TCREUR_Public/130509.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 9, 2013, Vol. 14, No. 91



BELARUSIAN NATIONAL: S&P Affirms 'B-' Ratings; Outlook Positive


DOUX GROUP: Administrators Seek Liquidation of Remaining Abattoir
NEXANS SA: S&P Affirms 'BB/B' Corp. Credit Ratings; Outlook Neg.


IVG IMMOBILIEN: Mulls Debt Restructuring; First Qtr. Loss Widens


FRIGOGLASS SAIC: Moody's Assigns '(P)B1' Corporate Family Rating
FRIGOGLASS SAIC: S&P Assigns 'BB-' Corp. Rating; Outlook Stable


INDEPENDENT NEWS: Seeks 20 Further Voluntary Redundancies


KAZAKHSTAN MORTGAGE: Fitch Assigns 'B' ST Foreign Currency Rating


FAR-EAST CAPITAL: Fitch Rates $800MM Unsecured Notes 'B+'


NIELSEN HOLDINGS: Moody's Affirms 'Ba3' CFR; Outlook Positive
SNS REAAL: S&P Keeps 'C' Ratings on 2 Subordinated Debt Issues


EMPRESA PRODUCTORA: Moody's Assigns 'Ba3' Corp. Family Rating
PORTUCEL SA: S&P Gives 'BB' CCR & Rates EUR250MM Notes 'BB'
UCI 17: Fitch Lowers Rating on Class A2 RMBS Tranche to 'B'


* ROMANIA: Unveils Plan to Overhaul Corporate Insolvency Law


* TAMBOV REGION: Fitch Lifts LT FC/LC Currency Ratings to 'BB+'


BANKIA SA: Qatar Eyes Acquisition of IAG Stake
BBVA EMPRESAS 1: Moody's Confirms 'B3' Rating on EUR78.3MM Certs
PESCANOVA SA: Creditor Banks Set to Meet with Deloitte
PYMES SANTANDER 5: Moody's Assigns '(P)Ca' Rating on Cl. C Notes

U N I T E D   K I N G D O M

BOTANIC INNS: In Administration; Buyer Sought
CEVA GROUP: Moody's Assigns 'Ca-PD/LD' Prob. of Default Rating
CLAVIS 2007-01: S&P Lowers Ratings on Two Note Classes to 'B+'
STERLINGMAX I MBS: S&P Cuts Ratings on Two Note Classes to 'CC'

* UK: Uninsured Depositors & Bondholders May Face Losses
* UK: Fitch Says Banks Reduce MMF Usage as Liquidity Buffers Peak


* Fitch: Euro Auto ABS Index Performance Displayed Stable Trends
* Upcoming Meetings, Conferences and Seminars



BELARUSIAN NATIONAL: S&P Affirms 'B-' Ratings; Outlook Positive
Standard & Poor's Ratings Services said that it had revised its
outlook on Belarusian National Reinsurance Organization (Belarus
Re) to positive from stable.  At the same time, S&P affirmed the
'B-' counterparty credit and insurance financial strength ratings
on Belarus Re.

The outlook revision follows S&P's similar rating action on the
Republic of Belarus and on the largest Belarus-based banks.

The ratings on Belarus Re now reflect only its stand-alone credit
profile.  In line with S&P's insurer country risk criteria, the
ratings on Belarus Re are capped by the sovereign credit ratings
on its country of domicile, Belarus.  S&P's criteria use the
long-term local currency sovereign credit rating as a proxy for
country risk.

S&P notes that economic stabilization in Belarus, reflected in
lower inflation and reduced pressure on the exchange rate, has
had a positive effect on Belarus Re's financial profile,
especially on its the quality of investments, liquidity, and
earnings generation capacity.

Belarus Re is the sole reinsurer in the country, and its stand-
alone financial risk profile is dominated by credit risks
associated with the sovereign.

In accordance with S&P's criteria for government-related entities
(GREs), S&P assess the likelihood of timely and sufficient
extraordinary government support to Belarus Re as "high".  This
includes S&P's view that Belarus Re plays an "important" role for
and has a "very strong" link with the Belarusian government.

The positive outlook on Belarus Re mirrors the outlook on Belarus
and reflects S&P's view that further economic stabilization will
likely facilitate improvements in the company's financial
profile, and particularly in the quality of the investment
portfolio.  S&P could raise the ratings on Belarus Re if it was
to raise the long-term local currency rating on Belarus and if
Belarus Re's stand-alone characteristics also improved.  S&P do
not expect Belarus Re's GRE status to result in any notches of
support over the next 12 months, due to the low sovereign rating.

S&P do not anticipate taking negative rating actions on Belarus
Re, given its adequate capitalization level and marginal
underwriting results.  However, a negative rating action on
Belarus could trigger a similar rating action on Belarus Re.


DOUX GROUP: Administrators Seek Liquidation of Remaining Abattoir
Stuart Todd at just-food reports that judicial administrators
have demanded that the Quimper commercial court pronounce a
winding-up order for Doux's last remaining abattoir for fresh

Hopes had been raised that a buyer would be found for the plant
amid reports that the UK-based 2 Sisters Food Group had expressed
an interest but a bid never materialized, just-food recounts.

The court will render its judgment on May 14, just-food

The plant, which has been losing millions of euros annually, was
given a reprieve in September 2012 when Doux's fresh products
division was liquidated, just-food relates.  In the intervening
months, 270 jobs have been axed at the abattoir which currently
employs 147 workers, just-food states.

Meanwhile, Doux's management will on May 17 present the outlines
of its business continuation plan to the group's works council,
ahead of a court audience on May 21, just-food discloses.

Doux has been in administration since June 1, 2012, just-food

Doux is a French poultry group.

NEXANS SA: S&P Affirms 'BB/B' Corp. Credit Ratings; Outlook Neg.
Standard & Poor's Ratings Services said it revised its outlook on
France-based cable manufacturer Nexans S.A. to negative from

At the same time, S&P affirmed its 'BB/B' long- and short-term
corporate credit ratings on Nexans and S&P's 'BB' issue ratings
on the company's various debt instruments.  The recovery rating
of '3' on these instruments remains unchanged.

The outlook revision reflects S&P's revised expectations that
Nexans will not achieve meaningful improvement in its operating
margins and credit metrics in 2013 and a pronounced weakening in
its credit metrics over the past two years.

S&P now expects 2013 adjusted EBITDA margins to remain flat
around 2012's low levels of about 5%, despite the slight
favorable effect of the full year integration of Amercable and
Shandong Yanggu and the expected progressive recovery of the high
voltage submarine transmission segment toward the end of the
year.  This is in part because S&P expects the terrestrial
transmission segment to keep being a drag on margins due to
structural overcapacity in the market.  S&P also anticipates that
difficult macroeconomic conditions in Europe will weigh on
revenues and profitability in the more cyclical distributor and
installers segment based on the likely slowdown in industrial and
construction markets particularly in Europe.

As a result, S&P do not expect Nexans' credit metrics to
significantly improve in 2013, including adjusted funds from
operations (FFO) to debt in the low teens and remaining below the
levels S&P considers commensurate with a 'BB' rating.  This is
despite S&P's expectation of a turnaround in working capital from
2012 in the second half of 2013 due to a favorable contribution
from the submarine high voltage transmission segment, that could
lead to slightly positive free operating cash flow (FOCF).  S&P's
base case assumes a stable copper price for 2013 compared to

S&P notes that as of year-end 2012 and beyond, higher pension-
related debt adjustments that it assumes will be stable from 2012
will have a depressing effect on credit metrics.

For all these reasons S&P is revising its assessment of the
Nexans' financial risk profile to "aggressive" from

Nexans has announced a cost reduction and organization
rationalization plan which S&P expects will lead to a gradual
improvement of its operating margin in the next three years.  S&P
anticipates the positive effects of the plan will be very limited
in 2013 but will start being felt in 2014.  S&P's base case
assumes Nexans will be succesful in restoring its operating
margins in 2014 with an adjusted EBITDA margin close to 6%, an
adjusted FFO-to-debt ratio of close to 20%, and limited negative
FOCF, which S&P views as commensurate with its 'BB' rating.
However, S&P's negative outlook factors in some execution risk in
rolling out the plan successfully and on time.

The ratings on Nexans continue to reflect S&P's assessment of its
business risk profile as "fair" under its criteria.

S&P acknowledges Nexans' leading positions in competitive
segments of the cable industry, growing geographic
diversification, the increasing weight of higher-value-added
products in its total sales, and it still fairly solid capital
structure and liquidity. However, the ratings are primarily
constrained by Nexans' profitability -- S&P expects Nexans'
Standard & Poor's-adjusted EBITDA margin to remain at 2012's low
level of about 5% by the end of 2013 (in line with 2012 levels --
lower than most publicly listed industry peers').  Another rating
constraint is the cyclicality of some of Nexans' end markets and
its exposure to swings in raw materials prices, which can have a
heavy impact on working capital.  S&P's management and governance
score for Nexans is "fair," according to S&P's criteria.

The negative outlook reflects a one-in-three chance that S&P
could lower its ratings on Nexans if operating performance and
profitability did not show any sign of improvement in the coming
12 months or if the company generated significantly negative FOCF
in 2013.

S&P views an adjusted FFO-to-debt ratio in the 15%-20% range and
positive FOCF generation over the cycle as commensurate with the
current 'BB' rating.  In addition, S&P expects the debt-to-
capital ratio to remain below 45% at all times.  S&P's base-case
assumption is that Nexans will remain slightly below this
benchmark for 2013, but will be successful in gradually restoring
profitability and credit metrics for the whole group by 2014 as
the first effects of its cost reduction and organization
rationalization plan enter into force and operating performance
in the high voltage transmission segment returns to normal by the
end of 2013.

If Nexans failed to fully recover its operations in the submarine
high voltage transmission and show clear signs of progress in its
cost reduction and organization rationalization plan and
prospects of operating margins improvement in the coming 12
months, S&P would likely lower the ratings.  Also, any negative
deviation from S&P's cash flow forecasts leading to largely
negative FOCF, or any sizeable debt-funded acquisition in the
coming 12-18 months, would likely lead S&P to downgrade Nexans.

S&P would consider returning the outlook to stable if Nexans
successfully rolled out its recovery plan in high voltage
transmissions and its group-wide cost reduction and organization
rationalization plan, and showed clear prospects of improvement
in its operating performance and cash flow generation in the
coming 12 months.


IVG IMMOBILIEN: Mulls Debt Restructuring; First Qtr. Loss Widens
Dalia Fahmy at Bloomberg News reports that IVG Immobilien AG, the
German company that plans to restructure EUR4 billion (US$5
billion) of debt, said its first-quarter loss widened as the
value of its properties fell.

According to Bloomberg, the company said in a statement on
Tuesday that the net loss swelled to EUR45.1 million from EUR4.6
million a year earlier.  The value of IVG's properties dropped by
EUR42.5 million, Bloomberg discloses.

IVG, once Germany's largest commercial property company by market
value, has shed about 96% of its share price since 2008 following
a series of writedowns in its property values and difficulties
repaying debt, Bloomberg relates.

IVG, as cited by Bloomberg, said on Tuesday that it is working on
a plan to restructure all of its debt, which it will present at
its annual shareholders meeting on Aug. 14.

The company must repay EUR3.2 billion of debt due by the end of
2014, which it borrowed to finance operations and property
acquisitions, Bloomberg says, citing the company's annual report.

IVG Immobilien is a German-based real estate company.


FRIGOGLASS SAIC: Moody's Assigns '(P)B1' Corporate Family Rating
Moody's Investors Service assigned a provisional (P)B1 corporate
family rating (CFR) and B1-PD probability of default rating (PDR)
to Frigoglass S.A.I.C., one of the world's leading manufacturer
of beverage coolers and one of the largest glass bottle
manufacturers in West Africa and the Middle East.

