TCREUR_Public/130502.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

            Thursday, May 2, 2013, Vol. 14, No. 86



BELARUSBANK: S&P Affirms 'B-/C' Counterparty Credit Ratings
* BELARUS: Moody's Outlook on Banking Sector Remains Negative


READER'S DIGEST: Enters into Licensing Deals with Tarsago


* CYPRUS: Lawmakers Okay EUR10-Bil. Bailout; To Get Aid Tranche


AATON: Enters Financial Receivership; Seeks Buyer


FREESEAS INC: Issues Add'l. 300,000 Settlement Shares to Hanover


ALLIED IRISH: To Issue Bonus Shares to NPRFC
INTRADE: Obtains Forbearance; Averts Insolvency
PB DOMICILIO 2007-1: S&P Withdraws 'BB' Rating on Class E Notes


* ITALY: Fitch Says Back-Up Servicer Appointments Take Longer


EASTCOMTRANS LLP: Moody's Assigns B3 Rating to US$100MM Notes


EUROPROP SA: Fitch Cuts Ratings on 5 Note Classes to 'Dsf'
KLOECKNER GROUP: Moody's Rates EUR150MM PIK Notes '(P)Caa1'
STERLINGMAX I: Fitch Cuts Rating on Class B Notes to 'CC'


SNS REAAL: Moody's Maintains Review on 'E' Standalone BFSR


BANK OCHRONY: Fitch Affirms 'bb' Viability Rating
BRE BANK: Moody's Reviews Bond Ratings for Possible Downgrade


NOVOROSSIYSK COMMERCIAL: S&P Affirms 'BB-' Corp. Credit Rating
* BASHKORTOSTAN REPUBLIC: S&P Lifts ICR From BB+; Outlook Stable
* CITY OF UFA: S&P Affirms 'BB-' Issuer Credit Rating


ABANKA VIPA: Fitch Affirms 'C' Hybrid Instrument Rating
* SLOVENIA: Moody's Downgrades Government Bond Rating to Ba1


MADRID RMBS: Moody's Cuts Ratings on Two Note Classes to 'Ba3'


LEMTRANS LLC: Moody Assigns 'B3' Corp. Rating; Outlook Negative

U N I T E D   K I N G D O M

BRIGHTHOUSE GROUP: Moody's Assigns 'B2' CFR; Outlook Stable
HEARTS OF MIDLOTHIAN: Deny Administration Rumours
KENNEDY GROUP: NAMA Puts Properties Into Receivership
LEMTRANS LLC: Fitch Assigns 'B' Long-Term Issuer Default Rating
NEW LOOK: Fitch Assigns 'B-' Long-Term Issuer Default Rating

NEW LOOK: S&P Assigns Preliminary 'B-' Corporate Credit Rating
R&R ICE CREAM: Moody's Lowers CFR to B2 Following PAI Purchase
SEALINE: In Administration, Seeks Buyers
SUPERGLASS: Launches GBP12.2-Mil. Share Placing to Refinance Debt
UK COAL: On Brink of Insolvency; Seeks Voluntary Liquidation

* Fees to Drop for Insolvency Options, Scottish Trust Deeds Says


* U.S. Money Market Funds Exposure to EU Banks Down in March
* Upcoming Meetings, Conferences and Seminars



BELARUSBANK: S&P Affirms 'B-/C' Counterparty Credit Ratings
Standard & Poor's Ratings Services said it revised to positive
from stable its outlooks on Belarus-based JSC Savings Bank
Belarusbank, Bank BelVEB OJSC, BPS-Sberbank, and Belagroprombank
JSC.  At the same time S&P affirmed its counterparty credit
ratings on all four banks at 'B-/C'.

The outlook revisions follow similar action on the Republic of
Belarus.  S&P views the sovereign's creditworthiness as key risk
factor for Belarusian banks because of their high operational,
funding, and asset exposure to the predominantly state-owned
Belarusian economy.  In S&P's view, easing conditions in the
economy could help the banks to gradually strengthen their
financial profiles.  In addition, the four banks that S&P rates
are either:

   -- Subsidiaries of large Russian financial groups, whose
      creditworthiness is substantially superior to that of
      Belarus, and which in S&P's view would provide
      extraordinary support to their affiliates in Belarus; or

   -- Government-related entities (GREs), which S&P expects would
      receive extraordinary support from the state, and whose
      creditworthiness is highly correlated with that of the

The long-term ratings on all four banks do not currently include
any uplift for potential extraordinary government or parental
support, as the banks' stand-alone credit profiles (SACPs) are
at, or above, the sovereign level.  However, if sovereign
creditworthiness continues to improve S&P might include
uplift in future.

S&P considers Belarusbank and Belagroprombank, the two largest
and state-owned banks, to be GRE with a "very high" likelihood of
extraordinary support from the Belarusian government.  S&P do not
add any notches of uplift to Belagroprombank, because its SACP of
'b-' is already at the same level as the sovereign.

Belarusbank's SACP is even higher at 'b', reflecting the bank's
dominant business position in the banking sector and above
average funding profile.  However, S&P do not rate the bank above
the sovereign because of its high dependence on economic
conditions in Belarus, and the importance of lending to and
funding from the sovereign or its satellites.

S&P considers BPS-Sberbank and BelVEB to be strategically
important subsidiaries of Russia's Sberbank (not rated) and
Vnesheconombank (BBB/Stable/A-2), given the parents' significant
financial and operational support for their Belarusian
subsidiaries, as well as the importance of the Belarusian market
for Russian banks.  S&P believes BPS-Sberbank and BelVEB can
access the parents' liquidity if they need to, but S&P thinks the
benefits of this external support are restricted by the high-risk
operating environment in Belarus.

The positive outlooks on the banks reflect that on Belarus and
the possibility of an upgrade of the sovereign and the banks if
the government can sustain the strengthening economic stability.
S&P believes that better economic conditions in Belarus may also
support the banks' financial profiles.

Further rating actions on the four banks could result from
changes to S&P's foreign currency sovereign credit ratings or
transfer and convertibility (T&C) assessment of Belarus.
However, the ratings on Belarus and the four bankswould not
necessarily move in tandem.

S&P might consider positive rating actions if the bank's stand-
alone credit quality and the likelihood of external support
continued to improve, and if S&P raised its ratings and T&C
assessment on Belarus.

A negative rating action or downward revision of S&P's T&C
assessment on Belarus would likely trigger similar rating actions
on the four banks.


Ratings Affirmed; Outlook Action
                                        To                 From
JSC Savings Bank Belarusbank
Counterparty Credit Rating      B-/Positive/C      B-/Stable/C

Counterparty Credit Rating      B-/Positive/C      B-/Stable/C

Counterparty Credit Rating      B-/Positive/C      B-/Stable/C

  Certificate of Deposit         B-/C

Belagroprombank JSC
Counterparty Credit Rating      B-/Positive/C      B-/Stable/C

Certificate of Deposit          B-/C
Senior Unsecured                B-

* BELARUS: Moody's Outlook on Banking Sector Remains Negative
The outlook for Belarus's banking system remains negative,
unchanged since June 2009, says Moody's Investors Service in a
new report entitled "Banking System Outlook: Belarus."

Ongoing macroeconomic vulnerabilities underpin the key drivers of
the outlook, which remain (1) the government's limited ability to
extend support to the banks; (2) Moody's expectation that banks'
asset quality and capital adequacy will deteriorate further; and
(3) the banks' low foreign-currency liquidity relative to high
levels of foreign-currency deposits.

Over the 12-18 month outlook period, pressure on the banks'
standalone credit strength could stem from a number of
macroeconomic risks that could constrain growth and destabilize
government finances. In particular, Moody's says that potentially
tighter external financing conditions -- if the government fails
to secure sufficient external funding and/or energy subsidies --
would constrain the government's ability to stimulate domestic
demand through subsidies and by funding the banks' credit growth.

Moody's expects that banks' asset quality will weaken over the
outlook period as lower export earnings and weak GDP growth (2%
2013F) will dampen corporate profitability and diminish bank debt
serviceability. Under its central scenario, Moody's expects
system-wide problem loans to reach 8%-10% of total loans over the
next 12-18 months, compared with the rating agency's estimate of
6%-8% at year-end 2012. The banking system's capital adequacy
ratio is also likely to weaken to around 15% over the outlook
horizon, from 21% at year-end 2012 if all potential problem loans
are duly recognized.

The funding and liquidity positions of Belarusian banks remain
vulnerable to both the fragile confidence of retail depositors
and volatile FX-rate dynamics. Banks lack sufficient volumes of
liquid FX assets to cover their large FX deposits (63% of total
deposits). Difficulties in financing the current account deficit
and external debt, combined with fluctuations in the USD/BYR
rate, could trigger periodic deposit outflows over the next 12-18


READER'S DIGEST: Enters into Licensing Deals with Tarsago
The Reader's Digest Association, Inc. on April 30 disclosed that
it has licensed its operations in France, Belgium and the Nordic
region to SAPE, and in Poland, Romania and Hungary to Tarsago
Media Group.  Both of these agreements required U.S. Bankruptcy
Court approval, which the Company previously received.  The
partnerships took effect on April 30.

The Company's licensing initiative is one of the core pillars of
its transformation plan.  Last summer, the Company licensed its
businesses in Spain and Portugal to SAPE.  The Company continues
to pursue licensing agreements for its international business in
other regions.

"[Tues]day marks a big step in Reader's Digest Association's plan
to transform our international business by enabling us to reduce
corporate overhead to achieve a sustainable debt structure and to
simplify our business," said Robert E. Guth, CEO of Reader's
Digest Association.  "While we still have more to do, we believe
that these licensing transactions will provide the Company with
steady revenue streams and enable us to maintain our global
footprint without the costs associated with running these
businesses.  In addition, both of our licensees are excellent
strategic partners for Reader's Digest and know our business

Both SAPE and Tarsago have extensive understanding of the
Reader's Digest business.  SAPE is a leader in Spain and Portugal
in mail order and direct selling, and last year began a
partnership with RD through the licensing of the Iberia business.
Tarsago is co-owned by a former RD Central Europe executive.

Mr. Guth continued, "I would like to thank the France, Nordic,
Poland, Romania and Hungary teams for their significant
contributions to Reader's Digest International and for everyone's
efforts in making these transactions possible.  I look forward to
a close working relationship and successful partnership with
these teams in the future."

The Company expects all affected RDA employees will transition
with the businesses to the new owners.

                      About Reader's Digest

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

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

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

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

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


* CYPRUS: Lawmakers Okay EUR10-Bil. Bailout; To Get Aid Tranche
Alkman Granitsas and Stelios Bouras at Dow Jones Newswires report
that Cypriot lawmakers narrowly approved a EUR10 billion (US$13
billion) bailout, paving the way for the country to get its first
installment of aid in a few weeks, as it turns to restructure a
devastated economy.

The bailout loan passed with the approval of 29 of the 56 members
of the legislature, Dow Jones discloses.  As expected, the
opposition Communist AKEL and its ally the Socialist EDEK party
voted against, Dow Jones relates.  AKEL also has called for a
referendum on whether the island should remain in the euro zone,
Dow Jones notes.

The bailout was approved with support from the Democratic Rally
and the Democratic Party, both of which back the government and
by one lawmaker from the pro-government European Party, according
to Dow Jones.

Under an April agreement, Cyprus will make EUR13 billion of
deficit cuts and restructure its banking system in exchange for
the loan from its euro-zone peers and the International Monetary
Fund, Dow Jones discloses.

Cyprus, Dow Jones says, has agreed to a range of public spending
cuts from government travel to pension benefits, and it will
impose higher taxes on companies and consumers.

The government also has moved to shut down the island's second-
biggest bank, Cyprus Popular Bank PCL, and to overhaul its
largest, Bank of Cyprus PCL, leading to steep losses for large,
uninsured deposit holders, Dow Jones discloses.

The austerity measures, the overhauls in the financial sector and
the imposition of recent capital controls -- the first imposed by
a euro-zone country -- are expected to push Cyprus deeper into
recession, with the economy officially forecast to shrink 8.7%
this year, Dow Jones states.

The bailout vote follows ratification in April by the German and
Dutch parliaments, Dow Jones recounts.  According to Dow Jones,
other euro-zone members are expected to approve the loan in
coming weeks, while the IMF executive board is expected to
approve its EUR1 billion portion of the bailout in late May.


AATON: Enters Financial Receivership; Seeks Buyer
According to Studio Daily's Bryant Frazer, Aaton founder Jean-
Pierre Beauviala said in a statement posted to the French Society
of Cinematographers (AFC) Web site that the company has entered
financial receivership.

The company was most recently developing the Penelope Delta, a
digital camera that sought to replicate the ergonomics of the
35mm original, Studio Daily discloses.

"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," Studio Daily quotes Mr. Beauviala
as saying in the statement.  "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."

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, Studio Daily

Aaton is a French film camera manufacturer.


FREESEAS INC: Issues Add'l. 300,000 Settlement Shares to Hanover
The Supreme Court of the State of New York, County of New York,
on April 17, 2013, entered an order approving, among other
things, the fairness of the terms and conditions of an exchange
pursuant to Section 3(a)(10) of the Securities Act of 1933, as
amended, in accordance with a stipulation of settlement between
FreeSeas Inc.,  and Hanover Holdings I, LLC, in the matter
entitled Hanover Holdings I, LLC v. FreeSeas Inc., Case No.
153183/2013.  Hanover commenced the Action against the Company on
April 8, 2013, to recover an aggregate of $1,792,416 of past-due
accounts payable of the Company, plus fees and costs.  The Order
provides for the full and final settlement of the Claim and the
Action.  The Settlement Agreement became effective and binding
upon the Company and Hanover upon execution of the Order by the
Court on April 17, 2013.

Pursuant to the terms of the Settlement Agreement approved by the
Order, on April 17, 2013, the Company issued and delivered to
Hanover 560,000 shares of the Company's common stock, $0.001 par

The Settlement Agreement provides that the Initial Settlement
Shares will be subject to adjustment on the trading day
immediately following the Calculation Period to reflect the
intention of the parties that the total number of shares of
Common Stock to be issued to Hanover pursuant to the Settlement
Agreement be based upon a specified discount to the trading
volume weighted average price of the Common Stock for a specified
period of time subsequent to the Court's entry of the Order.

