TCREUR_Public/130501.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

                           E U R O P E

            Wednesday, May 1, 2013, Vol. 14, No. 85

                            Headlines



B E L A R U S

BELARUSIAN REPUBLICAN: Fitch Affirms 'B-' IFS Rating


C R O A T I A

ZAGREBACKI HOLDING: Moody's Confirms 'Ba2' Debt Rating


C Y P R U S

* CYPRUS: Parliament Set to Vote on Terms of EU Bailout


C Z E C H   R E P U B L I C

PLOMA AS: Seeks Buyers For Plant or Machinery


F R A N C E

AATON: In Financial Receivership, Seeks Buyer
CEGEDIM: S&P Raises Corporate Rating to 'B+'; Outlook Stable
ELIOR FINANCE: Fitch Rates EUR350MM Senior Secured Notes 'BB-'


G E R M A N Y

BRE BANK: Moody's Downgrades Long-Term Deposit Rating to 'Ba1'
SOLARWORLD AG: Reaches Deal with Creditors on Assignable Loans
WEPA HYGIENEPRODUKTE: Moody's Assigns '(P)B1' CFR; Outlook Stable
WEPA HYGIENEPRODUKTE: S&P Assigns Prelim. 'BB-' Corporate Rating


I R E L A N D

EIRCOM HOLDINGS: S&P Affirms B Corp. Credit Rating; Outlook Neg.
XTRA-VISION: In Receivership, 1,000 Jobs at Risk


I T A L Y

BANCA CARIGE: Moody's Lowers Ratings on Mortgage-Covered Bonds
ISLAND REFINANCING: Moody's Cuts Rating on Class D Notes to Caa2


L I T H U A N I A

BANKAS SNORAS: Court Expects to Rule on Debt Repayment Priority
LBC TANK: Moody's Assigns (P)B3 Rating to US$350MM Notes Issue


P O R T U G A L

* PORTUGAL: Injects EUR5.6 Billion Into Non State-Owned Banks


R U S S I A

KRAYINVESTBANK: Fitch Assigns 'B+' Rating to RUB1.5BB Bond Issue
PHOSAGRO OJSC: S&P Raises Corp. Rating From 'BB+'; Outlook Stable

* LIPETSK REGION: Fitch Assigns 'BB' Rating to RUB3BB Bond Issue
* NOVOSIBIRSK REGION: Fitch Affirms 'BB+/B' Currency Ratings
* RYAZAN REGION: Fitch Assigns 'B+' Rating to RUB2.5BB Bond Issue
* KHAKASSIA REPUBLIC: Fitch Upgrades Currency Ratings to 'BB'


S L O V E N I A

MLM FOUNDRY: Insolvency Process Begins
* SLOVENIA: EU Aid Package Expected to Amount EUR8 Billion


S P A I N

AYT HIPOTECARIO BBK I: Moody's Cuts Rating on Cl. D Notes to Caa3
BANCO BILBAO: Fitch Assigns 'BB-(EXP)' Pref. Securities Rating
BANKIA SA: Triggers Restructuring Credit Event, ISDA Says
SANTANDER FINANCIACION: Moody's Confirms Caa3 Rating on D Notes
PESCANOVA SA: Regulator Proposes Deloitte as Administrator

PROMOTORA DE INFORMACIONES: Mulls EUR2.9-Bil. Debt Restructuring
RURAL HIPOTECARIO: Moody's Cuts Ratings on Two Note Classes to Ca
TDA 29: Moody's Downgrades Rating on Class Notes to 'Caa3'


U N I T E D   K I N G D O M

BOND AVIATION: Moody's Assigns '(P)B2' Corporate Family Rating
BOND MISSION: S&P Assigns 'B' Long-Term Corporate Credit Rating
CLIVE RANGER: In Administration, Close Bath Store
EASTMAN KODAK: To Hand Units to U.K. Retirees in Settlement
KENSINGTON 2007-1: S&P Affirms 'B-' Rating on Class B2 Notes

R&R ICE CREAM: S&P Puts 'B+' Corp. Rating on CreditWatch Negative
TOWERGATE FINANCE: Moody's Rates New Sr. Sec. Notes Issue (P)B1
TOWERGATE FINANCE: Fitch Affirms 'B' LT Issuer Default Rating
TRAVELPORT HOLDINGS: S&P Raises Corp. Credit Rating to 'CCC+'


X X X X X X X X

* Moody's Issues Report on EU Burden-Sharing Policy for Banks


                            *********


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B E L A R U S
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BELARUSIAN REPUBLICAN: Fitch Affirms 'B-' IFS Rating
----------------------------------------------------
Fitch Ratings has affirmed Belarusian Republican Unitary
Insurance Company's (Belgosstrakh) and Export-Import Insurance
Company of the Republic of Belarus's (Eximgarant) Insurer
Financial Strength (IFS) ratings at 'B-'. The Outlooks are
Stable.

Key Rating Drivers

The ratings continue to reflect the 100% state-ownership of
Belgosstrakh and Eximgarant, and the significant support provided
by the state to the insurers by way of guarantees for the
majority of their insurance risks (Eximgarant: 62% and
Belgosstrakh: 73% of premiums written in 2012), as well as a
record of significant capital injections.

The insurers continued to maintain their strong market positions,
which are supported by the preferential treatment provided in the
legislation governing state-owned insurers.

Belgosstrakh continues to hold leading market positions in all
compulsory lines and in a number of voluntary lines. The
insurer's market share stabilized at around 50% of the sector's
premiums in 2012 (2011: 49% and 2010: 52%) after a decline in
previous years due to more rapid growth of voluntary lines at the
sector level.

Fitch views positively the decline in weight of the domestic
financial risks line in Eximgarant's portfolio in 2012, which is
not covered by government guarantees. Fitch does not expect the
government to withdraw its guarantees from the company's export
insurance activity.

Relative economic recovery and a significant fall in inflation in
2012 positively affected Belgosstrakh's and Eximgarant's
underwriting profit, and both companies recorded positive
operating profitability for the year, further supported by
investment income.

At the same time, the agency has concerns about the
sustainability of these operating results in a still uncertain
economic environment. These concerns are offset to some extent by
the predominantly short-tail nature of the insurers' business and
presence of the government guarantees for all compulsory lines,
which include the most exposed long-tail workers' compensation
line, exclusively written by Belgosstrakh.

Based on Fitch's risk-adjusted assessment, the insurers' capital
positions strengthened in 2012 after large capital injections of
BYR3.2 trillion and BYR3.4 trillion into Belgosstrakh and
Eximgarant, respectively. The capital increases are aimed at
enhancing the insurers' underwriting capacity and facilitating
retention of larger risks. Nonetheless, the agency continues to
acknowledge exposure of the insurers' capital to the low quality
of invested assets, which are significantly concentrated in
Belarusian issuers.

Belgosstrakh was founded in 1921 and is Belarus's largest insurer
with BYR2,150 billion in gross written premiums in 2012 and
BYR5,881 billion in total assets at end-2012. Belgosstrakh has
eight branches and 119 representative offices covering all
Belarusian regional centres, including Minsk.

Eximgarant was founded in 2001 and is the local exclusive
provider of export insurance and also holds strong market
position in regular non-life lines. Eximgarant was the fourth-
largest insurer in Belarus by premium volume in 2012, with BYR238
billion in gross written premiums and BYR4,221 billion in total
assets. Eximgarant is a member of the Prague club of the
International Union of Credit and Investment Insurers, which
includes the largest export credit and investments insurers from
developed and developing countries.

Rating Sensitivities

Any change in Fitch's view of the financial condition of the
Republic of Belarus or any significant change in the insurers'
relation with the government would be likely to have a direct
impact on the insurers' ratings.



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C R O A T I A
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ZAGREBACKI HOLDING: Moody's Confirms 'Ba2' Debt Rating
------------------------------------------------------
Moody's Investors Service has confirmed the Ba2 debt rating of
Zagrebacki Holding and assigned a negative outlook. This action
concludes the review of the rating for possible downgrade
initiated on February 4, 2013.

Ratings Rationale:

Moody's action on Zagrebacki Holding primarily reflects the
company's weak liquidity, combined with sizeable debt burden and
weak profitability. In the past two years Zagrebacki Holding was
not able to find a sustainable solution to strengthen its cash
position. Holding's liquidity was under significant pressure
arising from the high proportion of short-term debt in the
company's total debt burden (18% at year-end 2012) and interest
paid on large borrowings incurred in the last few years for
implementation of its sizeable capital expenditure program.
Liquidity position is expected to remain weak at around 5% of
operating expenses throughout 2013.

The Holding's Ba2 debt rating also reflects its debt burden which
has weakened substantially in a relatively short timeframe:
reaching an expected 120% of its operating income in 2012, up
from 33% in 2006 as well as its significant exposure to foreign
currency risk (more than 80% of the holding's debt is euro-
linked).

The Holding's rating is supported by (i) close institutional and
financial linkages with and strong control over the Holding's
management and spending plans exercised by the City of Zagreb
(Ba1/negative outlook) as sole owner, and (ii) the city's track
record in and commitment to supporting operations and development
of the Holding through direct funding in form of operating and
capital subsidies as well as its tariff-setting policy.

According to Moody's, the rating also benefits from the high
probability that the Holding would enjoy extraordinary support
from the City of Zagreb if needed to avoid default, reflecting
the strategic importance of the Holding as the owner of important
infrastructural assets in Zagreb and sole provider of city's
statutory services.

What Could Change The Ratings Up/Down

Any upgrade of rating of the City of Zagreb could determine
upward pressure on Zagrebacki Holding, only if associated with a
significant improvement in the financial performance and
liquidity position combined with sustained decrease in debt.

Any deterioration of Zagreb's rating will determine a downward
change of Zagrebacki Holding's rating. Any negative changes in
the institutional and financial framework under which Zagrebacki
Holding operates could exert downward pressure on the rating. The
rating could be also influenced by further deterioration in the
Holdings's operating performance, and already weak liquidity as
well as growth in overall debt exposure.

Headquartered in the City of Zagreb, the capital of Croatia,
Zagrebacki Holding comprises a number of businesses that serve
around 1.1 million inhabitants in both the City and County of
Zagreb. Zagrebacki Holding's five key businesses are: (i) water;
(ii) gas supply; (iii) public transport services; (iv) waste
collection and recycling; and (v) maintenance and cleaning of
public roadways.

The principal methodology used in this rating was Government-
Related Issuers: Methodology Update published in July 2010.



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C Y P R U S
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* CYPRUS: Parliament Set to Vote on Terms of EU Bailout
-------------------------------------------------------
Michele Kambas at Reuters reports that Cyprus's parliament was
set to decide yesterday whether to back a bailout imposed by its
EU partners, with approval likely from a thin majority against
mounting calls for the island to exit the euro.

Lawmakers were due to meet in an extraordinary session to ratify
the terms of the aid, which is conditional on Cyprus winding down
its second-largest bank and imposing heavy losses on uninsured
depositors in another, Reuters notes.  Voting was expected
yesterday afternoon, Reuters discloses.

No single party has a majority in the 56-member parliament, and
the government is counting on support from members of its three-
party center-right coalition which has 30 seats in total, Reuters
says.  It needs 29 votes for the bill to pass, Reuters notes.

Cyprus, the euro zone's third smallest country, is bracing itself
for at least two years of economic misery and record unemployment
as terms of the EUR10 billion (US$13 billion)bailout deal start
to bite, Reuters relates.

According to Reuters, government officials have warned that shut
out of financial markets for two years, Cyprus will fall into
chaotic default if lawmakers vote down the bill.

Communist AKEL, which had made the initial application for
financial aid in June 2012, said onerous terms offered by
Cyprus's EU partners were compelling enough for the island to
seek alternative sources of funding, Reuterss recounts.  AKEL, in
government until it lost presidential elections in February, said
it planned to vote against the bill, Reuters notes.

"Cyprus's only option is a solution outside the loan agreement
and the Memorandum of Understanding. Seeking such a solution is
possibly tantamount to a decision to exit the euro," Reuters
quotes AKEL as saying in a statement.



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C Z E C H   R E P U B L I C
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PLOMA AS: Seeks Buyers For Plant or Machinery
---------------------------------------------
EUWID reports that the assets of Ploma AS are currently being
offered for sale in a tender process which will run until
May 31, 2013.

According to the report, administrator Ivana Rychnovska said it
is possible to bid either for the whole plant -- and therefore
potentially resume production in Hodonin -- or for the separate
lines and components.

EUWID relates that Rychnovska said there are already two parties
interested in taking over the whole plant. The two potential
buyers are from the timber industry and have both expressed
interest in resuming plywood production.  Talks are in progress
with the two interested parties on the scope of the assets to be
taken over, the report relates.

Czech Republic-based, Ploma, a.s. -- http://www.ploma.cz/en/--
produces plywood and blockboards.

EUWID reported in November 2012 that insolvency proceedings were
instituted as early as August against the Czech plywood and
blockboard producer Ploma, which had run into financial
difficulties.  The competent court in Hodonin commenced
proceedings on Aug. 23, 2012, after creditor protection under
Czech law applied for by the company on May 25, 2012, at the
competent court in Hodonin had evidently not resulted in any
improvement in the financial situation.



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F R A N C E
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AATON: In Financial Receivership, Seeks Buyer
---------------------------------------------
Bryant Frazer at studiodaily reports that Aaton Founder Jean-
Pierre Beauviala said that the company has entered financial
receivership.

"Unfortunately, final production has been hit by defects in the
controller for the Dalsa sensor, and then by non-uniform
performances of the sensors themselves, whose quality did not
match that of the prototypes . . . . Unable to deliver the
numerous cameras ordered and already manufactured, Aaton found
itself short of capital, and we have had to resort to a financial
receivership procedure so as to allow the company to be bought by
an outsider," Mr. Beauviala wrote in the statement obtained by
the news agency.

It sounds like the Penelope Delta may still be alive as a
product, but only if Aaton can find a buyer with the resources to
get the camera to market with quality sensors, according to
studiodaily.

Aaton is a French film camera manufacturer.


CEGEDIM: S&P Raises Corporate Rating to 'B+'; Outlook Stable
------------------------------------------------------------
Standard & Poor's Ratings Services said that it had raised its
long-term corporate rating on French health care software and
services group Cegedim S.A. to 'B+' from 'B'.  The outlook is
stable.

At the same time, S&P raised its issue rating on Cegedim's
unsecured notes, due in 2015, to 'B+' from 'B'.  S&P revised the
recovery rating to '4' from '3'.

S&P affirmed the 'B+' issue ratings on the EUR300 million notes,
due in 2020.  The recovery rating of '4' indicates S&P's
expectation of average (30%-50%) recovery in the event of a
default.

The upgrade primarily reflects the improvement in Cegedim's
liquidity position on the back of a successful issue of a
EUR300 million bond, due in 2020, in March 2013.  The proceeds
enabled the company to address the mismatch between cash flow
generation and debt amortization.  S&P views Cegedim's new debt
maturity profile as manageable, with the next repayment in July
2015 when the remaining EUR169 million on an existing bond
matures.  Moreover, S&P estimates that the company's free cash
flow generation and EUR80 million undrawn revolving credit
facility are likely to cover the bond maturing in 2015.  S&P had
previously stated its concerns about the EUR40 million annual
amortization of Cegedim's term loan, compared with its flat-to-
slightly positive free cash flow.

Given that the term loan has been fully repaid and S&P estimates
the company to have at least 15% headroom under financial
covenants, S&P has reassessed Cegedim's liquidity to "adequate"
from "less than adequate".  S&P also acknowledges that Cegedim
has delivered on its refinancing plan.  In addition, the
company's operating performance improved in the second half of
2012 after a weaker first half than S&P expected.

S&P anticipates that Cegedim will show modest growth in 2013 and
maintain operating margins at least in line with last year's.
S&P also assumes the company will not make any significant
acquisition or pay dividends over the next three years, beyond
the restrictions included with the covenant reset in October
2012.

The stable outlook reflects S&P's view that Cegedim will maintain
an adequate liquidity position, with at least 15% headroom under
its financial covenants and positive free cash flow generation.
It also factors in S&P's anticipation of a stabilization of
operating margins.

S&P could lower the ratings if Cegedim's operating performance
deteriorated significantly in 2013.  This could lead to tighter
covenant headroom and lower free cash flow.  Given the
EUR169 million outstanding on the bond due 2015, S&P could take a
negative rating action if Cegedim did not generate a substantial
amount of discretionary cash flow or if it made significant
acquisitions over the coming three years.

S&P could consider raising the ratings if the company were to
sustainably improve its operating performance and show a steady
adjusted debt-to-EBITDA ratio of below 4.0x.


ELIOR FINANCE: Fitch Rates EUR350MM Senior Secured Notes 'BB-'
--------------------------------------------------------------
Fitch Ratings has assigned Elior Finance & Co. SCA's EUR350
million 6.50% senior secured notes due 2020 a final rating of
'BB-'with a Recovery Rating of 'RR3'. As expected, the net
proceeds from the issuance will be used to repay portions of
various tranches under the senior facilities agreement (SFA).

The rating action follows the review of the final terms of the
bond issue conforming to information already received by Fitch.

Holding Bercy Investissement SCA's (HBI) Long-term Issuer Default
Rating (IDR) is 'B+' with a Stable Outlook. HBI is the holding
company of France-based contract foodservices and concession
catering operator Elior Group (Elior). Fitch also rates the
company's remaining EUR1.7 billion senior secured credit facility
at 'BB-'/'RR3'.