Concurrently, Moody's has also assigned a provisional (P)B1
senior unsecured rating to the group's proposed issuance of
EUR250 million of senior unsecured notes due 2018. The outlook on
all ratings is stable. This is the first time Moody's has
assigned ratings to Frigoglass.

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 closing of the refinancing and a
conclusive review of the final documentation, Moody's will
endeavor to assign definitive ratings to Frigoglass. A definitive
rating may differ from a provisional rating. The ratings assigned
to Frigoglass assume that the group will successfully refinance
its current short-term debt maturities.

Ratings Rationale:

Assignment Of (P)B1 CFR--

"The (P)B1 ratings assigned to Frigoglass recognizes the group's
global presence and its long-term relationships with customers
including the largest Coca-Cola bottlers and some of the largest
beer producers in the world," says Paolo Leschiutta, a Moody's
Senior Credit Officer - Vice President and lead analyst for
Frigoglass. "These strengths compensate for Frigoglass's modest
size overall -- approximately EUR581 million in revenues as at
year-end 2012 -- in comparison to its much larger customer base,
and a degree of customer concentration, as Coca-Cola Hellenic
(CCHBC, Baa1 negative) accounts for approximately 25% of group's
revenues," adds Mr. Leschiutta.

The (P)B1 rating is also supported by the dominant market
position of Frigoglass in most of the markets in which it
operates and its global reach, particularly in emerging markets,
though end markets in the past have shown some volatility.
Frigoglass' presence in emerging markets adapts well to the needs
of its customers, which tend to be seeking to expand in these
regions. Moody's believes that these characteristics provide a
degree of visibility to Frigoglass's revenues as its customers
rely on the group's ability to provide reliable products in fast
growing market. Frigoglass was part of CCHBC group until 1996 and
has retained strong ties with the group since then. While Moody's
recognizes Frigoglass's success in recent years in increasing its
customer diversification, the group is likely to have weak
negotiating power with most of its customers and remains exposed
to raw material price volatility, which could affect its
profitability going forward.

Frigoglass is seeking to issue a new EUR250 million senior
unsecured bond due 2018 to refinance existing short-term debt
maturities. Pro-forma for the transaction, Moody's would expect
the group to exhibit financial leverage, measured by the ratio
debt/EBITDA, adjusted for operating leases and pension deficits,
lower than 4.0x and a retained cash flow (RCF)/net debt ratio of
around 20%. These metrics will position the group solidly in the
current rating category. However, Moody's notes that the group's
interest coverage, measured as EBITA/net interest, which the
rating agency expects to be in the region of 1.6x, is weak for
the rating category.

Following the bond issue, Moody's expects the group to enter into
committed revolving credit facilities with a total availability
of EUR50 million over three years. Moody's considers that these
will be adequate to cover Frigoglass's working capital needs,
although the rating agency notes that the group's liquidity
profile will remain vulnerable to significant working capital
swings during the year (EUR82 million absorption in Q1 2013) and
some short-term debt maturities that it expects to extend on a
regular basis (pro-forma for the bond issue, Frigoglass will have
around EUR49 million of short-term debt). The revolving credit
facilities will contain financial covenants. Following the
refinancing, headroom under these financial covenants is expected
to exceed 20%, although volatility in operating performances
might result in this headroom to contract significantly reducing
the company's flexibility to operate.

Moody's also notes the group's efforts to reduce its inventory
levels and the fact that it will retain approximately EUR100
million of available uncommitted credit lines. However, the
rating agency tends to assign a low value to uncommitted credit
lines as these might not be available when the company needs them
the most.

Assignment of (P)B1 Rating to Senior Unsecured Notes

The rating of the notes, in line with the CFR, reflects the fact
that the bank facilities will rank pari passu with the notes and
both instruments will benefit from the same guarantee package.
Guarantors will represent around 88% of group EBITDA and 75% of
total assets. Despite the fact that Frigoglass is based in
Greece, the current rating reflects (1) the group's modest
reliance on its Greek operations, which represent around 1.6% of
group's revenues; (2) the fact that Frigoglass will raise all it
financing needs and service its debt outside of Greece (i.e., the
group generates most of its cash flows outside of Greece and will
use them to service the note interest and principal payments
before they are passed to the Greek parent company); (3) the
group has minimal assets in Greece (around 7% of its total
assets); and (4) the bond and the bank facilities will be
governed under New York and English law.

The stable outlook on the ratings reflects Moody's expectation
that Frigoglass will improve its operating performances from the
2012 level and gradually reduce its financial leverage.

What Could Change The Rating Up/Down

A track record of stable performance and success in delivering
operating margin improvements through the group restructuring
program, leading to financial leverage approaching 3.5x and an
EBITA interest cover above 2x, could result in a rating upgrade.

Conversely, downwards rating pressure could arise if Frigoglass's
operating profitability or liquidity profile deteriorate, or if
the group generates negative free cash flow over a prolonged
period such that its financial leverage increases materially
above 4.5x on an ongoing basis.

Principal Methodology

The principal methodology used in this rating was the Global
Manufacturing Industry rating methodology published in December
2010. Other methodologies used include Loss Given Default for
Speculative-Grade Non-Financial Companies in the U.S., Canada and
EMEA, published in June 2009.

Incorporated in Greece, Frigoglass has a widespread global
presence, with a focus on countries in both Western and Eastern
Europe (accounting for 16% and 27% of the group's revenues,
respectively), Africa and the Middle East (37% of revenues) and
Asia and Oceania (17%). The group produces beverage refrigerators
(or iced-cold merchandiser) for global players in the beverage
industry, with key customers including Coca-Cola Company
bottlers, major brewers, Pepsi and dairy companies. Truad
Verwaltungs A.G. owns approximately 45% of Frigoglass and is a
long-term investor in the group. Truad Verwaltungs A.G. is a
trust representing the interests of the Leventis family and no
member has a majority vote.

FRIGOGLASS SAIC: S&P Assigns 'BB-' Corp. Rating; Outlook Stable
Standard & Poor's Ratings Services said that it assigned its 'BB-
' long-term corporate credit rating to Greece-based ice cold
merchandiser (beverage cooler) manufacturer Frigoglass S.A.I.C.
The outlook is stable.

At the same time, S&P assigned its issue rating of 'BB-' to the
EUR250 million proposed senior unsecured notes to be issued by
Frigoglass Finance B.V., a 100% subsidiary of Frigoglass.

The ratings on Frigoglass reflect our assessment of the group's
"fair" business risk profile and "aggressive" financial risk
profile.  Frigoglass is a leading manufacturer and distributor of
ice-cold merchandisers and glass containers, with sales in over
150 countries across the globe.  The company's main customers are
multinational beverage manufacturers.

S&P's assessment of Frigoglass' business risk profile as "fair"
reflects its presence in the mature and cyclical refrigeration
appliances industry, with high sensitivity to raw material price
changes.  (Raw materials represent approximately 60% of operating
costs).  S&P views the group's exposure to Europe (40% of total
sales in 2012) as a constraint on growth, given the uncertain
economic outlook and weak consumer demand prospects in the near

S&P views Frigoglass' financial risk profile as "aggressive."  In
terms of financial policy, S&P understands that the group will
continue to pursue a strategy of modest expansion in emerging
markets, combined with stable dividend payments.  S&P forecasts
low, but positive free cash flows in 2013, under its assumption
of weak growth prospects in mature European markets and stable
raw material prices.  Under S&P's base-case operating scenario,
debt to EBITDA should decline to about 4.3x, thanks to some cost-
efficiency improvements that should boost EBITDA.  In addition,
S&P forecasts that Standard & Poor's-adjusted funds from
operations (FFO) to debt should reach 14%-15%.  S&P anticipates
that the group's expansion strategy requires investments to
support growth, leading, in S&P's view, to gradually rising
capital expenditure.

In S&P's view, Frigoglass' strong customer relationships with
international beverage companies and its large geographical
diversification in high-growth regions like Africa and Asia
should offset weak growth prospects and consumer demand in
western Europe.

Over the next 12 months, S&P anticipates that Frigoglass'
adjusted FFO to debt should reach 14%-15% and adjusted debt to
EBITDA 4.0x-5.0x.  S&P considers these levels commensurate with
an "aggressive" financial risk profile and the current rating.

S&P could lower the rating if interest coverage by EBITDA falls
to less than 2.5x or the ratio of debt to EBITDA exceeds 5x or
more on a sustained basis.  S&P thinks this could occur if sales
in emerging markets drop and cost efficiencies are lower than it
forecasts in Europe, impairing gross margins.  S&P would also
view as a weakness any large swings in working capital, which
would lead to negative free operating cash flow in 2013.

S&P could raise the rating if debt leverage decreases
significantly, stemming from stable earnings and lower
utilization of the group's revolving credit facility.  Rating
upside for Frigoglass is in S&P's view contingent on the group
demonstrating "adequate" liquidity and debt to EBITDA of less
than 3x on a sustained basis.


INDEPENDENT NEWS: Seeks 20 Further Voluntary Redundancies
Laura Slattery at The Irish Times reports that Independent News
and Media is seeking 20 further voluntary redundancies from its
print editorial staff in Talbot Street in Dublin, but intends to
hire an additional seven employees to develop its web operations.

According to the Irish Times, the management of the company also
confirmed to officers from the National Union of Journalists on
Tuesday its intention to appoint an editor-in-chief who will have
oversight of the Irish Independent, the Sunday Independent and
the Evening Herald.

INM management, represented by Declan Carlyle and Michael
Denieffe, denied that it was the company's intention to merge the
newsdesks of the three titles, telling NUJ officials that they
will remain separate entities, but with some pooling of
production resources between the Irish Independent and the
Herald, the Irish Times relates.

The editor-in-chief, once appointed, will have responsibility for
all three titles and their websites, as well as tablet and
smartphone apps in development, the Irish Times discloses.

Meanwhile, senior executives at INM will this week meet with
banks to discuss its pension scheme, which is set to be
restructured, the Irish Times notes.

Some 10 people have left Talbot Street over the last few months,
leaving the company with a target of 19-20 new voluntary
redundancies, which are expected to come mostly from the print
production staff, the Irish Times recounts.

According to the Irish Times, the company told union officials
that they envisaged having to turn down some of the applications
for redundancy and that the process is expected to be finalized
by mid-June.

The redundancy payment terms will be three weeks' pay plus the
statutory two weeks' pay for each year of service, capped at two
years' salary, the Irish Times says.

                          Debt Write-Off

As reported by the Troubled Company Reporter-Europe on April 29,
2013, The Financial Times related that a consortium of banks
agreed to write off EUR138 million of debt owed by Independent
News & Media in a financial restructuring that would give the
lenders a sizeable stake in the struggling Irish media group.

                     Pension Scheme Overhaul

INM is selling its South African operation and proposing a
radical overhaul of its defined benefit pension scheme as part of
the arrangement, which includes plans for a EUR40 million rights
issue before the end of the year, the FT disclosed.  According to
the FT, Vincent Crowley, INM's chief executive, said the
restructuring would put the group on a secure financial footing
with a sustainable debt level and an ability to implement a
restructuring of its business.  INM management has been locked in
talks with its eight lenders for months aimed at reducing its
EUR422 million net debt, which was amassed during a decade long
acquisition spree, the FT related.  The company plans to use
EUR167 million raised from the recent sale of its South African
operation to repay some debt as the first part in a three-stage
restructuring process, the FT said.  It aims to agree a deal with
trustees of the company's defined benefit pension to reduce a
EUR162 million deficit in the scheme, the FT noted.  INM's
lenders would then write off EUR138 million of debt in return for
an equity stake in the company, which is expected to be between
11% and 16% following a rights issue planned before
the end of the year, the FT disclosed.