Since the issuance of the Initial Settlement Shares and
Additional Settlement Shares described above, Hanover
demonstrated to the Company's satisfaction that it was entitled
to receive 300,000 Additional Settlement Shares based on the
adjustment formula described above, and that the issuance of that
Additional Settlement Shares to Hanover would not result in
Hanover exceeding the beneficial ownership limitation.
Accordingly, on April 22, 2013, the Company issued and delivered
to Hanover 300,000 Additional Settlement Shares pursuant to the
terms of the Settlement Agreement approved by the Order.

The issuance of Common Stock to Hanover pursuant to the terms of
the Settlement Agreement approved by the Order is exempt from the
registration requirements of the Securities Act pursuant to
Section 3(a)(10) thereof, as an issuance of securities in
exchange for bona fide outstanding claims, where the terms and
conditions of such issuance are approved by a court after a
hearing upon the fairness of those terms and conditions at which
all persons to whom it is proposed to issue securities in such
exchange shall have the right to appear.

A copy of the Form 8-K is available for free at:


                        About FreeSeas Inc.

Headquartered in Athens, Greece, FreeSeas Inc., formerly known as
Adventure Holdings S.A., was incorporated in the Marshall Islands
on April 23, 2004, for the purpose of being the ultimate holding
company of ship-owning companies.  The management of FreeSeas'
vessels is performed by Free Bulkers S.A., a Marshall Islands
company that is controlled by Ion G. Varouxakis, the Company's
Chairman, President and CEO, and one of the Company's principal

The Company's fleet consists of six Handysize vessels and one
Handymax vessel that carry a variety of drybulk commodities,
including iron ore, grain and coal, which are referred to as
"major bulks," as well as bauxite, phosphate, fertilizers, steel
products, cement, sugar and rice, or "minor bulks."  As of Oct.
12, 2012, the aggregate dwt of the Company's operational fleet is
approximately 197,200 dwt and the average age of its fleet is 15

Freeseas disclosed a net loss of US$30.88 million in 2012, a net
loss of US$88.19 million in 2011, and a net loss of US$21.82
million in 2010.  The Company's balance sheet at Dec. 31, 2012,
showed $114.35 million in total assets, $106.55 million in total
liabilities and $7.80 million in total shareholders' equity.

RBSM LLP, in New York, issued a "going concern" qualification on
the consolidated financial statements for the year ended Dec. 31,
2012.  The independent auditors noted that the Company has
incurred recurring operating losses and has a working capital
deficiency.  In addition, the Company has failed to meet
scheduled payment obligations under its loan facilities and has
not complied with certain covenants included in its loan
agreements.  It has also failed to make required payments to
Deutsche Bank Nederland as agreed to in its Sept. 7, 2012,
amended and restated facility agreement and received notices of
default from First Business Bank.  Furthermore, the vast majority
of the Company's assets are considered to be highly illiquid and
if the Company were forced to liquidate, the amount realized by
the Company could be substantially lower that the carrying value
of these assets.  These conditions among others raise substantial
doubt about the Company's ability to continue as a going concern.


ALLIED IRISH: To Issue Bonus Shares to NPRFC
Allied Irish Banks, p.l.c., announced that the annual cash
dividend of EUR280 million on the EUR3.5 billion 2009 Non
Cumulative Preference Shares held by the National Pensions
Reserve Fund Commission (NPRFC), on behalf of the Irish State,
due May 13, 2013, will not be paid.

As a result AIB becomes obliged to issue and allot ordinary
shares to the NPRFC in accordance with AIB's Articles of
Association.   The number of Bonus Shares to be issued will be
calculated by dividing the unpaid dividend amount on the 2009
Preference Shares by the average price on an ordinary share over
the period of 30 days trading immediately preceding the annual
dividend date.  The final amount of Bonus Issue of ordinary
shares will therefore be announced in due course.  The Irish
State, through the NPRFC, owns 99.8% of the ordinary shares of

                      About Allied Irish Banks

Allied Irish Banks, p.l.c. -- is a
major commercial bank based in Ireland.  It has an extensive
branch network across the country, a head office in Dublin and a
capital markets operation based in the International Financial
Services Centre in Dublin.  AIB also has retail and corporate
businesses in the UK, offices in Europe and a subsidiary company
in the Isle of Man and Jersey (Channel Islands).

Since the onset of the global and Irish financial crisis, AIB's
relationship with the Irish Government has changed significantly.

As at Dec. 31, 2010, the Government, through the National Pension
Reserve Fund Commission ("NPRFC"), held 49.9% of the ordinary
shares of the Company (the share of the voting rights at
shareholders' general meetings), 10,489,899,564 convertible non-
voting ("CNV") shares and 3.5 billion 2009 Preference Shares.  On
April 8, 2011, the NPRFC converted the total outstanding amount
of CNV shares into 10,489,899,564 ordinary shares of AIB, thereby
increasing its holding to 92.8% of the ordinary share capital.

In addition to its shareholders' interests, the Government's
relationship with AIB is reflected through formal and informal
oversight by the Minister and the Department of Finance and the
Central Bank of Ireland, representation on the Board of Directors
(three non-executive directors are Government nominees),
participation in NAMA, and otherwise.

Allied Irish disclosed a loss of EUR3.64 billion on EUR1.10
billion of net interest income for the year ended Dec. 31, 2012,
as compared with a loss of EUR2.29 million on EUR1.35 billion of
net interest income in 2011.  Allied Irish's consolidated balance
sheet at Dec. 31, 2012, showed EUR122.51 billion in total assets,
EUR111.27 billion in total liabilities and EUR11.24 billion in
total shareholders' equity.

INTRADE: Obtains Forbearance; Averts Insolvency
Arash Massoudi at The Financial Times reports that John Delaney,
a director of Intrade, said enough customers have waived their
claims against the company to allow it to remain solvent and
pursue legal action against the estate of its founder.

The development comes weeks after the company, which allowed
customers to bet on everything from presidential elections to
film box-office receipts, said it was likely to become insolvent
and eventually liquidate after discovering a US$700,000 shortfall
in its customer segregated accounts.

Intrade spent the last month attempting to convince enough
customers to waive their claims to money they had with the
company to make up for the shortfall, the FT recounts.  According
to the FT, a statement from the company, which had ceased
activity on its markets and frozen customer accounts in March,
said it intends to begin processing withdrawal request from
customers later this week.

"The forbearance allows us to remove the shortfall from our
balance sheet liability," the FT quotes Ron Bernstein, a director
at Intrade, as saying.  "Because we are not facing insolvency
now, we are in a position to prosecute our legal claims and do
some limited operations."

Mr. Bernstein, as cited by the FT, said the company had about
US$2.2 million in its customer accounts.

The FT relates that in a statement earlier this month, the
company said it would pursue two "substantial monetary" claims
against two distinct parties for an aggregate amount of more than
US$3.5 million if it were to remain solvent.

A company audit earlier this year revealed that its founder John
Delaney, who died while climbing Mt. Everest in May 2011, had
received US$2.6 million in insufficiently documented payments
from the company in 2010 and 2011, the FT discloses.
Mr. Bernstein confirmed that the legal action the company would
pursue was related to those transactions, the FT notes.

The discovery of Intrade's financial problems has raised
questions about the oversight of unregulated prediction markets,
the FT says.

Intrade is a Dublin-based online prediction market.

PB DOMICILIO 2007-1: S&P Withdraws 'BB' Rating on Class E Notes
Standard & Poor's Ratings Services has withdrawn its credit
ratings on PB Domicilio 2007-1 Ltd.'s class D and E notes.

On Jan. 4, 2013, S&P withdrew its ratings on Deutsche Postbank
AG, whose senior unsecured debt is the collateral for PB
Domicilio 2007-1's class D and E notes.

On Jan. 28, 2013, following the originator's intention (through
the submission of a plan) to amend the transaction documents to
allow for a cash collateralization of these junior notes, S&P did
not withdraw its ratings on these classes of notes.

S&P has been advised that the noteholders have rejected the
originator's plan.  Therefore, S&P has withdrawn its ratings on
the class D and E notes.

PB Domicilio 2007-1 is a synthetic, partially funded residential
mortgage-backed securities (RMBS) transaction, which benefits
from a synthetic excess spread mechanism.  Its purpose is to
transfer the credit risk associated with a pool of residential
mortgage loans on BHW Bausparkasse AG Hameln's balance sheet.


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

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



Class               Rating
            To                  From

PB Domicilio 2007-1 Ltd.
EUR69.6 Million Floating-Rate Credit Linked Notes

Ratings Withdrawn

D           NR                  BBB (sf)
E           NR                  BB (sf)


* ITALY: Fitch Says Back-Up Servicer Appointments Take Longer
The appointment of a back-up servicer (BUS) in several Italian
structured finance transactions has sometimes taken longer than
Fitch Ratings envisaged, which could raise concerns if there were
a rapid deterioration of a servicer's creditworthiness. "However,
the Bank of Italy's willingness to ensure that servicer defaults
are managed in an orderly fashion eases our concerns regarding
operational and payment interruption risk," Fitch says.

Back-up servicers have now been appointed in 13 Italian RMBS and
SME CDO transactions featuring four servicers -- all medium-sized
Italian banks -- that we have been monitoring since the banks
were downgraded late last August. The appointment process,
especially the negotiation of the BUS agreement, has typically
taken at least three to four months, and sometimes up to seven
months, rather than the 30 or 45 days specified in some
transaction documents.

The recent RMBS and SME CDO experience confirms our view that
contractually prescribed timeframes for BUS appointments were
very ambitious, although we did not expect the process to take as
long as it did in some instances. We also recognize that the
issuers were not under urgent pressure to appoint a BUS, as the
initial servicers were financially sound and fully operational.
If a full new servicer appointment were needed, we think the
relevant parties could act with greater speed.

Our credit analysis focuses more on the time a BUS would take to
actually step in and replace a distressed servicer, and whether a
servicer default would be managed in an orderly fashion. The
appointment of a BUS -- be it at transaction closing or during
the life of the deal -- should help a quicker transfer of
servicing responsibilities if required, and therefore strengthens
SF transactions.

Moreover, the successful appointments in these transactions
indicate that originators can identify and engage a BUS when
necessary. In all but one case, the BUS is an Italian commercial
bank substantially comparable to the servicer in size,
experience, geographical franchise and IT systems. These
characteristics should make the full transfer of the servicing to
the BUS smoother, if it is required.

Even where servicers are distressed, administrative and strategic
support from the Italian authorities has resulted in negligible
exposure of Italian SF transactions to servicing disruption, and
militated against payment interruption risk.

There are few precedents, but two consumer ABS transactions
demonstrate this. Liquidation proceedings began in 2011 for the
originators/servicers of Compagnia Finanziaria 2007 and 16 Uno
Finance as part of the Bank of Italy's extraordinary
administration of their parent company, Delta S.p.A., which had
started in 2009. Although this was potentially a termination
event under the servicing agreements (at the discretion of the
SPVs), the initial servicers continued to manage the portfolio
under the supervision of the Bank of Italy (and the consent of
the SPVs and the noteholders), without disruption to servicing or
payments. A new servicing company took over the portfolios this
month, and will mainly employ staff from the original servicers.

In addition, the slow and smooth wind-down of the initial
servicers gave the already-appointed BUS sufficient time to
prepare itself to step in if required, significantly reducing the
potential time of exposure to operational risks, in Fitch's view.

These examples of continuing servicing activities after
bankruptcy reduce our concerns about operational and payment
disruption events in Italy.


EASTCOMTRANS LLP: Moody's Assigns B3 Rating to US$100MM Notes
Moody's Investors Service assigned a definitive rating of B3,
with a loss given default assessment of LGD3/45%, and a stable
outlook to the issuance of US$100 million five-year notes by
Eastcomtrans LLP. The company is to pledge its railcars as
collateral against the notes. Eastcomtrans will use the proceeds
from the notes placement to refinance part of its existing debt
and finance the expansion of its fleet.

Moody's definitive rating on this debt obligation is in line with
the provisional rating assigned on April 3, 2013.

Ratings Rationale:

The B3 rating assigned to the notes is equivalent to
Eastcomtrans's corporate family rating, reflecting the fact that
the notes will hold security over specific assets, which is the
case for the company's other secured and unsubordinated financial
debt. Therefore, Moody's takes the view that the notes will not
be subordinated to other secured debt, which currently represents
a dominant portion of the company's total debt.

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

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

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

What Could Change The Rating Up/Down

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

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

Principal Methodology

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

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


EUROPROP SA: Fitch Cuts Ratings on 5 Note Classes to 'Dsf'
Fitch Ratings has downgraded Europrop (EMC) S.A. (Compartment 1)
as follows:

EUR99.4m class A (XS0260127161): downgraded to 'Dsf' from 'CCsf';

EUR40.9m class B (XS0260129373): downgraded to 'Dsf' from 'Csf';

EUR28.1m class C (XS0260130207): downgraded to 'Dsf' from 'Csf';

EUR30.5m class D (XS0260130975): downgraded to 'Dsf' from 'Csf';

EUR15.8m class E (XS0260132088): downgraded to 'Dsf' from 'Csf';


The sales process of assets securing the last remaining loan
(Sunrise) that commenced in 2011 has, as expected by Fitch, not
concluded in time for legal final bond maturity on April 30,
2013. As a result, principal on all classes of notes will fall
overdue, prompting the rating action. This is in keeping with a
notice to noteholders issued on April 23, 2013 announcing a
potential note event of default given the near certainty that the
Sunrise loan would not be resolved in time.

The securitized loan is a 50% share in an A-note carved out of a
whole loan and subsequently syndicated between Europrop and
another CMBS, DECO 9 - Pan Europe 3 plc. As warned by Fitch in
May 2012, such an arrangement complicated the workout process
since the special servicer responsible shares a duty of care to
two sets of CMBS investors with different terms and conditions.
Given that DECO 9 matures in 2017, the disposal process will have
been drawn up with these creditors also in mind, and this likely
contributed to the avoidance of a fire-sale that would have been
necessary to meet Europrop's short remaining term.

Indeed the process is far from complete, with to date a mere 17
of the original 61 properties actually sold. Such a staged sell-
down is a reasonable strategy to avoid excessive discounting. A
further nine properties have been notarized and 13 are in the due
diligence process. Fitch understands that the passing of note
maturity will not interrupt the special servicer in its efforts
to liquidate the portfolio, and sale proceeds should continue to
be divided between the EuroProp and DECO 9 - Pan Europe 3 plc
noteholders as before.

Rating Sensitivity

As legal final maturity has elapsed, all the ratings are
withdrawn from 'Dsf' and Fitch will no longer cover further
developments. Nevertheless, Class A noteholders should go on to
receive significant recoveries, although neither the timing nor
recovery rate is simple to forecast with accuracy.

