TCREUR_Public/130522.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

                           E U R O P E

            Wednesday, May 22, 2013, Vol. 14, No. 100



LAIKI BANK: Lawmakers Coerced Into Backing Rescue Package


NATIONAL BANK: Fitch Raises Ratings on Covered Bonds to 'B'


CHEVRON TRAINING: Exits Examinership; Up to 15 Jobs Saved
HARLEY MEDICAL: High Court Set to Wind Up Cosmetic Surgery Firm
WARNER CHILCOTT: Moody's Reviews 'B1' CFR for Upgrade


FAXTOR ABS 2003-1: S&P Affirms 'CCC-' Ratings on 2 Note Classes
STORM 2013-III: Fitch Assigns 'BB(EXP)' Ratings to 2 Note Classes
TENNET HOLDING: S&P Rates Proposed Perpetual Sub. Bonds 'BB+'


GETIN NOBLE: Fitch Affirms 'BB' Long-term Issuer Default Rating


* ROMANIA: Cazanciuc to Present Insolvency Draft Law in July


AVTOVAZ JSC: Fitch Affirms 'B-' Long-Term Issuer Default Ratings
MTS INTERNATIONAL: S&P Rates Loan Participation Notes 'BB'


AYT 7: Service Replacement No Impact on Moody's Ratings
CODERE SA: Earnings Down 21% in Q1; May Default on Loans by June
FTA CAIXA GALICIA I: Moody's Cuts Rating on Class C Notes to 'B3'
GAT FTGENCAT: Fitch Affirms 'C' Rating on Series E Notes
IM GRUPO: Fitch Affirms 'CC' Rating on EUR32.4MM Class E Notes

* SPAIN: Credit Cooperatives Remain Resilient But Recession Bites
* Moody's Notes Dip in Spanish RMBS Market Performance in March


SAAB AUTOMOBILE: Three Former Execs Arrested Over Fraud Charges


* Moody's Takes Rating Actions on 13 Turkish Financial Groups


SHORTLINE PLC: Fitch Rates US$500MM Loan Participation Notes 'B-'
UKRSOTSBANK: Fitch Rates Unsecured UAH-Denominated Bonds B+(EXP)
UKRZALIZNYTSIA: Fitch Affirms B Shortterm Foreign Currency Rating

U N I T E D   K I N G D O M

HEART OF MIDLOTHIAN: Awaits Update on Reportedly UBIG Collapse
PARAGON HOTEL: Namir El Buys Firm Out of Administration
SUPERGLASS: Wins Shareholder Backing for GBP12.9MM Survival Plan
TURNSTONE MIDCO: Moody's Assigns 'B2' CFR; Outlook Stable



LAIKI BANK: Lawmakers Coerced Into Backing Rescue Package
Elias Hazou at Cyprus Mail reports that European Party MP
Demetris Syllouris said on Monday lawmakers were coerced into
backing a rescue package for ailing Laiki Bank last May.

According to Cyprus Mail, Mr. Syllouris told a panel that is
looking into the circumstances leading to the economy's near-
collapse that "Parliament was forced to vote for the EUR1.8

In May 2012, Parliament overwhelmingly voted in favor of the
state underwriting the issue of EUR1.8 billion in new shares for
Laiki to help it recapitalize from its exposure to toxic Greek
debt, Cyprus Mail relates.

Mr. Syllouris, as cited by Cyprus Mail, said that a government
bill had been rushed through the House plenum, leaving
legislators little time to study it.

MPs were then told to pass the bill "as is" on the same day --
before the bank re-opened for business -- or else Laiki would go
under, taking the rest of the economy with it, Cyprus Mail

Mr. Syllouris said he and his colleagues were forced to go along,
even though they lacked the information to make an informed
decision, Cyprus Mail notes.

One crucial bit of information that was missing was the bank
prospectus for the share issue, Cyprus Mail says.  At the plenary
session, Mr. Syllouris, as cited by Cyprus Mail, said, he
proposed that Parliament postpone the vote until the prospectus
came out the following Monday.

"At the time I was personally in favor of the bank closing,"
Cyprus Mail quotes Mr. Syllouris as saying.

When in May 2012 the state underwrote EUR1.8 billion to float
stricken Laiki, the lender was already neck-deep in emergency
liquidity assistance (ELA) to the tune of EUR3.8 billion due to a
steady outflow of deposits since the summer of 2011, Cyprus Mail

In July 2012, Cyprus' sovereign debt was rated junk, meaning it
could not be held as collateral for underwriting the bank, and
it's understood that at that point Laiki was technically
insolvent, Cyprus Mail discloses.

Laiki was founded in 1901 as the Popular Savings Bank Limassol.


NATIONAL BANK: Fitch Raises Ratings on Covered Bonds to 'B'
Fitch Ratings has upgraded National Bank of Greece's (NBG, 'B-
'/Stable/'B'), Piraeus Bank's (Piraeus, 'B-'/Stable/'B'), Alpha
Bank's (Alpha, 'B-'/Stable/'B') and Eurobank Ergasias' (Eurobank,
'B-'/Stable/'B') Greek mortgage covered bonds and assigned a
Negative Outlook as follows:

Alpha covered bonds, EUR3.75bn: upgraded to 'B' from 'CCC+';
Outlook Negative

Eurobank covered bonds, EUR2.45bn: upgraded to 'B' from 'CCC+';
Outlook Negative

NBG covered bonds (Programme I), EUR0.846bn: upgraded to 'B' from
'B-'; Outlook Negative

NBG covered bonds (Programme II), EUR8.4bn: upgraded to 'B' from
'CCC+'; Outlook Negative

Piraeus covered bonds, EUR1.25bn: upgraded to 'B' from 'CCC+';
Outlook Negative

Key Rating Drivers

The rating action follows the upgrade of the Greek sovereign and
the respective issuers to 'B-' from 'CCC', reflecting Fitch's
view on the rebalancing of the Greek economy and the banks'
recapitalization; the ratings of Greek covered bond programs
remain capped at the Country Ceiling, which has been upgraded to
'B' from 'B-'.