                 About Independent News & Media

Headquartered in Dublin, Ireland, Independent News & Media PLC
(ISE:IPD) -- is engaged in printing and
publishing of metropolitan, national, provincial and regional
newspapers in Australia, India, Ireland, New Zealand, South
Africa and the United Kingdom.  It also has radio operations in
Australia and New Zealand, and outdoor advertising operations in
Australia, New Zealand, South-East Asia and across Africa.  The
Company also has online operations across each of its principal
markets.  The Company has three business segments: printing,
publishing, online and distribution of newspapers and magazines
and commercial printing; radio, and outdoor advertising.  INM
publishes over 200 newspaper and magazine titles, delivering a
combined weekly circulation of over 32 million copies with a
weekly audience of over 100 million consumers.  In March 2008, it
acquired The Sligo Champion.  During the year ended December 31,
2007, the Company acquired the remaining 50% interest in
Toowoomba Newspapers Pty Ltd.


KAZAKHSTAN MORTGAGE: Fitch Assigns 'B' ST Foreign Currency Rating
Fitch Ratings has assigned Kazakhstan Mortgage Company's (KMC)
upcoming KZT10 billion domestic bond issue with five-year
maturity (series 12) and KZT10 billion domestic bond issue with
seven-year maturity (series 13), expected Long-term local
currency ratings of 'BBB-(EXP)'.

The final ratings are contingent upon the receipt of final
documents conforming to information already received.

Key Rating Drivers

The bonds represent senior and unsecured obligations of KMC. The
company has a Long-term foreign currency rating of 'BB+' and a
Long-term local currency rating of 'BBB-'. The Short-term foreign
currency rating is 'B'. The Long-term ratings have Stable

KMC's ratings reflect the company's ownership by the Kazakh
government, its strategic importance in the area of social
housing and Fitch's expectations of government support in the
form of a moderate capital injection in KMC budgeted by the
national government for 2013-2015. Fitch used its public-sector
entities rating criteria and applies a top-down approach in its
analysis of KMC, with a three-notch difference between its rating
and that of its sponsor (the Kazakh government).

The agency expects that as part of an approved state program
'Affordable housing 2020', KMC will receive about KZT75 billion
of capital injections from the Kazakhstan government over 2013-
2015. The company expects to receive KZT25bn of this in Q213 and

KMC acts as the government's agent in the area of affordable
housing provision and plays a crucial role in implementing
government social housing programs for low and middle income

The series 12 bond issue has an 8% fixed annual coupon and five-
year maturity. The series 13 bond issue has an 8.5% fixed annual
coupon and seven-year maturity. The principal repayment of both
issues will be made in a bullet payment.

The proceeds from the new bonds will be used for expansion of the
operations and the repayment of maturing debt.

Rating Sensitivities

The issues' rating would be sensitive to any movement in KMC's
Long-term local currency rating.


FAR-EAST CAPITAL: Fitch Rates $800MM Unsecured Notes 'B+'
Fitch Ratings has assigned Far-East Capital Limited S.A.'s
US$500 million 8% notes due 2018 and US$300 million 8.75% notes
due 2020 a final senior unsecured rating of 'B+' with a Recovery
Rating of 'RR4'. The notes are guaranteed by the majority of the
operating subsidiaries of the Far-East Shipping Company PLC
(FESCO or the company; 'B+'/Stable).

The US$500 million 8% senior secured notes due 2018 and the
USD300m 8.75% notes due 2020, have been assigned a senior
unsecured rating in line with FESCO's Long-term foreign currency
Issuer Default Rating (IDR) despite security provided as part of
the terms of the note agreements. This is due to the agency's
assessment of possible limitations realising collateral granted
for the benefit of the noteholders. Fitch's view of recovery upon
default is reflected in the 'RR4' Recovery Rating.

FESCO's ratings reflect its position as one of the leading
transportation and logistics companies in Russia with a growing
focus on its port operations in the Russian Far East and niche
market positions in rail. However, despite some diversification,
FESCO is likely to remain subject to volume and pricing
volatility, and in a sector of increased market consolidation,
its rail business potentially faces greater competition from its
larger rail transportation peers. Despite forecast improvement,
credit metrics are also considered weak with FFO net adjusted
leverage expected to be in excess of 3.0x and FFO fixed charge
cover of around 2.5x in the short term.

Key Rating Drivers

- Port Key to Business Profile

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

- Vladivostok a Gateway to Asia

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

- Intermodal and Niche Rail Operations

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

- GDP to Drive Growth

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

- Cyclicality Remains a Risk

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

- Diversified but Commodity Exposure

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

- Moderate Customer Diversification

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

- Rail Market Consolidation a Threat

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

- Potential Competition to Vladivostok Port

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

- Credit Metrics Major Rating Constraint

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

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

- Senior Secured Notes Rated as Unsecured

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

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

Security comprises an expected US$560 million of hard asset
security including railcars, buildings and containers (exact
constituents of the hard asset security package to be defined
within 180 days of bond issue date) as well as share pledges over
various holdings in the group including the company's main
operating subsidiaries. Fitch highlights that debt issued at
entities that do not act as guarantors are structurally senior to
the notes. Structurally senior debt is expected to total USD69m
but has been taken into consideration in Fitch's recovery


- Adequate Liquidity

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

- Covenant Headroom under OpCo Loan

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

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

Rating Sensitivities

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

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

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

- A deterioration in FFO net adjusted leverage to around 4.0x
  and FFO fixed charge cover consistently below 2.0x given
  lower than expected growth and/or efficiency-savings in the
  port division and/or material debt-funded acquisitions or
- Signs of increased competition or greater volatility of
  earnings in the port and/or rail business.

FESCO's ratings are:

Long-term foreign currency IDR of 'B+'/Stable

Long-term local currency IDR of 'B+'/Stable

National Long-Term Rating of 'A(rus)'/Stable

Foreign currency senior unsecured rating of 'B+'

Local currency senior unsecured rating of 'B+'


NIELSEN HOLDINGS: Moody's Affirms 'Ba3' CFR; Outlook Positive
Moody's Investors Service changed Nielsen Holdings N.V.'s rating
outlook to positive from stable following the company's
announcement that it signed a definitive agreement to sell its
Expositions trade show business to Onex Corporation for US$950

Nielsen plans to utilize the net proceeds to mitigate about 70%
of the borrowing needs related to its pending US$1.3 billion
Arbitron Inc. acquisition. The rating outlook change to positive
reflects that de-leveraging resulting from the Expositions
business sale, projected earnings growth and additional debt
repayment have the potential to reduce Nielsen's debt-to-EBITDA
leverage (approximately 4.7x LTM 3/31/13 incorporating Moody's
standard adjustments and pro forma for the Arbitron acquisition
and Expositions sale) to a level approaching 4x by the end of
2014. This is a leverage range Moody's previously indicated could
position the company for an upgrade. Moody's also affirmed
Nielsen's Ba3 Corporate Family Rating and assigned a SGL-3
speculative-grade liquidity rating.

Nielsen's trade show business has a high margin and growth
prospects in a recovering economy, but is vulnerable to shifts in
exhibitor spending that made the business much more cyclical than
Nielsen's remaining operations. Moody's believes Arbitron is a
better strategic fit for Nielsen with cost and revenue
opportunities with the company's Watch segment. The incremental
earnings and strategic opportunities from Arbitron, and the
capability to help fund and limit the net increase in debt-to-
EBITDA leverage on the Arbitron acquisition to roughly 0.1x more
than offset the modest loss of earnings (approximately 3% of
revenue and 6% of EBITDA, prior to corporate overhead for LTM
3/31/13) from the Expositions sale.


Issuer: Nielsen Holdings N.V.

Corporate Family Rating, Affirmed Ba3

Probability of Default Rating, Affirmed Ba3-PD

Issuer: Nielsen Finance LLC

Senior Secured Bank Credit Facility (Revolver) due Apr 1, 2016,
Affirmed Ba2, LGD3 - 31%

Senior Secured Bank Credit Facility (Class D Term Loan) due Feb
2, 2017, Affirmed Ba2, LGD3 - 31%

Senior Secured Bank Credit Facility (Class E Term Loan) due May
1, 2016, Affirmed Ba2, LGD3 - 31%

Senior Secured Bank Credit Facility (Class E Euro Term Loan) due
May 1, 2016, Affirmed Ba2, LGD3 - 31%

Senior Unsecured Regular Bond/Debenture due Feb 1, 2014, Affirmed
B2, LGD5 - 85%

Senior Unsecured Regular Bond/Debenture due Oct 15, 2018,
Affirmed B2, LGD5 - 85%

Senior Unsecured Regular Bond/Debenture due Oct 1, 2020, Affirmed
B2, LGD5 - 85%


Issuer: Nielsen Holdings N.V.

Speculative Grade Liquidity Rating, Assigned SGL-3

Outlook Actions:

Issuer: Nielsen Holdings N.V.

Outlook, Changed To Positive From Stable

Issuer: Nielsen Finance LLC

Outlook, Changed To Positive From Stable

Ratings Rationale:

Nielsen's Ba3 CFR reflects Moody's view that the company
maintains strong international business positions in the
measurement and analysis of consumer purchasing behavior and
media and marketing information that is protected by high entry
barriers. Revenue is generated from long-standing contractual
relationships with consumer product companies, media and
advertisers, and benefits from the company's status as a source
of independent benchmark information. The effect of cyclical
spending shifts by clients is dampened by the importance of the
information and analysis Nielsen provides, and revenue tends to
hold up well in periods of economic stress. Increasing
competition and changes in consumer buying habits and
advertising/marketing delivery channels due to technology
advancements are a risk with the pace of change likely to
accelerate. However, Moody's believes Nielsen is well-positioned
to broaden the coverage of its product and service offerings to
encompass new media channels.

Moody's expects Nielsen can manage costs and build on its track
record to deliver continued solid revenue performance and steady
profit growth despite a challenging operating environment in its
"Buy" division. The exit strategy of the consortium of private
equity investors (holding approximately 52% of the shares and
five of the 11 board seats) that led the 2006 leveraged-buyout as
well as the proclivity of such investors to utilize debt and cash
flow to fund shareholder distributions creates event risk. To
that end, Nielsen's initiation of a US$0.16 per share quarterly
dividend in 2013's first quarter (roughly 33% payout of CFO less
capex) is aggressive and will consume cash that could otherwise
be used to reduce debt or for acquisitions. However, Nielsen's
goal of achieving an investment-grade credit profile suggests the
company will manage shareholder distributions including the
dividend in a manner that allows for continued leverage
reduction. Moody's believes Nielsen's cash flow generation
provides capacity to make steady de-leveraging progress and
projects the company will reduce debt-to-EBITDA leverage to a low
4x range by the end of 2014.

Nielsen's SGL-3 speculative-grade liquidity rating reflects the
company's adequate liquidity position to fund the remaining
portion of the Arbitron acquisition not covered by net proceeds
from the Expositions business sale. The company's existing cash
(US$233 million as of 3/31/13), US$300-US$350 million of free
cash flow (after dividends) projected by Moody's, US$567 million
of unused capacity (net of drawdowns and letters of credit) on
the US$635 million revolver expiring April 2016, and the US$925
million expected net proceeds from the Expositions sale provide
modest coverage of the US$1.3 billion Arbitron acquisition,
approximately US$90 million of required term loan amortization
over the next 12 months, and the US$214.5 million February 2014
note maturity, factoring in cash flow seasonality.

Nielsen has financing commitments in place to cover the Arbitron
purchase price. Because the commitments are subject to customary
closing conditions, such financing is not factored into the SGL
analysis. However, Moody's expects to upgrade the liquidity
rating to SGL-2 from SGL-3 once permanent Arbitron financing is
put in place or the commitment is funded. The commitment is
available on a senior unsecured basis and pari passu with the
company's existing senior unsecured debt.

The positive rating outlook reflects Moody's expectation that
Nielsen will deliver operating results broadly in line with its
2013 guidance (4-5% revenue growth and 40-60 basis points EBITDA
margin improvement) and that shareholder distributions and
acquisitions are managed such that the company remains on a
deleveraging trajectory. Moody's assumes in the rating outlook
that the U.S. and global economies continue to expand modestly.

