33% and 6.06%, respectively) are
higher than the pool average (4.54%).  The recovery rates
reported on these defaults are in the range of 56%-57%.

The reserve fund in the transaction has been replenished to the
required level (EUR43 million), which is higher than at S&P's
July 2011 review.

S&P has applied its updated European SME CLO criteria to
determine the scenario default rates (SDRs) for this transaction.

S&P categorizes the originator as moderate, which factored in
Spain's Banking Industry Country Risk Assessment (BICRA) score
(as the country of origin for these SME loans is Spain).  This
resulted in a downward adjustment of one notch to the 'b+'
archetypical European SME average credit quality assessment to
determine loan-level rating inputs and applying the 'AAA'
targeted corporate portfolio default rates.  As a result, S&P's
average credit quality assessment of the pool is 'b'.

S&P further applied a portfolio selection adjustment of minus
three notches to the 'b' credit quality assessment, which S&P
based on its review of the current pool characteristics, compared
with the originator's other transactions.  As a result, S&P's
average credit quality assessment of the pool to derive the
portfolio's 'AAA' SDR was 'ccc'.

S&P has applied this approach as it was not provided with the
internal credit scores upon request, therefore S&P assumed that
each loan in the portfolio had a credit quality that is equal to
its average credit quality assessment of the portfolio.

S&P has assessed Spain's current market trends and developments,
macroeconomic factors, and the way these factors are likely to
affect the loan portfolio's creditworthiness.

As a result of this analysis, S&P's 'B' SDR is 6.5%.

The SDRs for rating levels between 'B' and 'AAA' are interpolated
in accordance with S&P's European SME CLO criteria.

                            COUNTRY RISK

Given that S&P's long-term rating on the Kingdom of Spain is
'BBB-', according to its nonsovereign ratings criteria, S&P has
affirmed its 'AA- (sf)' rating on the class A4 notes.  Based on
S&P's cash flow analysis, the current available credit
enhancement for this class of notes (the most senior in the
capital structure) can support ratings higher than 'AA- (sf)'.

                      RECOVERY RATE ANALYSIS

At each liability rating level, S&P assumed a weighted-average
recovery rate (WARR) by considering the asset type
(secured/unsecured), its seniority (first lien/second lien), and
the country recovery grouping  and observed historical
recoveries. S&P also factored in the actual recoveries from the
historical defaulted assets, to derive its recovery rate
assumptions to be applied in its cash flow analysis.

As a result of this analysis, S&P's WARR assumption in a 'AA'
scenario was 26.84%.  The recovery rates at more junior rating
levels were higher.

                        CASH FLOW ANALYSIS

S&P subjected the capital structure to various cash flow
scenarios, incorporating different default patterns, recovery
timings, and interest rate curves to generate the minimum break-
even default rate (BDR) for each rated tranche in the capital
structure.  The BDR is the maximum level of gross defaults that a
tranche can withstand and still fully repay the noteholders,
given the assets and structure's characteristics.  S&P then
compared these BDRs with the SDRs outlined above.

                         COUNTERPARTY RISK

The transaction features a basis risk swap.  HSBC Bank PLC
(Madrid Branch) (AA-/Negative/A-1+) is the swap counterparty.
Under S&P's 2012 counterparty criteria, it has defined it as a
"derivative" counterparty.  S&P has reviewed the swap
counterparty's downgrade provisions, and, in S&P's opinion, they
do not fully comply with its 2012 counterparty criteria.
However, according to S&P's 2012 counterparty criteria, the
maximum potential rating in this transaction is 'AA (sf)', which
is one notch above S&P's long-term issuer credit rating on HSBC
Bank (Madrid Branch).  Therefore, S&P's ratings in this
transaction are not constrained by counterparty risk.

The class A5(G) notes benefit from a guarantee provided by the
Kingdom of Spain.  The guarantee from the Kingdom of Spain can be
drawn either for interest or principal payments on the class
A5(G) notes under the priority of payments, when available funds
are insufficient.  S&P's rating on the class A5(G) notes is on a
standalone basis (i.e., S&P gives no credit to this guarantee).

The results of S&P's credit and cash flow analysis show that the
credit enhancement available to the class A5(G) and B notes is
commensurate with lower ratings than previously assigned.  S&P
has therefore lowered to 'A+ (sf)' from 'AA- (sf)' its rating on
the class A5(G) notes and lowered to 'A (sf)' from 'AA- (sf)' and
removed from CreditWatch negative its rating on the class B
notes.

The credit enhancement available to the class C and D notes is
commensurate with higher ratings than previously assigned.  S&P
has therefore raised to 'BBB+ (sf)' from 'BBB (sf)' its rating on
the class C notes and to 'BB- (sf)' from 'B+ (sf)' its rating on
the class D notes.

S&P's rating on the class E notes reflects the timely payment of
interest.  S&P lowered its rating on this class of notes to 'D
(sf)' on July 29, 2009, as it deferred interest payments.  The
class E notes are still deferring interest.  S&P has therefore
affirmed its 'D (sf)' rating on the class E notes.

IM GRUPO BANCO POPULAR FTPYME I is a cash flow CLO transaction
that securitizes loans to SMEs.  The collateral pool comprises
both secured and unsecured loans.  The transaction closed in
November 2006.

          STANDARD & POOR'S 17G-7 DISCLOSURE REPORT

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

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

            http://standardandpoorsdisclosure-17g7.com

RATINGS LIST

Class              Rating
            To                From

IM GRUPO BANCO POPULAR FTPYME I, Fondo de Titulizacion de Activos
EUR2.03 Billion Floating-Rate Notes

Ratings Raised

C           BBB+ (sf)         BBB (sf)
D           BB- (sf)          B+ (sf)

Rating Lowered and Removed From CreditWatch Negative

B           A (sf)            AA- (sf)/Watch Neg

Rating Lowered

A5(G)       A+ (sf)           AA- (sf)

Ratings Affirmed

A4          AA- (sf)
E           D (sf)


IM SABADELL 1: S&P Lowers Rating on Class C Notes to 'CCC-'
-----------------------------------------------------------
Standard & Poor's Ratings Services affirmed its credit ratings on
IM SABADELL EMPRESAS 1, Fondo de Titulizacion de Activos' class
A2 and B notes.  At the same time, S&P has lowered its rating on
the class C notes.

The rating actions follow the application of S&P's updated
criteria for European collateralized loan obligations (CLOs)
backed by small and midsize enterprises (SMEs), the application
of S&P's 2012 counterparty criteria and its nonsovereign ratings
criteria, as well as S&P's assessment of the transaction's
performance using the latest available investor report and
portfolio data from the servicer.

                          CREDIT ANALYSIS

S&P has applied its updated European SME CLO criteria to
determine the scenario default rates (SDRs) for this transaction.

S&P's qualitative originator assessment is moderate because of
the lack of data provided by the originator, Banco de Sabadell
S.A. Taking into account Spain's Banking Industry Country Risk
Assessment (BICRA) of 6, S&P has applied a one-notch downward
adjustment to the archetypical European SME average credit
quality assessment.  S&P further applied a portfolio selection
adjustment of minus three notches based on the transaction's
performance, which has recently deteriorated.  As a result, S&P's
average credit quality assessment of the portfolio is 'ccc',
which reflects the originator not providing S&P with the data it
requires.

The originator did not provide S&P with internal credit scores,
therefore it assumed that each loan in the portfolio had a credit
quality that is equal to S&P's average credit quality assessment
of the portfolio.  S&P then used CDO Evaluator to determine the
portfolio's 'AAA' SDR, which is 83.76%.

S&P has reviewed historical originator default data, and has
assessed the effect of macroeconomic conditions and developments,
changes in country risk, and the way these factors are likely to
affect the loan portfolio's creditworthiness.

As a result of this analysis, S&P's 'B' SDR is 6%.

The SDRs for rating levels between 'B' and 'AAA' are interpolated
in line with S&P's European SME CLO criteria.

                       RECOVERY RATE ANALYSIS

At each liability rating level, taking into account the observed
historical recoveries, S&P assumed a weighted-average recovery
rate (WARR) by taking into consideration the asset type, its
seniority, and the country recovery grouping.

As a result of this analysis, S&P's WARR assumptions in 'A',
'BBB', and 'BB' scenarios were 40.67%, 43.67%, and 52.96%,
respectively.

                        CASH FLOW ANALYSIS

S&P subjected the capital structure to various cash flow
scenarios, incorporating different default patterns and interest
rate curves, to determine each tranche's passing rating level
under its European SME CLO criteria.  In addition, S&P did not
give benefit to the swap agreement in its analysis at rating
levels above the rating on the swap provider.