The Negative Outlook on all Greek covered bonds programmes
reflects the deteriorating asset performance and the adverse
operating environment for Greek banks.

The rating of NBG programme I covered bonds is based on NBG's
Long-Term Issuer Default Rating (IDR) of 'B-', an unchanged
Discontinuity Cap (D-Cap) of 0 (full discontinuity risk) and the
asset percentage (AP) of 53% which Fitch takes into account in
its analysis, and corresponds to the figure published in NBG's
monthly investor report.

The rating of Alpha's, Eurobank's, NBG's Programme II and
Piraeus' covered bonds is based on the issuers' Long-Term IDR, an
unchanged D-Cap of 3 (moderate high discontinuity risk) and the
minimum level of over-collateralisation (OC) required by the
Greek covered bond law (5.26%, equivalent to 95% AP) that Fitch
relies upon.

The level of protection on all programmes allows at least 51%
recoveries on bonds assumed to default in a stress scenario,
justifying the one notch uplift of the covered bonds' rating
above the respective IDRs. In its stressed recovery analysis,
Fitch has used updated refinancing spread assumptions taking into
account the recent levelling off of Greek RMBS and government
debt spreads.

Rating Sensitivities

The ratings of all Greek covered bond programmes would be
vulnerable to a downgrade if the Country Ceiling for Greece was
revised downwards by one or more notches.

The ratings of Alpha, Eurobank, NBG Programme II and Piraeus
covered bonds would be vulnerable to a downgrade if the banks'
Long-Term IDR was downgraded by one or more notches. The rating
of NBG Programme I would be vulnerable to downgrade if NBG's
Long-Term IDR was downgraded to 'CCC' or below.


CHEVRON TRAINING: Exits Examinership; Up to 15 Jobs Saved
Irish Examiner reports that Chevron Training and Development Ltd.
has successfully exited examinership.

In September 2012, the company entered into examinership to
protect its employees' jobs and as a result of the approval
received from the High Court recently, up to 15 jobs will be
saved, Irish Examiner relates.

According to Irish Examiner, a statement said that Chevron
Training has pledged to restructure the company's cost base so
that it is "placed on a sustainable footing for the future".

Enniscorthy-based Chevron Training and Development Ltd. offers
accredited programs to more than 5,000 learners on a nationwide
basis each year.

HARLEY MEDICAL: High Court Set to Wind Up Cosmetic Surgery Firm
Irish Examiner reports that Harley Medical Group (Ireland), an
insolvent cosmetic surgery company being sued by 158 women over
faulty breast implants, looks set to be wound up by the
High Court.

According to the report, dozens of customers of the Harley
Medical have been trying to stop a liquidator from being
appointed over concerns it would adversely affect their claims.
However, the court has ruled that it has the jurisdiction to make
a winding up order.

"They are in an unhappy situation they have been supplied with
acknowledged faulty material," the report quotes solicitor Simon
McGarr as saying.  "They have health concerns, some of them have
suffered quite serious injuries, they have required surgery."

Mr. McGarr represents around 20 of the women who received PIP
implants made from industrial grade silicone.

Begbies Traynor on March 13 disclosed that investigators who
hunted the late Robert Maxwell's hidden fortune and who led the
search for the missing assets of collapsed claims management
company, The Accident Group, have been brought in to probe
cosmetic surgery business, Harley Medical Centre Ltd.

Paul Stanley, a partner at Begbies Traynor, will look into a
number of transactions -- including the payment of a dividend of
more than GBP1 million in 2010 -- at the company, which went into
administration in November 2012 following claims by thousands of
women fitted with faulty breast implants supplied by French firm,
Poly Implant Protheses (PIP).

WARNER CHILCOTT: Moody's Reviews 'B1' CFR for Upgrade
Moody's Investors Service placed the ratings of Warner Chilcott
Company, LLC under review for upgrade. This action follows the
announcement that Actavis will acquire Warner Chilcott plc for
$8.5 billion including the assumption of debt.

Ratings placed under review for upgrade:

Warner Chilcott Company, LLC:

  B1 Corporate Family Rating

  B1 - PD Probability of Default Rating 2

  Ba3 (LGD3, 34%) senior secured term loans and revolving credit

  B3 (LGD5, 87%) senior unsecured notes

Rating affirmed:

Warner Chilcott Company, LLC:

  SGL-1 Speculative Grade Liquidity Rating

Ratings Rationale:

Moody's rating review will focus on the benefits of Warner
Chilcott becoming part of a larger, more diversified company with
a stronger credit profile. The rating review will evaluate any
support mechanisms Actavis provides to the Warner Chilcott debt.
In the event that Actavis does not guarantee the debt, the
ratings of Warner Chilcott could be withdrawn due to insufficient
financial information.

Warner Chilcott's B1 Corporate Family Rating reflects the
company's modest scale, high product concentration, significant
exposure to patent expirations and generic challenges, and
management's shareholder-friendly policies. Several product
franchises face near term patent cliffs. The B1 rating is
supported by the company's strong profitability and cash flow, in
part due to good pricing flexibility, an efficient operating
structure, a low tax rate, and minimal capital expenditures.