KLOECKNER GROUP: Moody's Rates EUR150MM PIK Notes '(P)Caa1'
Moody's Investors Service assigned a provisional (P)Caa1 rating
to the EUR150 million of PIK Notes (due 2017) to be issued by
Kleopatra Holdings 1 S.C.A. ('Issuer'), the parent holding
company of Kloeckner Group.

Concurrently, Moody's has affirmed the B2 corporate family rating
(CFR) and B2-PD probability of default rating at Kleopatra
Holdings 2 S.C.A. ('KP Parent', formerly called Kloeckner
Holdings S.C.A.) as well as the Ba3 rating for the US$65 million
revolving credit facility (due 2016) and the US$435 million
senior secured term loan B (due 2016) at Kloeckner Pentaplast of
America Inc.

The agency has also upgraded the rating for the EUR255 million
second lien notes (due 2017) at KP Germany Erste GmbH to B3 from

The ratings outlook is stable.

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 (P)Caa1 rating for the PIK Notes reflects the fact that the
Notes will be subordinated to any existing and future
indebtedness of the subsidiaries of the Issuer and will also not
be guaranteed by any of the Issuer's subsidiaries.

Kloeckner intends to use the proceeds from the PIK Notes to
partially refinance Preferred Equity Certificates ("PECs"), fund
general corporate purposes and pay transaction-related fees and
expenses. The interest on the PIK Notes will be payable, prior to
May 15, 2015, at the election of the Issuer, entirely in cash or
entirely in kind. After May 15, 2015, interest will be paid in
cash provided Kloeckner Pentaplast of America Inc. and KP Germany
Erste GmbH have sufficient restricted payment capacity to
upstream cash.

This re-leveraging transaction comes shortly after the company's
debt restructuring process completed in June 2012. Moody's views
this transaction as evidencing a highly aggressive financial
policy on the part of Strategic Value Partners, Kloeckner group's
majority shareholder since June 2012, executed in order to
monetize a significant portion of their equity investment.

However, the affirmation of the CFR at B2 reflects Moody's
expectations that the company's operating performance will
continue to improve barring any significant increase in raw
material prices. While volume growth is expected to remain
subdued due to the soft macro-economic environment in Europe and
in the US, Moody's expects that Kloeckner will reap the benefits
of its cost saving initiatives leading to gradual deleveraging to
below 6.0x including the PIK notes (or to below 5.0x excluding
the PIK notes) by the end of fiscal year 2013.

The B2 CFR also takes into account the group's fairly
commoditized product portfolio as well as the price competitive
nature of the industry. In addition, the group remains exposed to
the price volatility of resin as only about 40% of contracts
contain automatic pass-through mechanisms.

The upgrade of the EUR255 million second lien notes to B3 from
Caa1 reflects the improved operating performance of the group,
combined with the fact that the rating of the notes was
previously strongly positioned within the Caa1 category.

The PIK Notes indenture requires the issuer to provide either (1)
the Issuer's consolidated financial statements on an ongoing
basis or (2) the consolidated financial statements for KP Parent
(which is the wholly owned direct subsidiary of the Issuer and
the top entity of the restricted group defined under the existing
senior secured facilities agreement), provided that the Issuer
includes a description of any material differences in the
financial condition between the Issuer and KP Parent on a
consolidated basis, including the outstanding Indebtedness of the
Issuer. Moody's further understands that the indenture stipulates
several restrictions on the Issuer's activities such that it is
only allowed to act as a holding company and issue PIK Notes.
Moody's would therefore expect no material differences between
the accounts of the Issuer and KP Parent other than the PIK Notes
issuance and related accounting implications.

In that context, Moody's anticipates that the CFR will be moved
from KP Parent to the Issuer level should the PIK issuance be
successful. This by itself should not result in any rating


The outlook on all ratings is stable. It reflects Moody's
expectations that Kloeckner's solid market positions and high
share of sales towards non-discretionary pharma and food end-
markets will continue to support the company's operating
performance and lead to a Moody's adjusted Debt/EBITDA ratio to
below 6.0x (including the PIK Notes) by the end of September

What Could Change The Rating Up/Down

All metrics quoted in that section include the PIK Notes.

Upwards pressure could build should KP manage to significantly
reduce leverage to below 5 times (including the PIK Notes),
measured as debt/EBITDA, on a sustainable basis on the back of
improvements in operating profitability. Furthermore, the rating
could enjoy upwards pressure were KP to improve free cash flow
generation to above 5% of total debt and interest cover in terms
of EBIT/Interest towards 1.5 times.

A deterioration in profitability, caused for instance by
increasing competition or challenges to manage volatile raw
material costs resulting in weaker profitability and material
negative free cash flow or the inability to improve Debt/EBITDA
as adjusted by Moody's towards 6 times as well as tightening
headroom under the company's financial covenants could put
negative pressure on the ratings.

Principal Methodologies

The principal methodology used in this rating was the Global
Packaging Manufacturers: Metal, Glass, and Plastic Containers
published in June 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.

Kleopatra Holdings 2 S.C.A., with legal domicile in Luxembourg,
is the ultimate holding company of German plastic packaging
manufacturer Klockner Pentaplast, a global leader in the
manufacturing of rigid plastic films for the pharmaceutical,
food, medical, electronics and other packaging industry. The
group generated EUR1.2 billion of sales in the last twelve months
ending September 2012.

STERLINGMAX I: Fitch Cuts Rating on Class B Notes to 'CC'
Fitch Ratings has downgraded Sterlingmax I MBS as follows:

Class A2 notes (XS0177867503): downgraded to 'CCCsf' from 'Bsf'
Class B notes (XS0177868063): downgraded to 'CCsf' from 'CCCsf'


On 9 April 2013 the trustee communicated that at least two thirds
of the controlling class noteholders, the class A2, exercised
their right to appoint the acceleration of the notes and the
enforcement of the security, due to the continued event of
default caused by the failure to pay in full interests on the
class B notes. Due to the direction from the class A2
noteholders, all the notes are immediately due and repayable and
the security constituted by the trust deed is enforceable.

The issuer failed to pay in full interest on the class B notes on
four payment dates since November 2010, with the last one in
November 2012 and constituting an event of default as per the
transaction's documentation.

On 24 April, the trustee issued a public notice of auction and
invitation to bid, communicating the sale of the collateral
through an auction to be held between 26 April and 2 May 2013.
After such auction the notes will be repaid using the proceeds
from the sale of the collateral and under strictly sequential
amortization established in the "enforcement priority of
payments". Therefore the notes are exposed to market risk and the
noteholders may be exposed to losses, in case the proceeds from
the auction are not enough to repay the notes in full.

The current remaining pool consists of 28 tranches from UK CMBS
(52%) and RMBS (34%) transactions. These tranches are
predominately mezzanine tranches from transactions originated
prior to 2007.

The downgrades reflect the uncertain magnitude of proceeds
achievable from the liquidation of the pool, which may be
insufficient to pay in full the outstanding balance of classes A2
and B.

Fitch notes that this is the third transaction managed by
Collineo Asset Management GmbH and rated by the agency that is
accelerated and the security enforced, jointly with Euromax IV
MBS SA in January 2011 and House of Europe II PLC in June 2011.
In both past cases the proceeds from the liquidation of the
security were insufficient to pay the notes in full.


Fitch notes that the class A2 notes may experience losses should
the remaining portfolio's liquidation price be below a given
value. This could be between 60% and 70% depending on the
magnitude of senior fees and expenses that will need to be paid
in the enforcement priority of payments. For the class B notes
not to experience any losses the liquidation price would need to
be between 80% and 90%.


SNS REAAL: Moody's Maintains Review on 'E' Standalone BFSR
Moody's Investors Service said that SNS Bank's Baa3/Prime-3
deposit rating and senior unsecured ratings, and its standalone
bank financial strength rating (BFSR) of E, equivalent to a
baseline credit assessment (BCA) of ca, remain on review.

SNS REAAL group has delayed the publication of the 2012 audited
financial statements, as it needs additional time to reflect the
implications of the nationalization into the group's accounts, in
particular with respect to the Property Finance business unit.
Moody's expects to conclude its reviews following SNS REAAL's
publication of the 2012 audited financial statements, planned for
mid-June 2013.

Similarly, SNS REAAL's Ba2 senior debt rating and the Insurance
Financial Strength Ratings (IFSRs) of SRLEV and REAAL
Schadeverzekeringen of Baa2 remain on review for downgrade. The
rating on the hybrids issued by SRLEV of B1(hyb) remains on
review, with direction uncertain.

Ratings Rationale:

Ongoing Review On Sns Bank's Ratings Driven By Delayed
Publication Of Audited Accounts For 2012

The ongoing review for upgrade on SNS Bank's BFSR reflects
Moody's view that SNS REAAL's nationalization (announced on
February 1, 2013) is likely to improve the bank's standalone
financial fundamentals. However, the potential for SNS Bank's
intrinsic financial strength to be restored will be driven by (1)
the impact of the future transfer of the commercial real-estate
exposures and the potential residual risks linked to this
portfolio, which have a bearing on Moody's assessment of the
appropriateness of the bank's future capitalization and loss-
absorption capacity; and (2) the future impact of the
nationalization on the bank's franchise and business profile
against the competitive environment in the Dutch banking market.
Moody's expects to develop a comprehensive opinion on these
factors following the publication of the 2012 annual accounts,
which will outline the implications of the nationalization.

The rating uplift from systemic (government) support -- 10
notches from the ca BCA -- that Moody's factors into SNS Bank's
current long-term senior unsecured and deposit ratings of Baa3
reflects (1) the bank's systemic importance in the Netherlands;
and (2) the Dutch government's financial flexibility to provide
support in case of financial distress. However, despite the
European Commission's (EC) granting of temporary approval for
state aid for SNS REAAL on February 22, 2013, the bank's Baa3
long-term senior unsecured and deposit ratings remain on review
for downgrade. This reflects Moody's view that if the bank is
faced again with material distress, the decision to provide
additional external support would likely depend on the bank's
long-term viability on an intrinsic basis. If SNS Bank fails to
restore its financial fundamentals and maintain a strong
franchise value in the long term, Moody's considers that the
government might be less inclined to commit additional financial
recourses for SNS Bank that could benefit senior creditors, going

As part of the ongoing review, Moody's will therefore assess (1)
the extent to which the EC could impose remedial measures that
would alter in a meaningful way the support package announced at
the time of nationalization; (2) the bank's ability to restore
its long-term viability; and (3) the resulting likelihood of
external support in the future.

Moody's expects to conclude the review on SNS Bank's deposit and
debt ratings at the same time as the review on its BFSR.

Ongoing Review On Other Ratings Of The Group Driven By Ongoing
Review On Sns Bank

The ongoing review for SNS Bank drives the review on the SNS
REAAL's senior debt rating, SRLEV's and REAAL
Schadeverzekeringen's IFSRs and SRLEV's hybrid instruments.
Moody's expects to conclude the review at the same time as it
concludes its review of SNS Bank's ratings.

Key Rating Sensitivities

SNS Bank

SNS Bank's BCA may improve as a result of the measures announced
by the Dutch Ministry of Finance following the nationalization,
provided that Moody's considers that the measures will (1)
restore the capital of SNS Bank and immunize it against future
losses in the legacy Property Finance portfolio; (2) reduce risks
of a potential shift in depositor and customer confidence; and
(3) not result in the EC imposing material restrictions.

The senior unsecured and deposit ratings are on review for
downgrade and as such, Moody's sees an upgrade as unlikely in the
foreseeable future.

Conversely, the Baa3/Prime-3 debt and deposit ratings are on
review for downgrade. This reflects the risk of the imposition of
restructuring remedies and other conditions upon SNS Bank by the
EU in response to the State aid extended upon its
nationalization, and their potential implications for senior
unsecured creditors.


An upgrade on the Group senior debt ratings is unlikely at
present, captured by the review for downgrade. Moody's would
consider an upgrade of the subordinated and hybrid debt ratings
if it believes that there would be meaningful expected recoveries
for these securities.

Conversely, (1) a deterioration in the intrinsic financial
strength of one or more of its main operating companies, or (2) a
lower degree of systemic support available for SNS Bank and/or
SNS REAAL senior creditors going forward, could prompt downwards
pressure on SNS REAAL's senior debt rating.

SRLEV AND REAAL Schadeverzekeringen Insurance Financial Strength

An upgrade on the IFSRs is unlikely at the moment given the
review for downgrade.

Conversely, a deterioration of the fundamentals of the insurance
operations such as a lower capitalization, a deterioration in
profitability or a material deterioration of the market position
could negatively affect their IFSRs.

SRLEV'S Hybrid Instrument

Downwards pressure on the B1(hyb) ratings could develop if the EC
prolongs the coupon ban on its hybrids , and Moody's believed
that the coupons would be deferred for a prolonged period of

However, if the EC lifted the coupon ban rapidly, upwards
pressure might develop on the B1(hyb) ratings. However, the
hybrids issued by SRLEV remain exposed to other risks, including
the risk of a liability exchange exercise undertaken by SNS REAAL
as part of the restructuring of the group and the risk of
weakening of the financial strength of SRLEV.

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

The principal methodologies used in rating SNS Reaal NV, REAAL
Schadeverzekeringen NV and SRLEV NV were Moody's Global Rating
Methodology for Property and Casualty Insurers Published in May
2010, Moody's Global Rating Methodology for Life Insurers
published in May 2010, and Moody's Guidelines for Rating
Insurance Hybrid Securities and Subordinated Debt Published in
January 2010.


BANK OCHRONY: Fitch Affirms 'bb' Viability Rating
Fitch Ratings has affirmed Bank Ochrony Srodowiska's (BOS) Long-
Term Issuer Default Rating (IDR) at 'BBB' with a Stable Outlook.
A full list of rating actions is at the end of this rating action


The affirmation reflects Fitch's view of the high probability of
support from the Polish sovereign ('A-'/Positive) in case of
need. This view reflects the state's indirect majority
shareholding in the bank, BOS's important role in financing the
country's environment protection projects and potential
reputational damage for the state should the bank default.

At the same time, the IDRs also take into consideration BOS's
limited systemic importance, the absence of any direct state
participation in the bank's capital, and its rather narrow policy
role. These factors result in a two-notch differential between
the sovereign's foreign currency Long-term IDRs and BOS.