                        SUPPLEMENTAL TESTS

The application of S&P's supplemental tests, in particular the
largest obligor default test, constrained its rating on the class
C notes to 'CCC- (sf)'.  This was due to the notes'
undercollateralization.

                         COUNTERPARTY RISK

As swap counterparty, Banco de Sabadell S.A. (BB/Negative/B)
covers basis risk and ensures a determined yield in the
transaction.  S&P has reviewed the swap counterparty's downgrade
provisions in the swap documentation, which comply with its 2012
counterparty criteria.  Nevertheless, under the documentation,
the swap counterparty is no longer eligible to remain in the
transaction (due to its current rating) and it has not taken the
remedy actions covenanted in the documents in the specified
timeframe.  Therefore, when S&P conducted its scenario analysis
at ratings above 'BB', it analyzed the transaction without giving
benefit to the swap agreement.

IM Sabadell Empresas 1 relies more on the swap's support than
other Spanish SME CLO transactions that S&P rates.  The issuer
pays all of the interest received to the swap counterparty.  In
turn, the swap counterparty pays to the issuer the weighted-
average coupon of the notes plus a margin of 30 basis points over
a notional amount, which is the outstanding balance of the notes.
Given the pool factor (the percentage of the pool's outstanding
aggregate balance) of 17.46%, the transaction has deleveraged
considerably, which has subsequently increased the level of
available credit enhancement.  However, this increase does not
mitigate the loss of payments from the swap when no credit is
given to the swap, given the recent deteriorating credit quality
of the assets and the transaction's structural features.  As of
December 2012, the level of defaults over the outstanding balance
of the assets had increased to 11.54% from 8.39% in December
2011.

Banco Santander S.A. (BBB/Negative/A-2) is the guaranteed
investment contract (GIC) provider in this transaction.  Under
the documentation, which complies with S&P's 2012 counterparty
criteria, Banco Santander will have 60 days to be substituted if
S&P lower its long-term issuer credit rating on it to below
'BBB-'.  Therefore, according to S&P's 2012 counterparty
criteria, the maximum rating the notes in this transaction can
achieve is 'A-'.

                           COUNTRY RISK

Given that S&P's long-term rating on the Kingdom of Spain is
'BBB-', according to its nonsovereign ratings criteria, the
maximum rating the notes in this transaction can achieve is 'AA-
(sf)'.  At their current rating levels, S&P's application of its
nonsovereign criteria does not constrain its ratings in IM
Sabadell Empresas 1.

Based on the application of S&P's updated European SME CLO
criteria and its 2012 counterparty criteria, it has affirmed its
'A- (sf)' ratings on the class A2 and B notes.

At the same time, S&P has lowered to 'CCC- (sf)' from ' CCC (sf)'
its rating on the class C notes due to the application of its
updated European SME CLO criteria and the transaction's recent
deteriorating performance.

IM SABADELL EMPRESAS 1 is a cash flow CLO transaction that
securitizes a portfolio of SME loans that Banco de Sabadell
originated in Spain.  The transaction closed in October 2007.

          STANDARD & POOR'S 17G-7 DISCLOSURE REPORT

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

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

            http://standardandpoorsdisclosure-17g7.com

RATINGS LIST

Class       Rating            Rating
            To                From

IM SABADELL EMPRESAS 1, Fondo de Titulizacion de Activos
EUR1 Billion Floating-Rate Notes

Ratings Affirmed

A2          A- (sf)
B           A- (sf)

Rating Lowered

C           CCC- (sf)         CCC (sf)


IM SABADELL 5: S&P Raises Rating on Class B Notes to 'BB(sf)'
-------------------------------------------------------------
Standard & Poor's Ratings Services raised to 'BB (sf)' from 'B+
(sf)' its credit rating on IM SABADELL EMPRESAS 5, Fondo de
Titulizacion de Activos' class B notes.

The rating action follows the application of S&P's updated
criteria for European collateralized loan obligations (CLOs)
backed by small and midsize enterprises (SMEs), the application
of S&P's 2012 counterparty criteria and its nonsovereign ratings
criteria, as well as its assessment of the transaction's
performance using the latest available investor report and
portfolio data from the servicer.

                          CREDIT ANALYSIS

S&P has applied its updated European SME CLO criteria to
determine the scenario default rates (SDRs) for this transaction.

S&P's qualitative originator assessment is moderate because of
the lack of data provided by the originator, Banco de Sabadell
S.A. Taking into account Spain's Banking Industry Country Risk
Assessment (BICRA) of 6, S&P has applied a one-notch downward
adjustment to the archetypical European SME average credit
quality assessment.  S&P further applied a portfolio selection
adjustment of minus three notches based on the transaction's
performance, which has recently deteriorated.  As a result, S&P's
average credit quality assessment of the portfolio is 'ccc',
which reflects the originator not providing S&P with the data it
requires.

The originator did not provide S&P with internal credit scores,
therefore it assumed that each loan in the portfolio had a credit
quality that is equal to its average credit quality assessment of
the portfolio.  S&P then used CDO Evaluator to determine the
portfolio's 'AAA' SDR, which is 82.30%.

S&P has reviewed historical originator default data, and has
assessed the effect of macroeconomic conditions and developments,
changes in country risk, and the way these factors are likely to
affect the loan portfolio's creditworthiness.

As a result of this analysis, S&P's 'B' SDR is 8%.

The SDRs for rating levels between 'B' and 'AAA' are interpolated
in line with S&P's European SME CLO criteria.

                       RECOVERY RATE ANALYSIS

At each liability rating level, taking into account the observed
historical recoveries, S&P assumed a weighted-average recovery
rate (WARR) by taking into consideration the asset type, its
seniority, and the country recovery grouping.

As a result of this analysis, S&P's WARR assumptions in 'A',
'BBB', and 'BB' scenarios were 29.11%, 31.69%, and 37.79%,
respectively.

                        CASH FLOW ANALYSIS

S&P subjected the capital structure to various cash flow
scenarios, incorporating different default patterns and interest
rate curves, to determine each tranche's passing rating level
under its European SME CLO criteria.  In addition, S&P did not
give benefit to the swap agreement in its analysis at rating
levels above the rating on the swap provider.

                         SUPPLEMENTAL TESTS

The application of S&P's supplemental tests, in particular the
largest obligor default test, constrained its rating on the class
B notes to 'A+ (sf)'.  However, S&P's rating on the class B notes
is constrained below this level for counterparty reasons.

                         COUNTERPARTY RISK

As swap counterparty, Banco de Sabadell S.A. (BB/Negative/B)
covers basis risk and ensures a determined yield in the
transaction.  S&P has reviewed the swap counterparty's downgrade
provisions in the swap documentation, which comply with its 2012
counterparty criteria.  Nevertheless, under the documentation,
the swap counterparty is no longer eligible to remain in the
transaction (due to its current rating) and it has not taken the
remedy actions covenanted in the documents in the specified
timeframe.  Therefore, when S&P conducted its scenario analysis
at ratings above 'BB', it analyzed the transaction without giving
benefit to the swap counterparty.

IM SABADELL EMPRESAS 5 relies more on the swap's support than
other Spanish SME CLO transactions that S&P rates.  The issuer
pays all of the interest to the swap counterparty.  In turn, the
swap counterparty pays to the issuer the weighted-average coupon
of the notes plus a margin of 25 basis points over a notional
amount, which is the outstanding balance of the notes.  Given the
pool factor (the percentage of the pool's outstanding aggregate
balance) of 23.36%, the transaction has deleveraged considerably,
which has subsequently increased the level of available credit
enhancement.  However, this increase does not mitigate the loss
of payments from the swap when no credit is given to the swap,
given the recent deteriorating credit quality of the assets and
the transaction's structural features.  As of December 2012, the
level of defaults over the outstanding balance of the assets had
increased to 14.56% from 7.24% in December 2011.

Banco de Sabadell is the guaranteed investment contract (GIC)
provider in this transaction as well.  Under the documentation,
which complies with S&P's 2012 counterparty criteria, Banco de
Sabadell will have 60 days to be substituted if S&P lowers its
short-term issuer credit rating on it to below 'A-1'.  Therefore,
according to S&P's 2012 counterparty criteria, the maximum rating
the notes in this transaction can achieve is 'BB'.

                           COUNTRY RISK

Given that S&P's long-term rating on the Kingdom of Spain is
'BBB-', according to its nonsovereign ratings criteria, the
maximum rating the notes in this transaction can achieve is 'AA-
(sf)'.  At their current rating levels, S&P's application of its
nonsovereign criteria does not constrain its ratings in IM
SABADELL EMPRESAS 5.