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

Headquartered in Dublin, Ireland, Warner Chilcott plc is a
marketer and developer of branded specialty pharmaceutical
products focused primarily within the women's healthcare,
gastroenterology, urology and dermatology segments. The company
operates through various subsidiaries including Warner Chilcott
Corporation (U.S.) and Warner Chilcott Company, LLC (Puerto Rico)
and others, collectively referred to as "Warner Chilcott".
Revenues in 2012 were approximately $2.5 billion.


FAXTOR ABS 2003-1: S&P Affirms 'CCC-' Ratings on 2 Note Classes
Standard & Poor's Ratings Services affirmed  its credit ratings
on FAXTOR ABS 2003-1 B.V.'s class A-1 E, A-2 E, A-2 F, A-3 E, A-3
F, B E, and B F notes.

Since S&P's previous review of the transaction in June 2012, it
notes that the pool has experienced negative ratings migration.
The proportion of assets in the 'CCC' rated category have
increased to 9.5% from 2.8% of the total pool.


        Current     as of           OC as of
       notional  June 2012 Current June 2012
Class (mil.EUR) (mil.EUR)   OC (%)     (%)   Interest   Def.
A-1E      33.97     51.53       80      65   6mE+55bp     No
A-2E      23.00     23.00       48      38   6mE+70bp     No
A-2F       9.00      9.00       48      38     4.745%     No
A3-E       7.50      7.50       26      19   6mE+90bp     No
A3-F      15.00     15.00       26      19     4.945%     No
B E        5.51      5.50       11       7   6mE+250bp   Yes
B F        9.54      9.50       11       7     6.545%    Yes
C-1       11.20     10.36        0       0     8.000%    Yes
C-2        6.52      6.02        0       0     8.000%    Yes

OC - Overcollateralization = [aggregate performing assets
  notional + principal cash amount - tranche notional (including
  notional of all senior tranches)]/aggregate performing assets
Def. - Deferrable.
6mE - Six-month EURIBOR (Euro Interbank Offered Rate).
Bp - Basis points.

In order to cure the failure of the par coverage and interest
coverage tests, the issuer has used interest and principal
proceeds to amortize the class A-1E notes to 15% of their
original size.  As a result, the overcollateralization has
increased for all the rated notes.

S&P has affirmed its ratings on the class A-1 E, A-2 E, A-2 F, A-
3 E, A-3 F, B E, and B F notes because following its review of
the transaction's developments and its credit and cash flow
analysis, S&P considers that the credit enhancement available to
the rated notes is still commensurate with their current ratings.

FAXTOR ABS 2003-1 is a cash flow collateralized debt obligation
(CDO) of European structured finance assets managed by IMC Asset
Management Inc.  The transaction closed in May 2003 and has been
in its amortization period since May 2008.


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

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


Class       Rating

FAXTOR ABS 2003-1 B.V.
EUR308 Million Asset-Backed Fixed- And Floating-Rate Notes

Ratings Affirmed

A-1 E       A+ (sf)
A-2 E       BBB (sf)
A-2 F       BBB (sf)
A-3 E       B+ (sf)
A-3 F       B+ (sf)
B E         CCC- (sf)
B F         CCC- (sf)

STORM 2013-III: Fitch Assigns 'BB(EXP)' Ratings to 2 Note Classes
Fitch Ratings has assigned Storm 2013-III B.V. EUR1,170.3 notes
expected ratings, as follows:

EUR1,100m Class A floating-rate notes: 'AAAsf(EXP)'; Outlook

EUR26.9m Class B floating-rate notes: 'AA-sf(EXP)'; Outlook

EUR20.6m Class C floating-rate notes: 'BBB+sf(EXP)'; Outlook

EUR22.8m Class D floating-rate notes: 'BBsf(EXP); Outlook Stable

EUR11.8m Class E floating-rate notes: 'BBsf(EXP)'; Outlook Stable

Credit enhancement for the class A notes is 7% and is provided by
subordination (6%) and a non-amortizing reserve fund of 1% which
will be fully funded at closing.

Key Rating Drivers

Concentrated Counterparty Exposure:

This transaction relies strongly on the creditworthiness of
Rabobank, which fulfills a number of roles, including collection
account provider, issuer account provider, cash advance facility
provider and commingling guarantor. In addition, it acts as back-
up swap counterparty.

Robust Performance:

Both the STORM series as well as Obvion's loan book have shown
stable performance in terms of arrears and losses. The 90+ days
arrears of the previous Fitch-rated transactions have been mostly
lower than the Dutch Index throughout the life of the deals.

NHG Loans:

The portfolio comprises 30.0% of loans that benefit from the
national mortgage guarantee scheme (Nationale Hypotheek Garantie
or NHG). The ratings incorporate benefit given to the NHG feature
although there was no credit for foreclosure frequency due to
lack of data.

Standard Portfolio Characteristics:

This is a 49 month seasoned portfolio consisting of prime
residential mortgage loans with a weighted-average (WA) original
loan-to-market-value (OLTMV) of 88% and a WA debt-to-income ratio
(DTI) of 31%, both of which are typical for Fitch-rated Dutch
RMBS transactions.

Commingling Risk Mitigated:

The notification trigger is set below 'A'; however, Fitch did not
consider the risk of a loss of funds due to commingling or
disruption of payments in the cash flow analysis. This is because
Fitch considers this risk mitigated by means of a commingling
guarantee provided by Rabobank.


Material increases in the frequency of defaults and loss severity
on defaulted receivables could produce loss levels higher than
Fitch's expectations, which in turn may result in potential
rating actions on the notes. If the agency stressed its 'AAA'
assumptions by 30% for both weighted average foreclosure
frequency and recovery rate, this would possibly result in a
downgrade of the class A note's rating to 'A-sf(EXP)'.