Downward rating pressure could occur if debt-to-EBITDA leverage
were to exceed 5.0x or free cash flow generation weakens through
deterioration in operating performance, significant acquisitions,
or shareholder distributions. The ratings could be downgraded or
the outlook changed to stable if Nielsen adopts more aggressive
financial policies including a move away from its intention to
continue de-leveraging and stated goal of achieving an
investment-grade credit profile. A deterioration of liquidity
could also create downward rating pressure.

An upgrade would require steady and growing earnings performance
paired with de-leveraging such that debt-to-EBITDA is moving
towards 4.0x and free cash flow generation is meaningful on a
sustained basis. Moody's would need to be comfortable that
Nielsen has the willingness and capacity to manage to these
tighter credit metrics after incorporating potential future
transactions such as the eventual exit of its private equity
holders. Nielsen would also need to maintain a good liquidity
position including an expectation by Moody's that significant
maturities from 2016-2018 can be managed within free cash flow
generation and likely refinancing actions.

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

Nielsen, headquartered in Diemen, The Netherlands and New York,
NY, is a global provider of consumer information and measurement
services that operates in approximately 100 countries. Nielsen's
Buy segment (61% of FY 2012 revenue) consists of two operating
units: (i) `Information', which includes retail measurement and
consumer panel services; and (ii) `Insights', which provides
analytical services for clients. The Watch segment (36% of
revenue) provides viewership data and analytics across
television, online and mobile devices for the media and
advertising industries. The company announced the sale of its
Expositions segment (3% of revenue; an operator of largely US-
based trade show, event and conference activities) for US$950
million in May 2013. Revenue for the 12 months ended March 2013
was approximately US$5.9 billion excluding Expositions and
including Arbitron.

SNS REAAL: S&P Keeps 'C' Ratings on 2 Subordinated Debt Issues
Standard & Poor's Rating Services raised to 'A-' from 'BBB' its
insurer financial strength and counterparty credit ratings on the
insurance operating companies of the SNS REAAL group--SRLEV N.V.
and REAAL Schadeverzekeringen N.V. (collectively known as SNS
REAAL Insurance operations or SRIO).  S&P also raised to 'BBB+'
from 'BBB-' its counterparty credit rating on the group's
insurance holding company, REAAL Verzekeringen N.V.  At the same
time, S&P removed these ratings from CreditWatch with positive
implications, where they had been placed on Feb. 5, 2013.  The
outlook is negative.

In addition, S&P maintained the issue credit ratings on the 30-
year and perpetual subordinated debt issues issued by SRLEV N.V.
on SRLEV's two subdebt issues at 'C' and 'CC', respectively.  The
latter remains on CreditWatch negative.

The upgrade reflects the inherent strengths of the insurance
operations, which have been largely undimmed by the travails of
its company and sister bank.  S&P resolved the CreditWatch
placement because it considers that the near-term strategic
position of SRIO is now settled and S&P is able to fully
recognize the group's strengths.  The negative outlook reflects
S&P's view that the remaining risk factors are likely to play out
over a longer timescale.  Thus, the ongoing uncertainty around
SRIO is best expressed in the form of an outlook.  S&P do not
expect to see any material change to the ownership or makeup of
the SNS REAAL group for the next 12-18 months.  Should this
change, S&P may reconsider the ratings and outlook.

S&P first placed the ratings on SRIO on CreditWatch developing in
July 2012, when the group announced a strategic review that could
have seen the insurance operations broken up or sold off.  In the
immediate aftermath of the nationalization in February 2013, S&P
changed the CreditWatch implications to positive to reflect its
view that the separation of SRIO from SNS Bank could strengthen
SRIO's creditworthiness.

While a range of strategic options remain under consideration,
S&P's base-case scenario reflects the expectation that SRIO will
remain intact, associated with SNS Bank under the current group
structure and owned by the Dutch state for at least the next 18
months and probably beyond.  Should alternative scenarios emerge,
S&P may reconsider the ratings.  In the longer term, SRIO could
be detached from SNS Bank and returned to the private sector, but
S&P do not expect this to happen in the next 12-18 months.

S&P assess SRIO on a stand-alone basis, having in March 2013
decoupled its ratings from those on SNS Bank, which previously
constrained it.  S&P do not impute any support to the ratings
based on SRIO's governmental ownership because the relationship
is likely to be relatively short.

S&P regards SRIO's competitive position as strong.  S&P considers
that there is potential for reputational damage arising from the
nationalization.  However, S&P considers that the group's open
architecture and multibrand strategy will limit reputational
damage.  The European Commission may also impose operational and
pricing restrictions on SRIO, as a state-owned insurer.  Based on
precedents within the Dutch market, S&P expects the impact of the
Commission's restrictions to be significant in the near term.
Operating performance has held up well through the group's
travails in recent years and S&P continues to regard it as

S&P continues to regard SRIO's capitalization as strong.  Capital
adequacy, as measured using Standard & Poor's capital model is
extremely strong; however, S&P do not expect the group to
maintain this high level of capitalization in the medium or long
term. Conversely, following the deferral of the coupons on
SRLEV's subdebt, S&P regards financial flexibility as marginal.

S&P does not expect the delayed 2012 financial statements to show
a material impairment to SRIO's capital base.  S&P has made a
cautious estimate of 2013 performance, forecasting lower non-life
premium and a post-tax profit of EUR150 million.  S&P expects,
however, that SRIO will return to growth and stronger
profitability thereafter.

As S&P stated on March 29, 2013, SRLEV's 30-year and perpetual
subordinated issues will be rated 'C' and 'CC', respectively,
while they are required by the European Commission to defer their
coupon payments.  These ratings are unchanged by the rating
action on their issuer.

The negative outlook reflects S&P's view that despite its
inherent strengths, SRIO may find it difficult to maintain its
performance over the next 12-24 months.

The insurance group's franchise may be impaired by the
nationalization, and the European Commission may impose
restrictions on the state-owned insurer's ability to compete on
price within the Dutch market.  It is possible that the
Commission may also impose wider restrictions.

The group restructuring plan has yet to be submitted; the outcome
will not be known until toward the end of this year at the
earliest.  Therefore, its implications cannot be predicted.
Separating SRIO from SNS Bank carries inherent execution risk,
which could be enhanced if continuing problems within the bank
demand group management's focus.  Should any of these factors
materially impair the group's performance, S&P could take a
negative rating action.

Capitalization is expected to remain very strong according to
S&P's model throughout the forecast period.  Should significant
capitalization be upstreamed out of SRIO, this too could trigger
a negative rating action.

S&P could revise the outlook to stable if it considers that
SRIO's competitive position has not been impaired by the above
named factors and if S&P gains comfort over the development and
execution of the group's strategy for SRIO.


EMPRESA PRODUCTORA: Moody's Assigns 'Ba3' Corp. Family Rating
Moody's Investors Service assigned a Ba3 Corporate Family Rating,
and a Ba3-PD Probability of Default Rating to Portucel -- Empresa
Productora de Pasta e Papel, S.A. (Portucel).

Concurrently, Moody's assigned a provisional (P)Ba3 (LGD4, 50%)
rating to the proposed EUR250 million senior unsecured notes due
2020 to be issued by Portucel. The outlook on all ratings is
stable. This is the first time that Moody's has rated Portucel.

The assignment of a definitive Bond Rating is subject to the
successful closing of the refinancing and placement of the EUR250
million senior unsecured notes. Portucel will use the net
proceeds from the debt issuance to replenish existing cash and
equivalents that will be used to repay a EUR200 million bond loan
maturing on May 9, 2013 and to pay its annual dividend, which has
been proposed in an amount of EUR115 million. It should be noted
that this proposal still has to be approved at the May 21 annual
general meeting.

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

Ratings Rationale:

The assigned Ba3 CFR balances Portucel's solid business profile,
healthy capital structure and strong free cash generation ability
on a standalone basis with significant debt sitting at its
majority shareholder Semapa, and the historical and likely future
significant dividends which may be used to service Semapa's debt.
Semapa is a listed investment holding company with its 81%
shareholding in Portucel (excl. treasury shares) being its
largest and most important asset. Semapa is highly indebted and
heavily reliant on cash upstreamed by Portucel via dividends or
other means to cover holding costs and service its debt. In its
analytical consideration of Portucel's financial strength,
Moody's has therefore included about EUR900 million of net debt
owed by Semapa, reflected in a Corporate Family Rating that is
below Portucel's stand-alone credit profile.

On this basis, Moody's calculate a pro forma its adjusted
leverage of around 4.5x Debt/EBITDA as of March 2013 (including
debt at Semapa level), which is fairly high for a Ba3 rating.
Moody's has also considered that funding needs at Semapa will
increase due to higher interest costs following the acquisition
of minorities in its other holding, Portuguese cement producer
Secil in 2012. This may, in Moody's opinion, lead Portucel to
increase dividend payments to levels that are in excess of it
free cash generation ability, and result in rising leverage at
Portucel. At the same time, Moody's has positively factored into
the rating extensive ring-fencing provision included in the draft
documentation, most importantly, a cap to dividend payments
linked to the leverage of Portucel, which, however, still allows
for the payment of sizeable dividends if leverage at Portucel
remains below 3.0x.

More fundamentally, the rating is supported by (i) Portucel's
well-invested, cost efficient and fully-integrated asset base;
(ii) its full integration into pulp and energy with good access
to domestic wood supporting (iii) a long-standing track record of
stable and comparatively high profitability with adjusted EBITDA
margins consistently in the mid to high 20% and low volatility,
also when compared to peers. Moody's considers uncoated fine
paper to be the most attractive standard paper grade in terms of
long-term demand development. While demand is cyclical, Moody's
assumes that the structural demand pressure is less severe
compared to publication paper grades.

On a more negative note, the rating is constrained by (i) the
inherent volatility of the industry with paper demand having
proven to be highly cyclical and closely linked to overall
macroeconomic conditions as well as the overall declining paper
markets in Europe, (ii) the fairly small scale when compared to
peers in the industry as indicated by sales of EUR 1.5 billion in
the last twelve months ending March 2013 as well as limited
geographic diversification; and (iii) the highly focused product
portfolio with uncoated fine paper production generating about
80% of group sales.

The rating also considers that, despite point in time favorable
profitability levels, these are likely to decline over the coming
quarters, considering Moody's assumption of continued demand
decline amid the weak macroeconomic environment in Europe that is
likely to persist in the short to medium term. In addition,
oversupply in a fairly fragmented market, coupled with a
weakening of pulp prices as expected by Moody's, and which is a
key input into fine paper, could lead to pressure on Portucel's
product pricing. Moody's also noted the event risk related to any
production problems given the limited number of mills within
Portugal. While Portucel's exposure to Portugal is limited with
about 16% of sales generated in the country, Moody's still
considers this as a risk factor as the group's entire production
base is located in the country, which bears the risk of contagion
from a weak sovereign risk profile. Channels of contagion might
include further contracting economic activity, possible adverse
changes to the tax regime and tariff cuts for renewable energy
production as well as liquidity constraints and higher financing

The stable outlook reflects Moody's expectation that Portucel
will maintain solid credit protection measures for its rating as
indicated by Debt/EBITDA (as defined by Moody's) remaining below
3 times (1.9x per December 2012) excluding the debt sitting at
Semapa. The stable outlook also takes into account the likelihood
of worsening leverage metrics in the next two to three years
should Semapa look to de-lever by increasing debt at Portucel
(with corresponding high dividend pay outs). It also expects
Portucel to be able to proactively refinance debt maturities,
considering its fairly short debt maturity profile.