Based on the application of S&P's updated European SME CLO
criteria, it has raised to 'BB (sf)' from'B+ (sf)' its rating on
the class B notes.

IM SABADELL EMPRESAS 5 is a cash flow CLO transaction that
securitizes a portfolio of SME loans that Banco de Sabadell
originated in Spain.  The transaction closed in July 2009.  The
trustee has notified S&P that the fund will be early amortized on
the July 2013 payment date.

          STANDARD & POOR'S 17G-7 DISCLOSURE REPORT

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

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

            http://standardandpoorsdisclosure-17g7.com


PESCANOVA SA: Faces Shareholder Ire Over Accounting Failings
------------------------------------------------------------
Tracy Rucinski and Carlos Ruano at Reuters report that Pescanova
SA sank deeper into scandal on Tuesday as shareholder anger
mounted over accounting failings and the chairman's undeclared
sale of shares in the period leading up to insolvency
proceedings.

Pescanova filed for insolvency on April 15 on at least EUR1.5
billion (US$2 billion) of debt run up to fuel expansion before
economic crisis hit its earnings, Reuters relates.

According to Reuters, Spain's stock market regulator said in a
statement Tuesday evening that 2012 financial results documents
it has received from the fish-finger maker did not comply with
required accounting standards, possibly opening the door to
sanctions.

The documents, submitted on Monday, had not been signed off by
Pescanova board members or auditors, and the firm was already
more than a month beyond an official deadline to present audited
accounts, Reuters notes.

On Monday, the firm revealed that Chairman Manuel Fernandez de
Sousa had sold half of his 14.4% stake in the firm between
December and February, shortly before starting work on the
insolvency process last month, Reuters discloses.

Mr. Fernandez de Sousa on Tuesday met with the head of Spain's
stock market regulator, Elvira Rodriguez, a source with knowledge
of the meeting, as cited by Reuters, said, though it is unclear
what was discussed.  The regulator, which like Pescanova declined
to comment on the meeting, is investigating the firm over
possible market abuse, Reuters notes.

In a stock market filing on Tuesday, Pescanova said Sousa lent
EUR9.3 million to the company following the stake sale, at a 5%
annual coupon, Reuters relates.

His stake sale has further stoked the fury of shareholders, who
have been trapped in the stock since trading was suspended on
March 1 when the company failed to meet the deadline to present
its 2012 results, Reuters says.

According to Reuters, the stock, much of it held by retail
investors, lost 58% of its value between Jan. 1 and the March 1
suspension following a 41% decline in 2012.

Aside from Mr. Sousa, the company's other main shareholders are
Spanish brewery SA Damm with 6.18%, Luxembourg financial holding
company Luxempart with 5.8% and UK-based Silicon Metals Holding
with 5%, Reuters discloses.

"The chairman owns little more than we do and yet has had four
board seats.  Hiding his real stake has allowed him to take
decisions that in our opinion were negative for the company,"
Reuters quotes a Damm spokeswoman as saying.

Reuters relates that sources with direct knowledge of the
situation said at least three of the main shareholders have hired
attorneys for advice over the matter.

Pescanova is a Galicia-based fishing company.  The company
catches, processes, and packages fish on factory ships.  It is
one of the world's largest fishing groups.


PYMES BANESTO 2: Moody's Cuts Rating on Class C Notes to 'Ca'
-------------------------------------------------------------
Moody's Investors Service downgraded by one notch to Ca Class C
of PYMES BANESTO 2 and confirmed the ratings of the other
tranches of this deal which were previously on review for
downgrade.

The ratings of the tranches of EMPRESAS BANESTO 5 and EMPRESAS
BANESTO 6, which were on review for downgrade were also all
confirmed. Deleveraging has led to sufficient credit enhancement
for the tranches whose ratings were confirmed, enabling them to
address sovereign risk and exposure to counterparty risk.

This rating action concludes the review for downgrade initiated
by Moody's on July 2, 2012, following Moody's downgrade of
Spanish government bond ratings to Baa3 from A3 on June 13, 2012.

All three affected transactions are Spanish asset-backed
securities (ABS) transactions primarily backed by loans to small
and medium-sized enterprises (SME), but the pools of BANESTO
EMPRESAS 5 and BANESTO EMPRESAS 6 also include a sizeable
proportion of loans to large corporates, creating some borrower
concentration in the two portfolios (with the top 10 borrowers
accounting for 24% and 38% of the total portfolio of BANESTO
EMPRESAS 5 and BANESTO EMPRESAS 6, respectively). Banco Espanol
de Credito, S.A. (Banesto, Baa3 review for upgrade/P-3 review for
upgrade) originated the transactions.

Ratings Rationale:

The confirmation of almost all tranches in the three transactions
reflects the presence of adequate credit enhancement to address
sovereign risk. The introduction of new adjustments to Moody's
modeling assumptions to account for the effect of deterioration
in sovereign creditworthiness has, to varying degrees, affected
all of the Spanish SME ABS included in the rating action. This
action also reflects the revision of key collateral assumptions
and increased exposure to low rated counterparties. Moody's
confirmed the ratings of securities whose credit enhancement and
structural features provided enough protection against sovereign
and counterparty risk. Class C of EMPRESAS BANESTO 5 and Class B
of EMPRESAS BANESTO 6 are strongly linked to Banesto's rating
where the reserve fund is held, thus limiting the upgrade
potential despite the very high levels of credit enhancement.

Class C of PYMES BANESTO 2 is now fully exposed to future
defaults since the reserve fund is fully depleted and was thus
downgraded to Ca .

The determination of the applicable credit enhancement that
drives 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. The portfolio credit enhancement represents the required
credit enhancement under the senior tranche for it to achieve the
country ceiling. By lowering the maximum achievable rating, the
revised methodology alters the loss distribution curve and
implies an increased probability of high loss scenarios.

Under the updated methodology incorporating sovereign risk on ABS
transactions, loss distribution volatility increases to capture
increased sovereign-related risks. Given the expected loss of a
portfolio and the shape of the loss distribution, the combination
of the highest achievable rating in a country for structured
finance transactions and the applicable credit enhancement for
this rating uniquely determine portfolio distribution volatility,
which the coefficient of variation (CoV) typically measures for
ABS transactions. A higher applicable credit enhancement for a
given rating ceiling or a lower rating ceiling with the same
applicable credit enhancement both translate into a higher CoV.

- Moody's Revises Key Collateral Assumptions

Moody's maintained its default and recovery rate assumptions for
the three transactions, which it updated on 18 December 2012 (see
"Moody's updates key collateral assumptions in Spanish ABS
transactions backed by loans to SMEs and leases". According to
the updated methodology, Moody's increased the CoV, which is a
measure of volatility, in all three transactions.

For PYMES BANESTO 2, the current default assumption is 17.4% of
the current portfolio and the assumption for the fixed recovery
rate is 45.0%. Moody's has increased the CoV to 58.9% from 42.0%,
which, combined with the revised key collateral assumptions,
resulted in a portfolio credit enhancement of 24.5%.

For EMPRESAS BANESTO 5, the current default assumption is 16.4%
of the current portfolio and the assumption for the fixed
recovery rate is 40.0%. Moody's has increased the CoV to 59.5%
from 41.3%, which, combined with the revised key collateral
assumptions, resulted in a portfolio credit enhancement of 24.5%.

For EMPRESAS BANESTO 6, the current default assumption is 14.4%
of the current portfolio and the assumption for the fixed
recovery rate is 35.0%. Moody's has increased the CoV to 56% from
42.5%, which, combined with the revised key collateral
assumptions, resulted in a portfolio credit enhancement of 27%.

- Counterparty Exposure Has Prompted Action

The conclusion of Moody's rating review also takes into
consideration exposure to 1) Banesto, which acts as the servicer,
swap counterparty and collection account bank in all three
transactions; and 2) Santander UK PLC (A2/P-1), which acts as
issuer account bank in PYMES BANESTO 2.

The rating action incorporates increased exposure to commingling
risk with Banesto. In its role as servicer for PYMES BANESTO 2,
Banesto transfers the collections from the portfolio within two
days from the collection account to a Santander UK account. The
reserve funds in EMPRESAS BANESTO 5 and EMPRESAS BANESTO 6 are
deposited with Banesto and are therefore exposed to the same
default risk as Banesto.

As part of its analysis, Moody's also assessed the exposure to
Banesto as swap counterparty in all three deals. The revised
/confirmed ratings of the notes are consistent with this
exposure.

- 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 its Rating Implementation Guidance report, "The Temporary Use
of Cash in Structured Finance Transactions: Eligible Investment
and Bank Guidelines", 18 March 2013; and the Request for Comment,
"Approach to Assessing Linkage to Swap Counterparties in
Structured Finance Cashflow Transactions: Request for Comment",
02 July 2012.