The Polish state controls BOS through the state-owned National
Fund for Environment Protection and Water Management (the Fund),
which held a 57% stake in the bank at end-Q113. The reduction of
the majority shareholding (from 79%), following the SPO in Q212,
had no impact on Fitch's view on support potentially available
from the Fund. The Fund considers BOS a strategic investment, and
Fitch understands that the Fund cannot reduce its shareholding in
the bank without the approval of the Ministry for the
Environment. Fitch has been informed by the Ministry that there
are no plans to dispose of the majority stake in the bank in the


BOS's IDRs could come under downward pressure if the Fund's
shareholding falls below 50%, which Fitch currently views as
unlikely; or if timely support is not made available to the bank
if required. A downgrade of the Polish sovereign rating could
lead to a similar action on BOS's ratings, although this is
unlikely at the moment given the Positive Outlook on the

A sovereign upgrade would be unlikely to result in positive
rating action on the bank, as the notching differential between
sovereign and BOS is likely to increase at higher rating levels.


The affirmation of BOS's Viability Rating (VR) at 'bb' reflects
its diversified funding, strengthened capital base and reasonable
liquidity. However, the bank's weak and volatile profitability,
coupled with deteriorating asset quality, a moderate share of
retail savings and limited franchise constitute significant drags
on the bank's VR. A further material increase in non-performing
loans (NPLs), coupled with high loan impairment charges and hence
pressure on capitalization, would be likely to result in a
downgrade of BOS's VR.

BOS's capitalization should be viewed in the context of low
coverage of impaired loans by specific reserves, increased NPLs
and limited internal capital generation. The SPO in Q212
moderately strengthened BOS's capitalization by PLN218.5 million
(or 21% of end-Q112 Fitch core capital). At end-2012, the Fitch
core capital (FCC) ratio stood at 12.5%, but unreserved NPLs were
equal to 45% of FCC.

BOS's profitability is likely to remain weak in 2013 due to loan
book stagnation and the weaker operating environment. The bank
expects a decrease in its average funding costs due to issuance
of short-term bonds (started in June 2012, about PLN0.5 billion
outstanding at end-2012) and a roll-over of its long-term bonds
at much lower spreads in Q113. A gradual shift towards higher-
yield retail products (mostly cash loans) is unlikely to
materially improve BOS's margins due to modest lending volumes,
but may negatively impact the bank's credit risk profile. Trading
gains generated by the brokerage house subsidiary increase the
bank's exposure to market risk and increase the volatility of the
bank's results. Brokerage business contributed 12% of BOS's
consolidated revenues in 2012 (2011: 18%), but the contribution
to the consolidated pre-impairment profit was negative in 2012
due to significant operating expenses.

The bank's asset quality will stay under pressure in 2013 from
the economic slowdown and seasoning of the residential mortgage
book, and to a lesser extent from growing unsecured consumer
loans. At end-2012, the impaired loans ratio had increased to
7.7%, mostly fuelled by several defaults in the construction and
real estate sector. However, the ratio of loans overdue by 90
days was considerably smaller at 4.2%. The reserve coverage of
impaired loans by specific reserves was a low at 30% (or 50% for
90-day-overdue loans).

BOS's liquidity buffer expanded in 2012 as a result of proceeds
from the share issue, weak lending activity and growth in
customer deposits (4% yoy). The pool of unencumbered highly
liquid assets covered 21% of total liabilities at end-2012 (2011:

BOS is a small universal bank in Poland (1.2% market share by
assets) with a strong environmental focus. Environmental loans
represented 20% (or PLN2.2bn) of the bank's total gross loans at
end-February 2013. The bank has been listed on the Warsaw Stock
Exchange since 1997.

The rating actions are as follows:

Long-Term foreign currency IDR: affirmed at 'BBB'; Outlook

Short-Term foreign currency IDR: affirmed at 'F3'

Viability Rating: affirmed at 'bb'

Support Rating: affirmed at '2'

Support Rating Floor: affirmed at 'BBB'

Senior unsecured debt: affirmed at 'BBB'

BRE BANK: Moody's Reviews Bond Ratings for Possible Downgrade
Moody's Investors Service has taken the following rating actions:

  Mortgage covered bonds issued by Bre Bank Hipoteczny: Baa2
  placed on review for downgrade

  Public sector covered bonds issued by Bre Bank Hipoteczny:
  Downgraded to Baa1 on review for downgrade from A3

Ratings Rationale:

The rating actions on the covered bonds follow the downgrade of
the issuer ratings by one notch to Ba1 from Baa3.

The Timely Payment Indicator (TPI) remains "Very-Improbable" for
both programs. This TPI, combined with the Ba1 issuer rating,
caps the ratings assigned to the public-sector covered bonds at

Furthermore, the level of over-collateralization (OC) currently
in place in the two programs is below the level of OC determined
in Moody's expected loss analysis. As a result of this
insufficient OC level, Moody's has placed the ratings of the
Mortgage covered bonds and the Public Sector covered bonds on
review for downgrade until Moody's reviews the issuer commitment
to add sufficient OC .

The ratings assigned by Moody's address the expected loss posed
to investors. Moody's ratings address only the credit risks
associated with the transaction. Other non-credit risks have not
been addressed, but may have a significant effect on yield to

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

The cover pool losses are an estimate of the losses Moody's
currently models if the relevant issuer defaults. Cover pool
losses can be split between market risk and collateral risk.
Market risk measures losses as a result of refinancing risk and
risks related to interest-rate and currency mismatches (these
losses may also include certain legal risks). Collateral risk
measures losses resulting directly from the credit quality of the
assets in the cover pool. Collateral risk is derived from the
collateral score.

Mortgage Covered Bonds

The cover pool losses are 67.9%, with market risk of 35.6% and
collateral risk of 32.3%. The collateral score for this program
is currently 48.3% and the OC in this cover pool is 46.3%, of
which Bre Bank Hipoteczny's provides 0% on a "committed" basis.
The minimum OC level that is consistent with the Baa2 rating
target is 47.0%. These numbers show that Moody's is relying on
"uncommitted" OC in its expected loss analysis.

Public Sector Covered Bonds

The cover pool losses are 42.5%, with market risk of 32.2% and
collateral risk of 10.3%. The collateral score for this program
is currently 20.6% and the OC in this cover pool is 24.8%, of
which Bre Bank Hipoteczny's provides 0% on a "committed" basis.
The minimum OC level that is consistent with the Baa1 rating
target is 25.0%.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 Bre Bank Hipoteczny's Public sector and Mortgage's covered
bonds, Moody's has assigned a TPI of Very-Improbable.

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 assigned to Bre Bank Hipoteczny's Mortgage and Public
Sector covered bonds is Very-Improbable. The TPI Leeway for Bre
Bank Hipoteczny's Mortgage and Public Sector's covered bonds 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.

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


NOVOROSSIYSK COMMERCIAL: S&P Affirms 'BB-' Corp. Credit Rating
Standard & Poor's Ratings Services revised its outlook on Russia-
based OJSC Novorossiysk Commercial Sea Port (NCSP) to stable,
from negative.  At the same time, S&P affirmed the 'BB-' long-
term corporate credit rating.

The outlook revision reflects NCSP's improved cash generation
after prudent capital expenditure (capex) and low dividend
payments in 2012.  The company reported an adjusted discretionary
cash flow of about US$346 million and a modest reduction of
Standard & Poor's adjusted debt to US$2.8 billion as of Dec. 31,
2012.  As a result, NSCP's credit metrics improved to 4.3x
adjusted debt to EBITDA and 16.3% funds from operations to debt
in 2012 (5.2x and 11% in 2011).

S&P believes that the ability to adjust capex will prop up the
group's continuing stable financial performance in the next few
years, notwithstanding S&P's assumption of fairly flat
development on the operational side.  S&P forecasts that NCSP
will improve and maintain a ratio of adjusted debt to EBITDA of
less than 4x in 2013-2014, which S&P views as commensurate with
its assessment of its "aggressive" financial risk profile and the
current rating level.

The rating action also factors in S&P's expectation that the
company will refinance its US$1.95 billion bank debt, which
starts amortizing in March 2014 with four US$488 million annual
amortization payments.  S&P understands that NCSP is in advanced
negotiations with its existing and new lenders to refinance the
outstanding debt in the next few months.  S&P also understands
the company is considering various refinancing options, including
a combination of debt instruments of various tenors, to better
distribute its debt maturity profile.  S&P believes that NCSP is
seeking a reset of the covenants to allow for more headroom, as
part of the refinancing.  Headroom under the net debt-to-EBITDA
covenant was tight as of year-end 2012 and, according to S&P's
base case, it forecasts that it will remain tight due to a
substantial step-up in threshold levels in 2013 and more in 2014.

Under S&P's base-case operating scenario, it forecasts that
revenues and EBITDA in 2013 will likely remain flat (from 2012)
based on S&P's assumptions of slightly lower handled oil and
grain volumes, NCSP's main earnings contributors.  S&P also
forecasts that the company will be able to maintain its EBITDA
margin of about 57% thanks to its ability to raise tariffs for
some of its cargo types.  S&P currently do not incorporate the
tariff deregulation, which is expected to come into force in
second-half 2013.  However, S&P notes that this may have a
positive effect on NCSP's margins in the medium-to-long term.

S&P believes that in times of likely flat operational
performance, the company will focus on cash generation by
prudently controlling its capex ahead of its sizable debt
repayment in 2014.  This, in S&P's opinion, will allow the
company to at least maintain a ratio of adjusted debt to EBITDA
at less than 4x and FFO to debt at more than 16% in the next two

S&P notes, however, that the recent conflict between NCSP's
controlling shareholders, Transneft and Summa--which saw the
election of a new chairman of the board (a Transneft
representative) and the dismissal of the CEO--poses some
additional risks: in particular, a possible increase in expansion
capex and perhaps frequent changes in management team given the
substantial amortization payment in 2014 and a somewhat unstable
operational environment.

The 'BB-' rating on NCSP is based on its stand-alone credit
profile (SACP), which S&P assess as 'bb-', as well as on its
opinion that there is a "low" likelihood that the Russian
government would provide timely and sufficient extraordinary
support to NCSP in the event of financial distress.

In accordance with S&P's criteria for GREs, its view of a "low"
likelihood of extraordinary government support is based on S&P's
assessment of NCSP's:

   -- "Limited" importance to the Russian government, as it
      operates largely as a profit-seeking enterprise.  S&P
      understands that NCSP's daily activities are important to
      the Russian government. (NCSP handles up to 60% of Russian
      crude oil exports.)  However, S&P believes that the
      government is primarily interested in the operation rather
      than in its credit standing.

   -- S&P also believes NCSP's activity could be undertaken by
      another private sector entity.

   -- "Limited" link with the Russian government, which owns 20%
      of the group directly, along with the golden share through
      a federal agency, and 30.3% indirectly.  NCSP is run like a
      private company, in S&P's opinion.

   -- Furthermore, S&P believes there is a possibility that the
      government may sell its stake soon.

S&P assess NCSP's liquidity position as "less than adequate"
under its criteria, despite liquidity sources to uses likely to
exceed 1.2x over the next 12 months to December 2013.

This assessment is constrained by:

   -- The tight headroom under its leverage covenant at year-end
      2012, which, according to S&P's base case, will likely
      remain so in 2013.  The covenants under NCSP's $1.95
      billion Sberbank facility include maximum net debt to
      EBITDA of 3.75x in 2012, decreasing to 3.0x in 2013, and
      2.5x from 2014.

   -- There was about 8% headroom under the leverage covenant
     (net debt to EBITDA without Standard & Poor's adjustments)
      in 2012 and about 10% headroom in 2011.  S&P calculates
      about 5% headroom for 2013, which is below the 15% level
      S&P sees as commensurate with the "adequate" liquidity
      profile under its criteria.  This facility is also subject
      to a minimum interest coverage ratio of 3.0x in 2012, 3.75x
      in 2014, and 4.75x thereafter.  In addition, the group is
      subject to a minimum fixed-charge coverage covenant of
      1.1x.  NCSP was compliant with those covenants with
      adequate headroom in 2012.

   -- A substantial annual debt amortization payment of about
      US$488 million under the US$1.95 billion Sberbank loan
      starting from 2014.  S&P calculates, however, a liquidity
      coverage of more than 1.2x in 2014 under its base case
      assuming flat operating performance and a continuation of
      prudent capex and conservative dividend payouts.

S&P's liquidity assessment of NCSP is supported by:

   -- S&P's understanding that the company is negotiating with
      Sberbank to amend the conditions of the bilateral loan
      including a smoother amortization schedule and reset of
      covenants.  Sberbank has been supportive so far by waiving
      covenants in 2011 and amending the frequency of covenant
      tests to an annual, from a quarterly, basis as proposed by
      NCSP in February 2013.

   -- S&P's view that NCSP appears to have solid relationships
      with other banks and generally good access to capital
      markets as seen in 2012 when the company managed to place
      Russian ruble bonds within a short timeframe.  S&P
      estimates that NCSP's main sources of liquidity over the 12
      months ending December 2013 are:

   -- S&P's base-case forecast cash flow from operations of about
      US$400 million.

   -- Reported cash and balances as of year-end 2012 of
      US$212 million.  This amount does not include about
      US$30 million that S&P assumes is tied to operations.

S&P's credit scenario factors in the following liquidity needs
over the next 12 months:

   -- Debt-amortization payments of about US$90 million.
   -- Capex of about US$61 million in the next 12 months.
   -- A dividend distribution of US$15 million.

S&P also believes there is a short-term upside to its liquidity
assessment if NCSP finalizes the refinancing and covenant
amendments, which is expected in the next few months.  These
measures, if completed, will significantly boost the company's
liquidity sources and covenant headroom and likely prompt S&P's
reassessment of its liquidity profile to adequate.

The stable outlook reflects S&P's expectation that NCSP will
continue to cautiously control its capex and preserve cash.  S&P
also believes that the company will be able to moderately raise
tariffs, which will help to preserve an EBITDA margin of about
57% despite slightly lower cargo volumes.  S&P also expects that
the present covenants will be reset as part of refinancing, or
waived so that the company remains in compliance.  Concurrently,
S&P anticipates that NCSP will finalize the refinancing of its
$1.95 billion loan well ahead of the first amortization payment
in March 2014, thereby extending and better distributing its debt
repayment profile.

S&P could lower the ratings if it was to believe that the company
could not refinance and amend the covenants well ahead of the
first amortization payment in March 2014.  S&P could also take a
negative rating action if the group's operating performance
weakens and the EBITDA drops significantly below the 2012 level.
This could occur on weaker economic conditions than S&P currently
anticipates, which would depress oil transportation volumes, or
if the company were to adopt of a more-aggressive expansion plan.
All these factors would result in lower-than-expected cash flow
generation and deleveraging.