The new notes issued by Elior Finance will rank as senior secured
obligations and 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'). Fitch expects Elior Finance, a
Luxembourg-based special purpose vehicle, to advance the note
proceeds to HBI via the new Facility H1 included under the
recently amended 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.

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 the company's credit profile. From a business risk
standpoint, Fitch believes Elior has a profile in line with a
'BB' rating category. 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 funds from operations (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 leveraged 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 revolving
credit facility to March 2018 and extended the maturity on term
loans of about EUR1.0 billion 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 senior secured creditors 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

- Free cash flow (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%



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G E R M A N Y
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BRE BANK: Moody's Downgrades Long-Term Deposit Rating to 'Ba1'
--------------------------------------------------------------
Moody's Investors Service downgraded BRE Bank S.A.'s (BRE) long-
term bank deposit rating to Baa3 from Baa2 with a stable outlook.
BRE's short-term rating was also downgraded to Prime-3 from
Prime-2. BRE's standalone bank financial strength rating (BFSR)
at D equivalent to a ba2 baseline credit assessment (BCA) was
affirmed with a stable outlook.

At the same time, BRE Bank Hipoteczny's (BBH) long-term deposit
rating was downgraded to Ba1 with a stable outlook from Baa3 and
its short-term ratings to Not-Prime to Prime-3. In addition the
bank's BFSR was affirmed at E+ with a stable outlook. However,
BBH's BCA was repositioned to b3 from b1 in the same BFSR
category.

The rating actions on BRE and BBH's supported ratings were driven
by the downgrade of the German parent and support-provider
Commerzbank AG's baseline credit assessment to ba1 with stable
outlook from baa3 within the D+ bank financial strength rating
category.

Ratings Rationale:

The supported ratings of both subsidiaries of Commerzbank AG
incorporate notching uplift due to parental support
considerations. This is based on the strategic ownership and
control of these entities as well as the history of funding and
capital support provided by Commerzbank AG.

In Moody's opinion the likelihood of parental support remains
very high in case of need, unchanged from the previous
assumptions. However, Moody's considers that the German parent's
ability to extend ongoing support has weakened as expressed in
the downgrade of Commerzbank's stand-alone BCA to ba1 from baa3.
This serves as a reference point from which to impute rating
uplift for subsidiaries as a result of possible parental support.
Therefore in line with the one notch downgrade and stable outlook
on the parent's stand-alone rating, the supported long terms
ratings of BRE and BBH were lowered by one notch with a stable
outlook.

BRE Bank

For BRE Bank's supported long-term ratings Moody's continues to
incorporate two notches of uplift due to a combination of
parental and systemic support assumptions. The latter is driven
by the fact that BRE Bank benefits from an established franchise
as the fourth largest bank in terms of loans and deposits in
Poland with a large retail customer deposit base.

In affirming BRE's standalone credit strength with a stable
outlook Moody's notes the bank's strong franchise in the Polish
market, relatively stable trends in asset quality and high
provisioning coverage, as well as improvement in operating
profitability and capital ratios. The standalone rating is,
however, constrained by the structural concentration on FX
mortgages in the bank's loan book which are funded by gradually
amortizing wholesale sources from the parent. In case of FX
volatility over the medium-term this factor may expose the bank
to increased funding and credit risks. However, as the FX
portfolio gradually matures in a very low interest rate
environment this risk remains fairly limited at this stage.

BBH

BBH's supported long-term ratings are maintained one notch below
the supported ratings of its direct parent BRE Bank. This rating
positioning is a function of Moody's view that BBH is closely
integrated within the BRE Group and provides strategic and
specialized access to the commercial covered bond market. In
terms of its funding needs BBH is highly dependent and integrated
with BRE's treasury activities and distribution channels.

This structural and funding integration in the group explains a
high 5 notches of uplift in BBHs long-term ratings due to the
parental support considerations. BBH's supported ratings do not
incorporate any uplift from systemic support, since it is not
considered a systemically important entity in Poland.

In terms of standalone ratings Moody's has affirmed BBH's BFSR at
E+, however its BCA was repositioned to b3 from b1. This is to
recognize that BBH as a predominantly monoline franchise is
constrained by an ongoing stagnation in the commercial real
estate market. BBH's ability to fund itself independently remains
weak and requires on-going funding support from the group.

What Could Drive The Ratings Down/Up

A downgrade of the Commerzbank's standalone ratings could trigger
a further downgrade of the both subsidiaries' supported ratings.
Although Moody's notes that current ratings are on stable outlook
at this stage.

BRE

Downwards pressure on the BFSR could be triggered by
deterioration in BRE's asset-quality trends, given its exposure
to foreign-currency mortgages, erosion of its leading franchise,
or liquidity pressures. However, the recent performance and
improved profitability for the past years support the stable
outlook on the standalone ratings of BRE.

Upwards pressure on BRE Bank's standalone rating could develop in
case of significant further reduction in its FX exposure, as
would an improved independent funding profile without
compromising maturity mismatches on the balance sheet. Improving
the bank's capitalization and leverage ratios (on a comparable
basis) similar with higher rated Polish peer would also be a
credit positive.

BBH

BBH's standalone credit strength could be negatively impacted by
asset quality deterioration considering the bank's exposure to
higher risk segments such as land financing and real estate
development. Moody's would also view negatively continuously
depressed core profitability and widening mismatch in the
maturity of assets and liabilities.

Upwards pressure on BBH standalone rating, although unlikely in
the short-term, could develop following a significant improvement
in the granularity of its portfolio, higher sustainable recurring
profit and demonstration of an independent funding franchise.

Other Ratings Affected

The long-term senior unsecured ratings of BRE Finance France SA,
BRE's specialized bond issuance vehicle, were also adjusted
accordingly to Baa3 from Baa2 with a stable outlook.

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


SOLARWORLD AG: Reaches Deal with Creditors on Assignable Loans
--------------------------------------------------------------
SolarWorld AG on April 30 disclosed that it came to a mutual
understanding with creditors of assignable loans (Schuldscheine)
representing about 80% of the outstanding assignable loans debt
with regard to essential economic principles of a concept for
restructuring SolarWorld's financial liabilities.  This
preliminary agreement is still subject to the approval of all
committees.

The plan will enable the company to reduce its non-current
liabilities by approximately 60%.  As a further component, a
capital reduction of about 95% in combination with a capital
increase against contribution in kind will be suggested to an
extraordinary shareholders' meeting of SolarWorld.  As part of
the capital increase, a significant proportion of financial
liabilities (about 60%) is to be discharged by a debt-to-equity-
swap.

In all material respects, the creditors of two bonds (ISIN
XS0478864225 and ISIN XS0641270045) will receive treatment equal
to that of the other non-secured financial creditors of the
company.  To take the bondholders' interests into account to the
best possible extent, creditor meetings will be convened shortly
to enable the bondholders to each appoint a joint agent.

SolarWorld AG is Germany's biggest solar-panel maker.


WEPA HYGIENEPRODUKTE: Moody's Assigns '(P)B1' CFR; Outlook Stable
-----------------------------------------------------------------
Moody's Investors Service assigned a provisional (P)B1 Corporate
Family Rating to WEPA Hygieneprodukte GmbH. Upon confirmation of
the capital structure and assignment of definitive ratings,
Moody's would expect to assign a Probability of Default Rating of
B1-PD. Concurrently, Moody's assigned a provisional (P)B2 (LGD4,
68%) rating to the proposed EUR250 million senior secured notes
due 2020 to be issued by WEPA. The outlook on all ratings is
stable. This is the first time that Moody's has rated WEPA.

The assignment of a definitive Corporate Family and Probability
of Default Rating is subject to the successful closing of the
refinancing and placement of the EUR250 million senior secured
notes. WEPA will use EUR237 million of net proceeds from the
issuance together with about EUR29 million of initial borrowings
und a new revolving credit facility to repay existing bank
borrowings and related interest hedges. In addition, Wepa will
use EUR25 million of proceeds to subscribe for new shares in its
affiliate MKG. MKG in turn intends to use these funds to repay
indebtedness incurred in connection with the repurchase of the
32% stake in the WEPA group from Pamplona in 2012.

Moody's issues provisional instrument ratings in advance of the
final sale of securities and these reflect the rating agency's
credit opinion regarding the transaction only. Upon a conclusive
review of the final documentation, Moody's will endeavor to
assign a definitive rating to the notes. A definitive rating may
differ from a provisional rating.

Ratings Rationale:

The assignment of a (P)B1 CFR to WEPA is supported by the group's
solid market positions in the production of private label
consumer tissue products, which benefits from stable demand due
to the largely non-discretionary nature of the products. Strong
ties with leading European retailers including joint product
development support WEPA's market position. Moody's believes that
the group's focus on private label products is a strength in the
currently challenging macroeconomic environment as it could allow
WEPA to gain market share at the expense of branded products. The
rating also considers the earnings recovery since 2012. Moody's
assumes that these improvements can largely be sustained on the
back of portfolio optimization measures and improved internal
efficiencies, despite potential for volatility in input costs.

On a more negative note, the rating is constrained by the fairly
small scale of WEPA as indicated by sales of about EUR850 million
in 2012 as well as limited geographic diversification,
considering that WEPA generates the vast majority of revenues in
the mature European tissue market. In addition, the relatively
narrow product portfolio and dependency on a couple of large
retailers make WEPA vulnerable to changes in these markets.
Moody's also cautions that the price competitive nature of the
industry with strong bargaining power of retailers and
susceptibility of profitability to highly volatile input costs
leave the company exposed to potential margin volatility.

Given these factors, WEPA's leverage is considered relatively
high at this point in time and positions WEPA initially somewhat
weakly in the B1 rating category, as evidenced by Debt/EBITDA as
adjusted by Moody's of 4.7x. Moody's expects WEPA however to
gradually strengthen its financial metrics on the back of rising
profitability and positive albeit modest free cash flow
generation.

The stable outlook reflects Moody's expectation that WEPA will
continue its track record of gradual profit improvements
supported by fairly balanced supply and demand conditions in
Europe with no new capacity currently under construction. In such
an environment, Moody's expects WEPA to be able to continue its
portfolio optimization strategy which aims to focus on margin
quality over volumes. In addition, restructuring and cost savings
following the acquisition of Kartogroup in 2009 should further
support increasing profit levels.

This should allow WEPA to improve its financial risk profile such
that its Debt/EBITDA as defined by Moody's drops to around 4.5x
over the course of 2013. The stable outlook is also built on
Moody's assumption of WEPA maintaining a solid liquidity profile
following the refinancing with continued positive free cash flow
generation and sufficient headroom under financial covenants.

Following the proposed refinancing, Moody's anticipates that
WEPA's liquidity profile will be adequate. Internal sources
include cash on hand of EUR6 million pro forma for the
refinancing. In addition, Moody's notes that WEPA will have
access to a new revolving credit facility amounting to EUR 90
million as well as to a renewed factoring/securitization
agreement.

These sources should be sufficient to fund working cash
requirements, estimated at around 3% of 2012 sales, as well as
capex forecasted at around EUR 30 million per year, with the RCF
in place to support seasonal working capital swings. Moody's
expects WEPA to continue to generate positive, albeit modest
amounts of free cash flows. Moody's notes positively that
following the proposed refinancing, WEPA will not have any
material debt maturities before yearend 2014, when parts of its
factoring agreements mature, which Moody's however understands,
the company aims to renew well in advance of maturity.

The (P)B2 rating assigned to the proposed EUR250 million senior
secured notes is one notch below the group's corporate family
rating. The rating on this instrument reflects its junior ranking
behind the sizeable EUR90 million super senior revolving credit
facility (RCF) and Moody's assumption of preferred treatment of
trade payables in a going concern scenario. The RCF and the
senior secured notes share the same collateral package,
consisting of a pledge over materially all of the group's assets
as well as upstream guarantees from most of the group's operating
subsidiaries, representing more than 85% of aggregate assets and
EBITDA. However, RCF lenders benefit from priority treatment in a
default scenario as their claims will be discharged before any
remaining proceeds will be distributed to the holders of the
proposed senior secured notes.

A higher rating would require WEPA to build a track record of
resilient credit metrics and further progress with regards to its
portfolio optimization program. Quantitatively, Moody's would
consider a positive rating action if Moody's adjusted Debt/EBITDA
were to decline to materially below 4 times with EBITDA margins
around 12% (9.9% per 2012) on a sustained basis and consistently
positive free cash flow generation.

Negative pressure would build should WEPA not be able to achieve
further improvements in profitability, as exemplified by
Debt/EBITDA staying materially above 4.5x on a Moody's adjusted
basis. A negative rating action could also be triggered by a
weakening liquidity profile due to WEPA incurring material
amounts of negative free cash flow and/or tightening covenant
headroom.

Assignments:

Issuer: Wepa Hygieneprodukte GmbH

Corporate Family Rating, Assigned (P)B1

Senior Secured Regular Bond/Debenture, Assigned (P)B2

Senior Secured Regular Bond/Debenture, Assigned a range of LGD4,
68 %

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

WEPA Hygieneprodukte GmbH, based in Arnsberg (Germany), is a
leading producer and supplier of tissue paper products in Europe.
The company focuses on private label consumer tissue products,
which generated about 87% of group sales with the remainder of
sales generated by tissue solutions for away from home
applications. The company operates ten production sites across
Europe and employs approximately 2,600 staff, which generated
about EUR850 million of sales in 2012. WEPA is owned by the
Krengel Family, with Martin Krengel serving as the CEO of WEPA.


WEPA HYGIENEPRODUKTE: S&P Assigns Prelim. 'BB-' Corporate Rating
----------------------------------------------------------------
Standard & Poor's Ratings Services said that it has assigned its
preliminary 'BB-' long-term corporate credit rating to Germany-
based tissue paper group WEPA Hygieneprodukte Gmbh.  The outlook
is stable.

At the same time, S&P assigned its preliminary 'BB-' issue rating
to WEPA's proposed EUR250 million senior secured notes.  S&P
assigned the proposed notes a preliminary recovery rating of '4',
indicating its expectation of average (30%-50%) recovery in the
event of a payment default.

The final ratings will be subject to the successful closing of
the proposed issuance and will 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 the final debt amounts and the
terms of the final documentation, including notably the security
provided to the noteholders, depart from the materials S&P has
already reviewed, or if it do not receive the final documentation
within what S&P considers to be a reasonable time frame, it
reserves the right to withdraw or revise its ratings.

The preliminary rating reflects S&P's view of WEPA's "aggressive"
financial risk profile and "fair" business risk profile, as
defined in its criteria.

WEPA's "aggressive" financial risk profile reflects S&P's view of
the group's relatively high debt leverage, stemming from the
acquisition of Italian-based tissue producer Kartogroup in 2009.
S&P adjusts WEPA's reported debt by adding off-balance sheet
factoring lines (EUR59 million in 2012), pension liabilities
(EUR7 million), and operating leases (EUR19 million).

S&P's assessment of WEPA's "fair" business risk profile reflects
its view of the group's exposure to volatile input costs for pulp
and recovered paper, which has resulted in volatile profitability
in the past.

In S&P's base-case scenario, it forecasts low single-digit
revenue growth in the coming years and that WEPA will be able to
maintain EBITDA margins of 10%-11% in 2013 and 2014 on the back
of recent restructuring and efficiency initiatives.  Owing to
relatively low annual capital expenditures of about EUR30 million
and low dividends, S&P anticipates that there will be room to
decrease leverage somewhat in 2013-2014.  However, S&P do not
completely rule out the possibility of further expansionary
investments relating to new machines to increase capacity.  S&P
also notes that WEPA will incur cash outflows in 2013 relating to
the refinancing and restructuring that will hurt operating cash
flows. Adjusted for these items, which will likely total about
EUR30 million in 2013, S&P anticipates that the ratio of adjusted
FFO to debt will remain at about 15% in 2013 and 2014, compared
with 17.2% at the end of 2012.

The stable outlook reflects S&P's expectation that WEPA will
maintain broadly flat organic revenues and that EBITDA margins
will show only modest improvement in the coming years.  S&P could
take a negative rating action if it saw a material deterioration
in WEPA's profitability or cash flow generation, causing the
EBITDA margin to erode significantly to less than 10%.  S&P could
take a positive rating action if it believed that WEPA could
sustain adjusted FFO to debt of more than 20% and positive free
operating cash flow while keeping profitability stable throughout
the cycle.



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EIRCOM HOLDINGS: S&P Affirms B Corp. Credit Rating; Outlook Neg.
----------------------------------------------------------------
Standard & Poor's Ratings Services said that it has revised its
outlook on Ireland-based telecommunications group eircom Holdings
(Ireland) Ltd. (eircom) to negative from stable.  At the same
time, S&P affirmed its 'B' long-term corporate credit rating on
eircom, as well as the 'B' issue rating and '3' recovery rating
on the company's senior secured term loan.

The outlook revision reflects S&P's view that the next two years
will be extremely challenging for eircom, putting pressure on the
company's cash generation.  For years, the company under invested
in its network.  As a result, it is now investing large sums into
several important projects (roll-out of fiber, the launch of 4G,
and the development of its Internet Protocol TV service) to
defend its market shares and margins.  eircom also faces an
increase in the competitive environment with the entry of a new
player in the fixed-line business and continuous strong
performance of certain competitors, particularly in broadband and
mobile.  The combination of the significant capital expenditures
(capex) and tougher competition leads S&P to anticipate
significantly negative free operating cash flow (FOCF) for eircom
this year, as well as heightened execution risks.