In reviewing these transactions, Moody's used ABSROM to model the
cash flows and determine the loss for each tranche. The cash flow
model evaluates all default scenarios, which Moody's then weights
considering the probabilities of the inverse-normal 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 the
probability of occurrence of each default scenario; and the loss
derived from the cash flow model in each default scenario for
each tranche.

As such, Moody's analysis encompasses the assessment of stressed
scenarios. When remodeling the transaction(s) affected by the
rating action(s), Moody's has adjusted some inputs to reflect the
new approach.

Principal Methodology

The principal methodology used in these ratings was "Moody's
Approach to Rating CDOs of SMEs in Europe", published in February
2007.

The revised approach to incorporating country risk changes into
structured finance ratings forms part of the relevant asset class
methodologies, which Moody's updated and republished or
supplemented on March 11, 2013 ("Incorporating Sovereign risk to
Moody's Approach to Rating CDOs of SMEs in Europe"), along with
the publication of its Special Comment "Structured Finance
Transactions: Assessing the Impact of Sovereign Risk".

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
2013.

Issuer: EMPRESAS BANESTO 5, FTA

EUR1344M A Notes, Confirmed at A3 (sf); previously on Jul 2, 2012
Downgraded to A3 (sf) and Remained On Review for Possible
Downgrade

EUR96M B Notes, Confirmed at A3 (sf); previously on Jul 2, 2012
Downgraded to A3 (sf) and Remained On Review for Possible
Downgrade

EUR160M C Notes, Confirmed at Baa3 (sf); previously on Jul 2,
2012 Baa3 (sf) Placed Under Review for Possible Downgrade

Issuer: EMPRESAS BANESTO 6, FTA

EUR935M A Notes, Confirmed at A3 (sf); previously on Jul 2, 2012
Downgraded to A3 (sf) and Remained On Review for Possible
Downgrade

EUR165M B Notes, Confirmed at Baa2 (sf); previously on Jul 2,
2012 Baa2 (sf) Placed Under Review for Possible Downgrade

Issuer: Fondo de Titulizacion de Activos PYMES BANESTO 2

EUR541.7M A2 Notes, Confirmed at A3 (sf); previously on Jul 2,
2012 Downgraded to A3 (sf) and Placed Under Review for Possible
Downgrade

EUR24.3M B Notes, Confirmed at B1 (sf); previously on Jul 2, 2012
B1 (sf) Placed Under Review for Possible Downgrade

EUR34M C Notes, Downgraded to Ca (sf); previously on Jul 2, 2012
Caa3 (sf) Placed Under Review for Possible Downgrade


SANTANDER EMPRESAS 1: S&P Lowers Rating on Class D Notes to CCC+
----------------------------------------------------------------
Standard & Poor's Ratings Services took various credit rating
actions on Santander Empresas 1, Fondo de Titulizacion de
Activos' outstanding EUR318,671,235.06 floating-rate notes.

Specifically, S&P:

   -- Affirmed and removed from CreditWatch negative its rating
      on the class B notes.

   -- Raised and removed from CreditWatch negative its rating on
      the class C notes; and

   -- Lowered and removed from CreditWatch negative its rating on
      the class D notes

The rating actions follow the application of S&P's updated
criteria for European collateralized loan obligations (CLOs)
backed by small and midsize enterprises (SMEs), as well as S&P's
assessment of the transaction's performance using the latest
available investor report and portfolio data from the servicer.

On Jan. 17, 2013, when S&P's updated European SME CLO criteria
became effective, S&P placed on CreditWatch negative its rating
on the class D notes, and kept on CreditWatch negative its rating
on the class C notes.

On Feb. 15, 2013, S&P placed on CreditWatch negative its ratings
on the class B and C notes for counterparty reasons.

                          CREDIT ANALYSIS

S&P has applied its updated European SME CLO criteria to
determine the scenario default rates (SDRs) for this transaction.

S&P's qualitative originator assessment is moderate because of
the lack of data provided by the originator, Banco Santander S.A.
(BBB/Negative/A-2).  Taking into account Spain's Banking Industry
Country Risk Assessment (BICRA) of 6, S&P has applied a downward
adjustment of one notch to the archetypical European SME average
credit quality assessment.  S&P further applied a portfolio
selection adjustment of minus one notch.  As a result, S&P's
average credit quality assessment of the portfolio is 'b-'.

Because the originator did not provide enough data for S&P' to
review its scoring system, it did not consider its internal
scores.  In this instance, S&P made a conservative assumption to
consider each performing loan in the portfolio, with a credit
quality that is equal to S&P's average credit quality assessment
of the portfolio.  S&P then used CDO Evaluator to determine the
portfolio's 'AAA' SDR, which is 75.37%.

S&P has reviewed and assessed market trends and developments,
macroeconomic factors, changes in country risk, and the way these
factors are likely to affect the loan portfolio's
creditworthiness.

As a result of this analysis, S&P's 'B' SDR is 4.65%.

The SDRs for rating levels between 'B' and 'AAA' are interpolated
in accordance with S&P's European SME CLO criteria.

                           COUNTRY RISK

Given that S&P's long-term rating on Spain is 'BBB-', according
to its nonsovereign ratings criteria, S&P has affirmed its 'AA-
(sf)' rating on the class B notes.

                       RECOVERY RATE ANALYSIS

At each liability rating level, S&P assumed a weighted-average
recovery rate (WARR) by taking into consideration observed
historical recoveries for similar Spanish transactions.

As a result of this analysis, S&P's WARR assumptions in 'AAA' and
'AA' scenarios were 16.5% and 19.5%, respectively.

                         CASH FLOW ANALYSIS

S&P subjected the capital structure to various cash flow
scenarios, incorporating different default patterns and timings
and interest-rate curves, to determine each tranche's passing
rating level under its European SME CLO criteria.

S&P observed that the portfolio contains a wide range of spread
levels.  S&P considers that there is a risk that, should defaults
affect the highest highest-paying loans more than others, the
pool's yield would tend to decrease over time.  This could limit
the transaction's ability to service the rated notes.  Therefore,
S&P has applied a yield compression stress in its cash flow
analysis.

                         SUPPLEMENTAL TESTS

The application of our supplemental test only constrained S&P's
rating on the class D notes.

                         COUNTERPARTY RISK

As swap counterparty, Banco Santander, covers the interest-rate
risk.  S&P has reviewed the swap counterparty's downgrade
provisions, and, in S&P's opinion, they do not fully comply with
its 2012 counterparty criteria.  Therefore, when S&P conducted
its scenario analysis at ratings above 'BBB', it analyzed the
transaction's cash flow without giving benefit to the
counterparty.  S&P's scenario analysis indicated that the class B
notes can maintain the currently assigned ratings.  S&P has
therefore affirmed and removed from CreditWatch negative its 'AA-
(sf)' rating on the class B notes.

S&P's cash flow analysis, when conducted without the benefit of
the swap, indicated that the class C notes can achieve a higher
rating.  In the absence of the swap, the credit enhancement
available to the class C notes is commensurate with an 'A+ (sf)'
rating.  Therefore, S&P has raised to 'A+ (sf)' from 'A- (sf)'
and removed from CreditWatch negative its rating on the class C
notes.

S&P's supplemental test caps at 'CCC+ (sf)' its rating on the
class D notes.  Therefore, S&P has lowered to 'CCC+ (sf)' from
'B+ (sf)' and removed from CreditWatch negative its rating on the
class D notes.

Santander Empresas 1 is a cash flow CLO transaction securitizing
a portfolio of SME loans that Banco Santander originated in
Spain. The transaction closed in October 2005.

          STANDARD & POOR'S 17G-7 DISCLOSURE REPORT

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

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

            http://standardandpoorsdisclosure-17g7.com

RATINGS LIST

Class       Rating         Rating
            To             From

Santander Empresas 1, Fondo de Titulizacion de Activos
EUR3.1 Billion Floating-Rate Notes

Rating Raised and Removed From CreditWatch Negative

C           A+ (sf)        A- (sf)/Watch Neg

Rating Lowered and Removed From CreditWatch Negative

D           CCC+ (sf)       B (sf)/Watch Neg

Rating Affirmed and Removed From CreditWatch Negative

B           AA- (sf)       AA- (sf)/Watch Neg


SANTANDER EMPRESAS 3: S&P Lowers Rating on Class E Notes to 'CCC'
-----------------------------------------------------------------
Standard & Poor's Ratings Services took various credit rating
actions on Fondo de Titulizacion de Activos Santander Empresas
3's outstanding EUR663,619,203.75 floating-rate notes.