Any positive rating action would be linked to S&P's view of the
new capital structure, debt maturity profile post-refinancing,
and its anticipated headroom under the amended covenants.  An
upgrade would also be linked to the company being able to improve
and maintain its ratios of adjusted debt to EBITDA of less than
4x and adjusted FFO-to-debt ratio of about 20%.  This could
follow a combination of higher earnings, thanks to a rebound in
oil and grain volumes for example, the earlier-than-expected
impact from tariff deregulation, and controlled capital spending.

* BASHKORTOSTAN REPUBLIC: S&P Lifts ICR From BB+; Outlook Stable
Standard & Poor's Ratings Services said that it had raised its
issuer credit rating on Russia's Republic of Bashkortostan to
investment grade 'BBB-' from 'BB+'.  The outlook is stable.

S&P raised the rating on Bashkortostan because S&P believes the
republic is committed to prudent liquidity, as evidenced by the
decision to raise debt rather than use cash reserves in 2012, and
to spending and deficits controls.

The ratings on Bashkortostan reflect its very positive liquidity
position, low debt, a still strong--although weakening--operating
performance, and commitment to conservative spending.

Russia's developing and unbalanced institutional framework leads
to low budget predictability and limited flexibility and
constrains Bashkortostan's creditworthiness.  Other constraints
include expenditure pressures, especially from public sector
salary increases; the economy's concentration in the oil-
processing industry, and modest wealth in an international

The stable outlook reflects S&P's view that Bashkortostan's
continuing its prudent spending policies will enable it to
contain expenditure pressure and consolidate its solid financial
performance with deficits after capital accounts of only 5%-6%
under S&P's base-case scenario.  Accordingly, S&P expects the
republic to maintain high cash reserves at above RUB20 billion,
well exceeding annual debt repayment and deficits after capital
accounts in 2013-2014.

S&P could raise the rating in the next 24 months if Bashkortostan
further improves its budgeting and long-term planning policies,
which S&P thinks would lead to higher predictability and
visibility of its financials in the medium term, and especially
if it institutionalizes its currently prudent reserve and
liquidity policies.

Should the republic maintain higher-than-expected reserves,
structurally above 20%-25% of operating spending, and achieve
stronger financial performance, with deficits after capital
accounts declining to 1%-2% in 2014-2015 (likely via very
conservative spending policies), it could also be positive for
the ratings.  S&P do not consider this scenario very realistic,
though, due to expenditure pressures.

Should performance deteriorate in 2013-2014, with operating
surpluses noticeably below 10% and deficits after capital
accounts widening and leading to depletion of cash reserves below
expected levels, S&P could take negative rating actions.

* CITY OF UFA: S&P Affirms 'BB-' Issuer Credit Rating
Standard & Poor's Ratings Services affirmed its 'BB-' long-term
issuer credit rating and its 'ruAA-' Russia national scale rating
on the Russian City of Ufa, located in the Republic of
Bashkortostan.  S&P revised the outlook to stable from positive.

The affirmation reflects S&P's view that Ufa is likely to
maintain its moderate budgetary performance and neutral liquidity
position over the medium term.

The ratings on Ufa reflect S&P's view of Ufa's limited budgetary
flexibility and predictability, owing to Russia's developing and
unbalanced institutional framework and its high dependence on
federal and regional authorities' decisions; lower-than-average
wealth levels in an international context; and high capital-
expenditure requirements.  The ratings are supported by S&P's
view of Ufa's modest debt burden, S&P's expectation that its
maturity profile will become smoother, and its relatively low
contingent liabilities.

The city's budget is significantly exposed to the decisions of
the federal and regional governments regarding tax shares and
allocation of transfers and spending responsibilities.  In 2012,
a portion of the city's spending obligations was transferred to
the Republic of Bashkortostan, and in turn the share of personal
income tax that the city receives was decreased.  At the same
time, the amount of ongoing and capital transfers from
Bashkortostan increased and S&P expects that in 2013-2015
transfers will make up more than 50% of the city's total
revenues. S&P therefore believes that the flexibility and
predictability of Ufa's financials have decreased.

Ufa's wealth level exceeds the average for Bashkortostan, but
remains lower than that of Russian peers.  The city's economy is
still dependent on the oil refining and chemical industries, and
S&P expects it to grow only modestly in the next three years.
Infrastructure development needs are material and are likely to
pressure Ufa's budget over the medium term.

In S&P's base-case scenario for 2013-2015, it expects budgetary
performance to remain moderate and operating margins to remain at
breakeven, given the city's need to address increasing utility
costs and raise salaries.  S&P estimates that in 2013 Ufa will
allocate about 5% of additional operating spending to increase
public sector salaries, but will constrain spending growth in

S&P's base-case scenario also assumes that capital grants from
Bashkortostan, earmarked for investment in Ufa's road, transport,
and utilities infrastructure and housing construction will
alleviate the pressure on the city's budget in the medium term.
This cofinancing should allow Ufa to maintain its capital-
expenditure program at a high 30% of total expenditures in 2013-
2015, while its deficits after capital accounts will likely stay
below 5% of total revenues.

Consequently, Ufa's total tax-supported debt will remain modest
compared with that of international peers and won't exceed about
55% of consolidated operating revenues in the next three years.
S&P forecasts in its base-case scenario that Ufa will gradually
accumulate direct debt, which might reach 25% of operating
revenues, and that it will maintain the level of outstanding
guarantees that it issues to support infrastructure investment
projects at about 30% of operating revenues.

The stable outlook reflects S&P's view that although Ufa's
operating balance will likely remain at breakeven in 2013-2015,
expected capital transfers from higher-tier budgets will allow
the city to finance its capital program, while its deficits after
capital accounts and borrowing needs will remain modest.  The
outlook also assumes that the city's liquidity position will
remain neutral.

S&P could lower the ratings within the next 12 months if, in line
with its downside scenario, Ufa's liquidity position deteriorates
because of short-term debt accumulation, the need to service
guaranteed debt, or if the amount of available credit facilities
falls below the city's annual debt service.

S&P could raise the ratings within the next 12 months if, in line
with its upside scenario, additional budget revenues translate
into a positive balance after capital accounts and cash
accumulation, and together with a more gradual debt repayment
schedule, lead to a structural improvement of Ufa's liquidity


ABANKA VIPA: Fitch Affirms 'C' Hybrid Instrument Rating
Fitch Ratings has affirmed Abanka Vipa d.d.'s hybrid capital
instrument (ISIN: XS0283183084) at 'C'. The bank's other ratings
are unaffected by this action.


The affirmation follows the bank's announcement on April 26, 2013
of the cancellation of the interest payment on the issue. The
capital instrument's rating is notched down once from the bank's
Viability Rating of 'cc' and is in the lowest rating category
'C', due to an exceptionally high level of credit risk.

The hybrid capital instrument rating could be upgraded if there
was a multi-notch upgrade of the bank's Viability Rating and the
instrument becomes performing again.

If Abanka seeks to support its capitalization by buying back a
large part of the EUR120 million hybrid capital instrument issue
at a substantial discount, the impact on capital could be
material. At end-2012, the bank's Fitch core capital was EUR129
million. However, in Fitch's view, any positive impact would be
insufficient relative to the bank's overall recapitalization
needs, which the agency estimates at around EUR400 million.

The rating actions are:

-- Hybrid capital instrument: affirmed at 'C'
-- Long-term foreign currency IDR: 'B-', Negative Outlook,
-- Short-term foreign currency IDR: 'B', unaffected
-- Support Rating: '5', unaffected
-- Support Rating Floor: 'B-', unaffected
-- Viability Rating: 'cc', unaffected

* SLOVENIA: Moody's Downgrades Government Bond Rating to Ba1
Moody's Investors Service downgraded Slovenia's government bond
rating to Ba1 from Baa2. The outlook remains negative.

The decision to downgrade Slovenia's sovereign rating was driven
by the following key factors:

1) The state of Slovenia's banking sector

2) The marked deterioration of Slovenia's government balance

3) Uncertain funding prospects that heighten the probability that
external assistance will be needed

Ratings Rationale:

The first key factor underpinning this rating action is the
ongoing turmoil in the country's banking system and the high
likelihood that the sovereign will be required to provide further
assistance and capital injections. Asset quality at the banks
deteriorated considerably in 2012 and has continued to
deteriorate since. At Nova Ljubljanska Banka (Caa2/negative/E),
the country's majority state-owned lender and largest bank, non-
performing loans (NPLs) reached 28.2% of total loans in 2012.
NPLs reached 28% at Nova Kreditna Banka Maribor
(Caa2/negative/E), the second largest bank, and were
approximately 20% system-wide at end-2012. The authorities have
been injecting capital and providing assistance to the three
largest banks since 2011, and Moody's expects bank asset quality
to continue to deteriorate given the weak economic environment.
The economy entered recession once again in 2012, contracting by
2.3% as a result of the banking crisis, and Moody's forecasts
that the economy will contract by a further 1.9% in 2013 before a
weak recovery in 2014 where growth is expected to reach 0.2%.
Risks remain skewed firmly to the downside and the economic
outlook will depend to a large degree on the stabilization of the
banking crisis.

Delays in establishing the Bank Asset Management Company (BAMC,
the "bad bank"), following a political transition, suggest that
the sovereign remains heavily exposed to contingent liabilities.
Moody's estimates bank recapitalization costs in the order of 8-
11% of GDP. In Moody's opinion, implementing the BAMC's mandate
is essential for stabilizing the banking system.

The second key factor underlying Moody's decision to downgrade
Slovenia's government bond rating is the substantial increase in
Slovenia's government debt metrics. Slovenia's general government
debt at the end of 2012 reached an estimated 54.1% of GDP, up
from 22% in 2008. Slovenia's fiscal debt burden remains among the
lowest in the euro area, where the average is approximately 93%
of GDP. The ratio for Slovenia, however, is likely to exceed 60%
at the end of 2013 and not expected to stabilize until 2014-15 at
above 65% of GDP, excluding BAMC debt issuance. However, the
level at which debt metrics for Slovenia will peak is very
uncertain and will depend in part on whether the government will
need to provide further assistance to the banking system. The
level will also depend on the new government's fiscal targets,
which are likely to be less ambitious than the previous
government's targets, and on the macroeconomic outlook. Risks are
skewed negatively and debt levels could exceed 70-75% of GDP
after the banking system's issues have been resolved, but are
unlikely to reach unsustainable levels. Nevertheless, risks to
bondholders have increased and the sovereign's cost of funding is
likely to be prone to volatility.

Given the marked deterioration of the government's balance sheet
and the sovereign's limited debt tolerance as reflected by its
increasing cost of funding, Moody's has changed its assessment of
Slovenia's government financial strength, the third factor in
Moody's sovereign bond rating methodology, to 'medium' from
'high'. The adjustment to the factor score leads to a change in
the sovereign's rating range as indicated by Moody's methodology
to Ba1-Ba3 from Baa2-Ba1.

The third key factor leading to the rating action is the
uncertain funding environment facing Slovenia, which heightens
the risk that the sovereign will require external assistance to
meet its financial obligations. Moody's notes that Slovenia's
recent efforts to manage the sovereign's liabilities have been
relatively successful. The sovereign issued 18-month treasury
bills to retire outstanding instruments maturing in June 2013,
easing liquidity concerns and decreasing rollover risk. With the
treasury bill swap, Moody's estimates that the sovereign now
holds enough liquidity to meet its funding needs through the end
of the year, excluding a potential capital infusion to the
banking sector.

Despite the recent success, the sovereign's cost of funding
remains elevated and sensitive to financial market confidence.
Slovenia's vulnerability to external shocks, like those brought
about by the crisis in Cyprus, could make it difficult for the
sovereign to fund itself at sustainable rates, which increases
the likelihood that authorities would need to request an external
assistance program.

The negative outlook reflects Moody's view that the challenges of
the banking system remain substantial. The weak macroeconomic
environment amplifies these challenges and increases the
possibility of losses to bondholders.

What Could Change The Ratings Up/Down

Although unlikely in the near future, a substantial improvement
in economic conditions, a more benign funding environment, and
stabilization of the banking system without more support being
required than what authorities currently expect would lead to a
stable outlook.

Slovenia's sovereign rating could be downgraded again in the
event that the sovereign experiences a material deterioration in
funding conditions; such a deterioration is most likely to result
from economic or financial shocks arising from Slovenia's banking
sector or from the euro area sovereign debt crisis. A substantial
weakening of Slovenia's macroeconomic environment could also
jeopardize the stabilization of debt metrics, resulting in a loss
of creditworthiness.


As part of this rating action, Moody's has made the following
adjustments to country ceilings for corporate and structured

Local Currency Bond Ceiling -- Baa2 (from A3)
Local Currency Deposit Ceiling -- Baa2 (from A3)
Foreign Currency Bond Ceiling -- Baa2 (from A3)
Foreign Currency Deposit Ceiling -- Baa2 (from A3)

The lower ceilings reflect the increased risk of events which
would, in Moody's view, damage the credit standing of
substantially all debt issuers in Slovenia, including severe
economic and financial dislocation such as would be expected in
the unlikely event of Slovenia leaving the euro area.

The local currency country risk ceiling reflects the maximum
credit rating achievable in local currency for a debt issuer
domiciled in Slovenia. The foreign currency bond and deposit
ceilings are assessed to be in line with the local currency
ceilings given that Slovenia uses the euro as its legal tender.

The principal methodology used in this rating was "Sovereign Bond
Ratings Methodology" published in September 2008. Rating ceilings
were set in accordance with "Local Currency Country Risk Ceiling
for Bonds and Other Local Currency Obligations" published in
March 2013.


MADRID RMBS: Moody's Cuts Ratings on Two Note Classes to 'Ba3'
Moody's Investors Service downgraded the ratings of 4 notes and
confirmed the ratings of 3 notes in two Spanish residential
mortgage-backed securities transactions: Madrid RMBS I, Madrid
RMBS II. At the same time, Moody's confirmed the ratings of the
senior notes in Madrid Residencial II. Insufficiency of credit
enhancement to address sovereign risk and revision of key
collateral assumptions have prompted the downgrade action.

This rating action concludes the review of 8 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.

Ratings Rationale:

This rating action primarily reflects the insufficiency of credit
enhancement to address sovereign risk and revision of key
collateral assumptions. Moody's confirmed the ratings of
securities whose credit enhancement and structural features
provided enough protection against sovereign and counterparty

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

- Additional Factors Better Reflect Increased Sovereign Risk

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

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

- Revision of Key Collateral Assumptions

During its review Moody's increased its Milan assumption in
Madrid RMBS I, Madrid RMBS II and Madrid Residencial II to 35% ,
33% and 32% respectively. The revised Milan CE reflect the high
concentration of high LTV loans as well as the high exposure to
loans offered to Non-Spanish borrowers and to loans originated
via broker .