S&P has revised its assessment of eircom's business risk profile
to "fair" from "satisfactory," as its criteria define these
terms, given the continuously weak profitability of its mobile
division, ongoing declines in mobile and fixed broadband average
revenue per user (ARPU), fierce and further increasing
competition, S&P's view of the planned investments' execution
risks, and the uncertain timing and extent of commercial benefits
from these investments.

S&P has maintained its assessment of eircom's financial risk
profile as "highly leveraged."  It primarily reflects the
negative FOCF that S&P anticipates over the two years in its
base-case credit scenario, which S&P believes will likely reduce
the group's financial flexibility.

The issue rating on the senior secured loan issued by eircom
Finco S.a.r.l. is 'B', the same level as the corporate credit
rating on eircom.  The recovery rating on this debt is '3',
indicating S&P's expectation of meaningful (50%-70%) recovery
prospects in the event of a payment default.

The issue and recovery ratings are supported by S&P's valuation
of the group as a going concern and its view of the loan's
relatively comprehensive security package.  On the other hand,
S&P believes that the recovery rating is constrained by the
amount of senior secured debt and the potential under the loan
agreement for prior-ranking debt to be raised on the path to
default.

To determine recoveries, S&P simulates a default scenario.  S&P
believes that a default would most likely result from a sustained
deterioration in operating performance.  S&P envisages, among
other factors, pressure on revenues and operating margins due to
competition from alternative providers and potential new
entrants, a weaker macroeconomic environment, and continued
investment in fiber without any additional revenues.  S&P's
hypothetical scenario projects a default in 2017, at which point
EBITDA would have declined to approximately EUR350 million.

The negative outlook reflects the possibility of a downgrade in
the next 12 months if the group's negative FOCF generation is
heavier than expected or if S&P was to revise downward its
revenues and EBITDA expectations.  This could result, for
example, from any increasingly aggressive behavior by eircom's
principal competitors or higher capex than S&P anticipates
relating to eircom's network investment plans.

S&P could revise the outlook back to stable if eircom's prospects
for free cash flow were to stabilize in 2014/2015 and the company
successfully implements its cost-cutting program and sustains its
market positions.


XTRA-VISION: In Receivership, 1,000 Jobs at Risk
------------------------------------------------
independent.ie reports that over a thousand jobs at Xtra-Vision
are in jeopardy with a receiver appointed to the company.

The company has been in financial difficulties for the past few
years as it struggled with high rents, declining trade and the
impact of illegal video downloading, according to independent.ie.

Luke Charleton and Colin Farquharson, of Ernst & Young, were
appointed joint receivers.

The report notes that Retail Excellence Ireland said the
receivership Xtra-Vision was the result of a lack of focus on the
part of Government on the needs of the domestic economy.

"While we welcome the work of Government to promote Foreign
Direct Investment, we believe a similar level of intensity and
ingenuity must now be applied by Government to the needs of our
domestic economy,"  the report quoted REI Chief Executive David
Fitzsimons as saying.

independent.ie recalls that the move comes just two years after
the retail chain went into examinership in a bid to save it.  The
report relates that it resulted in rents it pays on a number of
properties being slashed in an effort to help it survive.

That company exited examinership with a fresh EUR8 million cash
injection from its parent firm, Birchall Investments, the report
notes.

The chain is headed by financier Peter O'Grady-Walshe, who is a
shareholder in Birchall along with businessman Nicholas Furlong.

It's understood that Xtra-vision had continued to find trading
extremely difficult despite exiting the examinership process in
2011, the report says.  It had been closing a number of stores
but was lining up a significant new investment in a digital
strategy, the report adds.

Xtra-Vision is a video and electronics retailing chain.  There
are 151 Xtra-vision stores, down from 165 in 2011.  It employs
1,050 people.



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


BANCA CARIGE: Moody's Lowers Ratings on Mortgage-Covered Bonds
--------------------------------------------------------------
Moody's Investors Service downgraded the residential and
commercial-backed covered bonds of Banca Carige S.p.A. (deposits
Ba2 on review for downgrade, bank financial strength rating
D/baseline credit assessment ba2 on review for downgrade). This
follows Moody's downgrade and further review for downgrade of the
issuer's ratings, initiated on April 27.

Specifically, Moody's has downgraded to Baa1 and placed on review
for downgrade the covered bond ratings of Carige mortgage
programme (Residential), and downgraded to Baa2 and placed on
review for downgrade the covered bond ratings of Carige mortgage
programme 2 (Commercial). In both cases, the covered bonds were
previously rated A2.

Ratings Rationale:

The downgrade and review for downgrade is prompted by the
downgrade and review for downgrade of the issuer's ratings. The
TPI assigned to these transactions remains unchanged at
"Improbable". Moody's TPI framework does not constrain the rating
of Carige's commercial mortgage covered bonds, but the
"Improbable" TPI does constrain the rating of the Carige's
residential mortgage covered bonds at its current level.

Key Rating Assumptions/Factors

Moody's determines covered bond ratings using a two-step process:
an expected loss analysis and a TPI framework analysis.

Expected Loss: Moody's uses its Covered Bond Model (COBOL) to
determine a rating based on the expected loss on the bond. COBOL
determines expected loss as (1) a function of the issuer's
probability of default (measured by the issuer's rating); and (2)
the stressed losses on the cover pool assets following issuer
default.

For the two programs, cover pool losses are an estimate of the
losses Moody's currently models if the relevant issuer defaults.
Moody's splits cover pool between market risk and collateral
risk. Market risk measures losses stemming from refinancing risk
and risks related to interest-rate and currency mismatches (these
losses may also include certain legal risks). Collateral risk
measures losses resulting directly from the cover pool assets'
credit quality. Moody's derives collateral risk from the
collateral score.

Carige Residential Mortgage CBs

Cover pool losses are 29.4%, with market risk of 23.2 % and
collateral risk of 6.2%. The collateral score for this program is
currently 9.2%. The over-collateralization (OC) in this cover
pool is 39.7%, of which Carige provides 22% on a "committed"
basis. The minimum OC level that is consistent with the Baa1
rating target is 17%- on top of OC being posted to cover set-off
and commingling risk in the ACT test. These numbers show that
Moody's is not relying on "uncommitted" OC in its expected loss
analysis.

Carige Commercial Mortgage CBs

Cover pool losses are 44.8%, with market risk of 19.6% and
collateral risk of 25.2%. The collateral score for this program
is currently 37.6%. The OC in this cover pool is 28.8%, of which
Carige provides 10.5% on a "committed" basis. The minimum OC
level that is consistent with the Baa2 rating target is 25%- on
top of OC being posted to cover set-off and commingling risk in
the ACT test - of which the issuer should provide 4% in a
"committed" form. These numbers show that Moody's is relying on
"uncommitted" OC in its expected loss analysis.

TPI Framework: Moody's assigns a "timely payment indicator"
(TPI), which indicates the likelihood that the issuer will make
timely payments to covered bondholders if the issuer defaults.
The TPI framework limits the covered bond rating to a certain
number of notches above the issuer's rating.

For Carige's residential and commercial mortgage covered bonds,
Moody's assigned TPI of "Improbable" remains unchanged.

Sensitivity Analysis

The issuer's credit strength is the main determinant of a covered
bond rating's robustness. The TPI Leeway measures the number of
notches by which Moody's might downgrade the issuer's rating
before the rating agency downgrades the covered bonds because of
TPI framework constraints.

The TPI Moody's assigns to Carige's residential and commercial
covered bonds is Improbable. The TPI Leeway for these programs is
limited, and thus any downgrade of the issuer ratings may lead to
a downgrade of the covered bonds.

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

Rating Methodology

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


ISLAND REFINANCING: Moody's Cuts Rating on Class D Notes to Caa2
----------------------------------------------------------------
Moody's Investors Service has taken rating actions on the
following classes of Notes issued by Island Refinancing S.r.l.
(amounts reflect initial outstanding):

Class A - 2007 Notes, Affirmed A2 (sf); previously on Jul 24,
2012 Downgraded to A2 (sf)

Class B - 2007 Notes, Affirmed Baa3 (sf); previously on Oct 20,
2010 Downgraded to Baa3 (sf)

Class C - 2007 Notes, Downgraded to B3 (sf); previously on Oct
20, 2010 Downgraded to B1 (sf)

Class D - 2007 Notes, Downgraded to Caa2 (sf); previously on Oct
20, 2010 Downgraded to B3 (sf)

Class X - 2007 Notes, Affirmed Ca (sf); previously on Oct 20,
2010 Downgraded to Ca (sf)

Moody's has not assigned ratings on the Class E Notes or Class F
Notes.

Ratings Rationale:

This downgrade action reflects Moody's revised loss expectation
for the Class C and D Notes while the rating affirmation of the
Class A, B and X Notes continues to reflect Moody's expected loss
for these tranches. Moody's has updated its performance
expectation due to the slower than expected collection rate, in
particular for the period since the first semester 2011. The
timing of collections versus the Initial Business Plan determines
when the Notes' interest deferral mechanism is triggered.
Interests on Class B, C, D and X have been deferred for more than
two years.

Moody's has updated its performance expectation following an in-
depth review of (i) the updated 2011 servicer's portfolio
business plan, (ii) the portfolio's remaining collections with
respect to their expected recovery values, (iii) potential timing
constraints faced by the servicer's work-out of the remaining
portfolio, (iv) historical recoveries and net collections as well
as transaction costs and swap payments, and (v) the current
property market and lending conditions in Italy and the potential
impact on recoveries.

Moody's analysis focused in particular on (i) a historical
comparison of various business plan forecasts against actual
collections for the forecasted period, (ii) the level of
transaction costs and the key cost drivers, (iii) the payments
under the swap, and (iv) factors which could potentially impact
the servicer's recovery and timing expectations going forward.

Moody's evaluated various performance stress scenarios for each
of the rated tranches to test the resilience of Moody's base case
recovery and timing assumptions ahead of legal final maturity on
the notes. The scenarios assume that the servicer would realize
lower recoveries that would further delay the redemption of the
Notes. Ongoing collections from recovery proceeds on the non-
performing loans does not provide sufficient cushion for a
repayment of the Class C, D and X Notes principal.

In general, Moody's analysis reflects a forward-looking view of
the likely range of commercial real estate collateral performance
over the medium term. From time to time, Moody's may, if
warranted, change these expectations. Performance that falls
outside an acceptable range of the key parameters such as
property value or loan refinancing probability for instance, may
indicate that the collateral's credit quality is stronger or
weaker than Moody's had anticipated when the related securities
ratings were issued. Even so, a deviation from the expected range
will not necessarily result in a rating action nor does
performance within expectations preclude such actions . There may
be mitigating or offsetting factors to an improvement or decline
in collateral performance, such as increased subordination levels
due to amortization and loan re- prepayments or a decline in
subordination due to realized losses.

Primary sources of assumption uncertainty are the current
stressed macro-economic environment and continued weakness in the
occupational and lending markets. Moody's anticipates (i) lending
will remain constrained over the next years, while subject to
strict underwriting criteria and heavily dependent on the
underlying property quality, (ii) strong differentiation between
prime and secondary properties, with further value declines
expected for non-prime properties, and (iii) occupational markets
will remain under pressure in the short term and will only slowly
recover in the medium term in line with anticipated economic
recovery. Overall, Moody's central global macroeconomic scenario
for the world's largest economies is for only a gradual
strengthening in growth over the coming two years. Fiscal
consolidation and volatility in financial markets will continue
to weigh on business and consumer confidence, while heightened
uncertainty hampers spending, hiring and investment decisions. In
2013, Moody's expects no growth in the Euro area and only slow
growth in the UK.

Moody's Portfolio Analysis

Island Refinancing S.r.l. is an Italian non-performing loan
transaction which closed in December 2007. The notes issued by
Island Refinancing S.r.l. funded the acquisition from Island
Finance (ICR4) S.p.A and Island Finance 2 (ICR7) S.r.l. of two
portfolios of non-performing mortgage and connected loans and the
related transaction costs. The legal final maturity date of the
notes is July 2025. At the cut-off date (30 June 2007), the
portfolio comprised of 7,824 loans granted to 3,395 borrowers
representing approximately EUR 1.9 billion of outstanding gross
book value. As of closing, nearly 90% of the pool was
concentrated in Sicily.

The Initial Portfolio Business Plan anticipated a 99.9%
completion of its net collection target by June 2016, the
remaining being until December 2018. However the net cash flow to
date represent EUR 299 million compared to EUR 577 million
expected net collection amount in the Initial Business Plan.
While a prolonged delay in collections results in higher than
initially expected interest due on the Notes (as principal
remains outstanding over a long period and interests are deferred
on all the classes except Class A), the impact on the credit risk
of the notes is linked to the cumulative collections from the
servicing of the portfolio in relation to the initially
anticipated net collections target and the timing of collections
ahead of the legal final maturity.

In reviewing the performance history of the transaction since
closing, the last four semesters since 2011 have shown a downward
trend in net collections. The average gross collections per
semester since S1 2011 amounted to EUR 19.2m, with maximum
collections of EUR 21.2m in S1 2012 and minimum collections of
EUR 17.2m in S1 2011. In comparison, the average gross
collections between closing in S2 2007 and S2 2010 were approx.
EUR 38.1 million per semester. Moody's believes that the more
recent net collection performance is, inter alia, a function of
the growing proportion of more difficult cases in the portfolio
and the continuing subdued conditions on the lending and property
markets.

Based on the updated business plan of the servicer as of December
2011, the expected net collections target for 2012 was EUR 52.2
million. Only EUR 30.7 million was received (i.e. 59% of the
target). The servicer's expected collections and collection
timing are a key factor in Moody's updated assessment. Moody's
net collection expectations, which have been used in the cash
flow model, were derived by a historical analysis of the average
net collections. In Moody's view the average net collection value
of most recent periods since S1 2011 are most representative of
the recovery potential and timing considering the composition of
the remaining portfolio. For its sensitivity cases Moody's has
assessed various scenarios which deviate by 20% to 30% around the
most recent achieved average net collection levels adjusted for
the most recent trend (which formed Moody's base case).

Rating Methodology

In rating this transaction, Moody's benchmarked each note using a
scenario analysis to test note repayment by legal maturity.

This approach projects Moody's cash flow expectations both in
terms of size and timing, to determine the potential shortfall
for each tranche of notes at legal maturity. The cash flow model
evaluates the loss for each tranche by applying various
performance scenarios in respect of the sub-servicer's resolution
strategy. The respective principal recoveries for each class is
determined by reducing the remaining outstanding note balance in
accordance with the Issuer's pre-enforcement principal priority
waterfall in which principal is allocated sequentially to the
Notes. Principal to the Notes is paid junior to the Issuer's
senior expenses and interest of the Notes. In a post enforcement
scenario all proceeds received by the Issuer are allocated
sequentially to the Notes. Finally, Moody's tests if the Notes
are fully repaid at legal final maturity under a base case and
stressed scenarios as a function of the target rating.

In deriving the principal repayment amounts for the notes on each
respective payment date, Moody's applied its expected net cash
flow for the period adjusted for senior expenses and interest
payable on the notes. For each targeted rating level, Moody's
first adjusted its base case expected cash flow (assumed to be
around EUR 16.5 million per semester) by applying haircuts
corresponding to the various rating categories. Class A Notes,
rated A2 (sf) is able to withstand a haircut of 30% to the base
case cash flows. Class B Notes rated Baa3 (sf) is able to
withstand a 20% haircut to the base case cash flows. Classes C, D
and X show losses in the base case. The base case cash flow has
been derived by establishing 1 to 2 standard deviations around
the most recent achieved average net collection levels and by
applying the lower value of the deviation results.

To compute net cash flows, Moody's assumed senior expenses of up
to 30% of expected net collections. Over the last seven quarters,
senior costs were on average between 10% - 20% of actual net
collections.

Finally a stress was also applied to the interest payable on the
notes. The notes pay interest based on 6-Month Euribor plus a
fixed margin. For future rates, Moody's assumed a base case
Euribor which is increasing every year. The applied rates are
between 1.25% and 4.25%. The same assumptions were taken for the
swap.

Other factors used in this rating are described in European CMBS:
2013 Central Scenarios published in February 2013.

The updated assessment is a result of Moody's on-going
surveillance of commercial mortgage backed securities (CMBS)
transactions. The last Performance Overview for this transaction
was published on February 12, 2013.



=================
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=================


BANKAS SNORAS: Court Expects to Rule on Debt Repayment Priority
---------------------------------------------------------------
Bryan Bradley at Bloomberg News, citing Verslo Zinios daily,
reports that Lithuanian court is set to decide when and what the
state can recover of about LTL3 billion (US$1.1 billion) in costs
from closing two banks.

According to Bloomberg, central bank head Vitas Vasiliauskas, as
cited by the daily, said that the Constitutional Court ruling
regarding state deposit-insurance fund's priority as creditor in
Snoras bankruptcy proceedings is expected during the summer.

Mr. Vasiliauskas said that striking down insurer's priority would
mean it probably could repay only about 50% of loans from
government, Bloomberg relates.  He said that the ruling is also
relevant for pending Ukio Bankas bankruptcy, Bloomberg notes.

Mr. Vasiliauskas said that the state and other creditors can't
recover any money, including more than LTL1 billion litai now
held by Snoras, until the court rules, according to Bloomberg.

Lithuania shut Bankas Snoras AB in November 2011 for suspected
misappropriation of assets, Bloomberg recounts.

Lithuania shut Ukio Bankas AB in February 2013, saying it was
insolvent due to risky lending, Bloomberg relates.

                        About Bankas Snoras

Bankas Snoras AB is Lithuania's fifth biggest lender.  Snoras
held LTL6.05 billion in deposits and had assets of LTL8.14
billion at the end of September.  It competes with Scandinavian
lenders including SEB AB, Swedbank AB (SWEDA), and Nordea AB.  It
also controls investment bank Finasta and Latvian lender Latvijas
Krajbanka AS.