TENNET HOLDING: S&P Rates Proposed Perpetual Sub. Bonds 'BB+'
Standard & Poor's Ratings Services said that it assigned its
'BB+' long-term issue rating to the proposed perpetual
subordinated bonds to be issued by Netherlands-based, fully
state-owned utility holding company TenneT Holding B.V. (A-
/Stable/A-2).  The completion and size of the issuance remain
subject to market conditions.  The company will market the
securities to German retail investors.

S&P understands that the proposed securities will be counted as
equity under International Financial Reporting Standards.  TenneT
plans to use the proceeds of the proposed securities to finance
the further expansion of the German grid.

S&P assess the proposed securities as having "minimal" equity
content, since they are subordinated but not deferrable until the
start of construction (SoC) of the power transmission line.
Following the SoC, S&P believes it could reassess the equity
content of the securities as "intermediate" for a period of 20
years, subject to S&P's assessment of management's financial

The 'BB+' rating on the new securities is two notches lower than
TenneT's stand-alone credit profile (SACP), which S&P assess at
'bbb'.  The difference reflects the application of S&P's notching
criteria, which call for:

   -- A one-notch deduction for subordination because the
      corporate credit rating (CCR) on TenneT is investment grade
      (that is, higher than 'BB+'); and

   -- A one-notch deduction for payment flexibility, reflecting
      the fact that the deferability of interest is optional
      following the SoC and that there are no preconditions for
      the instrument becoming deferrable.

S&P notches the securities from the SACP, rather than the CCR,
because S&P believes that governments will generally support the
hybrid instruments of government-related entities (GREs) only in
rare instances.  In addition, the "moderately high" degree of
potential extraordinary support from the Dutch state, which S&P
factors into its rating on TenneT, will likely not be available
to German retail bondholders, in S&P's view.

The issuance of the new securities does not affect S&P's view of
the "intermediate" equity content of TenneT's EUR500 million
existing hybrid securities.

Given S&P's view of the "minimal" equity content of the new
securities, S&P will treat them as debt for ratio calculation
purposes and all related dividend payments as a fixed charge, in
line with S&P's criteria on hybrid securities.


Although the proposed securities have no scheduled maturity, they
can be called at any time in the event of tax, accounting, or
rating methodology changes.  In addition, they can be redeemed
for cash by the issuer 10 years after the SoC and every interest
payment date thereafter.  If any of these events occur, the
company intends, but is not obliged, to replace the instrument.

In S&P's view, this statement of intent mitigates the risk that
TenneT will repurchase the notes on the open market.
Furthermore, S&P sees buyback as unlikely given its expectation
of continued capital requirements according to S&P's current
base-case credit scenario.

The securities will pay interest of 3% per annum, increasing to
5% at the SoC.  This step-up date is not associated with a call

The interest to be paid on the new securities will increase by
100 basis points 40 years after the SoC.  S&P considers this date
as the instrument's economic maturity because the cumulative 100
basis points is in S&P's view a material step-up, unmitigated by
any current commitment to replace the instrument.  Consequently,
in accordance with S&P's criteria, it will no longer recognize
the instrument as having any equity content once the time until
economic maturity is less than 20 years.


Following the SoC, TenneT's option to defer payment on the new
securities will be discretionary.  This means that TenneT may
elect not to pay accrued interest on an interest payment date
because it has no obligation to do so.  However, any outstanding
deferred interest payment will have to be settled in cash if
TenneT declares or pays an equity dividend or interest on equally
ranking securities, of if the holding redeems or repurchases
shares or equally ranking securities.  S&P sees this as a
negative factor.  That said, this condition remains acceptable
under S&P's methodology because once the issuer has settled the
deferred amount, it can still choose to defer on the next
interest payment

TenneT retains the option to defer coupons throughout the
instrument's life.  The deferred interest on the proposed
securities is cash cumulative, and will ultimately be settled in


Principal and interest on the proposed securities are unsecured
and subordinated obligations of TenneT.  The new securities rank
senior to common shares and pari passu among themselves and with
all other present or future unsecured and subordinated
obligations of the issuer.


GETIN NOBLE: Fitch Affirms 'BB' Long-term Issuer Default Rating
Fitch Ratings has affirmed Poland-based Getin Noble Bank's Long-
term Issuer Default Rating (IDR) at 'BB' and Viability Rating
(VR) at 'bb'. The Outlook on the Long-term IDR is Stable.


The affirmation of Getin's IDRs and VR reflects the bank's
reduced appetite for fast growth, improved liquidity position,
somewhat strengthened capitalization and stable retail deposit
base. These factors are balanced by weak asset quality, still
significant risk in the large (albeit falling) exposure to
foreign-currency mortgages, and reliance on the interbank market
to hedge structural currency mismatches.

Fitch does not expect changes to the bank's IDRs and VR in the
periods ahead, as indicated by the Stable Outlook. Downward
pressure on Getin's VR could arise from a sharp and prolonged
depreciation of the domestic currency. A weaker zloty would drag
on the bank's capitalization (through an increase in risk-
weighted assets) and liquidity (through margin calls on swap
transactions). However, this would only result in a downgrade of
the Long-term IDR if the Support Rating Floor was also lowered
(see below).

An upgrade of Getin's VR and IDRs would require a material
strengthening of its capitalization, re-balancing of the bank's
credit portfolio, substantial reduction of the balance-sheet
currency mismatch and a successful track record of solid
performance under the bank's revised strategy.

Getin's liquidity has improved. At end-Q113 Getin's liquidity
buffer equalled about PLN8.8bn or almost 18% of customer
deposits. The bank's deposit base (of which retail savings
comprised 77% at end-Q113) has been relatively stable and the
bank has been gradually increasing the share of (relatively
sticky and less rate-sensitive) personal accounts.