Following the proposed refinancing, Moody's views Portucel's
short term liquidity as adequate, considering the sizeable cash
position pro forma for the refinancing. Other internal sources of
cash pertain to operating cash generation. In addition, Moody's
notes that Portucel has two EUR50 million unused Commercial Paper
programs and a EUR20.5 million undrawn credit facility, but at
relatively short tenor, at its disposal as of December 2012. Cash
uses largely pertain to capex and dividend payments as well as
seasonal working capital swings. Following the refinancing, there
are no major maturities before 2015 when bond loans of around
EUR180 million and commercial papers of around EUR125 million
come due. Moody's understands that Portucel's financing
arrangements contain various sets of financial covenants and that
the group currently is expected to retain ample headroom.

The (P)Ba3 rating assigned to the proposed EUR250 million senior
unsecured notes is in line with the group's CFR, considering that
Portucel's debt arrangements senior unsecured and will rank pari
passu with the proposed bond.

A higher rating would require Portucel to reduce leverage in
terms of Moody's adjusted Debt/EBITDA below 2 times (based on
Portucel standalone). In addition, Moody's would expect Portucel
to retain its track record of resilient EBITDA margins in the mid
to high 20% as well as a healthy liquidity profile, including
sufficient headroom under financial covenants. However, as long
as Semapa's financial profile is weak and debt servicing is
reliant on Portucel's cash generation ability, a higher rating is

Negative pressure would build should Portucel not be able to
retain current levels of profitability and leverage, with
Debt/EBITDA increasing to above 3 times on a Moody's adjusted
basis (based on Portucel standalone) if at the same time,
Semapa's debt is not materially reduced. Evidence of Semapa
having difficulties in refinancing its debt or should Portucel
start to upstream cash to its shareholders by measures other than
ordinary dividend payments, this could also put pressure on the

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

Portucel, based in Lisbon (Portugal), is a leading producer of
office paper, market pulp and energy with revenues generated in
the last twelve months ending March 2013 of EUR1.5 billion and a
reported EBITDA of EUR380 million (25% margin). The group employs
about 2,290 of staff at two integrated paper mills and a pulp
mill in Portugal. Portucel is listed on the Lisbon stock exchange
and its market capitalization as of April 2013 amounted to EUR
2.1 billion. Majority shareholder Semapa is holding 81% of shares
(excluding treasury shares).

PORTUCEL SA: S&P Gives 'BB' CCR & Rates EUR250MM Notes 'BB'
Standard & Poor's Ratings Services said that it had assigned its
'BB' long-term and its 'B' short-term corporate credit ratings to
Portugal-based paper and pulp group Portucel S.A.  The outlook is

At the same time, S&P assigned its 'BB' issue rating to
Portucel's proposed EUR250 million senior unsecured notes due
2020.  The recovery rating on these notes is '3', indicating
S&P's expectation of meaningful (50%-70%) recovery for
noteholders in the event of a payment default.

The ratings on Portucel reflect Standard & Poor's view of the
company's "fair" business risk profile and its "significant"
financial risk profile, as S&P's criteria define these terms.
Portucel is majority owned by Semapa Group (not rated), which has
a weaker financial risk profile than Portucel, in S&P's view.
S&P considers Portucel to be a core entity within Semapa, as it
contributed more than 75% of the group's consolidated EBITDA in
2012.  Consequently, in line with S&P's parent-subsidiary rating
criteria, the ratings on Portucel are capped by S&P's assessment
of Semapa's credit quality.

At their current level, although S&P could apply a rating
differential of up to five notches between the long-term ratings
on Portucel and Portugal, according to S&P's criteria, the
ratings on Portucel are not constrained by the sovereign ratings
on Portugal (BB/Stable/B).  That is because S&P has assessed
Portucel as having a "low" exposure to domestic country risks
according to S&P's criteria for rating an entity in the European
Economic and Monetary Union (Eurozone) above the sovereign.  This
is due to the fact that the group derives only 17% of its sales
from Portugal.

The "fair" business risk profile is based on Portucel's exposure
to the highly competitive European forest products markets and
the company's relatively small size and scope, which limits the
business risk profile in S&P's view.

Portucel's "significant" financial risk profile is constrained
because it is owned by a weaker parent.

The stable outlook reflects S&P's expectation that Portucel will
benefit from continued strong operational performance at its
mills in Portugal.  S&P expects that the group will maintain an
EBITDA margin of at least 20% over the coming years, even if
eurozone economic conditions worsen.

S&P could lower the ratings if Portucel's operating performance
deteriorated to such an extent that S&P believed the EBITDA
margin would fall significantly below 20%, thus impairing the
performance of the whole Semapa group.  This could be the result
of an economic decline, coupled with input cost inflation or an
operational issue at one of the group's mills in Portugal.  S&P
could also lower the ratings if it saw financial risk increasing
at Semapa, Portucel's main shareholder.  This could for example
be the result of additional debt-funded investments,
extraordinary dividends, or share buybacks that led to debt to
EBITDA of more than to 4x.

S&P considers ratings upside as currently remote, due to
Portucel's limited diversification and the currently uncertain
economic conditions in Europe and Portugal, as well as Semapa's
weaker credit profile.  However, an unexpected improvement in
Semapa's financial profile, coupled with macroeconomic
improvements and subsequently stronger demand for Portucel's main
products, could lead S&P to reassess its ratings on Portucel.

UCI 17: Fitch Lowers Rating on Class A2 RMBS Tranche to 'B'
Fitch Ratings has affirmed 15 and downgraded one tranche of FTA
UCI 14-17, a series of non-conforming Spanish RMBS originated and
serviced by Union de Creditos Immobiliarios, a joint venture
between Banco Santander, and BNP Paribas.

Key Rating Drivers

- Temporary loan agreements

Since 2009 Union de Creditos Immobiliarios has been offering
temporary reductions in instalments to troubled borrowers. The
scheme provides a grace period, during which the borrower pays a
reduced instalment on their mortgage. The grace period is set so
that the reduced instalments clear the full outstanding arrears
amount during this timeframe and at the end of which the borrower
is reclassified as performing. The balance that would have
otherwise been due during the grace period is capitalized and
payable at a later stage within the same mortgage term.

Over the past 12 months, the proportion of borrowers that have
been subject to a temporary reduction in loan instalments has
increased in line with the worsening macro-economic environment
in Spain. As of December 2012, the balance of loans to borrowers
that had entered grace periods as a percentage of the current
collateral balance rose to between 42% (UCI 14) and 48% (UCI 17)
compared to 37% (UCI 14) and 44% (UCI 17) 12 months ago. Between
21% (UCI 14) and 24.5% (UCI 17) are currently still under such an

Although this scheme is intended to encourage borrowers to make
some form of payment on their mortgages and avoid foreclosure on
loans, Fitch is concerned that a further increase in the
proportion of borrowers utilizing the scheme will have a negative
impact on excess spread levels as well as lead to future payment
shocks for borrowers once their temporary reduced instalment
period expires.

The data provided by Union de Creditos Immobiliarios suggests
that loans which have been subject to a temporary reduction in
instalments have a higher probability of default. In its
analysis, the agency increased the roll-through to default rate
for borrowers that have been subject to reduced instalments but
who are now performing.

In addition, the agency has concerns that the reduced instalments
scheme may delay the recognition of defaults and allows the
excess spread to flow through the structure, as opposed to
utilizing it towards provisioning for loans that would have
otherwise defaulted at an earlier date.

The Negative Outlook assigned to ratings above 'CCCsf' across the
series reflects these concerns.

- Stable Delinquency Rates

Fitch believes that the temporary reduction in instalments has
had a positive effect on asset performance within the
transactions and has been the main driver behind the decline in
arrears from their peak levels in 2009. In addition, the portion
of loans in arrears by more than three months (3m+ arrears) in
all four deals has only marginally increased despite the on-going
difficult economic environment, compared to other Fitch-rated
Spanish RMBS transactions.

The two more seasoned transactions, UCI 14 and 15, continue to
outperform the later vintages with the level of loans in 3m+
arrears as a percentage of collateral balance stable at 8.8% and
8.6% respectively as of March 2013. In addition, both
transactions have replenished their reserve funds to their target
amounts due to the strong excess spread generated by the
structures. The affirmation of the tranches in these transactions
is a direct result of this steady performance.

UCI 16 and 17 have also seen a stabilization of arrears levels
over the past 12 months; however the overall level is higher
compared to the two more seasoned deals at 10.1% and 10.2%
respectively as of March 2013.

The relatively weaker performance, in combination with
insufficient excess spread generated by the structures has meant
that both deals have exhausted their respective reserve funds and
built up principal deficiency ledgers (PDL). As of March 2013 the
PDLs stood at EUR24.7 million (UCI 16) and EUR30 million (UCI 17)
however this is now reducing as asset performance stabilizes.

- Weak Excess Spread in UCI 17

UCI 17 has on average generated excess spread levels that have
been 80-100bp lower than that of the earlier transactions. This
is due to the combination of this transaction being the only deal
to feature a basis swap that is currently out of the money and it
being one of the worst performers within the series with the
higher levels of reduced instalments. Given the poorer
performance and the lower excess spread levels, the credit
enhancement available to the notes is not sufficient to withstand
the 'BB-sf' stresses. As a result the agency has downgraded the
senior notes to 'Bsf' from 'BB-sf'.


- A change in legislation that has a material effect on mortgage
  borrower behavior would cause the agency to revise its
  assumptions and could have a negative effect on the ratings.

- Should information on temporary reduction in loan instalments
  indicate higher roll-through to default rates; the agency will
  revise its treatment of such loans which could have a negative
  impact on the ratings.

The rating actions are:

Fondo de Titulizacion de Activos UCI 14:

Class A (ISIN ES0338341003) affirmed at 'BBsf'; Outlook Negative
Class B (ISIN ES0338341011) affirmed at 'Bsf'; Outlook Negative
Class C (ISIN ES0338341029) affirmed at 'CCCsf'; Recovery
Estimate of 0%

Fondo de Titulizacion de Activos UCI 15:

Class A (ISIN ES0380957003) affirmed at 'BBsf'; Outlook Negative
Class B (ISIN ES0380957011) affirmed at 'Bsf'; Outlook Negative
Class C (ISIN ES0380957029) affirmed at 'CCsf'; Recovery
  Estimate of 0%
Class D (ISIN ES0380957037) affirmed at 'CCsf'; Recovery
  Estimate of 0%

Fondo de Titulizacion de Activos UCI 16:

Class A2 (ISIN ES0338186010) affirmed at 'BB-sf'; Outlook
Class B (ISIN ES0338186028) affirmed at 'CCCsf'; Recovery
  Estimate of 0%
Class C (ISIN ES0338186036) affirmed at 'CCsf'; Recovery
  Estimate of 0%
Class D (ISIN ES0338186044) affirmed at 'CCsf'; Recovery
  Estimate of 0%
Class E (ISIN ES0338186051) affirmed at 'Csf'; Recovery Estimate
  of 0%

Fondo de Titulizacion de Activos UCI 17:

Class A2 (ISIN ES0337985016) downgraded to 'Bsf' from 'BB-sf';
  Outlook Negative
Class B (ISIN ES0337985024) affirmed at 'CCsf'; Recovery
  Estimate of 0%
Class C (ISIN ES0337985032) affirmed at 'CCsf'; Recovery
  Estimate of 0%
Class D (ISIN ES0337985040) affirmed at 'Csf'; Recovery Estimate
  of 0%

Portuguese sovereign-rated 'BB+'/Negative, PT's high domestic
concentration leads to a 'BBB' rating.


* ROMANIA: Unveils Plan to Overhaul Corporate Insolvency Law
------------------------------------------------------------ reports that with more than 23,000 companies, in
Romania, having gone under in 2012, the government unveiled plans
in April to overhaul its insolvency law in a bid to streamline
procedures and track down firms that are going insolvent in a bid
to avoid paying their creditors. relates that Romanian PM Victor Ponta said in April
that the law needs to be changed in order to support companies
that operate in good faith.