As reported in the Troubled Company Reporter-Europe on Dec. 2,
2011, The Baltic Times, citing LETA/ELTA, said Vilnius District
Court accepted the application regarding the initiation of
bankruptcy proceedings against Snoras bank.  The Bank of
Lithuania delivered application on Snoras bankruptcy on Nov. 28,
2011.

The TCR-Europe, citing Bloomberg News, reported on Nov. 28, 2011,
that Lithuania's central bank said that Snoras' financial
situation is "worse than previously identified" and saving the
bank "would cost significantly more and would take longer than
the available liquidity" at Snoras.  Governor Vitas Vasiliauskas
said at a news conference on Nov. 24 that some LTL3.4 billion
(US$1.3 billion) in assets are missing, according to Bloomberg.


LBC TANK: Moody's Assigns (P)B3 Rating to US$350MM Notes Issue
--------------------------------------------------------------
Moody's Investors Service assigned a first-time corporate family
rating of B1 and probability of default rating of B1-PD to LBC
Tank Terminals Holding Netherlands BV, a holding company of LBC
Tank Terminals. Concurrently, Moody's has assigned a provisional
(P)B3 rating to the proposed US$350 million senior unsecured
notes due 2023. The outlook on all ratings is stable.

The proceeds from the notes, in addition to US$271 million in
proceeds from the term loan under the US$396 million senior
credit facilities, will be used to refinance existing loan
facilities which were put in place to support the acquisition of
LBC by a Challenger led consortium in 2007, before it was
acquired by a consortium of existing minority Australian
shareholders and Dutch funds, PGGM and APG.

Moody's issues provisional ratings in advance of the final sale
of securities and these reflect Moody's credit opinion regarding
the transaction only. Upon a conclusive review of the final
documentation Moody's will endeavor to assign definitive ratings.
A definitive rating may differ from a provisional rating.

Ratings Rationale:

"The B1 CFR reflects the high leverage for LBC and weak free cash
flow, mitigated by the strength of its business risk profile and
contracts with many long standing highly rated customers," says
Douglas Crawford, Moody's lead analyst for LBC.

The CFR reflects (i) the company's high leverage and weak credit
metrics pro-forma for the proposed transaction, with gross
adjusted leverage expected at over 6.0x at FY2013 ended June,
with no deleveraging expected in the near term as the company
continues its expansion program; (ii) its limited size compared
to some of its competitors; (iii) its negative expected free cash
flow generation over the next three years due to high growth
capex; and (iv) the construction risk of adding storage and dock
capacity of over 200,000 m3 at its Bayport terminal in Houston,
Texas.

However, these are somewhat mitigated by (i) the resilient nature
of the business in an economic downturn with average terminal
utilization of 92% for the last three years ended December 2012
and most revenues supported by contracts on a take-or-pay basis
with fixed rate capacity charges that represent a small
percentage cost of the product; (ii)LBC's established global
network of terminals in strategic locations, with supporting
infrastructure providing barriers to entry; (iii) no direct
commodity price risk, as LBC only rents storage capacity; and
(iv) longstanding customer relationships with net churn below 1%
for the three years ending in FY2012 and an average contract life
of 3.3 years.

LBC's liquidity profile is adequate, supported by US$38 million
of cash on the balance sheet and full availability under a US$25
million revolving credit facility pro forma the transaction as of
December 2012. Working capital fluctuations are historically
limited but Moody's expects free cash flow to be negative due to
the company's expansion capex spend of around US$235 million in
the next four years. This will be funded by a US$100 million
capex facility (most of which the rating agency expects will be
drawn down in 2015), contracted equity contributions from the
shareholders, as well as internally generated cash flow. The bank
facilities have financial maintenance covenants referencing net
debt to consolidated EBITDA and net cashflow to consolidated net
finance charges and are set with ample headroom. They also have
cash sweeps that step-up in year four onwards.

The B1-PD PDR, in line with the CFR, assumes a recovery rate of
50%, as is common for a structure consisting of secured bank debt
and unsecured notes. The (P)B3 assigned to the senior unsecured
Notes, two notches below the CFR, reflects the presence of $396
million in senior secured credit facilities that rank ahead of
the notes.

The stable outlook reflects Moody's expectation that the
diversified portfolio of contracts will be renewed on a timely
and favorable basis and will generate relatively stable and
predictable cash flows, as the cash flows are derived from
contracts with long-standing customers.

What Could Change The Rating Up/Down

A rating upgrade will depend on LBC's progress in delivering on
its growth projects, and expected increases in cash flow and
EBITDA, with debt/EBITDA approaching 5.0x. The ratings could be
downgraded if LBC's debt/EBITDA remains elevated above 6.5x,
indicative of project delays, underperforming assets or even more
aggressive growth spending.

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

LBC is one of the top twenty largest independent operators of
bulk liquid storage terminals and the second largest independent
chemical storage company by capacity. It operates a network of 14
terminals, with locations in key port and terminal sites in the
U.S., France, Belgium, The Netherlands, Spain, Portugal and
China. On a last-12-months basis, as at December 31, 2012, it
reported revenues of US$255 million and reported terminal
adjusted EBITDA of US$103 million.



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


* PORTUGAL: Injects EUR5.6 Billion Into Non State-Owned Banks
-------------------------------------------------------------
Anabela Reis at Bloomberg News reports that Portugal's banks are
defying a prediction by Moody's Investors Service that the nation
would need to tap bailout funds a second time to refinance
lenders.

The government is raising taxes and cutting spending to meet the
terms of its EUR78 billion (US$102 billion) rescue by the
European Union and the International Monetary Fund, Bloomberg
discloses.

According to Bloomberg, as part of the plan, Portugal injected
EUR5.6 billion into banks that aren't state-owned, helping its
financial industry cope with higher capital requirements and a
rise in bad loans as the economy shrinks for a third year.

                        Moody's Estimates

"Despite the effort that has been made to improving the capital
for banks, amid the deterioration of the economic environment,
asset quality and profitability are going to continue to suffer,"
Bloomberg quotes Moody's analyst Pepa Mori as saying in an
interview in Lisbon on April 10.  Ms. Mori estimates the
country's lenders may need an additional EUR8 billion in capital,
with only about EUR6 billion left from the aid package, Bloomberg
states.

                           Stress Tests

"Even in a scenario of rising bad loans and sovereign risk,
Portuguese banks look resilient compared to peers in the
periphery," Bloomberg quotes analysts at Royal Bank of Scotland
Group Plc in London as saying in a note to clients April 19.
"Our stress tests show Portuguese banks can manage a rise in bad
loans of over 50 percent, and a widening in sovereign spreads."

To help refinance lenders, the state subscribed to contingent
convertible bonds sold by the banks that convert into equity if a
capital ratios drop below pre-defined levels, Bloomberg
discloses.  According to Bloomberg, Banco Comercial Portugues SA
plans to repay the state by the end of 2016, while Banco BPI SA
targets repayment by mid-2017.  BPI CEO Fernando Ulrich said in
an April 25 interview that the bank could pay earlier if
regulatory capital requirements changed, Bloomberg relates.



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


KRAYINVESTBANK: Fitch Assigns 'B+' Rating to RUB1.5BB Bond Issue
----------------------------------------------------------------
Fitch Ratings has assigned Krayinvestbank's RUB1.5 billion BO-02
Series domestic bond issue a final Long-term local currency
rating of 'B+', a final National Long-term rating of 'A-(rus)'
and a Recovery Rating of 'RR4'.

The bonds have a maturity of three years, a semi-annual coupon of
11.35% per year and a 1.5-year put option.


PHOSAGRO OJSC: S&P Raises Corp. Rating From 'BB+'; Outlook Stable
-----------------------------------------------------------------
Standard & Poor's Ratings Services said that it had raised its
long-term corporate credit rating on Russian phosphate fertilizer
and rock producer PhosAgro OJSC to 'BBB-' from 'BB+'.  The
outlook is stable.

S&P also raised its Russia national scale rating on the company
to 'ruAAA' from 'ruAA+'.

The upgrade reflects PhosAgro's successful secondary public
offering in April 2013.  This resulted in free float almost
doubling and the company obtaining over US$200 million of new
equity.  The share offer followed PhosAgro's debut issue, in
February this year, of a significant (US$500 million), long-term
bond at an affordable 4.2% coupon.  Combined with S&P's view of
the company's continually prudent financial policies, these
achievements have led S&P to revise its assessment of the
financial risk profile to "intermediate" from "significant".

S&P regards PhosAgro's business risk profile as "satisfactory."
The main factors supporting S&P's assessment include PhosAgro's
high profitability, illustrated by a favorable return on capital
higher than 25% over 2010-2012, EBITDA of about US$1.2 billion in
2012, an EBITDA margin of 25%-35% over 2009-2012, and moderate
maintenance capital expenditure (capex) of between US$160 million
and US$180 million per year.

PhosAgro owns very large, high-quality and low-cost phosphate
rock reserves whose annual production covers nearly 200% of its
needs. The surplus is sold domestically and exported to Europe.
The company also has access to competitively-priced Russian gas
and sulfur, the largest expenses after phosphate rock in
producing phosphate fertilizers.  PhosAgro has flexible
production lines, enabling it to quickly switch among core
fertilizer products to maximize margins.  S&P views positively
the increase in ownership of key units through the buyout of
minority interests in past years.

Constraints on PhosAgro's business risk profile include S&P's
country risk assessment for Russia.  Although PhosAgro exports
most of its products, its profits come from assets located in
Russia.  S&P expectd inflation to remain high there, with, for
example, gas prices rising 15% per year until they reach parity
with western European prices, net of transportation costs, and
mid-single-digit increases in rail transportation and other
costs. S&P also factors in the group's exposure to cyclical
markets for phosphate-based fertilizers, which can lead to
significant EBITDA and operating cash flow swings depending on
the industry supply and demand balance.  S&P notes, however, that
it's harder for farmers to do without phosphate than potash,
given its short-term impact on crop yields.  Increasing
fertilizer production capacity and, to a lesser extent, enhancing
efficiency, require substantial capex, can take three to four
years to complete, and entail some execution risk.

S&P's base case shows PhosAgro's EBITDA at US$1.1 billion in 2013
and more than US$0.9 billion in 2014, buoyed by healthy industry
conditions.  In the long term, S&P believes additional industry
capacity could materialize, putting pressure on margins, although
the timing and intensity are difficult to gauge.  Many industry
players have yet to decide whether to initiate several large
projects, and execution risks are material.  Demand and prices
for fertilizers can also fluctuate with crop prices, weather,
inventory level policies, and price expectations.  Political
decisions on the level of state subsidies in India, the world's
largest importer of phosphate fertilizers (DAP; diammonium
phosphate), also play an important role in demand and prices.

Key positive factors underpinning PhosAgro's "intermediate"
financial risk profile include the company's track record of very
conservative financial policies.  For the past several years, the
ratio of total debt to EBITDA was below 1x, including during the
global financial crisis.  Net debt to EBITDA was much lower, and
there were no major acquisitions or capex.  S&P takes into
account the company's policy of generally keeping net debt to
EBITDA at 1x or lower, but believes the ratio could temporarily
weaken to about 2x-2.5x in the event of acquisitions.  PhosAgro's
credit metrics have been strong for the ratings.  The company's
large dividend in 2011 was mostly to catch up, since it paid
almost no dividends between 2007 and 2010.  Under S&P's base
case, it conservatively factor in dividends at 40% of net income
from 2012, the high end of the company's 20%-40% range.

Offsetting factors include potentially large swings in cash
flows, reflecting prevailing industry cycles, and capital
intensity with long lead times in the industry to add plants or
mines.

The stable outlook reflects S&P's expectation of favorable
industry conditions in 2013-2014, leading to high profits, with
EBITDA at US$1 billion-US$1.1 billion, coupled with S&P's belief
that the company will retain its conservative financial policy.
S&P sees an adjusted debt to EBITDA of 1.5x or less as rating-
commensurate.

S&P sees rating downside as unlikely.  This could occur if the
company were to change its financial policies, such that debt to
EBITDA surpassed the aforementioned levels on a sustained basis,
or if industry conditions were to significantly weaken without
management taking action.

S&P sees rating upside as unlikely, given its view of the
company's exposure to Russian country risk and, to a lower
extent, cyclicality in the fertilizer industry.


* LIPETSK REGION: Fitch Assigns 'BB' Rating to RUB3BB Bond Issue
----------------------------------------------------------------
Fitch Ratings has assigned the Russian Lipetsk Region's RUB3
billion domestic bond issue (ISINRU000A0JTVZ8), due April 17,
2020, a final Long-term local currency rating of 'BB' and a final
National Long-term rating of 'AA-(rus)'.

Key Rating Drivers

The bond represents a senior and unsecured obligation of the
Russian Lipetsk Region. The region has Long-term local and
foreign currency ratings of 'BB' and a National Long-term rating
of 'AA-(rus)'. The Long-term ratings have Stable Outlooks. The
region's Short-term foreign currency rating is 'B'.

Fitch forecasts Lipetsk Region will maintain a satisfactory
budgetary performance with an operating margin at about 8%-10% in
2013-2014 driven by continued economic growth. The agency expects
the region's direct risk, including direct debt, to remain
moderate at about 30% of current revenue in 2013.

Lipetsk Region is located in the center of the European part of
Russia. The region contributed 0.7% of the Russian Federation's
GDP in 2010 and accounted for 0.8% of the country's population.

The bond has 28 quarterly coupons. The interest rate of the first
coupon was set at 7.89%. The principal will be amortized by 15%
of the initial bond issue value in April 2015, by 10% of the
initial bond issue value in July 2016 and by 15% of the initial
bond issue value in October 2017, October 2018 and July 2019. The
remaining 30% will be redeemed on April 17, 2020. The proceeds
from the bond issue will be used to refinance maturing debt and
to fund the region's budget deficit.

Rating Sensitivities

The issue's rating would be sensitive to any movement in the
Lipetsk Region's Long-term local currency rating.


* NOVOSIBIRSK REGION: Fitch Affirms 'BB+/B' Currency Ratings
------------------------------------------------------------
Fitch Ratings has affirmed the Novosibirsk Region's Long-term
foreign and local currency ratings at 'BB+', with Stable
Outlooks, and its Short-term foreign currency rating at 'B'. The
agency also affirmed the region's National Long-term rating at
'AA(rus)' with Stable Outlook.

Key Rating Drivers

The affirmation reflects sound operating performance of the
region, its low, albeit increasing direct risk, negligible
contingent liabilities and high self-financing capex capacity.
The ratings also factor in robust economic performance and the
short-term profile of the region's direct debt.

Fitch expects consolidation of the region's sound operating
performance with an operating margin at about 15% in 2013-2015.
This will be supported by further extension of the regional tax
base. In 2012, the operating balance accounted for 14.6% of
operating revenue, demonstrating continuous stability of the
region's budgetary performance. Fitch expects the region will
record a moderate deficit in 2013-2014, driven by high capex.

Fitch expects the region will continue to maintain a high level
of capex in the medium term, which will be offset by its strong
self-financing capacity. The region's capex remained high in
2012, accounting for 27% of total expenditure. The region's
current balance covered 46% of capex in 2012 reflecting the
region's high self-financing capacity on its capital outlays.
Capital transfers from the federal budget funded another 39% of
capex while the residual amount was covered by new debt.

Fitch projects maintenance of low indebtedness in the region in
the medium term. In 2012, direct risk accounted for 12.7% of
current revenue, and will be close to this level in 2013-2015.
Almost half the direct risk is composed of subsidized loans from
the federal budget, while another part is represented by short-
term bank loans. The region plans to issue RUB3 billion domestic
bonds in 2013 with maturity of five years, which will lengthen
the overall maturity profile of the region's debt.

The region's contingent liabilities are limited to RUB0.6 billion
of provided guarantees while the companies of the broader public
sector were free of debt as of the beginning of 2013. According
to its budget law, the region could provide up to RUB0.5 billion
of new guarantees in 2013. However, even considering this amount
the contingent liabilities will account for only 1% of projected
operating revenue in 2013.

The regional economy is well-diversified across sectors and large
number of companies. In 2012, GRP increased by 4.1% which
outpaced the national average growth of 3.7%. The administration
expects the economy will grow by average 5%-6% in 2013-2015
fuelled by increasing domestic demand and growing transit and
logistic services due to the region's beneficial location.

Novosibirsk region is in the southern part of the West Siberian
Plain, with Kazakhstan on its southwest border. Its population
accounted for 1.9% of the national total while its GRP
represented 1.3% of the national GDP.

Rating Sensitivities

Consolidation of sound budgetary performance would be positive.
The region's ratings could be positively affected by
consolidation of sound budgetary performance with operating
margin at about 15% accompanied by maintenance of moderate debt
level.

Worsened debt ratios would be negative. A downgrade or revision
of the Outlook to Negative could occur as a result of
deterioration of the debt coverage ratio (direct risk to current
balance) above average debt maturity caused by either weaker
operating performance or increasing debt.


* RYAZAN REGION: Fitch Assigns 'B+' Rating to RUB2.5BB Bond Issue
----------------------------------------------------------------
Fitch Ratings has assigned Russia's Ryazan Region RUB2.5 billion
domestic bond issue (RU000A0JTGF1), due Dec. 14, 2017, a Long-
term local currency rating of 'B+' and National Long-term rating
of 'A(rus)'.