In all three affected transactions, Moody's maintained the
current expected loss assumptions. Expected loss assumptions
remain at 12.35% for Madrid RMBS I, 13.13% for Madrid RMBS II,
and 9.5% for Madrid Residencial II.

In Madrid RMBS II, Class A2 and A3 amortize sequentially.
However, sequential amortization reverts to pro-rata if the
outstanding amount of loans more than six months in arrears and
net of recoveries exceeds 25% of the original notes balance. The
cumulative written-off loan balance net of recoveries represents
currently 6.7% of original pool balance, well below the trigger
level. Under the current expected loss assumption, Moody's does
not expect this trigger to be breached. As a result, Class A2 is
expected to be repaid in priority to Class A3 in most of the
default scenarios, and therefore Moody's confirms the A3 (sf)
rating for the Class A2.

- Exposure to Counterparty Risk

The conclusion of Moody's rating review takes into consideration
the exposure to Bankia (Ba2, Non-Prime), which acts as servicer
and collection account bank for all three transactions. This
exposure to Bankia does not negatively impact revised ratings of
the notes. Moody's rating action takes into consideration the
exposure to Banco Bilbao Vizcaya Argentaria (Baa3/P-3), which
acts as swap counterparty for the Madrid Residencial II
transaction. 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.


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

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 Madrid RMBS I and II, the final
spreads on the notes have been corrected in the models.

List of Affected Ratings

Issuer: Madrid Residencial II, FTA

EUR456M A Notes, Confirmed at A3 (sf); previously on Jul 2, 2012
Downgraded to A3 (sf) and Remained On Review for Possible


EUR1340M A2 Notes, Downgraded to Baa2 (sf); previously on Jul 2,
2012 Downgraded to A3 (sf) and Placed Under Review for Possible

EUR70M B Notes, Downgraded to Ba3 (sf); previously on Jul 2, 2012
Ba1 (sf) Placed Under Review for Possible Downgrade

EUR75M C Notes, Confirmed at Caa2 (sf); previously on Jul 2, 2012
Caa2 (sf) Placed Under Review for Possible Downgrade

Issuer: Madrid RMBS II Fondo de Titulizacion de Activos

EUR936M A2 Notes, Confirmed at A3 (sf); previously on Jul 2, 2012
Downgraded to A3 (sf) and Placed Under Review for Possible

EUR270M A3 Notes, Downgraded to Baa2 (sf); previously on Jul 2,
2012 Downgraded to A3 (sf) and Placed Under Review for Possible

EUR63M B Notes, Downgraded to Ba3 (sf); previously on Jul 2, 2012
Ba1 (sf) Placed Under Review for Possible Downgrade

EUR67.5M C Notes, Confirmed at Caa2 (sf); previously on Jul 2,
2012 Caa2 (sf) Placed Under Review for Possible Downgrade


LEMTRANS LLC: Moody Assigns 'B3' Corp. Rating; Outlook Negative
Moody's Investors Service assigned a B3 corporate family rating
and B3-PD probability of default rating, as well as a
national scale rating, to Lemtrans LLC. The outlook on all
ratings is negative. This is the first time Moody's has assigned
a rating to Lemtrans.

Ratings Rationale:

The rating action reflects that although Lemtrans's business
profile and financial metrics are strong for a B3 rating, the
rating is currently constrained by that of the sovereign (B3
negative) and the B3 foreign-currency bond country ceiling for
Ukraine, which capture the country's political, legal, fiscal and
regulatory environment. This environment includes the risk of the
devaluation of the domestic currency (hryvna, or UAH), which
Lemtrans is exposed to given that the company generates a
predominant portion of its revenues from its domestic operations
(albeit these are partially linked to the US dollar). In
addition, Lemtrans's ability to service its debt, all of which is
foreign-currency denominated, could be negatively affected by
actions taken by the Ukrainian government to preserve the
country's foreign exchange reserves. Moody's also notes that the
company's revenues and cash flows generated in the country are
exposed to foreign-currency transfer and convertibility risks,
which are reflected in the B3 foreign-currency bond country
ceiling for Ukraine.

In addition, the B3 CFR factors in (1) Lemtrans's moderate size;
(2) its high industry and customer concentration, with the
company's largest customers, DTEK (B3 negative) and Metinvest (B3
negative), representing 75% of its total revenue for 2012, which
renders Lemtrans's business dependent on its continuing
relationships with these two customers; (3) its highly
concentrated ownership, which creates the risk of rapid changes
in the company's strategy and development plans, along with the
risk of a revision of its financial policy and an increase in
shareholder distributions, and shaping its pricing policy in
favor of DTEK and Metinvest; (4) the company's history of
material related-party transactions, which in Moody's view lack
transparency and economic rationale; (5) Lemtrans's lack of track
record of operating under its current ownership structure (i.e.,
following the consolidation of 100% of the company's share
capital by System Capital Management Limited (SCM) in August
2012), and evolving structure of the Lemtrans group; and (6) the
high average age of the company's railcar fleet, at 20 years,
with around 30%-35% of the current fleet reaching the end of its
useful life in 2013-17.

More positively, Lemtrans's rating also reflects the company's
(1) solid market share of around 16% of Ukraine's entire gondola
railcar fleet and 18% in terms of cargo volumes transported in
gondola railcars (as of year-end 2012); (2) long-term
relationships with key customers and the absence of domestic
freight transportation companies of a similar size that could
easily replace Lemtrans in servicing its key customers'
transportation needs; (3) high operating efficiency, reflected by
an EBITA margin of above 40% (as adjusted by Moody's); (4) robust
projected financial metrics, which demonstrate the company's
ability to maintain leverage -- measured by debt/EBITDA -- below
3.0x, EBIT/interest above 2.0x and retained cash flow (RCF)/net
debt above 15% (all metrics are as adjusted by Moody's) even
under stress scenario; and (5) adequate liquidity.

The negative outlook on Lemtrans's ratings mirrors the negative
outlook on Ukraine's B3 sovereign rating and the consequent risk
of a further lowering of Ukraine's foreign-currency bond country

What Could Change The Rating Up/Down

Lemtrans's ratings are constrained by the Ukrainian political,
business, legal and regulatory environment, given that all its
assets and business activities are concentrated within the
country. Therefore, the company's ratings are ultimately
dependent on sovereign-level developments. Positive pressure
could be exerted on Lemtrans's ratings if Moody's were to upgrade
Ukraine's sovereign rating and raise its foreign-currency bond
country ceiling, coupled with Lemtrans (1) building a track
record of consistently robust financial performance and strong
market position; (2) conducting related-party transactions on an
arms-length basis and in a transparent manner; and (3)
maintaining adequate liquidity.

Negative pressure could be exerted on the ratings as a result of
(1) a further potential downgrade of the sovereign rating or
lowering of Ukraine's foreign-currency bond country ceiling; or
(2) a material deterioration in the company's operating and
financial performance, liquidity or market position.

Principal Methodology

Lemtrans LLC'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 Lemtrans LLC's core
industry and believes Lemtrans LLC's ratings are comparable to
those of other issuers with similar credit risk.

Lemtrans is the largest private freight rail transportation
company in Ukraine by railcar fleet size (15,288 railcars in
operation as of year-end 2012, which represented 8% of the
country's total and 16% of its entire gondola railcar fleet), as
well as by cargo transportation volumes (13% of total freight
volumes and 18% of volumes transported in gondola railcars in
2012). In 2012, the company derived 79% of its revenues from
freight transportation and other related services, 17% from
trading freight railcars and producing railway equipment, and 4%
from financial leasing of railway equipment. Lemtrans is fully
controlled by System Capital Management Limited (SCM).

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

U N I T E D   K I N G D O M

BRIGHTHOUSE GROUP: Moody's Assigns 'B2' CFR; Outlook Stable
Moody's Investors Service assigned a first-time B2 corporate
family rating and B2-PD Probability of Default Rating to
BrightHouse Group plc. The outlook on the rating is stable.

"The assigned B2 rating balances our assessment of the company's
scale and fairly high leverage, as well as the potential
regulatory and credit risks in the industry, with the company's
solid track record of growth and deleveraging in recent years,
with reported EBITDA rising to GBP49.4 million in FY2013 from
GBP29.4 million in FY2009," says Richard Morawetz, a Moody's Vice
President - Senior Credit Officer and lead analyst for

At the same time, Moody's has assigned a provisional (P)B2 rating
(LGD4) to its upcoming senior secured notes due 2018, reflecting
the limited amount of senior-ranking debt in the capital

Moody's issues provisional ratings in advance of the final sale
of securities and these ratings reflect the rating agency's
preliminary 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:

Corporate Family Rating and Probability Of Default Rating

In Moody's view, the key constraints to BrightHouse's B2 rating
include its small scale and high leverage of approximately 5.8x
on a pro forma basis for the transaction and based on FYE2013
earnings, as well as the risks related to potential regulatory
changes, to which the broader industry is also exposed. The
Office of Fair Trading currently regulates the consumer credit
market, and while recent reviews have not had any apparent impact
on BrightHouse's earnings, any significant reform to the
provision of credit, or to the terms that apply, could impact
future growth. Moody's also notes the credit risk associated with
the loan book's quality given the long-term nature of contracts
and the company's reliance on these contracts for future
revenues. In BrightHouse's case, approximately 64% of its FY2013
hire-purchase revenues had been pre-sold as of the beginning of
the year. While this should in principle result in stable
earnings, it relies on careful control of the credit quality of
the loan portfolio. The company reported a bad debt charge of
approximately 8% of revenues over the past two years.

The B2 rating also reflects the company's strong track record of
growth and deleveraging in recent years, reflecting both its
organic growth as well as new store openings. BrightHouse
reported 8.3% like-for-like revenue growth in FY2013 (to March),
and 7.4% in FY 2012, which is strong compared with rated retail
peers, especially in non-food. The company operates 280 stores
across the UK, compared with 147 in 2007, with 27 new stores
having opened in FY2013 alone. BrightHouse's client base consists
largely of low-income earners (approximately 60% are below the UK
median income), many of whom are recipients of state benefits.
Moody's believes that BrightHouse's fairly unique product
offering, notably product rentals over three years with the right
to purchase at the end of the contract, differentiates it from
most mainstream retailers, while it supplements this offering
with optional service and damage liability cover. Moody's
nevertheless assesses BrightHouse in the context of the broader
retail market, which can represent viable competition insofar as
customers can obtain credit financing from other sources, or
indeed opt to purchase with no credit.

Moody's deems the company's liquidity to be adequate. Upon
closing of the transaction, the company will retain approximately
GBP11 million in cash, of which GBP1.7 million is classified as
restricted due to solvency requirements reflecting the insurance
business and cash held in segregated accounts as a result of
voluntary prepayments by customers. The liquidity assessment
further assumes that the company will retain access to a
Revolving Credit Facility (RCF) of GBP25 million, which is
expected to be undrawn at closing. The RCF will retain financial
covenants for net debt-to-EBITDA, falling from 6.8x as of June
2013 to 4.1x as of March 2016. On the basis that the notes (and
the longer-dated shareholder loans) will represent the company's
only debt liabilities, the company is not expected to hold any
short-term debt immediately post transaction. The rating agency
also expects that the company will retain strong covenant
headroom under the RCF at all times. Given the seasonality in
cash flows -- with the third quarter seeing a working capital
outflow due to higher demand -- Moody's expects that the peak
drawing on the RCF will be in that quarter. On this basis, if the
RCF were to become inaccessible, Moody's would view the company's
liquidity as weak, or potentially inadequate, and this could have
rating implications.

Provisional (P)B2 Rating Of Senior Secured Notes

The provisional (P)B2 rating of the notes, at the same level as
the CFR, reflects the limited amount of debt ranking ahead of the
notes. The guarantors for the notes and the RCF are the same.
However, based on the terms of an inter-creditor agreement, while
the liens securing the notes will rank equally with the liens
that secure the RCF, in the event of enforcement of the
collateral, holders of the notes will receive proceeds only after
the lenders under the RCF have been repaid in full.

The GBP220 million in senior secured notes due 2018 will be used
to repay existing debt of approximately GBP75 million, certain
transaction costs and the repayment of GBP128.8 million of the
existing shareholder loan of GBP153.9 million, of which GBP25.1
million will remain outstanding. On this basis, following this
transaction and based on FYE2013 results, the company's pro forma
gross adjusted leverage is estimated at approximately 5.8x.
Moody's has not added back the depreciation of rental assets in
calculating EBITDA, in line with management's calculation of

Rationale For The Stable Outlook

Following the transaction, the company will be weakly positioned
within the rating category, but Moody's believes that the
company's track record of deleveraging will enable it to become
more strongly-positioned in the rating category over time. For
the rating to be more firmly positioned, gross adjusted leverage
would need to trend towards 5x. The assigned B2 CFR reflects
Moody's view that, based on past performance, this could be
achieved in the next 12-18 months.

What Could Change The Rating Up/Down

In light of the current rating positioning, upward pressure is
unlikely in the current year. However, the rating could be
positively impacted if leverage were to fall comfortably below
4.5x with strong liquidity. Conversely, there could be downward
pressure if leverage were to rise above 6x on a continued basis,
or if liquidity conditions deteriorated. On this basis, there
remains limited flexibility within the current rating category.

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

HEARTS OF MIDLOTHIAN: Deny Administration Rumours
football411 reports that Hearts of Midlothian said it is business
as usual amid reports that the club is set to enter into

The rumour mill has been awash with reports claiming the troubled
Tynecastle club was on the verge of administration, according to

However, Hearts, whose funding problems -- including late payment
of salaries to players -- are well publicised, have rubbished the
reports, the report notes.

football411 discloses that the Jambos say the club is working
hard to consolidate the recent gains in pursuit of stability.

"The club has been made aware of rumours concerning the
possibility of administration. . . . The club will continue to do
everything within its power to trade normally. It should be noted
that Hearts has not required or received additional funding from
UBIG or Ukio Bankas in over a year and is servicing its existing
debt. . . . The club is completely up to date with player
salaries and taxes and the club continues to head towards
operational self sustainability.  This has been made possible by
reducing operating costs while continuing to focus on increasing
revenues through season ticket sales, match ticket sales,
merchandise, hospitality and sponsorship. . . . While the general
economic and Scottish football marketplace conditions remain
challenging, Hearts is focussed on meeting its requirements as a
business and a football club. . . . The club's health and
viability continues to be dependent on successful player
identification, development and trading, careful cost control and
building revenues.  With the continued support of the Heart of
Midlothian fanbase, the club has an opportunity to continue
stabilising and then building for the future," the company said
in a statement obtained by the news agency.