Specifically, S&P has:

   -- lowered and removed from CreditWatch negative its ratings
      on the class B and D notes;

   -- lowered its rating on the class E notes;

   -- affirmed and removed from CreditWatch negative its ratings
      on the class A2, A3, and C notes; and

   -- affirmed its rating on the class F notes.

The rating actions follow the application of S&P's updated
criteria for European collateralized loan obligations (CLOs)
backed by small and midsize enterprises (SMEs), as well as S&P's
assessment of the transaction's performance using the latest
available investor report and portfolio data from the servicer.

On Jan. 17, 2013, when S&P updated European SME CLO criteria
became effective, it placed on CreditWatch negative its ratings
on the class A2, A3, B, C, and D notes.

On Feb. 15, 2013, S&P kept on CreditWatch negative its ratings on
the class A2, A3, and B notes for counterparty reasons.

                          CREDIT ANALYSIS

S&P has applied its updated European SME CLO criteria to
determine the scenario default rates (SDRs) for this transaction.

S&P's qualitative originator assessment is moderate because of
the lack of data provided by the originator, Banco Santander S.A.
(BBB/Negative/A-2).  Taking into account Spain's Banking Industry
Country Risk Assessment (BICRA) of 6, S&P has applied a downward
adjustment of one notch to the archetypical European SME average
credit quality assessment.  S&P further applied a portfolio
selection adjustment of minus one notch.  As a result, S&P's
average credit quality assessment of the portfolio is 'b-'.

Because the originator did not provide enough data for S&P to
review its scoring system, it did not consider its internal
scores.  In this instance, S&P made a conservative assumption to
consider each performing loan in the portfolio, with a credit
quality that is equal to S&P's average credit quality assessment
of the portfolio.  S&P then used CDO Evaluator to determine the
portfolio's 'AAA' SDR, which is 71.58%.

S&P has reviewed and assessed market trends and developments,
macroeconomic factors, changes in country risk, and the way these
factors are likely to affect the loan portfolio's
creditworthiness.

As a result of this analysis, S&P's 'B' SDR is 6.2%.

The SDRs for rating levels between 'B' and 'AAA' are interpolated
in accordance with S&P's European SME CLO criteria.

                           COUNTRY RISK

Given that S&P's long-term rating on Spain is 'BBB-', according
to its nonsovereign ratings criteria, S&P has affirmed its 'AA-
(sf)' ratings on the class A2 and A3 notes.

                       RECOVERY RATE ANALYSIS

At each liability rating level, S&P assumed a weighted-average
recovery rate (WARR) by taking into consideration observed
historical recoveries for similar Spanish transactions.

As a result of this analysis, S&P's WARR assumptions in 'AAA' and
'AA' scenarios were 16.5% and 19.5%, respectively.

                        CASH FLOW ANALYSIS

S&P subjected the capital structure to various cash flow
scenarios, incorporating different default patterns and timings
and interest-rate curves, to determine each tranche's passing
rating level under S&P's European SME CLO criteria.

S&P observed that the portfolio contains a wide range of spread
levels.  S&P considers that there is a risk that, should defaults
affect the highest highest-paying loans more than others, the
pool's yield would tend to decrease over time.  This could limit
the transaction's ability to service the rated notes.  Therefore,
S&P has applied a yield compression stress in its cash flow
analysis.

                        SUPPLEMENTAL TESTS

The application of the supplemental tests did not constrain any
of S&P's ratings in this transaction.

                         COUNTERPARTY RISK

As swap counterparty, Banco Santander, covers the interest-rate
risk.  S&P has reviewed the swap counterparty's downgrade
provisions, and, in S&P's opinion, they do not fully comply with
its 2012 counterparty criteria.  Therefore, when S&P conducted
its scenario analysis at ratings above 'BBB', it analyzed the
transaction's cash flow without giving benefit to the
counterparty.  S&P's scenario analysis indicated that the class
A2 and A3 notes can maintain the currently assigned ratings.  S&P
has therefore affirmed and removed from CreditWatch negative its
'AA- (sf)' ratings on the class A2 and A3 notes.

S&P's cash flow analysis, when conducted without the benefit of
the swap, indicated that the class B notes cannot maintain the
currently assigned rating.  In the absence of the swap, the
credit enhancement available to the class B notes is commensurate
with an 'A (sf)' rating.  Therefore, S&P has lowered to 'A (sf)'
from 'A+ (sf)' and removed from CreditWatch negative its rating
on the class B notes.  S&P has affirmed its 'BBB (sf)' rating on
the class C notes because they can maintain the currently
assigned rating in the absence of the swap.

When S&P performed its scenario analysis for the class D and E
notes, it gave full benefit to the swap counterparty.  Based on
S&P's assumptions, its analysis indicated that the current credit
enhancement available to the class D and E notes is commensurate
with 'B+ (sf)' and 'CCC (sf)' ratings, respectively.  Therefore,
S&P has lowered to 'B+ (sf)' from 'BB- (sf)' and removed from
CreditWatch negative its rating on the class D notes.  At the
same time, S&P has lowered to 'CCC (sf)' from 'B- (sf)' its
rating on the class E notes.

S&P's current 'D (sf)' rating on the class F notes is due to a
missed interest payment.  S&P has affirmed its 'D (sf)' rating on
the class F notes due to the results of its cash flow analysis.

Santander Empresas 3 is a cash flow CLO transaction securitizing
a portfolio of SME loans that Banco Santander originated in
Spain. The transaction closed in August 2007.

          STANDARD & POOR'S 17G-7 DISCLOSURE REPORT

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

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

            http://standardandpoorsdisclosure-17g7.com

RATINGS LIST

Class       Rating         Rating
            To             From

Fondo de Titulizacion de Activos Santander Empresas 3
EUR3,545.5 Million Floating-Rate Notes

Ratings Lowered and Removed From CreditWatch Negative

B           A (sf)        A+ (sf)/Watch Neg
D           B+ (sf)       BB- (sf)/Watch Neg

Ratings Affirmed and Removed From CreditWatch Negative

A2          AA- (sf)       AA- (sf)/Watch Neg
A3          AA- (sf)       AA- (sf)/Watch Neg
C           BBB (sf)       BBB (sf)/Watch Neg

Rating Lowered

E           CCC (sf)       B- (sf)

Rating Affirmed

F           D (sf)



===========
S W E D E N
===========


NORTHLAND RESOURCES: Pays Interest to Bondholders
-------------------------------------------------
Northland Resources S.A., together with its subsidiaries, on
April 15 disclosed that together with the administrator, it has
agreed to disburse the previously withheld interest on the
outstanding bond loans.

The Company's subsidiary Northland Resources AB has three
outstanding bonds to a combined amount of US$370 million.  As
previously announced, the Issuer withheld the interest due on
March 6, 2013, under the bond loans due to the ongoing corporate
reorganization process.

As part of the short term liquidity funding, announced on
March 22, 2013, it was decided by the bondholders and agreed that
the Issuer shall pay all outstanding interest payments under the
bonds by a withdrawal from the debt service reserve account,
DSRA. In total approximately US$23.6 million has been paid.

The interest payment does not exhaust to short term funding of
the US$16 million from the bondholders.  The remaining balance on
the DSRA is approximately US$33 million.

                 Default on Disclosure Obligations

As reported by the Troubled Company Reporter on April 3, 2013,
orthland Resources on March 28 disclosed that it expects the
Ontario Securities Commission will note the Company in default of
its continuous disclosure obligations under Ontario securities
law due to the Company not filing by April 2, 2013, its audited
financial statements and associated management discussion and
analysis for the fiscal year ended December 31, 2012.

Since January 2013, Northland has faced serious liquidity issues.
During this period the Company has published its Q4 2012
unaudited interim condensed financial statements.  However, since
the negotiations with potential investors are still ongoing,
management of the Company is currently not in a position to
evaluate the potential impacts of these negotiations on the
Annual Financial Statements and to finalize its assessment of the
going concern assumption.  As a result, the Company is not in the
position to file its Audited Annual Financial Statements and MD&A
by April 2, 2013.

Northland is a producer of iron ore concentrate, with a portfolio
of production, development and exploration mines and projects in
northern Sweden and Finland.  The first construction phase of the
Kaunisvaara project is complete and production ramp-up started in
November 2012.  The Company produces high-grade, high-quality
magnetite iron concentrate in Kaunisvaara, Sweden, where the
Company will exploit two magnetite iron ore deposits, Tapuli and
Sahavaara.  Northland has entered into off-take contracts with
three partners for the entire production from the Kaunisvaara
project over the next seven to ten years.  The Company is also
preparing a Definitive Feasibility Study ("DFS") for its
Hannukainen Iron Oxide Copper Gold ("IOCG") project in Kolari,
northern Finland and for the Pellivuoma deposit, which is located
15 km from the Kaunisvaara processing plant.