Key Rating Drivers

The bond represents a senior and unsecured obligation of the
Russian Ryazan Region. The region has Long-term local and foreign
currency ratings of 'B+' and a National Long-term rating of
'A(rus)'. The Long-term ratings have Stable Outlooks. The
region's Short-term foreign currency rating is 'B'.

Ryazan Region is located in the center of the European part of
Russia. Its capital, the City of Ryazan, is located 196km south-
east of Moscow. The region contributed 0.5% of the Russian
Federation's GDP in 2010 and accounted for 0.8% of the country's
population.

The bond has a fixed coupon rate of 9.5% per annum. The principal
will be amortized by 25% of the initial bond issue value on 18
June 2015, by 50% on 16 June 2016, and the final 25% will be
repaid on 14 December 2017. The proceeds from the new bond will
be used to finance the region's budget deficit and refinance
existing obligations.

Rating Sensitivities

The issue's rating would be sensitive to any movement in Ryazan
Region's Long-term local currency rating.


* KHAKASSIA REPUBLIC: Fitch Upgrades Currency Ratings to 'BB'
-------------------------------------------------------------
Fitch Ratings has upgraded the Republic of Khakassia's Long-term
foreign and local currency ratings to 'BB' from 'BB-', with
Stable Outlooks and affirmed its Short-term foreign currency
rating at 'B'. The agency has also upgraded the region's National
Long-term rating to 'AA-(rus)' from 'A+(rus)' with Stable
Outlook.

Key Rating Drivers

The upgrades reflect the republic's improved budgetary
performance, narrowed deficit, moderate debt and reduced
refinancing risk, due to prolonged maturity of the region's debt
portfolio. The ratings also factor in the high taxpayer
concentration and modest scale of the local economy.

Fitch expects Khakassia's operating margin to be about 10% with
minor deficit before debt variation at about 3%-5% of total
revenue in 2013-2015. The region's budgetary performance improved
in 2012 with operating balance reaching 9.8% of operating revenue
(2011: 6.5%). The republic's deficit before debt variation scaled
back to 2.4% of total revenue (2011: 16.3%), buoyed by sound
fiscal management.

Fitch expects the republic's direct risk to increase immaterially
up to 32% of current revenue by end-2015. The republic's direct
risk was moderate at 26.3% of current revenue in 2012 (2011:
28.3%). The region prolonged average maturity of its debt
portfolio in 2012, replacing short-term bank loans with loans up
to 36 months to maturity and domestic bonds. The region's payback
ratio of 3.2 years is well matched with average debt maturity.

The region contingent risk is moderate and limited to debt of few
public sector entities and guarantees issued by the region.
Khakassia guaranteed RUB220m debt of its mortgage agency in 2012,
which finalized settlement of disputed liability. Fitch asses the
region's ability to control contingent risk stemming from its
public sector and issued guarantees as prudent.

Khakassia's tax base is strong, but concentrated in few companies
representing mining, non-ferrous metallurgy and hydro power
generation. The 10 largest taxpayers contributed 52% to the
republic's tax revenue in 2012 (2011: 54.5%). Taxes provided 72%
of 2012 operating revenue. Fitch notes that despite high tax
concentration, the republic's prime taxpayers are distributed in
three industries, which mitigates sudden tax revenue shocks in
one sector.

Khakassia, located in resource rich south-west Siberia,
demonstrated economic growth rate of 8% in 2012. The
administration expects to sustain gross regional product (GRP)
growth at about 8% yoy in 2013-2015. However, the republic's per
capita GRP was about 50% of the national median in 2011. Its GRP
accounts for 0.3% of national GDP, and the republic's population
is 0.4% of the national population.

Rating Sensitivities

Consolidation of budgetary performance with operating margin at
above 10%, and maintenance of sound debt coverage matching
average debt maturity in the medium term would be rating
positive.

An increase in direct risk above 40% of current revenue coupled
with a weaker budgetary performance would be negative for the
ratings.



===============
S L O V E N I A
===============


MLM FOUNDRY: Insolvency Process Begins
--------------------------------------
Balkans.com reports that insolvency proceedings have been started
at the MLM foundry, days after the group failed to secure a
capital injection through a debt-to-equity conversion.

The Maribor District Court instituted Friday debt restructuring
at the parent company MLM at the request of chairman Boris
Slamberger, Balkans.com relates.

According to Balkans.com, Slamberger also announced that the
board would file for the administration of the group's bathroom
and kitchen fittings subsidiaries Sanitec and Armal.

In a press statement, Balkans.com relates, the MLM chairman said
he was confident the foundry group, which employs around 800
people, could be rescued through financial restructuring.

The court appointed Blaz Stumpfl as administrator for debt
restructuring, while creditors have until May 27, 2013, to file
their claims, Balkans.com relays.


* SLOVENIA: EU Aid Package Expected to Amount EUR8 Billion
----------------------------------------------------------
Yalman Onaran at Bloomberg News reports that Slovenia, the first
former Communist nation in the euro zone, is facing a typically
capitalist dilemma: whether to protect creditors of big banks.

According to Bloomberg, investment bank Keefe Bruyette & Woods
estimates rising loan losses resulting from a housing bust and a
second recession in two years have left a hole of about EUR7.5
billion (US$9.8 billion) at Slovenia-based lenders.  That's a lot
for a EUR35 billion economy, Bloomberg says.  A bank bailout
would push government debt above 70% of economic output,
Bloomberg notes.

Bloomberg relates that Raoul Ruparel, head of research at London-
based Open Europe, said that even after a successful domestic
debt sale two weeks ago, the country may need assistance from the
European Union, and holders of bank bonds, including the most
senior creditors, could be forced to take losses.

Such a bail-in, which would be the second in the euro zone, after
Cyprus, risks deepening divergence in the monetary union by
keeping borrowing costs higher in economically weak nations,
Bloomberg states.

"It's not impossible, but it's very unlikely that Slovenia can
manage to pull off the bank restructuring without any EU money,"
Bloomberg quotes Mr. Ruparel, who tracks economic and political
developments in the region, as saying.  "And when it turns to
official funds, the conditions will most likely include a bail-in
of creditors, especially because banks are the main problem."

Mai Doan, a London-based economist at Bank of America Merrill
Lynch, estimates the EU aid package might have to be about EUR8
billion because the government needs to finance a widening budget
deficit as well as bank restructuring, Bloomberg relates.  The
Organisation for Economic Co-operation and Development has
criticized the government's EUR900 million figure as too low and
urged some costs to be borne by owners of bank debt, Bloomberg
notes.

The government plans to give banks bonds in exchange for the
nonperforming assets they transfer to the bad bank, Bloomberg
discloses.

Prime Minister Alenka Bratusek said she will sell state assets,
including government stakes in banks as high as 90% of the
largest lender, to help pay for recapitalization, Bloomberg
relates.

"The government continues to emphasize it won't request a
bailout, but the pipeline of potential debt issuance in the
coming year is quite large," Bloomberg quotes Ms. Doan as saying.
"Investors would like to have a backstop from the EU to
comfortably invest in Slovenia's bank restructuring.  The
government will resist an EU package until it's pushed to do it
by markets, when yields rise to unsustainable levels."



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


AYT HIPOTECARIO BBK I: Moody's Cuts Rating on Cl. D Notes to Caa3
-----------------------------------------------------------------
Moody's Investors Service downgraded the ratings of nine junior
notes in four Spanish residential mortgage-backed securities
(RMBS) transactions: AyT Hipotecario BBK I, AyT Hipotecario BBK
II, Serie AyT C.G.H. BBK I and Serie AyT C.G.H. BBK II. At the
same time, Moody's confirmed the ratings of four senior
securities in the four deals and upgraded the rating of one
junior security in Serie AyT C.G.H. BBK II. Insufficiency of
credit enhancement to address sovereign risk have prompted these
downgrade actions. Increase in the credit enhancement in Serie
AyT C.G.H. BBK II after the restructuring which took place in
March 2013, from 2.0% to 5.4%, has prompted the upgrade of its
Class D notes to Caa3 (sf).

The rating action concludes the review of seven notes 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 six 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 primarily reflects the insufficiency of credit
enhancement to address sovereign risk. Moody's confirmed the
ratings of securities whose credit enhancement and structural
features provided enough protection against sovereign risk.

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.

In all four affected transactions, Moody's maintained the current
expected loss and MILAN CE assumptions. Expected loss assumptions
remain at 2.25% for AyT Hipotecario BBK I, 2.19% for AyT
Hipotecario BBK II, 2.88% for Serie AyT CGH BBK I and 2.16% for
Serie AyT CGH BBK II. The MILAN CE assumptions remain at 12.5%
for AyT Hipotecario BBK I, AyT Hipotecario BBK II, and Serie AyT
CGH BBK II and 15.0% for Serie AyT CGH BBK I.

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".

The methodologies used in these ratings were Moody's Approach to
Rating RMBS Using the MILAN Framework, published in March 2013
and 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,
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 or EL 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, the following inputs have been corrected
in the four transactions: the trigger inputs switching the
priority of payments and the reserve fund amortization mechanism.

List of Affected Ratings

Issuer: AYT HIPOTECARIO BBK I

EUR914.5M A Notes, Confirmed at A3 (sf); previously on Jul 2,
2012 Downgraded to A3 (sf) and Placed Under Review for Possible
Downgrade

EUR46M B Notes, Downgraded to Baa2 (sf); previously on Jul 2,
2012 Downgraded to A3 (sf) and Placed Under Review for Possible
Downgrade

EUR39.5M C Notes, Downgraded to Ba3 (sf); previously on Jul 2,
2012 Baa2 (sf) Placed Under Review for Possible Downgrade

Issuer: AYT HIPOTECARIO BBK II FONDO DE TITUALIZACION DE ACTIVOS

EUR918M A Notes, Confirmed at A3 (sf); previously on Jul 2, 2012
Downgraded to A3 (sf) and Remained On Review for Possible
Downgrade

EUR43.5M B Notes, Downgraded to Baa3 (sf); previously on Nov 23,
2012 Downgraded to Baa1 (sf) and Remained On Review for Possible
Downgrade

EUR38.5M C Notes, Downgraded to B2 (sf); previously on Jul 2,
2012 B1 (sf) Placed Under Review for Possible Downgrade

Issuer: SERIE AYT COLATERALES GLOBAL HIPOTECARIO BBK I

EUR1391.2M A Notes, Confirmed at Baa1 (sf); previously on Nov 23,
2012 Downgraded to Baa1 (sf) and Remained On Review for Possible
Downgrade

EUR81M B Notes, Downgraded to Ba3 (sf); previously on Nov 23,
2012 Downgraded to Baa3 (sf) and Remained On Review for Possible
Downgrade

EUR13.5M C Notes, Downgraded to B3 (sf); previously on Nov 23,
2012 Downgraded to B1 (sf) and Remained On Review for Possible
Downgrade

EUR14.3M D Notes, Downgraded to Caa3 (sf); previously on Nov 23,
2012 Downgraded to Caa1 (sf) and Remained On Review for Possible
Downgrade

Issuer: SERIE AyT COLATERALES GLOBAL HIPOTECARIO BBK II

EUR955.5M A Notes, Confirmed at Baa1 (sf); previously on Nov 23,
2012 Downgraded to Baa1 (sf) and Remained On Review for Possible
Downgrade

EUR30.5M B Notes, Downgraded to B1 (sf); previously on Jul 2,
2012 Baa2 (sf) Placed Under Review for Possible Downgrade

EUR7M C Notes, Downgraded to B3 (sf); previously on Jul 2, 2012
B1 (sf) Placed Under Review for Possible Downgrade

EUR7M D Notes, Upgraded to Caa3 (sf); previously on Feb 25, 2011
Downgraded to Ca (sf)


BANCO BILBAO: Fitch Assigns 'BB-(EXP)' Pref. Securities Rating
--------------------------------------------------------------
Fitch Ratings has assigned Banco Bilbao Vizcaya Argentaria's
(BBVA) potential issue of non-step-up non-cumulative perpetual
tier 1 capital securities (preferred securities) with fully
discretionary coupons and pre-set triggers for contingent
conversion an expected rating of 'BB-(EXP)'.

BBVA expects to issue a benchmark transaction of preferred
securities. This issuance, with fully discretionary coupon
payment and pre-set triggers for contingent conversion, is the
first of this kind for a Spanish bank.

Key Rating Drivers

The preferred securities are rated five notches below BBVA's
'bbb+' Viability Rating (VR), in accordance with Fitch's criteria
for "Assessing and Rating Bank Subordinated and Hybrid
Securities" dated Dec. 5, 2012, at www.fitchratings.com.

The notes are notched twice for loss severity as recoveries are
expected to be poor, because the preferred securities will rank
junior to all liabilities, including subordinated debt and
because of conversion into common equity on breach of one of the
pre-set triggers. These triggers are set at a 5.125% common
equity Tier 1 ratio at a consolidated and unconsolidated level, a
7% consolidated core tier 1 (CT1) ratio as defined by the
European Banking Authority (EBA) and a 7% capital principal
(Spain's adaption of EBA CT1 ratio) ratio on a consolidated
basis. At end-March 2013, BBVA capital ratios were well in excess
of these triggers.

To reflect the incremental non-performance risk of the notes
relative to the risk incorporated by the VR, the notes are
notched three times given the instrument's fully discretionary
coupon payment, which is deemed to be the most easily activated
form of loss absorption.

Rating Sensitivities

As the notes are notched off BBVA's VR, their rating is primarily
sensitive to any change in that rating. The rating sensitivities
of the bank's VR include a potential downgrade of the sovereign
or a marked deterioration of asset quality and/or profitability
as a result of a sustained tough operating environment in Spain.
BBVA's vulnerability to weaknesses in the Spanish market are
somewhat mitigated by its international diversification,
supporting a VR that is one notch above the sovereign Long-term
IDR, but at the same time it is not immune to developments in
Spain.


BANKIA SA: Triggers Restructuring Credit Event, ISDA Says
--------------------------------------------------------
The International Swaps and Derivatives Association's credit
derivatives determinations committee ruled on Monday that a
restructuring credit event has taken place on Bankia, the Spanish
bank formed in 2010 from the merger of Caja Madrid with other
savings banks.

Spain's bank restructuring body the Fondo de Reestructuracion
Ordenada Bancaria said on April 16 that it plans for force sub
debt holders to swap their bonds for either zero coupon notes or
equity, Creditflux relates.

According to Creditflux, market participants will hold auctions
to determine the value of Bankia's debt, but a date for the
auctions has not yet been set.

Bankia is a Spanish banking conglomerate that was formed in
December 2010, consolidating the operations of seven regional
savings banks.  As of 2012, Bankia is the fourth largest bank of
Spain with 12 million customers.


SANTANDER FINANCIACION: Moody's Confirms Caa3 Rating on D Notes
---------------------------------------------------------------
Moody's Investors Service confirmed the ratings of three notes
and upgraded the ratings of three notes issued by Santander
Financiacion 1, FTA (Santander Financiacion 1) and Santander
Financiacion 5, FTA (Santander Financiacion 5). High level of
credit enhancement, which protects against sovereign and
counterparty risk, primarily drove the rating action.

The rating action concludes the review for downgrade initiated by
Moody's on July 2, 2012. These two transactions are Spanish
asset-backed securities transactions backed by consumer loans
originated by Banco Santander S.A. (Baa2 / P-2).

Ratings Rationale:

The rating action primarily reflects the availability of
sufficient credit enhancement to address sovereign, increased
counterparty risk. The introduction of new adjustments to Moody's
modeling assumptions to account for the effect of deterioration
in sovereign creditworthiness and the revision of key collateral
assumptions and increased exposure to lowly rated counterparties
has had no negative effect on the ratings of all classes of notes
in these transactions.

Furthermore, the current level of credit enhancement available
(net of the existing positive principal deficiency ledger) under
the Class B (61.83%) and Class C (25.31%) of Santander
Financiacion 1 in the form of subordination from Class D is
sufficient to support an upgrade to A3 (sf) from Baa3 (sf) for
Class B and to Baa1 (sf) from B3 (sf). In Santander Financiacion
5 the reserve fund of 38.10% is sufficient to support the upgrade
of Class B to Baa2 (sf) from Baa3 (sf).

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 is A3, which is the maximum rating
that Moody's will assign to a domestic Spanish issuer including
structured finance transactions backed by Spanish receivables.
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 and the applicable credit enhancement for this rating
uniquely determines the volatility of the portfolio distribution,
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 two transactions, which it updated on December 21, 2012.
According to the updated methodology, Moody's increased the CoV,
which is a measure of volatility.

For Santander Financiacion 1 the current default assumption is
10% of the current portfolio and the assumption for the fixed
recovery rate is 30%. Moody's has increased the CoV to 59.58%
from 35.08%, which, combined with the revised key collateral
assumptions, corresponded to a portfolio credit enhancement of
21.50%.

For Santander Financiacion 5 the current default assumption is
17% of the current portfolio and the assumption for the fixed
recovery rate is 30%. Moody's has increased the CoV to 41.82%
from 35.00%, which, combined with the revised key collateral
assumptions, corresponded to a portfolio credit enhancement of
33.00%.

Moody's Has Considered Exposure to Counterparty Risk

The conclusion of Moody's rating review also takes into
consideration the increased exposure to commingling due to
weakened counterparty creditworthiness.

In Santander Financiacion 1, FTA Banco Santander acts as servicer
and transfers collections on a monthly basis to the issuers'
accounts at Santander UK PLC (A2/P-1). There is no longer any
reserve fund in Santander Financiacion 1, FTA as it has been
fully depleted on April 2009.