According to, Mr. Ponta, as cited by Agerpres
newswire, said "We need to change the insolvency law to help
those that genuinely enter insolvency for a brief period to avoid
bankruptcy, and to punish with bankruptcy those that fraudulently
enter insolvency in order not to pay their taxes." notes that government officials said a law draft has
been completed and should be up for debate this quarter.

Last year, some 23,665 insolvency procedures were started, 10% up
on the previous year, according to Coface, the credit insurer, recounts.  Retail and construction were the most
distressed sectors, discloses.

Ana Maria Placintescu, partner at law firm Musat & Asociatii,
commented that more companies have filed for insolvency recently,
but an "extremely low" number went on to undergo successful
reorganization, relates.  Most proceedings end with
bankruptcy and the liquidation of the debtor firm,

According to, Dorin Petcu, head of restructuring and
insolvency services at TZA Insolventa SPRL, the insolvency arm of
law firm Tuca Zbarcea & Asociatii, says the failure to pay taxes
is a consequence once insolvency procedures are initiated, but
this relates strictly to the taxes owed upon the initiation of
proceedings. relates that Mr. Petcu told BR "Reorganization under
the shield of the insolvency law does not mean that current taxes
owed after the initiation of insolvency proceedings are no longer
payable."  He added that the state budget takes precedence by law
over other creditors in certain areas, notes.

According to, Stan Tirnoveanu, senior partner at law
firm Zamfirescu Racoti & Partners (ZRP), said that certain legal
provisions allow the fraudulent use of the insolvency law.

Mr. Tirnoveanu explained there is no regulation on the bankruptcy
of a group of companies, and the coordination of procedures
started against a debtor of the group members is almost
impossible, relates.

Peter Dorner, senior partner at Casa de Insolventa Transilvania
(CITR), brought up the lack of legislation setting out the
oversight of the insolvency administrator, when the
administration rights of the company under this procedure have
not been lifted, discloses. notes that Mr. Dorner told BR "We think that a better
regulation of the duties of the insolvency administrator in this
stage of the procedure would be beneficial."

Mr. Petcu, of TZA Insolventa, pointed out that from the
creditor's perspective, the most important elements are the term
of the procedure and the method of collection of the receivables
during this term, recounts.  He commented that the
debtor supervision stage could last up to several years, due to
the many challenges to the preliminary table of creditors or in
other stages of the procedure, relates.  Without a
final table of creditors, the reorganization plan cannot be
submitted, and the bankruptcy proceedings cannot be started, states. relates that Ms. Placintescu told BR "We believe that
a revised draft of the law should firstly focus on encouraging
the reorganization of companies going through insolvency

Mr. Tirnoveanu of ZRP notes that more firms are seeking to begin
proceedings when the debtor is in an advanced stage of
insolvency, when it has maturing obligations, including fiscal
ones, according to  He added that the late start to
the procedure is seen in the slim proportion of successful
reorganizations, discloses.


* TAMBOV REGION: Fitch Lifts LT FC/LC Currency Ratings to 'BB+'
Fitch Ratings has upgraded the Russian Region of Tambov's Long-
term foreign and local currency ratings to 'BB+' from 'BB', with
Stable Outlooks and affirmed its Short-term foreign currency
rating at 'B'. The agency has also upgraded the region's National
Long-term rating to 'AA(rus)' from 'AA-(rus)' with Stable

Key Rating Drivers

The upgrades reflect the region's improved budgetary performance,
surplus before debt variation for the second consequence year and
moderate debt burden, which will decline according to Fitch's
expectation. The ratings also factor in the modest size of the
local economy and budget, which leads to a high dependence on
transfers from federation.

Fitch expects the region to maintain sound budgetary performance
with the operating margin averaging 14% in the medium term. In
2012, the region improved its budgetary performance with the
operating margin rising to 16.9% (2011: 14%). The region recorded
a surplus before debt variation for the second consecutive year.
In 2012 it accounted for 1.7% of total revenue and occurred
because of control of the operating expenditure growth.

Fitch does not expect the region's debt will materially change in
the medium term. Direct risk accounted for RUB6 billion (22% of
current revenue) in 2012 and Fitch forecasts that absolute debt
will stabilize at this level in 2013-2015. This means a gradual
decline in the relative debt burden to 17% of current revenue by
2015. In 2012, the administration improved the debt maturity
profile and contracted a three-year revolving credit line with
Sberbank of Russia (BBB/Stable/F3/bbb). However, the region is
not intending to stop using short-term one-year bank loans in the
medium term.

At the beginning of 2013, the region had accumulated significant
cash reserves of RUB5 billion, up from RUB3 billion a year
earlier. This led to very low net overall risk of 9.3% of current
revenue down from 14.6 in the previous year. Fitch expects the
region will use part of this accumulated cash for deficit
financing and partial financing of maturing debt in 2013.
However, the cash reserve remains strong and will exceed RUB4bn
by end-2013.

In Fitch's view, the region's contingent liabilities do not
expose it to any material risk. Contingent liabilities from
issued guarantees and public sector debt declined to RUB1.5
billion in 2012 from a peak of RUB6.2 billion in 2008. The region
issues guarantees to fund its investment program through public
companies. Indirect risk is well monitored by the region and has
maturity till 2017.

Tambov's economy is historically weaker than that of the average
Russian region. Despite recent fast development, the region's
wealth indicators remain well below the national median, which
supresses the region's tax base. This has led to the region's
high dependence on the federal transfers. However, federal
transfers act as a stabilizing factor during recessions, making
the region less vulnerable to negative external shocks.

Rating Sensitivities

Direct risk declining to about 15%-17% of current revenue,
coupled with maintenance of sustainable strong operating
performance in line with 2012 actuals would lead to an upgrade.

Deterioration of the budgetary performance with operating margin
close to 10%, resulting in weakening of the debt coverage ratio
coupled with increasing refinancing risk would lead to a


BANKIA SA: Qatar Eyes Acquisition of IAG Stake
Andrew Parker, Miles Johnson and Camilla Hall at The Financial
Times report that Qatar has sounded out International Airlines
Group about becoming the largest shareholder in the parent of
British Airways and Iberia by buying a stake held by Bankia, the
troubled Spanish bank.

According to the FT, two people familiar with the situation said
Qatar had made an informal approach to IAG to ask whether the
airline group would welcome the Gulf country shareholder.

Bankia's 12% stake in IAG is worth GBP627 million based on the
airline group's share price on May 7, the FT discloses.

One of the people said the initial approach happened last year,
adding it was not clear which Qatari entity could be used to buy
Bankia's stake in IAG, the FT notes.

A third person familiar with the matter said IAG informed Bankia
about three months ago that Qatar had expressed an interest in
buying the Spanish bank's stake in the airline group, the FT

However, Akbar Al Baker, chief executive of state-controlled
Qatar Airways, said the fast-growing Gulf airline was "not
interested" in purchasing the Bankia stake, the FT relates.
According to the FT, he also said he was "not aware" that any
other Qatari entity had an interest in the Bankia stake.

"Any other entity will not get into any kind of discussion in an
airline, or an airline stake, without asking Qatar Airways," the
FT quotes Mr. Al Baker as saying.

Bankia was nationalized last year after being overburdened by bad
property loans, and this year it appointed Rothschild to
supervise the disposal of non-core assets, including its IAG
stake, the FT recounts.

The Spanish bank declined to comment on IAG and Qatar, saying it
would seek the best possible price for its non-core assets, the
FT notes.

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

BBVA EMPRESAS 1: Moody's Confirms 'B3' Rating on EUR78.3MM Certs
Moody's Investors Service confirmed the rating of the classes of
notes issued by BBVA Empresas 1, FTA and by BBVA Empresas 2, FTA.
The two transactions are Spanish asset-backed securities
transaction backed small and medium-sized enterprises loans (SME
ABS) originated by Banco Bilbao Vizcaya Argentina S.A (BBVA,
Baa3, P-3).

The substantial level of credit enhancements available to protect
the notes against sovereign and counterparty risk, as well as a
resilient credit performance of the collateral pool in both
transactions drove this action.

The confirmation of the ratings concludes the review for
downgrade initiated by Moody's on both transactions on 02 July

Ratings Rationale:

These actions primarily reflect the availability of sufficient
credit enhancement in the transactions to mitigate the sovereign
risk and increased counterparty risk. The credit enhancement
built up to substantial levels in both transaction as a result of
their deleveraging and a resilient credit performance of their
collateral pools. In assessing the benefit of the increased
credit enhancement levels, Moody's also took into account the
high borrower concentration existing in these deals.

The credit enhancement levels in BBVA Empresas 1 at the last
payment date on 22 January 2013 were 78.8%, 53.2% and 13.1% for
the Class A, B and C notes, respectively. The cumulative defaults
in the collateral pool add up to 2.08% of the pool initial
balance as of end of March 2013. However, the five largest
obligors in the pool account for 24.3% of the current pool
balance. In addition, the reserve fund, which represents the only
source of credit enhancement for this class of notes, only covers
the top 2 borrowers. As a result, the credit enhancement benefit
to the Class C notes is substantially offset by the low
granularity of the pool.

The credit enhancement levels in BBVA Empresas 2 at the last
payment date on 28 February 2013 were 106.8%, 88.2% and 54.6% for
the Class A, B and C notes, respectively. The cumulative default
recorded in the collateral pool add up to 2.12% of the pool
initial balance as of end of March 2013 and the five largest
obligors in the collateral pool account for 12.0% of the current
pool balance. The substantial reserve fund of EUR 453.3 million
at the last payment date is currently held by BBVA acting as
account bank for the transaction.

The introduction of new adjustments to Moody's modeling
assumptions to account for the effect of the deterioration in
European sovereign creditworthiness and the revision of key
collateral assumptions and increased exposure to counterparties
of weakening credit quality had no material negative effect on
the ratings of the notes issued by BBVA Empresas 1 and BBVA
Empresas 2.

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. See "Structured
Finance Transactions: Assessing the Impact of Sovereign Risk" for
a more detailed explanation of the additional parameters.

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

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

Moody's Revises Key Collateral Assumptions

Moody's maintained its default and recovery rate assumptions for
the transaction, which it updated on December 21, 2012. According
to the updated methodology, Moody's increased the CoV, which is a
measure of volatility.

For BBVA Empresas 1, Moody's current default assumption is 12.3%
of the current portfolio and the assumption for the fixed
recovery rate is 40%. Moody's has increased the CoV to 68.34%
from 47.5%, which, combined with the revised key collateral
assumptions, corresponded to a portfolio credit enhancement of
21.5%. In addition, Moody's incorporated stress scenarios in its
analysis to cover for the fact that the pool in Empresas 1 is
highly concentrated and that this concentration level is not
embedded in its CoV and portfolio credit enhancement levels,
which assume a granular portfolio.

For BBVA Empresas 2, Moody's current default assumption is 15.0%
of the current portfolio and the assumption for the fixed
recovery rate is 40%. Moody's has increased the CoV to 67.54%
from 50.5%, which, combined with the revised key collateral
assumptions, corresponded to a portfolio credit enhancement of

Moody's Has Considered Exposure to Counterparty Risk

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

In BBVA Empresas 1, BBVA acts as servicer and transfers
collections on the second business day following receipt to the
issuers' account held by BBVA but benefiting from a guaranty up
to EUR33million by Societe Generale (A2/P-1), Sucursal en Espana
(SGSE). Any amounts exceeding EUR33 million will be transferred
to an additional account open in the name of the issuer by SGSE.
The reserve fund currently amounts to 13.1% of the notes balance.
Moody's has incorporated into its analysis the potential default
of BBVA as servicer, which could expose the transaction to a
limited commingling loss of approximately one month of

In BBVA Empresas 2, BBVA acts as servicer and transfers
collections on the second business day following receipt to the
issuers' account held by BBVA. The reserve fund currently amounts
to 54.6% of the notes balance. Moody's has incorporated into its
analysis the potential default of BBVA, which would expose the
transaction to a commingling loss over the collection period, i.e
a loss of approximately three month of collections, as well as
the loss of the reserve fund.