=====================
S W I T Z E R L A N D
=====================


PETROPLUS HOLDINGS: Petit-Couronne to Close After Bids Rejected
---------------------------------------------------------------
Tara Patel at Bloomberg News reports that Petroplus Holdings AG's
Petit-Couronne refinery in Normandy will shut for good after a
court rejected all offers for the crude-processing plant.

According to Bloomberg, a statement from Petroplus said that the
court in Rouen ruled that bids from Murzuk Oil and Netoil Inc.
failed to contain financial and technical means to "ensure a
lasting takeover".

Petroplus, as cited by Bloomberg, said that the company
administering the refinery will cease operations and a procedure
to fire staff will begin in the coming days.  French Industry
Minister Arnaud Montebourg confirmed in a statement that the
court decision ends the search for buyers, Bloomberg relates.

The fate of the 154,000-barrel-a-day refinery has hung in the
balance since Zug, Switzerland-based Petroplus filed for
insolvency in January 2012, Bloomberg notes.  Administrators
rejected five bids in February, Bloomberg recounts.

                         About Petroplus

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

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

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

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



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


TURKIYE FINANS: Fitch Assigns 'bb-' Viability Rating
----------------------------------------------------
Fitch Ratings has assigned Turkiye Finans Katilim Bankasi A.S.'s
(Turkiye Finans) forthcoming Sukuk issue an expected rating of
'BBB(EXP)'.

Turkiye Finans is the originator of the Sukuk; and, certificates
will be issued by a fully-owned SPV established in Turkey. The
SPV will use 51% of the proceeds to acquire the beneficial
interests and rights in a pool of leasing assets from Turkiye
Finans. The profit from these assets will be distributed to the
Sukuk investors. Turkiye Finans (as managing agent) will actively
manage this portfolio and ensure that profits are in line with
the entire expected return on the Sukuk. The remaining 49% of the
proceeds will be used to execute a commodities-based murabaha
transaction between the SPV and Turkiye Finans.

KEY RATING DRIVERS

The 'BBB(EXP)' expected rating assigned to the Sukuk is driven
solely by Turkiye Finans' Long-term foreign currency Issuer
Default Rating (IDR) of BBB' as the Sukuk structure is viewed as
an originator-backed/asset-based structure. According to Fitch's
criteria, the Sukuk rating is directly linked to Turkiye Finans'
Long-term IDR.

The originator backing is based on: i) Turkiye Finans's payment
and performance obligations under the Sukuk transaction documents
ranking pari passu with its other future or present senior
unsecured debt obligations; ii) Turkiye Finans's irrevocable
undertaking to purchase the relevant leasing assets from the SPV
and settle the murabaha transaction, including the agreed profit
rate, on the scheduled or any earlier dissolution dates; and iii)
on any periodic distribution date, Turkiye Finans (as managing
agent) is obliged to actively manage and generate the necessary
returns from the Sukuk assets that would be sufficient to cover
the periodic distribution payments to Sukuk holders. A failure to
do so would trigger a dissolution event and enforce Turkiye
Finans to pay the entire sum of the outstanding deferred sale
price (which also includes the unpaid portion of the profits).

Fitch understands that certificate holders have a beneficial
interest in the cash flows generated by the underlying assets,
but do not have recourse to those assets. As such, the sukuk are
asset-based not asset-backed.

By assigning a rating to the issue, Fitch does not express an
opinion on the Sukuk structure's compliance with Shariah
principles or whether the relevant transaction documents are
enforceable under any applicable law, including, without
limitation, English and Turkish law.

RATING SENSITIVITIES

Fitch would expect the Sukuk rating to move in tandem with, and
be sensitive to any change in, Turkiye Finans' Long-term foreign
currency IDR, which is, in turn, driven by Fitch's view of
potential support from its majority shareholder.

Turkiye Finans engages in interest-free banking - primarily with
SMEs and corporate clients. It is a small but growing bank, owned
66.3% by the The National Commercial Bank ('A+'/Stable) of Saudi
Arabia.

Turkiye Finans is currently rated as follows:

-- Long-term foreign currency IDR 'BBB'; Outlook Stable
-- Long-term local currency IDR 'BBB+'; Outlook Stable
-- Short-term foreign currency IDR 'F3'
-- Short-term local currency IDR 'F2'
-- National Long-term rating 'AAA(tur)'; Outlook Stable
-- Viability Rating 'bb-'
-- Support Rating '2'



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


HBOS PLC: MPs Demand Inquiry Into Bonuses of Former Bosses
----------------------------------------------------------
BreakingNews.ie reports that pressure is mounting in the UK on
disgraced former HBOS bosses amid anger over mammoth pension pots
and nearly GBP1 million of "bonuses for going bust".

According to BreakingNews.ie, seven directors of HBOS landed
GBP914,000 in "change of control" payments triggered by the
bank's rescue takeover by Lloyds Banking Group following its
GBP20.5 billion taxpayer bailout in 2008.

It also emerged that Sir James Crosby and Andy Hornby -- two of
the three former HBOS chiefs damned by a parliamentary commission
for "catastrophic failures of management" -- were on pension
schemes that accrued benefits at twice the rate of average
workers, BreakingNews.ie notes.

Mr. Hornby, eligible to start drawing down a GBP240,000-a-year
HBOS pension when he turns 50 in four years' time, is now in the
spotlight following Sir James's decision earlier to hand back 30%
of his GBP580,000-a-year pension, BreakingNews.ie discloses.

According to BreakingNews.ie, under the change of control
payments handed out at the time of the Lloyds takeover,
Mr. Hornby received GBP251,000 cash and 7,599 shares -- on top of
salary, pensions awards and redundancy payments, BreakingNews.ie
discloses.

MPs are now demanding an inquiry into the handouts,
BreakingNews.ie says.

John Mann, MP and member of the Treasury Select Committee, said
the due diligence done at the time of the deal needed to be
investigated, while the former bosses should also pay the money
back, BreakingNews.ie relates.

According to BreakingNews.ie, he told the Guardian: "This is
taxpayers' money being used to pay bonuses to bankers that
brought down their own bank and cost thousands of ordinary
workers their jobs.

"These are bonuses for going bust."

Others to receive the payments include Peter Cummings -- the
former head of corporate lending and the only ex-HBOS director
penalized by the Financial Services Authority (FSA) after being
fined GBP500,000 and banned for life from working in the City,
BreakingNews.ie discloses.  He received GBP129,000 and 2,051
shares, BreakingNews.ie says.

Lloyds, as cited by BreakingNews.ie, said the decisions to award
change-of-control payments and pensions were made by HBOS before
its takeover.

"At the time these arrangements were settled, Lloyds did not own
HBOS.  All decisions with respect to the redundancy or severance
terms applicable to departing HBOS senior executives, including
pensions, were made by the HBOS remuneration committee or board
of HBOS prior to the acquisition by Lloyds," BreakingNews.ie
quotes a spokesman as saying.

HBOS plc is a banking and insurance company in the United
Kingdom, a wholly owned subsidiary of the Lloyds Banking Group
having been taken over in January 2009.  It is the holding
company for Bank of Scotland plc, which operates the Bank of
Scotland and Halifax brands in the UK, as well as HBOS Australia
and HBOS Insurance & Investment Group Limited, the group's
insurance division.  The group became part of Lloyds Banking
Group through a takeover by Lloyds TSB January 19, 2009.


HEALTHCARE LOCUMS: Bleasdale Wants Board to Buy Shares at GBP1.12
-----------------------------------------------------------------
Kate Burgess at The Financial Times reports that Kate Bleasdale,
the nurse and former executive vice-chairman of Healthcare
Locums, which she founded a decade ago, has written to the board
demanding that it buy her remaining shares at GBP1.12 each, the
latest twist in a two-year-long saga for the health and social
care recruiter.

According to the FT, Ms. Bleasdale's demand compares with a
current share price of 0.75p -- the price offered to take the
company private by its two largest shareholders, investment funds
Toscafund and Ares Capital.  Together, the two funds own more
than 72.5% of Healthcare Locums, the FT discloses.

Angel Acquisitions, the investment vehicle of the two funds, has
also promised a GBP10 million capital injection to keep the
recruitment group's banks at bay, the FT says.  Their GBP6.15
million bid, made last week, came shortly after HCL's board
declared that poor trading had forced the staffing company up
against its banking covenants and that it needed emergency
funding, the FT relates.

In 2011, shares in HCL -- which Ms. Bleasdale founded in 2003 and
brought to Aim two years later -- were suspended amid allegations
of accounting irregularities, the FT recounts.  Four US investors
are still pursuing the group in the courts, the FT discloses.