In Santander Financiacion 5, FTA Banco Santander acts as servicer
and transfers collections on a daily basis to the issuers'
accounts at Banco Santander S.A (Baa2/P-2). The reserve fund also
resides at Banco Santander S.A.

Moody's has incorporated into its analysis the potential default
of Banco Santander S.A, which could expose both transactions to a
commingling loss on the collections and to the loss of the
reserve fund for Santander Financiacion 5.

Banco Santander S.A acts as swap counterparty in the two
transactions. As part of its analysis, Moody's assessed the
exposure to the swap counterparty, which does not have a negative
effect on the rating levels at this time.

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 Request for Comment, "Approach to Assessing Linkage to
Swap Counterparties in Structured Finance Cashflow Transactions:
Request for Comment", July 2, 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 that are then weighted
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.

In the context of the rating review, Moody's has remodeled the
transactions and adjusted a number of inputs to reflect the new
approach.

The methodologies used in these ratings were "Moody's Approach to
Rating Consumer Loan ABS Transactions", published in October 2012
and "The Temporary Use of Cash in Structured Finance
Transactions: Eligible Investment and Bank Guidelines", published
in March 2013.

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, along with the publication of its
Special Comment "Structured Finance Transactions: Assessing the
Impact of Sovereign Risk".

List of Affected Ratings

Issuer: FTA, Santander Financiacion 1

EUR1738.5M A Notes, Confirmed at A3 (sf); previously on Jul 2,
2012 A3 (sf) Placed Under Review for Possible Downgrade

EUR25.7M B Notes, Upgraded to A3 (sf); previously on Jul 2, 2012
Baa3 (sf) Placed Under Review for Possible Downgrade

EUR61.7M C Notes, Upgraded to Baa1 (sf); previously on Jul 2,
2012 B3 (sf) Placed Under Review for Possible Downgrade

EUR47.5M D Notes, Confirmed at Caa3 (sf); previously on Jul 2,
2012 Caa3 (sf) Placed Under Review for Possible Downgrade

Issuer: FTA, Santander Financiacion 5

EUR774M A Notes, Confirmed at A3 (sf); previously on Jul 2, 2012
Downgraded to A3 (sf) and Remained On Review for Possible
Downgrade

EUR301M B Notes, Upgraded to Baa2 (sf); previously on Jul 2, 2012
Baa3 (sf) Placed Under Review for Possible Downgrade


PESCANOVA SA: Regulator Proposes Deloitte as Administrator
----------------------------------------------------------
Tracy Rucinski at Reuters reports that Spanish stock market
regulator CNMV said it had proposed Deloitte as the administrator
of Spanish fishing firm Pescanova, which has filed for
insolvency.

A Spanish court accepted Pescanova's insolvency filing on April
25 and put the CNMV in charge of appointing independent
administrators, Reuters relates.

                        Accounting Failings

As reported by the Troubled Company Reporter-Europe on April 18,
2013, Reuters related that 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.
Spain's stock market regulator said in a statement on April 16
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, Reuters
disclosed.  The documents, submitted on April 15, 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 noted.

                            Stake Sale

On April 15, 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 disclosed.  In a stock
market filing on April 16, Pescanova said Mr. Sousa lent EUR9.3
million to the company following the stake sale, at a 5% annual
coupon, Reuters related.  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 said.
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.  Reuters noted 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.


PROMOTORA DE INFORMACIONES: Mulls EUR2.9-Bil. Debt Restructuring
----------------------------------------------------------------
Esteban Duarte and Manuel Baigorri at Bloomberg News report that
Promotora de Informaciones SA, the publisher of El Pais
newspaper, wants to reorganize the terms of about EUR2.9 billion
(US$3.8 billion) of debt.

According to Bloomberg, a person familiar with the matter said
that Prisa, as Spain's biggest media company is known, plans to
propose terms of the restructuring to lenders as soon as next
month.

The unprofitable media company is reopening talks as about
EUR1.28 billion of loans near an initial maturity date in March
2014, Bloomberg says, citing the company's latest annual report.

"The company needs this restructuring and the market was waiting
for this deal to happen but we still need to see the results of
the agreement and conditions imposed by banks," Bloomberg quotes
Pedro Oliveira, an analyst at Banco BPI in Porto, Portugal, as
saying by telephone on Monday.

Prisa said earlier this month it was still holding talks with
several companies to sell literature business Alfaguara as well
as other assets as it seeks to reduce debt, Bloomberg recounts.
Any deal will be announced after a binding agreement is reached,
the company said.  Prisa's net loss was EUR255 million last year,
compared with EUR451 million a year earlier, Bloomberg notes.

Promotora de Informaciones SA (PRISA) is a Spain-based company
engaged, through its subsidiaries, in the diversified media
sector.  The Company mainly operates in four major business
areas: Education and publishing, Press, Radio and Audiovisual.


RURAL HIPOTECARIO: Moody's Cuts Ratings on Two Note Classes to Ca
-----------------------------------------------------------------
Moody's Investors Service downgraded the ratings of eleven junior
and six senior notes in four Spanish residential mortgage-backed
securities transactions: Rural Hipotecario VII, FTA, Rural
Hipotecario VIII, FTA, Rural Hipotecario IX, FTA, Rural
Hipotecario XI, FTA. At the same time, Moody's confirmed the
ratings of one senior security in Rural Hipotecario IX, FTA.
Insufficiency of credit enhancement to address sovereign risk has
prompted this action.

The rating action concludes the review of four notes 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 14 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 primarily reflects the insufficiency of credit
enhancement to address sovereign risk. Moody's confirmed the
ratings of securities whose credit enhancement and structural
features provided enough protection against sovereign and
counterparty risk.

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.

In all four affected transactions, Moody's maintained the current
expected loss and MILAN CE assumptions. Expected loss assumptions
remain at 0.80% for Rural Hipotecario VII, 1.90% for Rural
Hipotecario VIII, 3.57% for Rural Hipotecario IX and 2.70% for
Rural Hipotecario XI. The MILAN CE assumptions remain at 10% for
Rural Hipotecario VII, 15% for Rural Hipotecario VIII, 15% for
Rural Hipotecario IX and 15% for Rural Hipotecario XI.

Exposure to Counterparty Risk

The conclusion of Moody's rating review also takes into
consideration the exposure to Banco Cooperativo Espanol S.A.
(Ba1/NP on review for downgrade), which acts as swap counterparty
for Rural Hipotecario VII, Rural Hipotecario VIII, Rural
Hipotecario IX, Rural Hipotecario XI. Moody's notes that,
following the breach of the second rating trigger, the swaps in
the four transactions do not reflect 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".

The methodologies used in these ratings were Moody's Approach to
Rating RMBS Using the MILAN Framework, published in March 2013
and 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 all four Rural Hipotecario
transactions, the input for the principal deficiency ledger has
been corrected during the review.

List of Affected Ratings

Issuer: Rural Hipotecario VII, Fondo de Titulizacion de Activos

EUR957.1M A1 Notes, Downgraded to Baa1 (sf); previously on Jul 2,
2012 Downgraded to A3 (sf) and Remained On Review for Possible
Downgrade

EUR100M A2 Notes, Downgraded to Baa1 (sf); previously on Jul 2,
2012 Downgraded to A3 (sf) and Remained On Review for Possible
Downgrade

EUR19.2M B Notes, Downgraded to Ba2 (sf); previously on Nov 23,
2012 Downgraded to Baa1 (sf) and Remained On Review for Possible
Downgrade

EUR23.7M C Notes, Downgraded to B3 (sf); previously on Dec 16,
2011 Baa3 (sf) Placed Under Review for Possible Downgrade

Issuer: Rural Hipotecario VIII, Fondo de Titulizacion de Activos

EUR802.4M A2a Notes, Downgraded to Baa2 (sf); previously on Nov
23, 2012 Downgraded to Baa1 (sf) and Remained On Review for
Possible Downgrade

EUR350M A2b Notes, Downgraded to Baa2 (sf); previously on Nov 23,
2012 Downgraded to Baa1 (sf) and Remained On Review for Possible
Downgrade

EUR27.3M B Notes, Downgraded to B3 (sf); previously on Nov 23,
2012 Downgraded to Baa2 (sf) and Remained On Review for Possible
Downgrade

EUR15.6M C Notes, Downgraded to Caa2 (sf); previously on Nov 23,
2012 Downgraded to Ba3 (sf) and Remained On Review for Possible
Downgrade

EUR7.2M D Notes, Downgraded to Caa3 (sf); previously on Nov 23,
2012 Downgraded to Caa1 (sf) and Remained On Review for Possible
Downgrade

EUR11.7M E Notes, Downgraded to Ca (sf); previously on Dec 16,
2011 Caa3 (sf) Placed Under Review for Possible Downgrade

Issuer: Rural Hipotecario IX, Fondo de Titulizacion de Activos

EUR1021.7M A2 Notes, Confirmed at Baa1 (sf); previously on Nov
23, 2012 Downgraded to Baa1 (sf) and Remained On Review for
Possible Downgrade

EUR210M A3 Notes, Downgraded to Baa3 (sf); previously on Nov 23,
2012 Downgraded to Baa1 (sf) and Remained On Review for Possible
Downgrade

EUR29.3M B Notes, Downgraded to B3 (sf); previously on Jul 2,
2012 Baa3 (sf) Placed Under Review for Possible Downgrade

EUR28.5M C Notes, Downgraded to Caa3 (sf); previously on Nov 23,
2012 Downgraded to Caa1 (sf) and Remained On Review for Possible
Downgrade

EUR10.5M D Notes, Downgraded to Ca (sf); previously on Jul 2,
2012 Caa1 (sf) Placed Under Review for Possible Downgrade

Issuer: Rural Hipotecario XI, Fondo de Titulizacion de Activos

EUR2113.1M A Notes, Downgraded to Baa2 (sf); previously on Nov
23, 2012 Downgraded to Baa1 (sf) and Remained On Review for
Possible Downgrade

EUR25.3M B Notes, Downgraded to B1 (sf); previously on Nov 23,
2012 Downgraded to Baa1 (sf) and Remained On Review for Possible
Downgrade

EUR61.6M C Notes, Downgraded to B3 (sf); previously on Dec 16,
2011 Baa3 (sf) Placed Under Review for Possible Downgrade


TDA 29: Moody's Downgrades Rating on Class Notes to 'Caa3'
----------------------------------------------------------
Moody's Investors Service downgraded the ratings of one senior
note and four junior notes in three Spanish residential mortgage-
backed securities (RMBS) transactions: TDA 29, FTA; TDA 31, FTA
and Unicaja TDA VPO, FTA. At the same time, Moody's confirmed the
ratings of two senior notes in TDA 29, FTA and TDA 31, FTA
respectively.

The rating action 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 linkage
to counterparty. Moody's confirmed the ratings of securities
whose credit enhancement and structural features provided enough
protection against sovereign and counterparty risk. The linkage
to counterparty risk is the primary driver in the rating action
for Unicaja TDA VPO, FTA.

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) as well
as its MILAN CE assumption in all three transactions. Expected
loss assumptions remain at 3.5% TDA 29, FTA, 5.34% for TDA 31,
FTA and 1.4% for Unicaja TDA VPO, FTA. The MILAN CE assumptions
remain at 15% for TDA 29, FTA, 20.4% for TDA 31, FTA and 10% for
Unicaja TDA VPO, FTA.

Exposure to Counterparty Risk

The conclusion of Moody's rating review takes into consideration
the exposure to Unicaja Banco (Ba1 on review for possible
downgrade), which still acts as collection account bank,
reinvestment account bank , issuer account bank and swap
counterparty for Unicaja TDA VPO, FTA. Moody's concludes that the
commingling loss due to the exposure to Unicaja bank is
negatively affecting the rating of the senior note and is a
driver of this downgrade. Moody's also notes that, following the
breach of the second rating trigger, the swap does not comply
with Moody's de-linkage criteria, however the revised rating of
the notes are not negatively impacted by 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 "Approach to Assessing Linkage to Swap Counterparties in
Structured Finance Cashflow Transactions: Request for Comment".

Methodologies

The methodologies used in these ratings were Moody's Approach to
Rating RMBS Using the MILAN Framework" published in March 2013
and "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 TDA 29, FTA Moody's corrected the
input for Class A2 and C note margin.

List of Affected Ratings

Issuer: TdA 29 Fondo de Titulizacion de Activos

EUR435M A2 Notes, Confirmed at Baa2 (sf); previously on Nov 23,
2012 Downgraded to Baa2 (sf) and Remained On Review for Possible
Downgrade

EUR17.4M B Notes, Downgraded to B2 (sf); previously on Nov 23,
2012 Downgraded to B1 (sf) and Remained On Review for Possible
Downgrade

EUR9.3M C Notes, Downgraded to Caa3 (sf); previously on Nov 23,
2012 Downgraded to Caa2 (sf) and Remained On Review for Possible
Downgrade

Issuer: TDA 31, Fondo de Titulizacion de Activos

EUR280.5M A Notes, Confirmed at Baa1 (sf); previously on Nov 23,
2012 Downgraded to Baa1 (sf) and Remained On Review for Possible
Downgrade

EUR6M B Notes, Downgraded to Ba2 (sf); previously on Nov 23, 2012
Downgraded to Baa2 (sf) and Remained On Review for Possible
Downgrade

EUR13.5M C Notes, Downgraded to Caa3 (sf); previously on Nov 23,
2012 Downgraded to Caa2 (sf) and Remained On Review for Possible
Downgrade

Issuer: UNICAJA TDA VPO

EUR188.8M A Notes, Downgraded to Baa3 (sf); previously on Nov 23,
2012 Downgraded to Baa1 (sf) and Remained On Review for Possible
Downgrade



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


BOND AVIATION: Moody's Assigns '(P)B2' Corporate Family Rating
--------------------------------------------------------------
Moody's Investors Service assigned a (P)B2 corporate family
rating to Bond Aviation Group Limited. Concurrently, Moody's also
assigned a (P)B2 rating to the GBP200 million senior secured
notes maturing in 2019 to be issued by Bond Mission Critical
Services plc. The outlook on the ratings is stable. This is the
first time Moody's has assigned a rating to the Company.

Ratings Rationale:

"The (P)B2 CFR reflects Bond's limited scale and regional
concentration in the UK market competing with much larger
helicopter service providers, while also recognizing the
Company's long-standing relationships with predominantly high
quality customers, including air ambulance private charities and
to a lesser extent local government bodies, as well as the long-
term tenure of its operating contracts", says Martin Chamberlain,
Moody's lead analyst for Bond. Moody's estimates that on a pro-
forma basis for this transaction, the Company's gross adjusted
leverage will be around 5.8x for FYE December 2013. Over the near
term, deleveraging is expected to remain limited.

Negatively, Moody's notes that Bond has limited scale in both the
oilfield services and mission critical services industries.
Bond's air medical services operate entirely within the UK, while
its energy support services predominantly focus on the North Sea.
Bond's small scale leaves it vulnerable to larger competitors
such as CHC and Bristow, where their large, global fleets
position them favorably with a global customer base.
Additionally, in the absence of amortizing debt Moody's does not
expect medium-term deleveraging to be meaningful which limits the
Company's financial flexibility, a significant factor in an
industry that is highly capital intensive. Furthermore, the high
leverage burden could be increased through an expansionary growth
strategy. In particular, as North Sea drilling operations become
increasingly deep water, the investment in costly heavy
helicopter fleet to remain competitive will require borrowing
through finance and operating leases.

Positively, the CFR reflects Bond's established relationships
with mainly large, well-capitalized, credit-worthy customers as
well as the long-term nature of its contracts which benefit from
relatively high proportions of fixed revenues and high renewal
rates. Moody's believes that Bond's focus to increase the
proportion of more profitable deep water offshore transportation
will help to mitigate the increase in debt burden to fund the
aircraft contracted to those operations. Additionally, Moody's
expects the increased crew changes from the decommissioning of
shallow water rigs to positively support operations. Furthermore,
the strong historic financial track record of growing contract
value and winning new business combined with a relatively modern
fleet of helicopters with high and stable values help underpin
the rating.

The Notes will be used to refinance existing bank debt and
partially repay an intercompany loan. The Company will also
benefit from a new GBP25 million revolving credit facility (RCF)
the purpose of which will be to fund upfront costs when
purchasing light/medium helicopters on finance leases. Attached
to the RCF will be an additional uncommitted accordion of GBP15
million, i.e. total of GBP40 million, all of which will be
undrawn at the closing of the transaction. Maintenance financial
covenants do not tighten at a rapid pace.

Liquidity will benefit from adequate opening covenant headroom
and no amortizing bank debt through to 2019. The Notes, issued by
Bond Mission Critical Services plc. are rated (P)B2, at the same
level as the CFR reflecting Moody's view that while the notes
would rank behind the RCF in an enforcement scenario, the amount
of the RCF is not sufficient to notch down the rating of the
bond.

The stable outlook reflects Moody's expectation that Bond's Debt
to EBITDA will be maintained below 6.0x and free cash flow
generation will remain positive.

What Could Change the Rating -- Up

Given the relatively small size of Bond, upward pressure on the
rating would be dependent upon a sustained reduction in leverage,
as measured by an adjusted debt/EBITDA ratio trending towards
4.0x, as a result of the group demonstrating prudence in its
expansion strategy.

What Could Change the Rating -- Down

The rating could experience downward pressure if the fundamentals
of Bond's business dramatically changed or key blue-chip
customers significantly reduced their business with the group.
Specifically, increased pressure on the rating could result from
an adjusted debt/EBITDA ratio higher than 6.0x, and/or an
inability of the group to generate FCF to reduce net debt.
Downward pressure on the rating could also develop if the group
were to experience significant drawings on its RCF to fund rapid
expansion.