Significant reliance on hedging transactions remains a rating
weakness. The bank refinances its large portfolio of foreign
currency loans mainly through well-diversified (by counterparty
and maturity) cross-currency interest rate swaps (CIRS). At end-
Q113 Getin's liquidity was sufficient to satisfy margin calls on
CIRS resulting from even a quite sharp further fall in the zloty.
However, in the event of market turmoil, access to derivatives
could be limited and their costs would materially increase.

In Fitch's opinion Getin's capitalization is modest due to the
bank's risk profile, material unreserved NPLs and still
substantial proportion of foreign currency loans (slightly below
35% of total loans at end-Q113). The quality of the bank's
regulatory capital is moderate as 23% of this was subordinated

Getin's weaker performance in Q113 has been driven by the
economic slowdown (i.e. the muted appetite for new credit) and
margin contraction. The bank aims to cushion pressure on margins
through repricing of deposits during 2013 and the growing share
of relatively low-cost personal accounts.

Getin's weak asset quality is mostly sensitive to a rise in the
unemployment rate and a prolonged and sharp depreciation of the
Polish zloty. The inflow of NPLs has subsided in 2012 and Q113
and the latest vintage indicators show contained default rates in
the new production in all major product segments. However, the
economic slowdown and strategic stronger focus on higher-yielding
(and higher risk) products could drag on asset quality.


The affirmation of Getin's Support Rating of '3' and Support
Rating Floor of 'BB' is based on Fitch's view of the moderate
probability of support from the Polish state. This view reflects
Getin's deposit funding structure sourced mostly from retail
savings (7.5% market share at end-2012) and the fact that Getin
is the largest private, domestically-owned bank in the country.

The Support Rating and Support Rating Floor are sensitive to a
change in Fitch's assumptions on the ability and propensity of
the Polish sovereign to provide support for the country's banks.
Any explicit political intention to ultimately reduce the
implicit state support for systemically important banks might
result in Fitch revising Support Rating Floors downwards in the
medium term.

The rating actions are as follows:

Long-term foreign currency IDR: affirmed at 'BB'; Outlook Stable

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

National Long-term Rating: affirmed at 'BBB(pol) '; Outlook

Viability Rating: affirmed at 'bb'

Support Rating: affirmed at '3'

Support Rating Floor: affirmed at 'BB'


* ROMANIA: Cazanciuc to Present Insolvency Draft Law in July
Romania-Insider reports that all the pieces of legislation
concerning insolvency will be brought together into one
Insolvency Code, and the Romanian Justice Minister Robert
Cazanciuc plans to send the draft law of this code to the
Government this summer, in July.

Mr. Cazanciuc cited the unhappiness in the legal system caused by
the need to make decisions based on several laws, and the high
number of insolvencies recorded in recent years, Romania-Insider

Romania-Insider relates that the minister said when creating the
Insolvency Code, the ministry will also debate it with
representatives of the business environment.

"There's a need for an insolvency code which will balance between
lenders and debtors," Romania-Insider quotes the minister as
saying, adding he does not know yet if an insolvency code for
individuals will also be created.

In 2011, over 19,000 companies became insolvent in Romania,
Romania-Insider discloses.  In 2012, over 23,000 companies
started insolvency procedures, Romania-Insider recounts.  Several
big companies in Romania filed for insolvency, including the
state owned energy producer Hidroelectrica, chemical producer
Oltchim, road builder Romstrade, a former Mechel factory, various
real estate projects, according to Romania-Insider.


AVTOVAZ JSC: Fitch Affirms 'B-' Long-Term Issuer Default Ratings
Fitch Ratings has affirmed JSC AvtoVAZ's Long-term foreign and
local currency Issuer Default Ratings (IDR) at 'B-' and Short-
term foreign and local currency IDRs at 'B'. The agency has also
affirmed the foreign and local currency senior unsecured rating
at 'B-' Recovery Rating 'RR4' and National Long-term rating at
'BB(rus)'. The Outlook for the long-term ratings is Stable.

Key Rating Drivers:

State Support

AvtoVAZ's B- Long-term IDR is dependant on government support.
Government support, has already been tested in the recent past
and is also reflected by a further prolongation of state
interest-free debt in the amount of RUB51 billion to 2032. Given
the economic and social importance of AvtoVAZ, Fitch believes
that state support will be maintained in case of need.

Expected Change of Ownership

In Q412, Renault and Nissan signed a binding agreement with
state-owned Rostec (former Russian Technologies, the owner of 29%
of AvtoVAZ) which stipulates that both companies will jointly
invest up to US$750 million in AvtoVAZ by mid-2014 thereby
increasing their combined effective stake in the issuer to
50.01%. Given weak legal ties and limited tangible support in
cash from Renault and Nissan, the change of ownership will not
automatically trigger a rating upgrade.

Cooperation with Renault-Nissan Positive

In line with the 10-year strategy elaborated with the Renault-
Nissan alliance, AvtoVAZ is updating its product portfolio from
outdated cars to newer and more modern models. Other areas of
cooperation include improvement of quality issues and joint
purchases. Fitch believes that this cooperation will gradually
benefit AvtoVAZ's financial profile in coming years.

Market Share to Stabilize

AvtoVAZ's Russian market share decreased to 19.5% in 2012 from
23% in 2011. It was hit by the end of governmental stimulus
programs from which it was the main beneficiary and from relative
higher growth in higher-end segments from which it is absent.
However, Fitch expects AvtoVAZ's new models including vehicles
developed with Renault and Nissan to sustain market share in the
18%-20% range over the next 2-3 years.