Both transactions are also exposed to BBVA acting as swap
counterparty. As part of its analysis, Moody's took into account
the counterparty risk related to these swaps which had no
negative impact on the notes rating at this time.

Other Developments May Negatively Affect the Notes

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

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

Moody's describes additional factors that may affect the ratings
in its Request for Comment, "Approach to Assessing Linkage to
Swap Counterparties in Structured Finance Cashflow Transactions:
Request for Comment", July 2, 2012.

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

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

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

The methodologies used in these ratings were "Moody's Approach to
Rating CDOs of SMEs in Europe", published in February 2007 and
"The Temporary Use of Cash in Structured Finance Transactions:
Eligible Investment and Bank Guidelines", published in March

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

List of Affected Ratings


EUR200M A2 Certificate, Confirmed at A3 (sf); previously on Jul
2, 2012 Downgraded to A3 (sf) and Placed Under Review for
Possible Downgrade

EUR50.1M B Certificate, Confirmed at A3 (sf); previously on Jul
2, 2012 Downgraded to A3 (sf) and Placed Under Review for
Possible Downgrade

EUR78.3M C Certificate, Confirmed at B3 (sf); previously on Jul
2, 2012 B3 (sf) Placed Under Review for Possible Downgrade

EUR121.6M A3 Certificate, Confirmed at A3 (sf); previously on Jul
2, 2012 Downgraded to A3 (sf) and Placed Under Review for
Possible Downgrade


EUR2416.8M A Certificate, Confirmed at A3 (sf); previously on Jul
2, 2012 Downgraded to A3 (sf) and Placed Under Review for
Possible Downgrade

EUR153.9M B Certificate, Confirmed at A3 (sf); previously on Jul
2, 2012 A3 (sf) Placed Under Review for Possible Downgrade

EUR279.3M C Certificate, Confirmed at Baa3 (sf); previously on
Jul 2, 2012 Baa3 (sf) Placed Under Review for Possible Downgrade

PESCANOVA SA: Creditor Banks Set to Meet with Deloitte
FIS reports that seven creditor banks of Pescanova -- La Caixa,
Banco Sabadell, Banco Popular, Bankia, NCG, Royal Bank of
Scotland and Deutsche Bank -- was set to meet with Deloitte, the
reorganization proceeding administrator of the company, last
Monday in order to resume negotiations to refinance its debt.

According to FIS, financial sources consulted by EFE agency said
45 days have been missed since the organization committee was
created because "the previous management did not offer a map of
the debt at any time, so the committee could not make progress."

The current debt of the Spanish company amounts to about EUR3,000
million, FIS discloses.  And according to the auditing firm KPMG,
in charge of Pescanova's forensic audit, whose aim is to detect
likely financial and economic fraud, the immediate liquidity
needs of the company amount to EUR60 million, FIS notes.

At the meeting, Deloitte was expected to submit the inventory and
the list of creditors of the company and, a month later, the 2012
annual accounts belonging to Pescanova, FIS discloses.

On behalf of the reorganization receivers, Santiago Hurtado and
Senen Touza was set to participate in the meeting, FIS states.

With respect to the bank debt, about EUR1,900 million of the
total correspond to its parent firm and the remaining amount to
subsidiaries, the Spanish ones (about EUR400 million) and the
foreign ones (about EUR700 million), FIS says, citing the agency
Europa Press.  To this amount, another EUR375 million is added
related to bond issues, according to FIS.

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

Pescanova filed for insolvency on April 15 on at least EUR1.5
billion (US$2 billion) of debt run up to fuel expansion before
economic crisis hit its earnings.  The Pontevedra mercantile
court in northwestern Galicia accepted Pescanova's insolvency
petition on April 25.  The court ordered the board of directors
to step down and proposed Deloitte as the firm's administrator.

PYMES SANTANDER 5: Moody's Assigns '(P)Ca' Rating on Cl. C Notes
Moody's Investors Service assigned the following provisional
ratings to the debt to be issued by Fondo de Titulizacion de
Activos PYMES Santander 5 (the Fondo):

EUR1368M A Notes, Assigned (P)A3 (sf)

EUR342M B Notes, Assigned (P)B1 (sf)

EUR342M C Notes, Assigned (P)Ca (sf)

Fondo de Titulizacion de Activos PYMES Santander 5 is a
securitization of standard loans and credit lines granted by
Banco Santander (Baa2/P-2; Negative Outlook) to small and medium-
sized enterprises (SMEs) and self-employed individuals in Spain.

At closing, the Fondo -- a newly formed limited-liability entity
incorporated under the laws of Spain -- will issue three series
of rated notes. Santander will act as servicer of the loans and
credit lines for the Fondo, while Santander de Titulizacion
S.G.F.T., S.A. will be the management company (Gestora) of the

Ratings Rationale:

As of April 2013, the audited provisional asset pool of
underlying assets was composed of a portfolio of 23,219 contracts
granted to SMEs and self-employed individuals located in Spain.
In terms of outstanding amounts, around 71.6% corresponds to
standard loans and 28.4% to credit lines. The assets were
originated mainly between 2010 and 2012 and have a weighted
average seasoning of 1.4 years and a weighted average remaining
term of 3.9 years. Around 10.8% of the portfolio is secured by
first-lien mortgage guarantees. Geographically, the pool is
concentrated mostly in Catalonia (20.3%), Madrid (19%) and
Andalusia (13.1%). At closing, any loans in arrears
will be excluded from the final pool.

In Moody's view, the strong credit positive features of this deal
include, among others: (i) a relatively short weighted average
life of 2.3 years; (ii) a granular pool (the effective number of
obligors is near 1,000); and (iii) a geographically well-
diversified portfolio. However, the transaction has several
challenging features: (i) a strong linkage to Santander related
to its originator, servicer, accounts holder and liquidity line
provider roles; (ii) a relatively high exposure to the
construction and building industry sector (25.5% according to
Moody's industry classification); (iii) no interest rate
hedge mechanism in place; and (iv) a complex mechanism that
allows the Fondo to compensate (daily) the increase on the
disposed amount of certain credit lines with the decrease of the
disposed amount from other lines, and/or the amortization of the
standard loans. These characteristics were reflected in Moody's
analysis and provisional ratings, where several simulations
tested the available credit enhancement and 20% reserve fund to
cover potential shortfalls in interest or principal envisioned in
the transaction structure.

The ratings are primarily based on the credit quality of the
portfolio, its diversity, the structural features of the
transaction and its legal integrity.

In its quantitative assessment, Moody's assumed a mean default
rate of 16.46%, with a coefficient of variation of 39.85% and a
recovery rate of 37.5%. Moody's also tested other set of
assumptions under its Parameter Sensitivities analysis. For
instance, if the assumed default probability of 16.46% used in
determining the initial rating was changed to 17.46% and the
recovery rate of 37.5% was changed to 35%, the model-indicated
rating for Serie A, Serie B and Serie C of A3(sf),
B1(sf) and Ca(sf) would be Baa1(sf), B1(sf) and Ca(sf)

The global V-Score for this transaction is Medium/High, which is
in line with the score assigned for the Spanish SME sector and
representative of the volatility and uncertainty in the Spanish
SME sector. V-Scores are a relative assessment of the quality of
available credit information and of the degree of dependence on
various assumptions used in determining the rating. The main
source of uncertainty in the analysis relate to the Transaction
Complexity. This element has been assigned a Medium/High V-Score,
as opposed to Medium assignment for the sector V-Score. For more
information, the V-Score has been assigned accordingly to the
report "V-Scores and Parameter Sensitivities in the EMEA Small-
to-Medium Enterprise ABS Sector" published in June 2009.

The methodologies used in this rating were "Moody's Approach to
Rating CDOs of SMEs in Europe" published in February 2007,
"Refining the ABS SME Approach: Moody's Probability of Default
assumptions in the rating analysis of granular Small and Mid-
sized Enterprise portfolios in EMEA", published in March 2009 and
"Moody's Approach to Rating Granular SME Transactions in Europe,
Middle East and Africa", published in June 2007.

In rating this transaction, Moody's used ABSROM to model the cash
flows and determine the loss for each tranche. The cash flow
model evaluates all default scenarios that are then weighted
considering the probabilities of the Inverse Normal distribution
assumed for the portfolio default rate. On the recovery side
Moody's assumes a stochastic (normal) recovery distribution which
is correlated to the default distribution. In each default
scenario, the corresponding loss for each class of notes is
calculated given the incoming cash flows from the assets and the
outgoing payments to third parties and noteholders. Therefore,
the expected loss or EL for each tranche is the sum product of
(i) the probability of occurrence of each default scenario; and
(ii) the loss derived from the cash flow model in each default
scenario for each tranche.

Therefore, Moody's analysis encompasses the assessment of stress

U N I T E D   K I N G D O M

BOTANIC INNS: In Administration; Buyer Sought
BBC News reports that Botanic Inns has gone into administration.

According to BBC, the chain of pubs, restaurants and hotels will
continue trading, while administrators KPMG seek a buyer for all
or parts of the troubled business.

It appears the group has fallen victim to the economic downturn,
compounded by high rent levels on properties set during the boom
and a high level of company debt, BBC discloses.

Botanic Inns is Northern Ireland's biggest pub chain.  The
company employs 600 people in 16 outlets.

CEVA GROUP: Moody's Assigns 'Ca-PD/LD' Prob. of Default Rating
Moody's Investors Service changed CEVA Group plc's probability of
default rating to Ca-PD/LD. Concurrently, Moody's has placed
CEVA's corporate family rating of Caa3 and all other ratings
under review for upgrade.

Ratings Rationale:

The assignment of the /LD indicator to the PDR follows the
company's announcement that - following the non-payment of
interest due April 1, 2013 - it has completed exchange offers to
convert 11.5% junior priority lien notes due 2018, 12.75%
unsecured notes due 2020, 12% unsecured notes due 2014 and bridge
loan due 2018 into equity instruments. Moody's expects to remove
the "/LD" indicator after approximately three business days.

All ratings have been placed under review for upgrade to reflect
the fact that, following the debt equitization, CEVA's leverage
will fall materially. Instrument ratings will be based on Moody's
Loss Given Default methodology following the assignment of a
revised CFR. However, Moody's cautions that an upgrade of the CFR
may not necessarily lead to an upgrade of the existing instrument

CEVA Group plc'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 CEVA Group plc's core
industry and believes CEVA Group plc'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.

CEVA Group plc is the fourth-largest integrated logistics
provider in the world in terms of revenues (EUR7 billion as at
December 31, 2012 on a last-12-months (LTM) basis). As at
financial year-end 2012, CEVA had a presence in more than 160
countries worldwide, employing around 49,000 people and managing
approximately 9 million square meters of warehouse facilities.

CLAVIS 2007-01: S&P Lowers Ratings on Two Note Classes to 'B+'
Standard & Poor's Ratings Services lowered and removed from
CreditWatch negative its credit ratings on the class M1a, M1b,
M2a, and M2b notes in Clavis Securities PLC's series 2007-01.
At the same time, S&P has affirmed and removed from CreditWatch
negative its ratings on the class AZa, B1a, and B1b notes, and
has affirmed its ratings on the class A3a, A3b, and B2a notes.

Following S&P's May 30, 2012 downgrade of Danske Bank A/S (A-
/Positive/A-2), rating triggers under the guaranteed investment
contract (GIC) and liquidity facility documentation were breached
in the transaction.  The issuer has been unable to replace Danske
Bank to remedy these breaches.  Therefore, a standby liquidity
drawing was made and all funds held in the GIC account were
transferred to the transaction account.

S&P has been advised that funds held in the transaction account
earn a nominal interest rate.  Funds previously held in the GIC
account received a LIBOR-linked interest rate.  S&P has modeled
this change into its cash flow models by assuming funds held in
the transaction account earn no interest.  This change results in
an increasingly negative effect moving down the capital
structure, and particularly affects the mezzanine and
subordinated notes.  On Dec. 10, 2012, S&P placed its ratings on
the class AZa to B1b notes on CreditWatch negative, until it
conducted a review of the effect of this change on its ratings on
these classes of notes.