These metrics incorporate Moody's usual adjustments.

Principal Methodology

The principal methodology used in this rating was the Global
Business & Consumer Service Industry Rating Methodology published
in October 2010. Other methodologies used include Loss Given
Default for Speculative-Grade Non-Financial Companies in the
U.S., Canada and EMEA published in June 2009.

Based in Staverton, Bond is one of the leading mission critical
helicopter services providers in the UK, providing onshore
support services in the areas of Search & Rescue and Safety &
Environment to public administration bodies and charities. The
company also provides offshore helicopter support for Energy
Support Services primarily to blue-chip corporate customers. The
company operates 44 helicopters and following several substantial
contract wins in 2009 / 2010 reported revenues/EBITDA of GBP132.7
million/GBP35.2 million in 2012.


BOND MISSION: S&P Assigns 'B' Long-Term Corporate Credit Rating
---------------------------------------------------------------
Standard & Poor's Ratings Services said that it assigned its 'B'
long-term corporate credit rating to U.K.-based Bond Mission
Critical Services PLC (Bond), the subsidiary of Avincis Mission
Critical Services Holdings, S.L.U.  (S&P refers to Bond and
Avincis Mission Critical Services Holdings together as Avincis or
the group).  S&P affirmed its 'B' rating on Avincis Mission
Critical Services Holdings on April 25, 2013.  The outlook on
Bond and Avincis is stable.

At the same time, S&P assigned its 'B' issue rating to Bond's
proposed GBP200 million senior secured notes.  The recovery
rating on the senior secured notes is '3', indicating S&P's
expectation that lenders would receive moderate (50%-70%)
recovery in the event of payment default.

The rating on Bond reflects S&P's view of its strong link and
operational integration with its 100% parent Avincis.  S&P
believes that the subsidiary increases the group's scale and
revenue diversification, provides a portfolio of mission-critical
oil and gas customers, and conforms to the group's contract
structures.  S&P also believes that Bond's strong capabilities in
the North Sea allow the group to pursue its growth strategy in
this region.  S&P therefore equalizes the corporate credit rating
on Bond with that on Avincis.

S&P's affirmation of the rating on Avincis Mission Critical
Services Holdings follows Bond's announcement that it intends to
raise GBP200 million senior secured notes to refinance
GBP139 million of bank debt and partially repay an intercompany
loan.  S&P do not expect the transaction to significantly weaken
the consolidated group's credit metrics.  However, S&P considers
that the group's financial policy is aggressive and S&P estimates
that its credit metrics will remain weak after the refinancing,
with Standard & Poor's-adjusted funds from operations (FFO) to
debt of about 7% and adjusted debt to capital of about 85%
in 2013.

The ratings on Avincis are constrained by the group's "highly
leveraged" financial risk profile, high capex requirements to
maintain a fleet of 349 helicopters (including Bond's
helicopters), and weak credit metrics.

These risks are partially mitigated by Avincis' "satisfactory"
business risk profile.  This is underpinned by Avincis' leading
position in the mission-critical helicopter services market; its
geographic diversity in Western Europe, Chile, and Australia; its
stable revenue stream from multi-year contracts with national,
regional, and local government entities; and its consistently
high contract renewal rates.

In S&P's view, Avincis' liquidity will remain sufficient to
support its debt service and ongoing operational needs.

S&P believes that ratings downside is most likely to arise in the
event that liquidity weakens, for example, because of greater
negative FOCF than S&P currently forecasts.  This could stem from
deteriorating operating performance or excessive capex.  In
addition, ratings downside could arise if the company's operating
margin continues to deteriorate in 2013 or if macroeconomic
conditions in the group's key markets, notably Spain and Italy,
continue to weaken.  This could lead S&P to revise Avincis'
"satisfactory" business risk profile downward to "fair," which
may also result in a downgrade.

S&P could raise the rating if the group's revenue and
profitability grow significantly, on the back of additional scale
benefits and/or contract wins.  Given the lack of significant
amortizing debt in the capital structure, S&P believes that an
improvement in credit metrics will mostly be driven by better
operating performance.  S&P considers adjusted FFO to debt of
more than 9%, on a sustainable basis, to be commensurate with the
'B+ 'rating.


CLIVE RANGER: In Administration, Close Bath Store
-------------------------------------------------
Liza-Jane Gillespie at Bath Chronicle reports that Clive Ranger
Limited has closed its Bath store a month after the chain went
into administration.

Despite attempts by administrator Deloitte to sell the company,
the regional jewellery chain has had to close three of its stores
with the loss of 27 jobs, according to Bath Chronicle.

The report notes that the company in April disclosed that it was
in administration but at the time hoped to keep all stores open.

"Clive Ranger Limited is a well-known brand throughout the South
West and South Wales, but has faced a downturn in trading as a
result of the current difficult economic conditions. . . . As no
buyer has been found to date, the business will regretfully wind
down.  This was the cause of the Bath, Bristol and Swansea stores
closing during the last couple of weeks which resulted in 27
redundancies.  The Cardiff store is currently still trading and
it is hoped that a sale of this store will be achieved," the
report quoted Director of the restructuring services team at
Deloitte, Paul Evans, as saying.

Clive Ranger Limited is a diamond ring specialist.  The chain
opened its first shop in Cardiff in 1977, and moved into Bath in
1992.


EASTMAN KODAK: To Hand Units to U.K. Retirees in Settlement
-----------------------------------------------------------
Eastman Kodak Company on April 29 announced a comprehensive
settlement agreement with the U.K. Kodak Pension Plan (KPP), its
largest creditor, with respect to its Chapter 11 Plan of
Reorganization.  Under the agreement, which will be filed with
the U.S. Bankruptcy Court, Kodak's Personalized Imaging and
Document Imaging businesses will be spun off under new ownership
to KPP.

The settlement agreement provides, among other things, for the
spin-off of Kodak's Personalized Imaging and Document Imaging
businesses to KPP for cash and non-cash consideration of US$650
million.  Certain proceeds will be used to support the emergence
of Kodak from Chapter 11 and the growth of its Commercial Imaging
business.  The agreement also settles approximately US$2.8
billion of claims by KPP against Kodak and certain of its
affiliates.

"In one comprehensive transaction, Kodak will realize its
previously announced intention to divest its Personalized Imaging
and Document Imaging businesses and settle its largest legacy
liability," said Antonio M. Perez, Kodak Chairman and Chief
Executive Officer.  "The KPP transaction moves us past several
key hurdles in our reorganization, resolving all potential claims
worldwide, assuring continued operations outside of the United
States, placing our Personalized Imaging and Document Imaging
businesses with a new owner that recognizes their value and is
focused on their growth and success, and providing the remaining
liquidity we require to emerge from Chapter 11.  We are very
pleased with the transaction, the value it creates for our
stakeholders, and the dedication and creativity of KPP that made
it possible to achieve this extraordinary result."

Steven Ross, Chairman of KPP, said, "KPP and Kodak have been
working collaboratively since the beginning of the case, and this
acquisition provides security for and delivers the greatest value
to, the KPP members.  Overall, this settlement gives the KPP
members greatly improved future prospects whilst being good for
Kodak's employees, its creditors and for UK businesses.

"The businesses that we are acquiring will deliver long-term cash
flows to support the plan's obligations.  The financial stability
that KPP will provide for the Personalized Imaging and Document
Imaging businesses will be beneficial to those businesses'
employees, customers and partners."

The agreement will be implemented as part of Kodak's Chapter 11
plan in the United States.  At consummation of the spin-off,
Kodak and its worldwide affiliates will be released from their
obligations to KPP.  The UK Pensions Regulator has been kept
fully informed of this process and the Regulator has granted
clearance in respect of the acquisition.  The Regulator has
decided that it will approve the release of Kodak Limited, the
KPP's sponsoring employer, from its liabilities to the KPP and
the UK Pension Protection Fund has confirmed that it has no
objection.  Closing of the transaction is subject to the approval
of the U.S. Bankruptcy Court, approval by the Regulator and the
satisfaction or waiver of other conditions precedent.

Kodak intends to file a draft Chapter 11 plan with the Bankruptcy
Court on April 30, and to seek approval of the KPP settlement and
related transactions promptly thereafter, withdrawing the
previously-filed motion for the standalone sale of the Document
Imaging business.

                       About Eastman Kodak

Rochester, New York-based Eastman Kodak Company and its U.S.
subsidiaries on Jan. 19, 2012, filed voluntarily Chapter 11
petitions (Bankr. S.D.N.Y. Lead Case No. 12-10202) in Manhattan.
Subsidiaries outside of the U.S. were not included in the filing
and are expected to continue to operate as usual.

Kodak, founded in 1880 by George Eastman, was once the world's
leading producer of film and cameras.  Kodak sought bankruptcy
protection amid near-term liquidity issues brought about by
steeper-than-expected declines in Kodak's historically profitable
traditional businesses, and cash flow from the licensing and sale
of intellectual property being delayed due to litigation tactics
employed by a small number of infringing technology companies
with strong balance sheets and an awareness of Kodak's liquidity
challenges.

In recent years, Kodak has been working to transform itself from
a business primarily based on film and consumer photography to a
smaller business with a digital growth strategy focused on the
commercialization of proprietary digital imaging and printing
technologies.  Kodak has 8,900 patent and trademark registrations
and applications in the United States, as well as 13,100 foreign
patents and trademark registrations or pending registration in
roughly 160 countries.

Attorneys at Sullivan & Cromwell LLP and Young Conaway Stargatt &
Taylor, LLP, serve as counsel to the Debtors.  FTI Consulting,
Inc., is the restructuring advisor.   Lazard Freres & Co. LLC, is
the investment banker.  Kurtzman Carson Consultants LLC is the
claims agent.

The Official Committee of Unsecured Creditors has tapped Milbank,
Tweed, Hadley & McCloy LLP, as its bankruptcy counsel.

Michael S. Stamer, Esq., David H. Botter, Esq., and Abid Qureshi,
Esq., at Akin Gump Strauss Hauer & Feld LLP, represent the
Unofficial Second Lien Noteholders Committee.

The Retirees Committee has hired Haskell Slaughter Young &
Rediker, LLC, and Arent Fox, LLC as Co-Counsel; Zolfo Cooper,
LLC,
as Bankruptcy Consultants and Financial Advisors; and the Segal
Company, as Actuarial Advisors.

Robert J. Stark, Esq., Andrew Dash, Esq., and Neal A. D'Amato,
Esq., at Brown Rudnick LLP, represent Greywolf Capital Partners
II; Greywolf Capital Overseas Master Fund; Richard Katz, Kenneth
S. Grossman; and Paul Martin.

Kodak completed the $527 million sale of digital-imaging
technology on Feb. 1, 2013.  Kodak intends to reorganize by
focusing on the commercial printing business.


KENSINGTON 2007-1: S&P Affirms 'B-' Rating on Class B2 Notes
------------------------------------------------------------
Standard & Poor's Ratings Services took various rating actions on
all classes of notes issued by Kensington Mortgage Securities
PLC's series 2007-1.  Specifically, S&P has raised the ratings on
the class A3a, A3b, and A3c notes, lowered the rating on the
class M2b notes, and affirmed all other ratings.

The rating actions follow S&P's credit and cash flow analysis of
the most recent transaction information that it has received
(December 2012).  S&P's analysis reflects the application of its
U.K. residential mortgage-backed securities (RMBS) and
counterparty criteria.

Severe arrears (90+ days) have decreased since S&P's previous
review in March 2012, but remain high compared with S&P's U.K.
Nonconforming RMBS Index.  The total arrears reported for
December 2012 are 38.71%.  However, from the loan-level data, S&P
notes that arrears have previously been capitalized.  Where this
is the case, S&P believes that the probability of default is
higher than for loans that are current.  In S&P's analysis, it
therefore considered 44.63% of the loans to be in arrears, which
increased its weighted-average foreclosure frequency (WAFF)
compared with its last review.  Below are the WAFF and weighted-
average loss severity (WALS) that S&P has used in its analysis.

Rating     WAFF    WALS
level     (%)      (%)
AAA       57.87    41.02
AA        52.49    37.20
A         46.03    30.12
BBB       40.69    26.23
BB        35.14    23.49
B         32.44    20.95

However, the transaction has deleveraged since March 2012,
thereby increasing the credit enhancement across all classes of
notes.

The transaction continues to pay principal sequentially because
the 90+ day arrears (currently 26.60%) have breached the
documented trigger of 22.5%.  However, severe arrears have been
declining over the past year, which S&P believes is partly due to
the capitalization of arrears.  Given this trend, S&P believes
that the 90+ day arrears could drop below 22.5% and the
transaction would then pay principal on a prorata basis.
Consequently, the subordination available for the class M2b notes
would remain unchanged at that point.  In S&P's cash flow model,
if it assumes some pro rata payment in its most stressful
scenario, then the credit enhancement does not increase
sufficiently to maintain the 'A- (sf)' rating on the class M2b
notes.  S&P has therefore lowered the rating by two notches to
'BBB (sf)'.

The increase in S&P's WAFF since its last review has been offset
by the increase in credit enhancement for the remaining classes
of notes.  As a result, S&P has affirmed its ratings on the class
M1a, M1b, B1a, B1b, and B2 notes.

In February 2013, the bank account and liquidity facility
agreements were amended to be in line with S&P's 2012
counterparty criteria.  However, the currency and basis risk swap
agreements are not in line with S&P's 2012 counterparty criteria.
The maximum achievable rating for this transaction is therefore
the rating on Barclays Bank PLC (A+/Negative/A-1) plus one notch,
as Barclays Bank is posting collateral in line with the swap
documentation.  S&P has raised the ratings on the class A3a, A3b,
and A3c notes to 'AA- (sf)' accordingly.

S&P's credit stability analysis indicates that the maximum
projected deterioration that it would expect at each rating level
for time horizons of one year and three years under moderate
stress conditions is in line with S&P's credit stability
criteria.

Kensington Mortgage Securities series 2007-1 is backed by
nonconforming U.K. residential mortgages originated by Kensington
Mortgage Co. Ltd., Money Partners Ltd., and Money Partners Loans
Ltd.

          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

Kensington Mortgage Securities PLC
EUR492.1 Million, GBP236.3 Million, US$465 Million Mortgage-
Backed Floating-Rate
Notes Series 2007-1

Ratings Raised

A3a              AA- (sf)        A+ (sf)
A3b              AA- (sf)        A+ (sf)
A3c              AA- (sf)        A+ (sf)

Ratings Affirmed

M1a              A+ (sf)
M1b              A+ (sf)
B1a              B (sf)
B1b              B (sf)
B2               B- (sf)

Rating Lowered

M2b              BBB (sf)         A-(sf)


R&R ICE CREAM: S&P Puts 'B+' Corp. Rating on CreditWatch Negative
-----------------------------------------------------------------
Standard & Poor's Ratings Services placed its 'B+' long-term
corporate credit rating on U.K. ice cream manufacturer R&R Ice
Cream PLC (R&R Ice Cream) on CreditWatch with negative
implications.

At the same time, S&P placed its 'B+' issue rating on R&R Ice
Cream's existing EUR350 million senior secured notes due 2017 on
CreditWatch negative.  The recovery rating on these notes remains
unchanged at '4', indicating S&P's expectation of average (30%-
50%) recovery for noteholders in an event of payment default.

In addition, S&P assigned its 'B' preliminary long-term corporate
credit rating to R&R PIK PLC (R&R PIK), a newly established
entity that is being used to fund the acquisition of R&R Ice
Cream.  R&R PIK is ultimately controlled by funds under the
management of PAI Partners SAS. (S&P refers to R&R Ice Cream and
R&R PIK together as R&R or the group.)

At the same time, S&P assigned its preliminary issue rating of
'CCC+' to R&R PIK's EUR253 million subordinated payment-in-kind
(PIK) toggle notes due 2018.  The recovery rating on these notes
is '6', indicating S&P's expectation of negligible (0%-10%)
recovery in the event of a payment default.

The final ratings will be subject to the successful closing of
the proposed issuance and will 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 the final debt amounts and the
terms of the final documentation depart from the materials S&P
has already reviewed, or if S&P do not receive the final
documentation within what it considers to be a reasonable time
frame, S&P reserves the right to withdraw or revise its ratings.

The CreditWatch placement follows R&R's announcement that it
intends to revise its capital structure by issuing EUR253 million
of subordinated PIK toggle notes.  S&P understands that the new
capital structure will also include EUR59 million of unsecured
vendor loan notes and new financial equity of EUR217 million.
This equity will comprise mainly convertible preferred equity
certificates (CPECs).  S&P understands that the group will use
most of the proceeds to fund the acquisition of R&R Ice Cream.
This is in relation to PAI's acquisition of R&R from Oaktree
Capital Management LP.

The CreditWatch placement reflects S&P's view that the PIK toggle
notes will weaken R&R Ice Cream's credit metrics such that they
are no longer commensurate with the 'B+' rating.  S&P believes
that the additional debt will increase R&R Ice Cream's debt to
EBITDA and that potential additional cash interest on the PIK
toggle notes will impair its interest coverage ratio.  S&P
projects that R&R Ice Cream's Standard & Poor's-adjusted debt-to-
EBITDA ratio will increase to about 10x from about 8x, and that
EBITDA interest coverage could deteriorate to about 1.9x from its
current level of about 2.5x if interest is paid in cash on
preliminary PIK toggle notes.

The ratings on R&R are constrained by S&P's assessment of the
group's financial risk profile as "highly leveraged."  S&P's
assessment of R&R's business risk profile as "fair" partly
mitigates this.