Growing Though Volatile Market

In line with Fitch's expectations, Russian car market decelerated
in 2012 although exceeded its pre-crisis level. The Russian
market has been the second largest European market since 2011.
The agency expects mid-single digit growth in the foreseeable
future due to a favorable base effect. Longer term, growth should
be supported by low number of cars per capita and ongoing
penetration of car credit market relative to developed countries,
although we expect volatility to remain high.

Poor Profitability

Fitch expects AvtoVAZ's operating margin (excluding government
grants) to remain negative until at least 2014 on the back of
limited growth potential in entry segment both in terms of prices
and volumes. However, Fitch believes that AvtoVAZ's profitability
will gradually increase as its product mix improves although it
should remain weak.

Negative Free Cash Flow

On the back of the current large-scale modernization program,
Fitch expects AvtoVAZ's capex to remain at 9%-11% of sales over
the next couple of years. High capex requirements and no material
expected cash inflows from shareholders will result in negative
single-digit free cash flow margin and no deleveraging below 4.0x
(FFO gross leverage) in the foreseeable future.

Limited Diversification and Industry Risks

The ratings are also limited by low geographical and product
diversification. AvtoVAZ's product mix concentrates on ultra-
budget/budget 'B' and 'C' segments, and exports a modest 12% of
its cars (mostly to CIS countries). In addition, car markets are
inherently cyclical and highly volatile, exposing automotive
manufacturers to potential liquidity shocks.

Rating Sensitivities:

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

  -- Acquisition of a controlling stake in the company by Renault
     and/or Nissan; and

  -- Sustained improvement in profitability and FCF generation.

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

  -- Lower level of direct and/or indirect support from Russian
     government; and

  -- Sustained deterioration of the company's credit metrics
     stemming from weakening operating performance.

MTS INTERNATIONAL: S&P Rates Loan Participation Notes 'BB'
Standard & Poor's Ratings Services said that it assigned its 'BB'
issue rating to the proposed loan participation notes (proposed
notes) to be issued by special-purpose vehicle (SPV) MTS
International Funding Ltd., which is incorporated as a company
limited by shares under the laws of the Republic of Ireland and
owned 100% by a charitable trust.  S&P has not assigned a
corporate credit rating to MTS International Funding, nor has S&P
assigned a recovery rating to the proposed notes.

MTS International Funding will use the proceeds of the proposed
notes to fund a proposed loan facility for the largest provider
of telecoms services in Russia and the Commonwealth of
Independent States (CIS), Mobile TeleSystems (OJSC) (MTS;
BB/Stable/--).  S&P has assigned an issue rating of 'BB' to the
proposed loan facility, in line with the corporate credit rating
on MTS.  The recovery rating on this facility is '3', indicating
S&P's expectation of meaningful (50%-70%) recovery for creditors
of the loan in the event of a payment default.

The ratings on the proposed notes and the proposed loan facility
are based on preliminary information and are subject to S&P's
satisfactory review of the final documentation.

The rating on the proposed loan facility is predicated on S&P's
understanding that this facility will have an unsecured claim on
MTS, and will thereby rank pari passu with the existing unsecured
creditors at MTS.

The rating on the proposed notes is based on the direct pass-
through of the economic benefit of the loan facility to the
noteholders, through notes whose terms are back to back with
those of the loan facility.  MTS International Funding is an
orphan SPV, whose activity is limited only to the issue of the
notes and the onlending of the proceeds to MTS.  These features
offset the facts that neither MTS nor any of its subsidiaries
will either guarantee or provide any credit support to MTS
International Funding, and that the notes will not have a direct
claim on the cash flows and assets of MTS and its subsidiaries.

The rating on the proposed notes reflects the rating on the
proposed loan facility.  Any change to the preliminary
documentation relating to the pass-through features and other
legal aspects of the transaction could have a material bearing on
the rating on the proposed notes.

                        RECOVERY ANALYSIS

S&P's recovery rating on the proposed loan facility reflects MTS'
predominately unsecured capital structure, in which the proposed
notes will rank pari passu with the other unsecured debt by way
of the loan facility.  The recovery rating also reflects the
insolvency regime in Russia, which S&P views as relatively
unfavorable for creditors.

S&P notes that the documentation for proposed loan facility will
contain limited restrictions, comprising negative pledges,
change-of-control provisions, and restrictions on asset

S&P values the MTS group on a going-concern basis to reflect MTS'
leading market positions in Russia and the CIS, established
network assets, and valuable customer base.  S&P believes that a
default would most likely result from excessive leverage as a
result of operating underperformance.

To determine recoveries, S&P simulates a default scenario.  In
this scenario, excessive leverage as a result of lengthy
operating underperformance would most likely lead to default in

At the hypothetical point of default, S&P values the company at
about $5.6 billion.  S&P assumes that the company's debt
structure would remain similar to the structure today on its path
to default.  After deducting about $400 million of enforcement
costs, the residual enterprise value available for unsecured
creditors is about $5.2 billion.  This is sufficient for
meaningful (50%-70%) recovery on MTS' unsecured debt facilities.

With regard to the pass-through transaction, although S&P has not
assigned a recovery rating to the proposed notes, it believes
that recovery prospects for these notes are intrinsically linked
to those for the loan facility.  This reflects S&P's
understanding that the noteholders will receive the same rights
as those under the loan facility.  As a result, S&P considers
that potential recoveries for the noteholders rely entirely on
the effective operation of the pass-through structure between MTS
and the issuer, MTS International Funding.  In addition, S&P
foresees a risk that enforcement costs at the issuer level could
create an additional layer of expense that may slightly reduce
the recovery prospects for the noteholders versus the direct
recovery prospects for the loan facility lender.