The rating actions follow S&P's credit and cash flow analysis of
the transaction information that it has received.  S&P's analysis
considered the marked increase of possession loans that it has
recently observed in the pool.  S&P notes that this increase has
been due to a large number of receiver-of-rent loans being taken
into possession.

As of the December 2012 interest payment date (IPD),
repossessions accounted for 4.64% of the collateral, compared
with 1.79% as at the previous June 2012 IPD.  Repossessions fell
to 3.32% in March 2013.  S&P has incorporated the rising
repossessions into its analysis by assuming repossessed loans
have already defaulted and recoveries from these loans will be
received after foreclosure. The recovery levels vary at each
rating level and are based on S&P's calculated weighted-average
loss severity (WALS) assumptions.

S&P has observed an increase in the weighted-average loan-to-
value ratio since its March 2012 credit and cash flow review.
Over the same period, 90+ days delinquencies have fallen and
seasoning has increased.

The decreased arrears and increased seasoning have led to a lower
weighted-average foreclosure frequency (WAFF) compared with S&P's
March 2012 review.  Below are the WAFF and WALS that S&P has used
in its analysis.

Rating     WAFF    WALS
level       (%)     (%)

AAA       47.76   46.64
AA        39.27   42.44
A         32.60   34.52
BBB       26.39   29.87
BB        20.93   26.47
B         18.79   23.24

The application of S&P's 2012 counterparty criteria linked the
maximum achievable ratings in this transaction to its long-term
issuer credit rating (ICR) on Danske Bank.  As Danske Bank is no
longer a counterparty for this transaction, the maximum
achievable ratings are no longer linked to S&P's ICR on Danske
Bank.  The ratings are now capped at S&P's long-term ICR on The
Royal Bank of Scotland PLC (A/Stable/A-1), as currency swap
counterparty, plus one notch.  This results in a maximum
potential rating of 'A+ (sf)'.

S&P has affirmed its ratings on the class AZa, B1a, B1b, A3a, and
A3b notes because it believes the available credit enhancement
for these classes of notes is sufficient to offset the negative
effect of the transaction account earning no interest and the
results of S&P's repossessed loans modeling stresses.  At the
same time, S&P has removed from CreditWatch negative its ratings
on the class AZa, B1a, and B1b notes.

The impact of the transaction account earning no interest is
greater for the mezzanine notes.  S&P has therefore lowered and
removed from CreditWatch negative its ratings on the class M1a,
M1b, M2a, and M2b notes.

Although the effect is negative for the class B2a notes, this
class is not likely to default in the near future and is
supported by the fully funded reserve fund at 2.54% of the
current outstanding note balance.  S&P has therefore affirmed its
'B- (sf)' rating on the class B2a notes.

Clavis Securities' series 2007-01 is a U.K. residential mortgage-
backed securities (RMBS) transaction backed by nonconforming
residential mortgages originated by GMAC Residential Funding Co.


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                Rating
         To                    From

Clavis Securities PLC
EUR314.6 Million and GBP338.9 Million Mortgage-Backed
Floating-Rate Notes Series 2007-01

Ratings Lowered and Removed From CreditWatch Negative

M1a      BB+ (sf)              BBB- (sf)/Watch Neg
M1b      BB+ (sf)              BBB- (sf)/Watch Neg
M2a      B+ (sf)               BB- (sf)/Watch Neg
M2b      B+ (sf)               BB- (sf)/Watch Neg

Ratings Affirmed and Removed From CreditWatch Negative

AZa      BBB+ (sf)             BBB+ (sf)/Watch Neg
B1a      B (sf)                B (sf)/Watch Neg
B1b      B (sf)                B (sf)/Watch Neg

Ratings Affirmed

A3a      A (sf)
A3b      A (sf)
B2a      B- (sf)

STERLINGMAX I MBS: S&P Cuts Ratings on Two Note Classes to 'CC'
Standard & Poor's Ratings Services has lowered its credit ratings
on STERLINGMAX I MBS Ltd.'s class C and D notes.  At the same
time, S&P has placed on CreditWatch negative its 'CCC (sf)'
rating on the class A-2 notes, and has affirmed its 'D (sf)'
rating on the class B notes.

The rating actions follow the senior noteholders' decision to
accelerate the maturity of the notes.  Subsequently, on April 24,
2013, the trustee issued a notice of auction and invitation to
bid on the assets in STERLINGMAX I MBS' portfolio.  In accordance
with the transaction documentation, the trustee has appointed a
liquidation agent to liquidate the assets in the portfolio.

The noteholders of at least two-thirds of the class A-2 notes had
executed their right to accelerate the notes.  The proceeds from
the auction to liquidate the assets in the portfolio will be
distributed to the noteholders in accordance with the priority of
payments.  Depending on the proceeds amount from this auction,
the class A-2 noteholders could suffer substantial losses.  S&P
has therefore placed on CreditWatch negative its rating on the
class A-2 notes.

Under the liquidation scenario, the class C and D noteholders are
highly likely to experience losses.  Therefore, S&P has lowered
to 'CC (sf)' from 'CCC- (sf)' its ratings on the class C and D
notes, to reflect that they are highly vulnerable to nonpayment.

S&P has affirmed its 'D (sf)' rating on the class B notes
following an interest shortfall on Nov. 20, 2012.  Interest
shortfalls also occurred on Nov. 20, 2011, May 20, 2011 and
Nov. 20, 2010.

S&P will lower to 'D (sf)' its ratings on a rated class of notes
if the proceeds available to that class are less than the
liabilities outstanding plus accrued interest.

STERLINGMAX I MBS is a cash flow collateralized debt obligation
(CDO) comprising mostly U.K. residential and commercial mortgage-
backed securities (RMBS and CMBS), and commercial asset-backed
securities (ABS).


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:




GBP157 Million Secured Floating-Rate And Residual Notes

Class     Rating                 Rating
          To                     From

Ratings Lowered

C         CC (sf)                CCC- (sf)
D         CC (sf)                CCC- (sf)

Rating Placed On CreditWatch Negative

A-2       CCC (sf)/Watch Neg     CCC (sf)

Rating Affirmed

B         D (sf)

* UK: Uninsured Depositors & Bondholders May Face Losses
Bruno Waterfield at The Telegraph reports that uninsured
depositors and bondholders in eurozone banks could face imposed
losses following stress tests carried out before a "single-
supervisory mechanism" headed by the European Central Bank begins
work next June.

Jeroen Dijsselbloem, the chairman of eurozone finance ministers,
warned that that the ECB checks on the quality of banking assets
could lead to banks being shut down, highlighting the need for
eurozone agreement on bank resolution rules this summer, the
Telegraph relates.

According to the Telegraph, the prospect of eurozone banks facing
closure will alarm British expatriates who live and have
transferred their savings, proceeds from house sales and other
assets to eurozone bank accounts in countries such as France,
Spain and Italy.

"The first thing that the ECB will have to do when they take on
their supervisory task is to have an asset-quality review of the
main banks that will be under their supervision and I think very
soon after that all the other banks in Europe as well because
there is still the risk of contamination between banks,"
Mr. Dijsselbloem, as cited by the Telegraph, said.

"The outcome of that asset quality review we don't know yet, but
it might be worrying.  It might be worrying for some banks in
some countries.  We don't exactly know. What I do know is that
when we do have an outcome that is worrying, we need to have the
instruments to deal with the problems."

As well as setting up the new ECB "single-supervisory mechanism"
in June 2014, the eurozone is to agree common rules on "bank
resolution", setting out which uninsured depositors and
bondholders will lose money if financial institutions need to be
taken into receivership and restructured, the Telegraph notes.

To avoid the cost of banking bailouts falling on highly indebted
eurozone governments, banks that fail the ECB stress tests will
face having losses and writedowns imposed on their creditors, the
Telegraph says.

Wolfgang Schaeuble, the German finance minister, has lifted
Germany's opposition to a so-called banking union as long as it
remains within the current EU treaty, without a common European
deposit guarantee or resolution fund, the Telegraph relates.

According to the Telegraph, ahead of a meeting next week,
eurozone finance ministers remain divided on how to impose
writedowns on banks following controversy over how losses were
inflicted on depositors in the recent EU-IMF rescue of Cyprus.

The question of how to bail-in bank creditors is likely to avoid
writedowns on the value of deposits, over the guaranteed or
insured level of EUR100,000, so that "in many instances"
depositors will not face losses, the Telegraph says.

There are also divisions over using national "deposit guarantee
systems" (DGS), aimed at protecting depositors under EUR100,000,
to contribute to writedowns when unsecured senior creditors face
losses, the Telegraph notes.

The Irish EU presidency, which is overseeing negotiations until
the end of July, has expressed concern that resolution rules
might "unusable" unless DGS protection is not given protected
status from the costs of restructuring a failing bank, the
Telegraph relates.

* UK: Fitch Says Banks Reduce MMF Usage as Liquidity Buffers Peak
UK banks' use of funding from US prime money market funds (MMF)
has continued to decline in early 2013, consistent with their
ongoing efforts to reduce reliance on wholesale funding, Fitch
Ratings says. Overall, short-term wholesale funding has now most
likely reached minimum levels.

US MMF exposures to UK banks fell to 4.3% of assets under
management at end-March, a 16% decline over the last nine months
and a new low over our period of study (which dates back to end-
2006). However, we do not expect MMF flows to UK banks to dip
significantly below this level as the banks need to maintain some
access to this form of short-term funding as part of their
strategy to diversify funding sources.

The reliance of the two banks most affected by the crisis (RBS
and Lloyds) on wholesale debt markets has reduced due to their
deleveraging, liquidity accumulation and build-up of customer
deposits. Overreliance on short-term debt is no longer a negative
rating driver for these UK banks. Short-term wholesale funds,
including some US MMF flows, was covered 3.7x by the liquidity
portfolio at RBS and 3.8x at Lloyds at end-Q113.

The banks' liquidity portfolios are at, or approaching, peak
levels and we do not expect them to reduce significantly in the
short-to medium-term because loan demand is still muted in the
UK. Liquid assets could be used to buy back surplus (and more
expensive) wholesale funding. A reduction in liquidity is
unlikely to be a negative rating driver as their buffers remain
among the highest in Europe.

Since July, the Funding for Lending Scheme has provided an
additional funding source. While primary usage of this scheme has
not been as high as the government expected, a secondary impact
has been to reduce funding costs across the board. With less need
for liquidity and still muted loan growth, deposit rates fell to
their lowest levels since the crisis. The extension of the scheme
last month to January 2015 is likely to continue to support low
funding costs.

A detailed review of March MMF flows and shifts in exposure to
banks around the world can be found in the special report "U.S.
Money Fund Exposure and European Banks: Decline Amid Eurozone
Concerns," dated April 30, 2013, at


* Fitch: Euro Auto ABS Index Performance Displayed Stable Trends
Fitch Ratings says in its quarterly European Auto ABS Index
report that the performance of its indices primarily displayed
stable trends in Q113.

The Fitch 30+ Delinquency Index increased marginally to 1.8% from
1.6% during Q1 while the Fitch 60+ Delinquency Index and Fitch
Annualised Loss index remained stable at 0.9% and 0.5%,

Macroeconomic factors on average remained stable across the EU,
while trends varied across countries. New car sales and used car
prices continued to display decreasing trends in Q112 and
manufacturers remained under pressure as a result.

New auto ABS issuance in Q113 was significantly below the highs
of Q412. However, levels remained above those recorded in Q112
and the Q412 issuance volume was exceptionally high and not
representative of a typical quarterly issuance amount.

The report, entitled 'Auto ABS Index - Europe', is available on or by clicking on the link above.

* 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

                 * * * End of Transmission * * *