Ms. Bleasdale was suspended in January 2011, the board was
subsequently replaced and the company had to restate its accounts
later that year, the FT notes.  The shares were relisted in
September 2011 after HCL's investors backed a highly dilutive
fundraising to pay down and restructure its debt, the FT relates.

According to the FT, Ms. Bleasdale has now sent a solicitor's
letter to HCL's board claiming that the decision in January 2011
to suspend trading in the company's shares was unreasonable and
unnecessary, that the refinancing plan favored larger
shareholders at the expense of smaller investors, and the board
had failed to consider alternative rescue options.

The letter asserts that the company should therefore pay GBP2.24
million or GBP1.12 a share, the price of HCL's shares before
their suspension, the FT states.

Healthcare Locums is a UK-based healthcare recruitment group.


LCP PROUDREED: S&P Lowers Ratings on Two Note Classes to 'B'
------------------------------------------------------------
Standard & Poor's Ratings Services lowered its credit ratings on
all classes of notes in commercial mortgage-backed securities
(CMBS) transaction LCP Proudreed PLC.  At the same time, S&P
removed the ratings from CreditWatch negative, where they were
placed on Dec. 6, 2012.

The rating actions follow S&P's review of the credit quality of
the pool's two loans and their real estate collateral under its
updated criteria for rating European CMBS transactions.  S&P
placed its ratings on LCP Proudreed's class A, B, C, and D notes
on CreditWatch negative when the updated criteria came into
effect.

LCP Proudreed is a secured loan transaction backed by two loans,
which mature in August 2014.  The note legal final maturity date
is in August 2016.

                           THE LCP LOAN

The LCP loan accounts for 86% of the pool loan balance.  The 115
properties securing this loan are located across the U.K., with
concentrations in southeast England and the West Midlands.

The underlying cash flow is granular.  There are about 600
tenants occupying the 115 properties and no significant exposure
to a single tenant.  The largest tenant accounts for only 7.5% of
the total income, and the top 10 tenants account for 27.7%.  The
vacancy rate is currently 13%.

The weighted-average lease term is 6.33 years.  Of the rental
income, approximately 30% have break options or are due to expire
by loan maturity.

In the February 2013 report the servicer reported an interest
coverage ratio of 3.96x and a LTV ratio of 69.78%.  The increase
in the ICR has more to do with a reduction in the interest burden
than an increase in rental income.  Of the loan balance, 70% is
hedged via an interest rate cap at 6%, and the actual interest
rate is now much lower than at closing.  The remainder of the
loan is hedged via a swap.

                        THE PROUDREED LOAN

The Proudreed loan makes up 14% of the combined loan balance.
The properties securing this loan are in England and Wales, with
the highest concentration being in southeast England (87% by
valuation).

Asda Stores Ltd. is the largest tenant, accounting for 37% of the
rent, with only one store.  Asda is part of the Walmart Group.
There are approximately 90 tenants in total, and the 10 largest
tenants account for 66% of the overall rent.  The vacancy rate by
area is only 4.6%.

The weighted-average lease term is 7.76 years.  Of the rental
income, approximately 30% has break options or expires by loan
maturity.

In the February 2013 report, the servicer reported a LTV ratio of
68.52% and an interest coverage ratio of 3.65x.  The increase in
the ICR is mainly due to a reduction in the interest burden, not
an increase in income.  Of the loan balance, 70% is hedged via an
interest rate cap at 6%, and the actual interest rate is now much
lower than at closing.  The remainder of the loan is hedged via a
swap.

                          RATING ACTIONS

While the transaction's performance has been stable since
closing, under S&P's updated criteria, its analysis indicates
that the current ratings on the class A, B, and C notes cannot be
maintained at their current levels.  In S&P's view, the current
available subordination for the class A, B, and C notes is
commensurate with 'BBB (sf)', 'BB (sf)', and 'B (sf)' scenarios,
respectively.

According to S&P's analysis, the class D notes are unable to
maintain the current rating.

S&P has therefore lowered its ratings on all classes of notes and
removed them from CreditWatch negative.

          STANDARD & POOR'S 17G-7 DISCLOSURE REPORT

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

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

            http://standardandpoorsdisclosure-17g7.com

RATINGS LIST

LCP Proudreed PLC
GBP322 Million Commercial Mortgage-Backed Secured Floating-Rate
Notes

                     Rating
Class          To              From

Ratings Removed from CreditWatch Negative and lowered

A              BBB (sf)        A (sf)/Watch Neg
B              BB (sf)         BBB (sf)/Watch Neg
C              B (sf)          BB- (sf)/Watch Neg
D              B (sf)          B+ (sf)/Watch Neg


LEHMAN BROTHERS: LBIE Creditors May Get Full Repayment, PwC Says
----------------------------------------------------------------
Stephen Morris at Bloomberg News reports that creditors to Lehman
Brothers International Europe may be repaid in full after
administrators settled disputes with some of the failed
investment bank's affiliates, increasing the size of expected
future recoveries.

Bloomberg relates that an e-mailed statement from
PriceWaterhouseCoopers LLP said a recent agreement with a Lehman
affiliate has freed up an additional US$9.1 billion of assets,
which will be distributed later this year.  LBIE is planning a
second dividend to unsecured creditors, as well as a first
distribution to client money claimants this month, Bloomberg
discloses.

"To be able to advise ordinary unsecured creditors that we now
have a reasonable chance of eventually repaying their claims in
full, marks a significant milestone," Bloomberg quotes Tony
Lomas, lead administrator at PwC, as saying in the statement.
"We do expect to pay a second, significant dividend to creditors
in the near future, taking us another step towards this new
target."

PwC, as cited by Bloomberg, said in the statement the
administrators have already returned GBP13.6 billion (US$20.9
billion) in cash and securities to clients with funds deposited
at the defunct brokerage.  PwC said at the time that Lehman
International made its first interim distribution to unsecured
creditors in November, paying 25.2 pence on the pound, or about
GBP7 billion, for 1,582 claims, Bloomberg notes.

According to Bloomberg, the Sunday Telegraph, citing an
administrator report, said that the estate of LBIE is preparing
to make an initial US$340 million payment to its clients,
equivalent to 20 cents on the dollar of US$1.7 billion of claims
held in a central client pool.  The newspaper said that unsecured
creditors will receive at least GBP2.8 billion over three
payments this year, equivalent to more than 10 pence on the pound
of claims, Bloomberg relates.

                      About Lehman Brothers

Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was
the fourth largest investment bank in the United States.  For
more than 150 years, Lehman Brothers has been a leader in the
global financial markets by serving the financial needs of
corporations, governmental units, institutional clients and
individuals worldwide.

Lehman Brothers filed for Chapter 11 bankruptcy Sept. 15, 2008
(Bankr. S.D.N.Y. Case No. 08-13555).  Lehman's bankruptcy
petition disclosed US$639 billion in assets and US$613 billion in
debts, effectively making the firm's bankruptcy filing the
largest in U.S. history.  Several other affiliates followed
thereafter.

Additional units, Merit LLC, LB Somerset LLC and LB Preferred
Somerset LLC, sought for bankruptcy protection in December 2009
or more than a year after LBHI and its other affiliates filed
their bankruptcy cases.

The Debtors' bankruptcy cases are handled by Judge James M. Peck.
Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife,
Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at
Weil, Gotshal & Manges, LLP, in New York, represent Lehman.  Epiq
Bankruptcy Solutions serves as claims and noticing agent.

Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell,
Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve
as counsel to the Official Committee of Unsecured Creditors.
Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's
investment banker.

On Sept. 19, 2008, the Honorable Gerard E. Lynch, Judge of the
U.S. District Court for the Southern District of New York,
entered an order commencing liquidation of Lehman Brothers, Inc.,
pursuant to the provisions of the Securities Investor Protection
Act (Case No. 08-CIV-8119 (GEL)).  James W. Giddens has been
appointed as trustee for the SIPA liquidation of the business of
LBI

The Bankruptcy Court has approved Barclays Bank Plc's purchase
of Lehman Brothers' North American investment banking and
capital markets operations and supporting infrastructure for
US$1.75 billion.  Nomura Holdings Inc., the largest brokerage
house in Japan, purchased LBHI's operations in Europe for US$2
plus the retention of most of employees.  Nomura also bought
Lehman's operations in the Asia Pacific for US$225 million.

                 International Operations Collapse

Lehman Brothers International (Europe), the principal UK trading
company in the Lehman group, was placed into administration,
together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE
Holdings Ltd.  Tony Lomas, Steven Pearson, Dan Schwarzmann and
Mike Jervis, partners at PricewaterhouseCoopers LLP, have been
appointed as joint administrators to Lehman Brothers
International (Europe) on September 15, 2008.  The joint
administrators have been appointed to wind down the business.

Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan
Inc. filed for bankruptcy in the Tokyo District Court on
Sept. 16.  Lehman Brothers Japan Inc. reported about JPY3.4
trillion (US$33 billion) in liabilities in its petition.

Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers
Bankruptcy News.  The newsletter tracks the Chapter 11 proceeding
undertaken by Lehman Brothers Holdings, Inc., and other
insolvency and bankruptcy proceedings undertaken by its
affiliates. (http://bankrupt.com/newsstand/or 215/945-7000)


TITAN EUROPE 2007-1: S&P Lowers Rating on Class A Notes to 'B-'
---------------------------------------------------------------
Standard & Poor's Ratings Services lowered its credit rating on
Titan Europe 2007-1 (NHP) Ltd.'s class A notes to 'B- (sf)'.  At
the same time, S&P affirmed its 'D (sf)' ratings on the class B,
C, D, and E notes.

The rating actions follow S&P's review of the transaction
applying its European commercial mortgage-backed security (CMBS)
criteria.

                           CREDIT REVIEW

Titan Europe 2007-1 (NHP) is a single loan transaction where the
loan went into default in November 2008 and was transferred into
special servicing.  The loan matured in January 2009.

The loan is secured on nursing homes, the majority of which were
originally leased to Southern Cross Healthcare, with the
remainder leased to third-party tenants.  In November 2011, the
leases that were operated by Southern Cross Healthcare were
transferred to HC-One.

Since July 2011, the borrower has failed to make sufficient
payments to cover the whole loan interest and swap payments.  The
servicer reported that the borrower has retained a portion of the
funds that would otherwise have been applied in payment of
interest on the whole loan and the swap.  This has enabled the
borrower to make such funds available to HC-One in connection
with the continued operation and future capital expenditure
equirements of the care homes.

The borrower has confirmed that it will now only withhold cash of
approximately GBP4 million per quarter from April 2013 to ensure
there are adequate funds to continue with the operation and
future capital expenditure requirements of the care homes.

Servicing advances have been made to pay the interest on the
class A and class X notes (not rated).  As of today, the
cumulative amount of servicing advances is GBP14.25 million.  The
class B, C, D, and E notes have not received any interest
payments since July 2011.

In January 2013, the servicer reported that the mid-market value
of the swap was GBP184 million and the borrower owes GBP55
million in swap payment arrears.

                          RATING ACTIONS

S&P believes that the likelihood that the class A notes will
experience principal losses has increased.  S&P has therefore
lowered its rating on this class of notes to 'B- (sf)' from 'BB+
(sf).

The class B, C, D, and E notes continue to experience interest
shortfalls.  In addition, S&P expects principal losses on these
classes of notes.  S&P is therefore affirming its 'D (sf)'
ratings on these notes.

          STANDARD & POOR'S 17G-7 DISCLOSURE REPORT

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

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

            http://standardandpoorsdisclosure-17g7.com

RATINGS LIST

         Rating           Rating
Class    To               From

Titan Europe 2007-1 (NHP) Ltd.
GPB610.27 mil. commercial mortgage-backed variable-
and floating-rate notes

Ratings Lowered

A      B- (sf)            BB+ (sf)

Ratings Affirmed

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



===================
U Z B E K I S T A N
===================


AGROBANK: Moody's Cuts Ratings on Deposit Ratings to 'Caa1'
-----------------------------------------------------------
Moody's Investors Service downgraded the long-term local- and
foreign-currency deposit ratings of Uzbekistan's Agrobank to Caa1
from B3. Moody's has also lowered the bank's baseline credit
assessment (BCA) to ca from caa1, within the E standalone bank
financial strength rating (BFSR) category. At the same time, the
rating agency affirmed the E standalone BFSR and the Not Prime
short-term deposit rating.

The outlook on all long-term ratings is now stable.

The rating action is driven by Agrobank's failure to address
material capital and liquidity shortfalls related to fraud which
was identified in 2011. As a consequence, the bank capital base
remains fully depleted and Agrobank continues to depend on
ongoing external support from the Uzbekistan authorities to
sufficiently fund its operations. The action also captures
Moody's view that there is a high probability that such external
support -- in the form of liquidity and/or regulatory forbearance
-- will continue.

The rating action is largely based on Agrobank's unaudited
financial statements for 2012, prepared under local GAAP as well
as the bank's non-public management reports for that period.

Ratings Rationale:

Capital Shortfall

The primary factor for these rating action is Agrobank's failure
to address material capital shortfall as the recent share
issuance did not raise sufficient new capital to address asset
quality risks and restore the bank's capital base. In addition,
Moody's believes that the bank has a limited ability to recover
losses that resulted from the fraudulent activities identified in
2011. As a consequence, Agrobank's capital base remains fully
depleted because of the misappropriation of funds totaling around
UZS250 billion ($126 million) (recorded as receivables from
former employees) that accounted for around 100% of Agrobank's
core capital as of 1 January 2013.

Under Agrobank's capital-raising plan for 2012, the bank had
expected to raise UZS113 billion (an amount equivalent to less
than 50% of problem non-core assets as of 1 January 2013), but it
received only UZS41 billion of capital contribution from its
shareholders. In Moody's view, which is based on historical
observations, any prospects of future capital injections remain
uncertain. Furthermore, the rating agency notes the risk that any
capital contributions from Agrobank's shareholders over the next
few years may not be sufficient to fully address the risk of
capital shortfall.

Moody's notes that Agrobank has not recognized any losses from
the fraudulent activity neither in its IFRS nor in the statutory
reporting because it is seeking to recover losses through legal
proceedings in Uzbekistan. Moody's scenario analysis considers
the level of regulatory capital of 13.6% reported by the bank at
YE2012 is misleading insofar as, in Moody's view, the bank is
unlikely to recover the proceeds of the fraud.

Liquidity Shortfall

Moody's says that the large amount of the fraud-related
receivables, which accounted for 13% of Agrobank's total assets
as at YE2012, will continue to exert negative pressure on the
bank's liquidity profile. At the same time, Moody's notes that
Agrobank's liquidity profile has stabilized over the past 18
months. A cumulative liquidity shortfall for up to one year
decreased to around UZS347 billion at YE2012 from UZS 427 billion
at YE2011, and short-term liquidity risk has diminished due to
the bank's improved access to interbank funding and increased
inflows of deposits, including funds from state-controlled
agencies, which supported liquidity needs and lengthened the
average duration of the bank's liabilities.

The rating agency says that the large amount of outstanding
impaired assets will remain a key negative driver for Agrobank's
performance, affecting the bank's credit profile and exerting
pressure on its capital base and liquidity position.

The combination of the factors indicates that there is high
probability that Agrobank will need external support in the next
12-18 months.

Support Considerations

Moody's says that Agrobank's Caa1 deposit ratings now incorporate
a three-notch uplift from its standalone BCA of ca, reflecting a
high probability of systemic support given Agrobank's government
ownership, its large market shares and systemic importance for
Uzbekistan's economy, as well as the bank's special mandate in
servicing the socially important agriculture sector.

The stable outlook on Agrobank's Caa1 deposit ratings reflects
Moody's expectation that the bank will be able to continue as a
going concern without material changes of its risk profile over
the next 12-18 months.

What Could Change the Ratings Up/Down

Moody's believes there is little likelihood of any upward
movement in Agrobank's ratings over the next 12-18 months. In the
longer-term rating horizon, the ratings could be upgraded if the
bank (1) receives a fresh capital injection sufficient to address
the risk of capital shortfall, which would enable it to cover
additional charges and gradually write off problem assets ; or
(2) demonstrates progress in recovering problem assets;

At the same time, negative pressure could be exerted on
Agrobank's ratings due to any material adverse changes in the
bank's risk profile, particularly any significant weakening of
its liquidity position, which could lead to a reassessment of the
supported ratings.

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

Domiciled in Tashkent, Uzbekistan, Agrobank reported total
unaudited local GAAP assets of UZS1.96 trillion ($990.0 million)
and net income of UZS18.68 billion ($9.4 million) as of 1 January
2013.



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


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                            *********

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.

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

Troubled Company Reporter-Europe is a daily newsletter co-
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Valerie U. Pascual, Marites O. Claro, Rousel Elaine T. Fernandez,
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delivered via e-mail.  Additional e-mail subscriptions for
members of the same firm for the term of the initial subscription
or balance thereof are US$25 each.  For subscription information,
contact Peter Chapman at 215-945-7000 or Nina Novak at
202-241-8200.


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