AYT 7: Service Replacement No Impact on Moody's Ratings
Moody's has determined that the proposed action of Ahorro y
Titulizacion S.G.F.T.; S.A to carry out the custody and servicing
functions of AyT 7 Promociones Inmobiliarias I loans by Kutxabank
S.A (Ba1/NP), will not, in and of itself and at this time, result
in a downgrade or withdrawal of the current ratings of the notes
issued by AyT 7 Promociones Inmobiliarias I FTA.

Moody's opinion addresses only the credit impact of the Proposal,
and Moody's is not expressing any opinion as to whether the
Proposal has, or could have other, non-credit related effects
that may have a detrimental impact on the interests of note
holders and/or counterparties.

Moody's will maintain on review for downgrade the rating of the
notes which currently are already on review pending Moody's
assessment of the rating linkage to some counterparties. Moody's
will also re-assess the credit enhancement levels consistent with
each structured finance rating category in light of deteriorating
credit conditions in Spain and expected asset performance

The principal methodology used in this rating was " Moody's
Approach to Rating RMBS Using the MILAN Framework" published in
March 2013. Other methodology used in this rating was "Global
structured finance Operational Risk Guidelines: Moody's approach
to analyzing Performance Disruption Risk published on March 2011.

CODERE SA: Earnings Down 21% in Q1; May Default on Loans by June
Patricia Laya at Bloomberg News reports that Codere SA reported
its worst earnings in more than two years.

Codere, which depends on Argentina for more than one-third of its
revenue, reported a 21% drop in first-quarter earnings after an
anti-smoking law went into effect in that country, Bloomberg
discloses.  According to Bloomberg, earnings before interest,
taxes, depreciation and amortization amounted to EUR62.1 million
(US$79.9 million), the lowest in 10 quarters.

Moody's lowered Codere's "corporate family rating" one grade to
Caa3, nine steps below investment grade on concern it may default
on loans by the end of June, Bloomberg relates.

Codere has yet to refinance a EUR60 million senior facility that
matures on June 15 and "is vital in enabling the company to
continue meeting its obligations at the corporate level," Ivan
Palacios, the lead analyst for Codere at Moody's Investors
Service, as cited by Bloomberg, said in a report.

Codere SA is a Spain-based company engaged, together with its
subsidiaries, in the operation of activities related to the
private gaming sector, principally in the operation of arcade and
slot machines, sports betting houses, bingo halls, casinos and
racetracks.  The Company has presence in Spain, Italy, Argentina,
Brazil, Colombia, Mexico, Panama and Uruguay.

                           *     *     *

As reported by the Troubled Company Reporter-Europe on March 13,
2013, Moody's Investors Service downgraded to Caa2 from Caa1 the
corporate family rating and from Caa1-PD to Caa2-PD the
probability of default rating of Codere S.A. Concurrently,
Moody's has downgraded to Caa3 from Caa2 the ratings on Codere
Finance (Luxembourg) S.A.'s EUR760 million worth of 8.25% senior
notes due 2015 and USD300 million worth of 9.25% senior notes due
2019. S&P said the outlook on all ratings is negative.

FTA CAIXA GALICIA I: Moody's Cuts Rating on Class C Notes to 'B3'
Moody's Investors Service downgraded the ratings of seven notes
in three Spanish residential mortgage-backed securities (RMBS)
transactions: Serie AyT C.G.H. Caja Granada I, Serie AyT C.G.H.
Caixa Galicia I and Rural Hipotecario V FTA. At the same time,
Moody's confirmed the ratings of two securities in the three
deals. Insufficiency of credit enhancement to address sovereign
risk have prompted these downgrade actions. For Rural Hipotecario
V also structural features, in particular the lack of interest
rate hedging, has driven the downgrade of Class A1 rating from
A3(sf) to Baa1(sf).

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

Ratings Rationale:

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

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

Additional Factors Better Reflect Increased Sovereign Risk

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

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

In all three affected transactions, Moody's maintained the
current expected loss and MILAN CE assumptions. Expected loss
assumptions remain at 3.00% for Serie AyT CGH Caja Granada I,
2.30% for Serie AyT CGH Caixa Galicia I and 0.54% for Rural
Hipotecario V. The MILAN CE assumptions remain at 15.0% for Serie
AyT CGH Caja Granada I, 12.5% for Serie AyT CGH Caixa Galicia I
and 10.0% for Rural Hipotecario V.

Other Developments May Negatively Affect the Notes

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

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

The methodologies used in these ratings were Moody's Approach to
Rating RMBS Using the MILAN Framework, published in March 2013
and The Temporary Use of Cash in Structured Finance Transactions:
Eligible Investment and Bank Guidelines, published in March 2013.

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

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

In the context of the rating review, the transactions have been
remodeled and some inputs have been adjusted to reflect the new
approach. In addition, the following inputs have been corrected
in the three transactions: the trigger inputs switching the
priority of payments and the reserve fund amortization mechanism.