KENNEDY GROUP: NAMA Puts Properties Into Receivership
BBC News reports that more properties which were owned by the
Coleraine-based Kennedy Group have been placed into receivership
by the National Asset Management Agency.

The seven properties were owned by three different companies and
are located in Antrim, Portstewart and Londonderry, BBC

The latest receiverships concern ACI Developments, Waterside
Crescent and Kennedy Investments, BBC notes.

The ACI Developments assets are four parcels of land close to the
Junction One center in Antrim, BBC states.

That company's main asset, a business park on the Ballymena Road,
had already been placed in receivership by NAMA, BBC recounts.

The Waterside Crescent assets taken by NAMA are two retail
warehouses on Strand Road in Derry, BBC discloses.

The Kennedy Investments properties are adjoining sites on The
Crescent in Portstewart which have planning permission to build
24 apartments, BBC says.

LEMTRANS LLC: Fitch Assigns 'B' Long-Term Issuer Default Rating
Fitch Ratings has assigned Ukraine's Lemtrans LLC a Long-term
foreign currency Issuer Default Rating (IDR) of 'B' with a Stable

Lemtrans' ratings are supported by its position as the largest
private gondola railcar operator in Ukraine (B/Stable) with
15,288 units at end-2012 in operation and an 18% market share. It
is second only to the State Administration of Railways Transport
of Ukraine (Ukrzaliznytsia, B-/Stable) whose freight railcar
fleet is decreasing. DTEK (B/Stable) and Metinvest (B/Stable) are
Lemtrans' two largest customers and are related parties, and
generated 75% of the company's revenues in 2012. Lemtrans'
exposure to a handful of commodities and customers, as well as
large short-term debt maturities constrain its ratings. Despite
the company's ambitious capex plans for 2013-2015, Fitch expects
that Lemtrans will maintain its funds from operations (FFO)
adjusted net leverage below 3x over this period.


Ukraine's Largest Private Gondola Railcar Operator
Lemtrans' cargo transportation volumes reached 51m tons in 2012,
a 65% increase on 2010, in line with its growing railcar fleet.
Lemtrans aims to increase its fleet to 20,000 gondola railcars
and control 31% of the market by 2015. Its main competitor and
the operator of the national rail system, Ukrzaliznytsia (UZ),
had 58,200 gondola railcars at end-2012, down from 60,250 at end-
2010. However, most of these railcars are old and have exceeded
their useful life.

Fitch expects that Lemtrans will generate strong cash flows from
operations in 2013-2015, exceeding already solid results achieved
in 2011-2012 and that its EBITDA margins will improve slightly on
the 2012 level of 38% following the expected disposal of certain
low-margin non-core assets in 2013.

Customer Concentration, Bulk Cargo Exposure
Lemtrans' two largest customers, DTEK and Metinvest, both part of
the same holding as Lemtrans, accounted for 75% of its revenues
and 82% of its transportation volumes in 2012. However, we did
not incorporate any parent support into Lemtrans' ratings. DTEK
and Metinvest are Ukraine's largest industrial holdings that
transport tens of millions of tons of coal, iron ore and ferrous
products every year by rail. Fitch expects that DTEK's and
Metinvest's coal, ore and product transportation volumes will, at
least, stay at the current levels over the medium term. The
agency also believes that DTEK and Metinvest will continue
dominating Lemtrans' revenues and volumes over this period.

Fitch notes that coal mining and steel industries are the key
sectors of the Ukrainian economy, and coal and metal goods make
up over half of total cargo volumes on the UZ's rail network (54%
in 2011). On the other hand, Lemtrans' exposure to a handful of
customers and bulk commodities distinguishes it from its 'BB'
rated Russian peers such as UCL Rail B.V. (BB+/Positive) and
Globaltrans plc (BB/Stable) that are significantly more
diversified by cargo types and customers.

UZ's Aged Networks and Eroding Freight Position
Ukraine's railways owned and operated by UZ are fairly aged.
Fitch expects that in 2013-2016 UZ will be spending heavily on
acquiring new locos and on network upgrades to ensure stable
operations of the entire rail system. It will also remain focused
on acquiring new passenger railcars. Therefore, Fitch believes
that UZ is unlikely to invest significant amounts to replace its
aged cargo wagons over the medium term due to lack of funds and
expects UZ's market share in gondola transportation to decline
from the present 50% over the medium term.

Large Capex, Moderate Leverage
At end-2012, Lemtrans had moderate FFO adjusted net leverage of
1.7x. Over 2013-2015, the company intends to spend several
billion hryvnia to renew over half of its railcar fleet by end-
2015 (including aged railcar write-offs). Although Fitch expects
that Lemtrans' post-capex free cash flows will be negative in
2013-2014, the agency forecasts that Lemtrans will maintain its
FFO adjusted net leverage at below 3x in 2013-2015.

Large Short-term Debt
Fitch assesses the company's existing liquidity as relatively
weak. At end-2012, Lemtrans had UAH3.1bn in gross debt, of which
UAH1.1bn or 35% was short term against cash of UAH710m. Finance
lease obligations currently make up 91% of the company's debt.


Customer Diversification and Cargo Mix

Fitch would view positively Lemtrans' improved customer
diversification and cargo mix. However, given Ukraine's
dependence on coal mining and steel production these changes are
not likely over the medium term.

Significant Hryvnia Devaluation

The foreign currency risk is mitigated by the fact that the
majority of Lemtrans' tariffs are denominated or linked to USD.
However, a large, sustained hryvnia softening against the USD and
RUB could weaken Lemtrans' credit ratios and could put pressure
on its ratings as its leases are denominated in foreign

Leverage Above 3.5x

Lemtrans' ratings might come under pressure if its FFO adjusted
net leverage exceeds 3.5x on a sustained basis.

The rating actions are:

  Long-term foreign currency IDR: assigned at 'B'; Outlook Stable

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

  Foreign currency senior unsecured rating: assigned at 'B'

NEW LOOK: Fitch Assigns 'B-' Long-Term Issuer Default Rating
Fitch Ratings has assigned New Look Retail Group Limited (New
Look) a Long-term Issuer Default Rating (IDR) of 'B-' with a
Stable Outlook. Fitch has also assigned New Look's planned
GBP800m senior secured notes an expected senior secured rating of
'B(EXP)'/'RR3'. The final rating is contingent upon the receipt
of final documents conforming to information already received by

The 'B-' IDR reflects the aggressiveness of the proposed
recapitalization. However, this is offset by New Look's
established market leadership in the UK, favorable medium-term
industry trends and improving operating performance in recent
quarters. From a business risk standpoint, Fitch views New Look
as possessing a number of company-specific traits consistent with
a higher rating. However, the company's financial profile and
limited expected de-leveraging potential, is more in line with a
low-rated 'B' issuer and is viewed as a constraining factor for
New Look's ratings.


Established Market Position

Fitch considers New Look's high fashion content and value
proposition as differentiating factors compared with its
immediate peer group. This has resulted in a strong brand
position in the UK value clothing segment which is benefiting
from a long-term structural change, largely driven by increased
acceptance of value retail brands. New Look is further supported
by the multi-channel offering comprising 1,141 owned and
franchised stores worldwide (590 owned stores in the UK) and a
fast-growing e-commerce and mobile-commerce presence. These
company-specific traits justify a high 'B'/low 'BB' rating
category but the rating is constrained by the company's heavy
reliance on the UK market.

E-Commerce Expansion

New Look has set a three-year plan to improve EBITDA back to the
highs of FY10 (GBP249 million) to GBP280 million by FY16.
However, the mix of EBITDA is fundamentally different with the
share of UK retail profit expected to contribute to less than 60%
of group EBITDA by FY16 (FY13:80%) and the e-commerce division
expected to generate over 60% of the growth in group EBITDA from
FY13 (from 9% of group EBITDA in FY13 to 16% by FY16). Fitch
views management's growth assumption as reasonable based on
current trends and results achieved in recent periods. More
broadly, these expectations are consistent with industry trends
as online retailing is expected to grow at 15.1% (CAGR) from 2012
to 2016.

Subdued UK Consumer Environment

Although New Look plans to increase its overseas exposure, its UK
division remains a major part of its business, contributing 71%
of group revenue and 88% of group EBITDA in FY12. The UK consumer
environment remains subdued as unemployment is still high,
household incomes remain squeezed while real wage continues to
fall. As a result, competition among clothing retailers is very
high with promotions and discounting being the new norm in the

Improving Operating Performance

Despite the strong brand franchise, operating performance in
recent years has been affected by several factors, both internal
and external. This includes a one-off event with the departure of
40% of its key buyers when New Look moved its headquarters from
Weymouth to London. As a result, there was inconsistent ranging,
pricing and quality in its products, which led to increased
markdowns and depressed profitability in FY11 and FY12. The poor
operating performance has since reversed, as evidenced by its
latest actual LTM December 2012 results. Fitch expects the UK
retail sector to remain under pressure driven by weak consumer
confidence and above-average supply chain inflation. In FY13,
Fitch expects sales to increase by 1.8% (FY12: -0.9%) and EBITDA
margin to improve to 12.5% (FY12: 9.6%). Further gradual
improvement in profitability is factored in thereafter.

Aggressive Financial Profile

Fitch characterizes New Look's financial profile as aggressive.
This is prompted by the partial refinancing of the Holdco PIK
loan with additional debt issued at the Opco level, which
justifies the 'B-' IDR despite the extended debt maturity
profile. In addition, Fitch has included the expected obligations
under the new PIK facility in its calculation of leverage
metrics. Several characteristics that support this approach
include the large size of the remaining PIK obligation relative
to the overall debt of the group, transferability of rights and
obligations, option to pay interest in cash, and guarantees from
operating subsidiaries within the restricted group. Fitch
projects FFO-adjusted net leverage to increase to around 7.1x
(cash-pay FFO-adjusted net leverage of 6.0x) by FYE14 (March
2014). In Fitch's definition of FFO-adjusted net leverage
(including PIK), this is weak relative to the 'B' median for the
sector at 6.0x. FFO fixed charge cover (including cash interest
and rents) is equally considered weak at 1.5x.

Senior Secured Notes Rating

The 'B(EXP)'/'RR3(EXP)' senior secured rating reflects Fitch's
expectations that the enterprise value of the company -- and
resulting recovery for its creditors -- will be maximized in a
restructuring (going concern approach) rather than a liquidation
due to the relatively asset-light nature of the business.
Furthermore, a default scenario would likely be triggered by
unsustainable financial leverage, possibly as a result of
increasingly weak consumer spending or poor acceptance of the
company's product roll-outs. As such, Fitch has applied a 25%
discount to expected FYE13 EBITDA and believes a distressed
multiple of 5.0x is appropriate. This results in above-average
expected recoveries (51%-70%) for senior secured note holders in
the event of default and hence a rating for the planned notes at
'B' one notch above New Look's IDR.


Positive: Future developments that may, individually or
collectively, lead to a positive rating action include:

- FFO-adjusted net leverage (including PIK) consistently below
   and expected to be sustained below 6.5x

- FFO fixed charge cover (including cash interest and rents)
   consistently above 1.7x - 2.0x

- EBITDA margins at or above 15% driven by core business

Negative: Future developments that may, individually or
collectively, lead to a negative rating action include:

- FFO-adjusted net leverage (including PIK) consistently above

- FFO fixed charge cover (including cash interest and rents)
   consistently below 1.2x

- EBITDA margins below 10%

- Inability to maintain positive free cash flow delaying
   deleveraging potential

NEW LOOK: S&P Assigns Preliminary 'B-' Corporate Credit Rating
Standard & Poor's Ratings Services said that it assigned its
preliminary 'B-' long-term corporate credit rating to U.K.-based
value apparel retailer New Look Retail Group Ltd. (New Look).
The outlook is stable.

At the same time, S&P assigned its preliminary 'B-' issue rating
to the proposed GBP800 million fixed- and floating-rate secured
notes to be issued by New Look Bondco I PLC.  The recovery rating
on the secured notes is '4', indicating S&P's expectation of
average (30%-50%) recovery in the event of a payment default.

The final ratings 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 S&P do not receive the final documentation
within a reasonable time frame, or if the final documentation
departs from the materials it has already reviewed, S&P reserves
the right to withdraw or revise the ratings.

The ratings on New Look primarily reflect S&P's view of the
company's financial profile as "highly leveraged."  New Look's
preliminary Standard & Poor's-adjusted capital structure includes
GBP800 million senior secured notes and a GBP371 million payment-
in-kind (PIK) note, alongside more than GBP1 billion of operating
lease adjustments.  Against this, New Look's Standard & Poor's-
adjusted EBITDA was about GBP280 million at its financial year-
end in March 2013.

The ratings also reflect New Look's "fair" business risk profile.
S&P sees the potential for moderate growth in EBITDA under the
currently adverse economic environment.  In S&P's opinion,
stronger growth than it anticipates hinges on the profitable
diversification of the company's sales channels, as well as on
its successful expansion into high-growth foreign markets.
However, these strategic goals are still at an early stage.

In S&P's opinion, even if the challenging operating environment
for value apparel retailers in Europe persists, New Look should
be able to maintain the necessary earnings capacity and financial
flexibility to maintain its highly leveraged debt structure.  New
Look's "adequate" liquidity should, in S&P's opinion, enable the
company to withstand potential temporary operating setbacks as
they arise in the sector.  In particular, S&P believes that New
Look will be able to maintain its adjusted EBITDA cash interest
coverage ratio (excluding noncash interest) at more than 1.5x in
the 12 months following the implementation of the new capital

Ratings downside could arise if ongoing negative top-line trends
or a continued decline in New Look's EBITDA margin to less than
15% reflect a durable weakening in its operations or liquidity,
causing New Look's adjusted EBITDA cash interest coverage to
approach 1x and free operating cash flow to turn negative.

S&P do not see any ratings upside in the short term.  However,
S&P would likely consider taking a positive rating action if New
Look's business operations grow more strongly than it currently
forecasts, on the back of a successful expansion strategy and
translating into adjusted EBITDA cash interest coverage of more
than 2.0x and adjusted debt to EBITDA of no more than 7.5x.