The major factors that support S&P's assessment of the group's
"fair" business risk profile are:

   -- R&R's market-leading positions in its core geographies.
      R&R strengthened these positions with its recent
      acquisition of Eskigel, the largest private label ice cream
      manufacturer in Italy.  R&R has a 58% share of the U.K.
      private-label market and a 28% share of the German private-
      label market.

   -- Operational efficiencies through well-invested
      manufacturing facilities.

   -- Good cash conversion into positive free cash flow (in 2012
      the conversion rate was about 80%).

   -- A good relationship with key suppliers: Tesco and ASDA in
      the U.K.; Aldi and Edeha in Germany; and Carrefour and
      Leader Price in France.

   -- Good diversification in terms of products and brands, but
      overall concentration in a single, discretionary food
      category.

   -- R&R's medium-term business prospects depend on its ability
      to manage the following risks: R&R remains exposed to a
      mature European market exhibiting low-single-digit growth.
      A lack of meaningful presence in growing emerging markets
      leaves the group exposed solely to a low-growth region.  In
      addition, some European countries are currently
      experiencing weak consumer spending and the possibility of
      further weakening due to government austerity measures.

   -- R&R's product range comprises private-label products, which
      creates pricing pressure and leads to a limited ability to
      pass on price increases to customers when competing with
      branded multinational players.

   -- R&R's exposure to volatile raw materials prices could put
      pressure on the group's margins, despite its track record
      of profitability management.

   -- R&R's business is highly seasonal and weather-dependent,
      and the bulk of revenue generation occurs from May to
      August. This can put pressure on the group's revenues and
      margins.

   -- The deterioration in performance in the group's French
      business could also have a negative bearing on the EBITDA
      margins.

S&P expects to resolve the CreditWatch on R&R Ice Cream after the
successful issuance of the PIK toggle notes.  S&P is likely to
lower both the long-term corporate credit rating on R&R Ice Cream
and the issue rating on existing EUR350 million senior secured
notes due 2017 by one notch to 'B'.

Alternatively, S&P could remove the rating from CreditWatch and
affirm it if the proposed acquisition by PAI does not proceed.

The stable outlook on R&R PIK reflects S&P's view that if it
succeeds in issuing the PIK toggle notes it will likely maintain
revenue and stable margins over the next 12-18 months.  An
EBITDA-to-cash interest ratio of about 2x and "adequate"
liquidity are commensurate with the 'B' rating.

In S&P's opinion, a positive rating action on R&R PIK or on R&R
Ice Cream is remote at this stage, due to the group's increased
appetite for leverage.

S&P believes that ratings downside could stem primarily from
increases in raw material costs that the group cannot recover
from price increases within a short timeframe, and from further
deterioration in the performance of the French business.

In addition, ratings downside could arise if EBITDA deteriorated
on account of unfavorable weather conditions in the peak summer
months, and/or higher costs for the integration of recent
acquisitions.  S&P could also take a negative rating action if
liquidity becomes materially weaker due to reduced profitability
and/or increased acquisition activity and restructuring costs,
and if cash interest coverage falls to less than 1.5x.

RATINGS LIST

Ratings Affirmed; CreditWatch/Outlook Action
                                        To                 From
R&R Ice Cream PLC
Corporate Credit Rating                B+/Watch Neg/--
B+/Negative/--
Senior Secured                         B+/Watch Neg       B+
Recovery Rating                        4                  4

New Rating

R&R PIK PLC
Prelim. Subordinated                   CCC+
Prelim. Subordinated                   6

R&R PIK PLC
Corporate Credit Rating
Preliminary rating                     B/Stable/--


TOWERGATE FINANCE: Moody's Rates New Sr. Sec. Notes Issue (P)B1
---------------------------------------------------------------
Moody's Investors Service assigned a (P)B1 rating to the new
senior secured floating rates notes which are to be issued by
Towergate Finance Plc as part of the recently announced debt
refinancing of the Towergate Group. The outlook is stable, in
line with that of Towergate Holdings II Limited (Towergate
Holdings).

Moody's said that the ratings are based on the expectation that
the final documentation of the instrument will not differ
materially from the current documentation.

Ratings Rationale:

Moody's (P)B1 rating reflects the refinancing of the existing
GBP10 million Revolving Credit Facility (RCF), the GBP82.5
million acquisition facility, Term Loan A and Term Loan B (all
currently rated B1, stable outlook). The instruments are to be
refinanced with a tap on the existing senior secured notes
(currently also rated B1, stable outlook) and a new senior
secured floating rate note, both of which are due to mature in
2018. The senior secured notes, the floating rate notes and the
new GBP85 million RCF, which is also being established as part of
the debt refinancing, will all rank pari passu and will be
secured by first priority pledges over the share capital of
Towergate Finance Plc and various material subsidiaries of the
Towergate Group.

On a consolidated basis, Towergate PartnershipCo Limited
(Towergate) as at year end 2012 now reports under IFRS, as
opposed to UKGAAP. As at YE 2012, Towergate reported total fee
and commission income of GBP439 million (2011 IFRS restated:
GBP420 million), an operating profit of GBP106.8 million (2011
IFRS restated: GBP107.4 million) and a net loss of GBP4.7 million
(2011 IFRS restated loss: GBP23.4 million), with the bottom line
results benefitting from Towergate no longer having to annually
amortize its intangible assets under IFRS.

The (P)B1 senior secured debt rating is derived from the current
B3 corporate family rating, which incorporates Moody's
expectation of the EBITDA margin remaining consistently above 25%
together with a modest improvement in financial leverage and
coverage metrics from the 2012 IFRS levels (2012 debt-to-EBITDA
of 7.9x and interest coverage of 0.9x, on a Moody's basis).

Whilst not considered likely in the short-term due to the stable
outlook, factors that could lead to an upgrade include adjusted
free cash flow exceeding 5% of debt, a debt-to-EBITDA ratio
consistently below 6.5x and interest coverage exceeding 1.5x (all
on a Moody's basis, under IFRS). Conversely, further negative
rating action could result from further deterioration in the
leverage/coverage metrics over the near-to medium term from the
current (end 2012) levels. Further negative rating pressure could
also arise in the event of a meaningful and unprofitable
acquisition strategy, although Moody's anticipates that
Towergate's future acquisition strategy is likely to remain
focused on small scale acquisitions.

The following rating was assigned with a stable outlook:

Towergate Finance Plc:

Senior secured floating rate notes at (P)B1 (LGD3, 30%)

The methodologies used in this rating were Moody's Global Rating
Methodology for Insurance Brokers & Service Companies published
in February 2012 and Loss Given Default for Speculative-Grade
Non-Financial Companies in the U.S., Canada and EMEA published in
June 2009.


TOWERGATE FINANCE: Fitch Affirms 'B' LT Issuer Default Rating
-------------------------------------------------------------
Fitch Ratings has affirmed Towergate Finance plc's (Towergate)
Long-term Issuer Default Rating (IDR) at 'B' with a Stable
Outlook. Fitch has also affirmed Towergate's existing 8.5% senior
secured notes due 2018 at 'BB'/'RR1' and existing 10.5% senior
notes due 2019 at 'B-'/'RR5'.

Fitch has also assigned Towergate's proposed senior secured
floating rate notes (FRN) due 2018 and tap to the 8.5% senior
secured notes due 2018 -- together amounting to GBP396 million --
an expected rating of 'BB(EXP)'/RR1'. The proposed notes will
refinance the existing senior secured term loans and the drawn
amounts under the acquisition facility. As part of the
refinancing, GBP14.6m of the existing 8.5% senior secured notes
held by shareholders following the CCV acquisition will be
exchanged into additional 10.5% senior notes due 2019. The final
rating on the notes is contingent upon the receipt of final
documents conforming to information already received by Fitch.

KEY RATING DRIVERS

Improving Organic Performance:
The affirmation of the IDR and the recent revision of the Outlook
to Stable from Negative reflect the improvement in Towergate's
organic operating performance over FY12 despite the prolonged
challenging economic conditions and soft premium rates
environment. In Fitch's view, the group's results have been
supported by adequate business diversification; strong revenue
growth in the Underwriting and Paymentshield divisions has
compensated for flat performance in Retail Broking and persistent
pressure in the Network business. The EBITDA margin (adjusted for
one-off costs) has also improved to 37.5% from 36.8% on a pro-
forma basis as a result of cost savings measures implemented
during the year and the disposal of Powerplace, an electronic
marketplace for commercial lines of insurance.

Favourable Impact of Acquisitions:
"In our view, Towergate's initial strategy to de-lever via small
bolt-on acquisitions has been successful in FY12 after the lack
of deleveraging and operating underperformance noted in FY11. The
integration of affiliated company CCV in June 2012 enabled the
group to reduce total gross debt to EBITDA to 5.7x (on a pro-
forma basis) from 6.3x at FY11 (before the CCV deal). In
addition, the group has completed 27 small acquisitions during
the year and we expect that the benefits of their integration
within Towergate will materialize over the next 12-18 months.
This, combined with our expectation of sustained operating
performance at the Underwriting and Paymentshield divisions,
should support further deleveraging in the near to medium-term
and Towergate's IDR at 'B' with a Stable Outlook," Fitch says.

Leading UK Non-Life Insurance Intermediary:
Towergate's IDR of 'B' reflects the group's leading position as
an independent insurance intermediary in the UK, its well-
established relationship with leading insurance providers, its
wide distribution platform and underwriting capacity in niche
segments of the personal and SME commercial non-life insurance
market.

Weak Credit Metrics but Adequate Liquidity:
Despite the recent improvement in financial performance, we
consider Towergate's IDR to be constrained by credit metrics.
Although the proposed refinancing of the existing bank debt has
no detrimental impact on leverage levels on a pro-forma basis, we
expect the funds from operations (FFO) fixed charge cover ratio
to be weaker as a result of higher cash interest costs. However,
we expect further improvements in credit metrics over the next
12-24 months, driven by organic and external growth. In our view,
Towergate maintains satisfactory liquidity and the proposed
refinancing provides the group with adequate financial
flexibility, supported by free cash flow generation and the
absence of debt amortization before the main bond maturities fall
due in 2018 and 2019. The liquidity position of the group is
enhanced by a new GBP85 million revolving credit facility --
which can be used for acquisitions -- expected to be undrawn at
closing of the refinancing.

Recoveries Unchanged:
"We continue to expect recoveries to be maximised in a going
concern scenario given the asset-light nature of Towergate's
business. Although the 2012 acquisitions have primarily been
funded by additional debt, we expect those to benefit Towergate's
enterprise value in a distressed scenario. The 'BB'/'RR1(EXP)'
expected rating for the proposed senior secured FRN and notes
that will rank pari passu with the existing senior secured notes
reflects strong anticipated recoveries for creditors in a default
scenario. The 'B-'/'RR5' rating for the 2019 senior notes
reflects lower-than-average recovery prospects," Fitch says.

RATING SENSITIVITIES

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

- FFO gross leverage below 5.0x on a sustainable basis as a
   result of greater scale and debt repayments.

- FFO fixed charge cover above 2.0x on a sustainable basis.

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

- FFO gross leverage above 6.75x on a sustainable basis.

- FFO fixed charge cover below 1.5x on a sustainable basis.

- Evidence of material pressure on free cash flow generation.


TRAVELPORT HOLDINGS: S&P Raises Corp. Credit Rating to 'CCC+'
-------------------------------------------------------------
Standard & Poor's Ratings Services said that it raised its long-
term corporate credit ratings on Travelport Holdings Ltd. and
indirect primary operating subsidiary Travelport LLC (together,
Travelport) to 'CCC+' from 'SD' (selective default).  The outlook
is stable.

At the same time, S&P raised all its issue ratings on the debt
facilities borrowed by Travelport, in line with S&P's action on
the corporate credit rating.

In particular, S&P raised its issue rating on:

   -- the first-lien senior secured debt facilities to 'B' from
      'CCC'.  The recovery rating on the first-lien facilities is
      unchanged at '1', indicating S&P's expectation of very high
      (90%-100%) recovery prospects in the event of a payment
      default.

   -- the remaining senior unsecured notes due September 2014 to
      'CCC-' from 'C'.  S&P revised its recovery rating on these
      notes downward to '6' from '5', indicating S&P's
      expectation of negligible (0%-10%) recovery prospects in
      the event of a payment default.

   -- the subordinated notes to 'CCC-' from 'C'.  The recovery
      ratings on these debt instruments are unchanged at '6',
      indicating S&P's expectation of negligible (0%-10%)
      recovery prospects in the event of a payment default.

In addition, S&P assigned its 'CCC+' issue rating to Travelport's
new US$630 million and US$230 million second-lien term loans.
The recovery rating on these term loans is '4', indicating S&P's
expectation of average (30%-50%) recovery prospects in the event
of a payment default.

S&P also assigned its 'CCC-' issue rating to Travelport's new
US$186 million and US$415 million senior unsecured notes.  The
recovery rating on these notes is '6', indicating S&P's
expectation of negligible (0%-10%) recovery prospects in the
event of a payment default.

Finally, S&P withdrew its 'C' issue and '6' recovery ratings on
the 1.5-lien term loan and the second-lien notes that Travelport
repaid as part of the restructuring.  S&P has also withdrawn its
'D' issue and '6' recovery ratings on the payment-in-kind (PIK)
notes (tranches A and B), as these instruments were converted to
equity and US$25 million of subordinated notes.

The rating actions follow S&P's review of Travelport's business
and financial risk profiles after it downgraded the group to 'SD'
on April 16, 2013.  S&P had lowered the ratings because, among
other actions, Travelport exchanged its holdco PIK notes into
senior subordinated notes and equity, which qualified as a
distressed debt exchange under S&P's criteria.  In accordance
with S&P's criteria, it changes its long-term corporate credit
rating of 'SD' after an issuer's distressed exchange to reflect
its new capital structure.

Although S&P believes that the refinancing has simplified
Travelport's capital structure, in S&P's opinion it remains
unsustainable and it sees a risk of another distressed debt
exchange once the next significant debt maturity in August 2015
comes closer.

After the refinancing, S&P considers Travelport to have
sufficient liquidity to meet its short-term operational and
financial commitments, but S&P do not foresee any significant
deleveraging over the next 12-24 months.  This, together with
S&P's calculation of limited headroom under Travelport's
covenants over this period, constrains the rating.  S&P also
believes that Travelport has a limited ability to withstand
shocks to its business due to marginal free operating cash flow
generation under our base case.

S&P could lower the rating on Travelport if an effective
refinancing plan is not in place one year in advance of the
first-lien bank debt maturity in August 2015, as this would
weaken Travelport's liquidity position and make a payment default
more likely, in S&P's view.  S&P could also lower the rating, to
'CC', if Travelport announces a distressed debt exchange as part
of another refinancing and recapitalization plan.

Rating upside would require increased visibility on Travelport's
ability to meet the large debt maturity in August 2015, stronger
credit metrics, and evidence of sustainable positive free
operating cash flow generation.



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


* Moody's Issues Report on EU Burden-Sharing Policy for Banks
-------------------------------------------------------------
The steady policy progression towards resolving banks by
governmental burden-sharing with creditors is likely to continue,
as declining political tolerance amid stabilizing markets mean a
greater willingness to permit creditor losses, says Moody's
Investors Service in a new report, "Growing recourse to burden-
sharing in EU bank resolutions points to reduced likelihood of
systemic support for senior unsecured debt and uninsured
deposits."

Since the onset of the financial market crisis and ensuing
sovereign turmoil, Moody's has seen a steady progression in
policy towards resolving banks that increasingly incorporates
burden-sharing with creditors. "The recent imposition of losses
(bail-in) on all classes of unsecured bank creditors in Cyprus
was another step toward broader burden-sharing in the euro zone,
and has contributed to an acceleration of efforts to achieve a
banking union, as well as a bank resolution framework in the EU
in advance of the original 2018 target date," said Johannes
Wassenberg, a Moody's Managing Director, EMEA Banking.

"While there are significant legal, financial and political
issues to resolve, Moody's expects convergence around a
resolution framework that will include burden-sharing for
unsecured (including senior) creditors as well as, potentially,
uninsured depositors," added Mr. Wassenberg.

In advance of adoption of a single resolution framework, Moody's
expects the approaches to bank resolutions in the EU will remain
system- and entity-specific; the Cyprus case does not create a
single 'template' for resolution or provide precise implications
for investors and creditors vis-a-vis burden-sharing.
Policymakers at the national level continue to show a reluctance
to target senior creditors and depositors and risk broader market
repercussions.

However, as illustrated in the case of Cyprus, weaker sovereigns
have had to accept burden sharing -- albeit only with junior
creditors until Cyprus -- as a pre-condition for multi-lateral
support packages. Moody's expects that highly indebted sovereigns
that need to recapitalize their banking systems will face similar
choices and pressures. Hence, the likelihood of bail-in has
increased for unsecured creditors, including senior unsecured
bondholders and potentially depositors, in cases where banking
distress occurs concurrent with sovereign distress.

From a ratings perspective, Moody's assessment of bank credit
risk reflects Moody's continuing view that systemic support is
never assured, senior creditors at banks not deemed systemically
important are less likely to receive support in the event of bank
failures and junior creditors of all banks are highly likely to
bear losses in such an event. Moody's will continue to assess the
implications for systemic support for senior creditors and
depositors as consensus on the burden-sharing frameworks are
reached.


                            *********

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

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

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

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


                            *********


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

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

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

This material is copyrighted and any commercial use, resale or
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Information contained herein is obtained from sources believed to
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