R&R ICE CREAM: Moody's Lowers CFR to B2 Following PAI Purchase
Moody's Investors Service downgraded the corporate family rating
of R&R Ice Cream Limited to B2 from B1 and its probability of
default rating to B2-PD from B1-PD to reflect the expected
increase in the company's leverage resulting from the company's
acquisition by PAI partners SAS (PAI). The rating outlook is

Concurrently, Moody's has assigned a provisional (P)Caa1 rating
to the proposed EUR253 million senior PIK Toggle notes due May
2018 to be issued by R&R PIK plc. Proceeds from the new PIK notes
will be used to finance the proposed acquisition of (1) R&R Ice
Cream by PAI; and (2) Fredericks Holdings (Guernsey) Limited
(Fredericks) by R&R Ice Cream. Moody's nevertheless notes that,
in the event that the Fredericks acquisition does not close on or
prior to August 20, 2013, then a portion of the PIK issuance
proceeds (EUR54.5 million) would be redeemed.

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

In accordance with its Loss Given Default (LGD) framework,
Moody's upgraded the rating assigned to R&R Ice Cream plc's
EUR350 million senior secured notes due 2017 to B1 from B2 to
reflect the higher loss absorption resulting from the proposed
issuance of a subordinated PIK instrument.

Ratings Rationale:

Downgrade of CFR and PDR to B2

The downgrade of R&R Ice Cream's CFR to B2 follows the increase
in leverage resulting from the proposed acquisition of the
company by PAI partners, beyond the parameters which Moody's had
defined for the B1 rating when it first assigned a rating to R&R
Ice Cream. Moody's expects that R&R's adjusted debt/EBITDA ratio
(including the PIK) is likely to increase to around 6x for at
least 18 months, which reflects the impact of the new PIK
facility. This is a rise from the 4.4x recorded in the 12 months
to September 2012.

The PIK note is issued by a newly-created holding entity which is
outside of the restricted group, which Moody's understands is not
going to report consolidated financial results for the group. As
Moody's has included the PIK debt into the assessment of R&R's
financial profile, the rating agency would expect R&R to include
additional disclosures in its quarterly reporting on the
unconsolidated financial position of the PIK issuer. Failure to
that could lead to the withdrawal of the rating assigned to the
PIK note.

Moreover, the issuance of senior PIK Toggle notes is likely to
reduce the company's financial flexibility because the first and
last coupon are mandatorily payable in cash and other interest
payments are also likely to be made in cash as long as there is
restricted payment capacity, especially as the PIK issuer is a
holding company with no operating activities or assets (other
than 100% of the ordinary shares of New R&R, the parent of R&R
Ice Cream, and intercompany receivables from New R&R).

The B2 CFR is further constrained by: (i) R&R's limited size and
its narrow product focus; (ii) the price competitive nature of
the industry, with the considerable bargaining power of
retailers; and (iii) the potential for margin volatility, partly
on the back of weather conditions and input price fluctuations
which may not always be entirely mitigated by price increases.

More positively, the B2 rating is supported by: (i) R&R's strong
position within the private label ice cream sector; (ii) its wide
product offering and ability to innovate; (iii) broadly stable
market fundamentals in the rather low-cyclical food industry;
(iv) well-established customer relationships with only moderate
concentration among both retailers and discounters; as well as
(v) an improved geographic spread following the recent
acquisitions in France and Italy.

The B2 rating reflects Moody's assumption that R&R would maintain
an adequate liquidity cushion including access to a covenanted
EUR60 million revolving credit facility (RCF) which, together
with factoring facilities in its core markets, can be used to
finance its seasonal sizeable working capital needs and with
sufficient headroom under financial covenants.

The stable outlook reflects Moody's expectations that R&R will
successfully integrate its acquisitions, continue to deliver cost
efficiencies and increase sales of branded products which will
all contribute to improve its profitability over time. The stable
outlook further assumes that R&R will not embark in sizeable
debt-financed acquisitions over the intermediate term and that it
will continue to deliver positive free cash flow. Quantitatively,
a stable outlook requires that R&R decreases its adjusted
debt/EBITDA ratio (including the PIK) to 5.5x over the next 18 to
24 months.

Provisional (P)Caa1 Rating Assignment To Senior Pik Toggle Notes

The (P)Caa1 (LGD5, 84%) rating assigned to the proposed senior
PIK Toggle notes due 2018 reflects their subordinated position in
the capital structure behind a significant amount of senior
secured liabilities. The new PIK instrument is secured on a
first-ranking pledge granted by R&R PIK plc over the shares of
its subsidiary New R&R, the parent of R&R Ice Cream. However, the
PIK facility will not be guaranteed by any of the subsidiaries
which guarantee the super senior revolving credit facility and
senior secured notes.

Upgrade of Senior Secured Notes

In line with Moody's LGD principles, the upgrade to B1 (LGD3,
33%) of R&R Ice Cream's senior secured notes due 2017 reflects
the higher loss absorption resulting from the proposed issuance
of a subordinated PIK instrument.

What Could Change The Rating Down/Up

The company's ratings could be downgraded if its operational
performance weakens, or if it engages in acquisitions such that
its leverage metric rises above 6x. Furthermore, any
deterioration in the company's liquidity position could result in
a downgrade, of it R&R were generate negative free cash flows
during an extended period of time.

Positive pressure on the ratings is not expected in the near term
considering the expected increase in leverage. However, Moody's
could consider an upgrade if R&R were to reduce its adjusted
debt/EBITDA metric towards 4x and its EBIT/interest expense ratio
increases towards 2x, on a sustainable basis.

Principal Methodologies

The principal methodology used in these ratings was the Global
Packaged Goods published in December 2012. Other methodologies
used include Loss Given Default for Speculative-Grade Non-
Financial Companies in the U.S., Canada and EMEA published in
June 2009.

Headquartered in Northallerton, UK, R&R Ice Cream is one of the
largest European private label ice cream manufacturers with total
sales in 2012 of EUR600 million. R&R Ice Cream's product
portfolio also includes branded ice cream such as Kelly's and
Landliebe as well as products sold under the Nestlé and Mondelez

SEALINE: In Administration, Seeks Buyers
motorboatsmonthly reports that Sealine was placed into
administration after a bumpy ride with owners and dealers alike.

MBM understands that there are no boats currently in build, and
that deposits taken will be returned to customers, according to

Frank Shepherd of administrators Baker Tilly Restructuring and
recovery LLP, said, "We are inviting offers for parts of or the
whole of the business and we hope to contact employees as soon as
possible but regret that significant redundancies are likely."

Established in 1972 by Tom Murrant, Sealine became one of the so-
called 'Big Four' British yards following strong growth
throughout the 1990s.  It enjoyed recent success with the
SC35/S380 sportscruiser, and was due to launch a flybridge
version, the F380, this summer.

SUPERGLASS: Launches GBP12.2-Mil. Share Placing to Refinance Debt
Gareth Mackie at the Scotsman reports that Superglass embarked on
a GBP12.2 million share placing to refinance its debt owed to
Clydesdale Bank.

The firm, which also revealed a doubling in losses for the first
six months of the year, said the refinancing was crucial to its
survival, the Scotsman relates.

Superglass plans to use GBP3 million from the share placing
proceeds to pay down its debt with Clydesdale, which has also
agreed to have GBP6.5 million of debt exchanged for convertible
shares, the Scotsman says.

According to the Scotsman, the firm warned: "If for any reason
the refinancing does not proceed, it is likely that existing
shareholders' ordinary shares would have no value and that the
company would likely enter into administration or some other form
of insolvency procedure."

The refinancing aims to cut the company's debt cut from about
GBP12 million to GBP2.5 million, and give it cash balances of at
least GBP7.6 million, the Scotsman discloses.

Superglass is a Stirling-based insulation maker.

UK COAL: On Brink of Insolvency; Seeks Voluntary Liquidation
Andrew Bounds at The Financial Times reports that UK Coal
Operations, the company that runs two of the last three deep pits
in Britain, has warned that it is in danger of falling into
insolvency -- putting 2,000 jobs, and the value of 6,800 workers'
pensions, at risk.

According to the FT, spokesman Andrew Mackintosh said that a fire
that forced the closure of its largest colliery, Daw Mill in
Warwickshire, had left the company with insufficient cash to meet
running costs, and made further restructuring inevitable.

"We lost GBP100 million of equipment, GBP160 million of coal and
have GBP35 million of costs," Mr. Mackintosh told the FT.  "We
are looking at everything we can do to save 2,000 jobs and
maximize the returns to creditors."

An initial restructuring -- which split the business into UK Coal
Operations and Harworth Estates, a separate property company --
had been necessitated in December, by a GBP450 million pension
deficit, the FT notes.

However, a document seen by the FT shows that UK Coal Operations'
cash flow problems recently caused it to request a deferral of
payments to HM Revenue & Customs -- which was denied.

As a result, the directors of UK Coal Operations are seeking a
voluntary liquidation to avoid being forced into insolvency, the
FT states.

Under the directors' proposal, a liquidation would enable a
subsidiary to be created to run the surviving mines, but would
still cost power generators and HMRC tens of millions of pounds,
the FT discloses.

According to the FT, the document suggests the best solution
would be to transfer the workforce to a new company, which could
then second them to another entity, preserving pension rights.
Creditors would then receive an estimated 32p in the pound, the
FT says.

UK Coal Mine Holdings is the country's biggest coal producer,
supplying about 5% of the UK's energy needs.

* Fees to Drop for Insolvency Options, Scottish Trust Deeds Says
The Scottish Trust Deed on April 30 disclosed that the proposed
changes, which are to be brought before Scottish Parliament later
this year, are part of the drive to reform bankruptcy laws
partially due to creditor complaints about how little money is
being received by them compared to the insolvency practitioners
that administer the trust deeds and sequestrations.

Normally, under the terms of a Trust Deed the client makes a
monthly payment to an insolvency practitioner, who deducts their
fees and then distributes any funds remaining to creditors as
part of the Trust Deed agreement.  These fees are agreed at the
start of the trust deed process and are based on an hourly rate.
The insolvency practitioner must work to the agreed number of
hours in order to claim in full.  However, if additional work
needs to be done beyond what was originally agreed there is scope
for the fees to increase.  Once the agreed period of the trust
deed has elapsed and the debtor has made all the required
payments the rest of the debt is formally written off.  In many
instances this has been up to 70% of the debt.

The new proposals will change all of this.  Insolvency
Practitioner's will be expected to agree a single initial fee for
setting up a trust deed, with their ongoing administration fees
covered by a percentage of funds recovered on behalf of the
creditors.  Any additional work that incurs extra fees will have
to be approved by creditors or by the Accountant in Bankruptcy.
This will ensure creditors will receive the maximum possible
amount of the money they are owed.

However the changes to the fee structure are not the only ones
that could insolvency practitioners losing out.

Couples will be able to have joint Protected Trust Deeds, which
is in contrast to the current rules which force each individual
to have their own, despite their finances being part of a joint
pot. This will result in the reduction of the fees charged
overall by up to half and allow a couple to manage their
financial affairs on an equitable joint basis.

In addition, social security payments will be prevented from
being part of the allowable sources of income for a protected
trust deed.  This is currently the case with bankruptcy awards
and the same rule will now apply to protected trust deeds.

A spokesperson for Trust Deeds Company,
said: "The changes that the Accountant in Bankruptcy is proposing
will ensure that creditors get more money than they would do
under the current regulations, however it could be at the expense
of the insolvency practitioners that are administering the
debtors' case.

"While the new rules will make creditors very happy because they
will get a much larger dividend than before, there may very well
come a time when it is at the expense of the insolvency
practitioners, who will end up out of pocket as a result."

Scottish Trust Deed --
provides help and advice on the Scottish Trust Deed debt


* U.S. Money Market Funds Exposure to EU Banks Down in March
U.S. prime money market fund (MMF) exposure to Eurozone banks
declined in March 2013, likely reflecting investor concerns over
recent events in Italy and Cyprus, according to Fitch Ratings.

As of end-March 2013, MMF allocations to Eurozone banks
represented 13.2% of assets under management within Fitch's
sample, a decline of 19% on a dollar basis relative to the end-
February level of 16% of MMF assets. Despite this recent decline,
Fitch notes allocations to Eurozone banks have increased by over
70% since end-June 2012 when European Central Banks (ECB) actions
led to relative stabilization of market sentiment.

Canadian banks remained the largest single country exposure at
13.4% of assets, a 9% increase since end-February. In aggregate,
MMF allocations to Canadian, Japanese and Australian banks
represented approximately one-third of total assets in Fitch's
sample versus approximately 20% of assets as of end-May 2011.

Australian, Canadian and Japanese banks collectively represent 10
of the top-15 largest exposures of MMF assets in Fitch's sample,
with just three European institutions in the top-15.

The proportion of eurozone exposure in the form of repos, at
slightly more than 20% of these banks' collective exposure,
remains well below the levels of roughly 40% of exposure
experienced during the height of the crisis last summer.

The full report 'U.S. Money Fund Exposure and European Banks:
Decline Amid Eurozone Concerns' is available at

* Upcoming Meetings, Conferences and Seminars

June 13-16, 2013
      Central States Bankruptcy Workshop
         Grand Traverse Resort, Traverse City, Mich.
            Contact:   1-703-739-0800;

July 11-13, 2013
      Northeast Bankruptcy Conference
         Hyatt Regency Newport, Newport, R.I.
            Contact:   1-703-739-0800;

July 18-21, 2013
      Southeast Bankruptcy Workshop
         The Ritz-Carlton Amelia Island, Amelia Island, Fla.
            Contact:   1-703-739-0800;

Aug. 8-10, 2013
      Mid-Atlantic Bankruptcy Workshop
         Hotel Hershey, Hershey, Pa.
            Contact:   1-703-739-0800;

Aug. 22-24, 2013
      Southwest Bankruptcy Conference
         Hyatt Regency Lake Tahoe, Incline Village, Nev.
            Contact:   1-703-739-0800;

Oct. 3-5, 2013
      TMA Annual Convention
         Marriott Wardman Park, Washington, D.C.

Nov. 1, 2013
      NCBJ/ABI Educational Program
         Atlanta Marriott Marquis, Atlanta, Ga.
            Contact:   1-703-739-0800;

Dec. 2, 2013
      19th Annual Distressed Investing Conference
          The Helmsley Park Lane Hotel, New York, N.Y.
          Contact:   240-629-3300 or

Dec. 5-7, 2013
      Winter Leadership Conference
         Terranea Resort, Rancho Palos Verdes, Calif.
            Contact:   1-703-739-0800;


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

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

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

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


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

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

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

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

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

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

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