List Of Affected Ratings:

Issuer: AyT Colaterales Global Hipotecario, FTA Caixa Galicia I

EUR826.2M A Notes, Confirmed at A3 (sf); previously on Jul 2,
2012 Downgraded to A3 (sf) and Placed Under Review for Possible

EUR36.9M B Notes, Downgraded to Ba1 (sf); previously on Jul 2,
2012 Baa2 (sf) Placed Under Review for Possible Downgrade

EUR21.6M C Notes, Downgraded to B3 (sf); previously on Jul 2,
2012 Ba3 (sf) Placed Under Review for Possible Downgrade

Issuer: AyT Colaterales Global Hipotecario, FTA Caja Granada I

EUR369.1M A Notes, Downgraded to Baa1 (sf); previously on Jul 2,
2012 Downgraded to A3 (sf) and Remained On Review for Possible

EUR18M B Notes, Downgraded to B3 (sf); previously on Jul 2, 2012
Ba1 (sf) Placed Under Review for Possible Downgrade

EUR8M C Notes, Confirmed at Caa3 (sf); previously on Jul 2, 2012
Caa3 (sf) Placed Under Review for Possible Downgrade


EUR566.8M A1 Notes, Downgraded to Baa1 (sf); previously on Nov
23, 2012 Confirmed at A3 (sf)

EUR18.8M B Notes, Downgraded to Ba2 (sf); previously on Nov 23,
2012 Downgraded to Baa1 (sf) and Remained On Review for Possible

EUR9.4M C Notes, Downgraded to B1 (sf); previously on Jul 2, 2012
Baa3 (sf) Placed Under Review for Possible Downgrade

GAT FTGENCAT: Fitch Affirms 'C' Rating on Series E Notes
Fitch Ratings has affirmed GAT FTGENCAT 2006, FTA's notes,
revised the Outlook on the series A2(G) and revised the Recovery
Estimate on series D, as follows:

Series A2(G) (ISIN ES0341097014) affirmed at 'Asf'; Outlook
revised to Stable from Negative

Series B (ISIN ES0341097022) affirmed at 'Asf'; Outlook Negative

Series C (ISIN ES0341097030) affirmed at 'BBsf', Outlook Negative

Series D (ISIN ES0341097048) affirmed at 'CCsf'; Recovery
Estimate revised to RE 0% from RE 35%

Series E (ISIN ES0341097055) affirmed at 'Csf'; Recovery Estimate
RE 0%

Key Rating Drivers

The affirmation reflects the transaction's stable performance
since the last review in May 2012. Since then, the senior notes'
credit enhancement has increased substantially due to natural
amortization. Series A2(G)'s credit enhancement is close to 50%,
which enables the series to withstand the agency's stress tests
at a 'AAAsf' level. This is reflected in the revision of the
series' Outlook to Stable from Negative. Credit enhancement for
series B increased to 41% from 33% at the last review. Both,
series A2(G) and B, are capped at an 'Asf' level due to the
agency's concerns about the transaction's potential exposure to
commingling and payment interruption risk.

The transaction's portfolio is originated and serviced by Caixa
d'Estalvis de Catalunya (Catalunya Banc), which is unrated. The
agency considers that the transaction may be exposed to
commingling and payment interruption risk in the absence of any
other sources of liquidity apart from the reserve fund, which may
mitigate the temporary loss of liquidity following a hypothetical
default of Catalunya Banc. The reserve fund has been rather
volatile in the past and has recently been reduced to EUR22,000,
compared to a required level of EUR9.5 million. This development
is reflected in the revision of series D's recovery estimate to
0% from 35%.

The portfolio has amortized to EUR61 million or 13.88% of its
initial outstanding balance with current defaults worth EUR13
million. Cumulative defaults add up to EUR22 million,
representing 36% of the outstanding balance. Throughout the past
year delinquencies continuously increased in relative terms.
Delinquencies of over 90 days now represent 9.5% of the
outstanding balance and delinquencies over 180 days 5%. Overall,
the portfolio is highly concentrated in terms of obligors,
industries and regions.

Rating Sensitivities

The agency has included additional stress scenarios to ensure the
ratings' stability. The first scenario tested the ratings'
sensitivity to a decrease in recovery rate assumptions by 25% and
the second simulated increased default probabilities by 25%. The
results suggested that neither of the scenarios would trigger a
rating action.

The transaction is a cash flow securitization of an initial
static pool of EUR440 million of 6,922 loans to Spanish small and
medium enterprises (SMEs) originated and serviced by Catalunya

IM GRUPO: Fitch Affirms 'CC' Rating on EUR32.4MM Class E Notes
Fitch Ratings has upgraded IM Grupo Banco Popular Empresas 1's
class C notes and affirmed the rest classes of notes as follows:

EUR154.1m Class A2 (ISIN ES0347843015): affirmed at 'AA-sf';
Outlook Negative

EUR28.8m Class B (ISIN ES0347843023): affirmed at 'AA-sf';
Outlook Negative

EUR27.0m Class C (ISIN ES0347843031): upgraded to 'A+sf' from
'Asf'; Outlook Stable

EUR54.9m Class D (ISIN ES0347843049): affirmed at 'BBsf'; Outlook

EUR32.4m Class E (ISIN ES0347843056): affirmed at 'CCsf'; RE 100%


The ratings on the class A2 and B notes are capped at 'AA-sf' due
to the five-notch differential between Spain's sovereign rating
of 'BBB'/Negative and the highest achievable structured finance
ratings. The ratings cap reflects the agency's concerns that the
weakening sovereign increases the likelihood of extreme macro-
economic events that could undermine the performance of the
securitizations. The Negative Outlook assigned to class A2 and B
reflects the Outlook on the sovereign rating.

The upgrade of the class C notes reflects their increased credit
enhancement (CE) levels due to deleveraging, which allows them to
withstand Fitch's 'A+sf' rating stresses with significant
cushion, despite the portfolio's worsening performance since the
last review in June 2012.

The class E notes were issued to fund the reserve and their
repayment would be dependent upon the level of the reserve fund
(RF) at maturity and amount of recoveries realised on defaulted
assets. The RF is currently at the required level of EUR45
million but can amortize to an absolute floor of EUR22.5 million
if the 90+ day delinquency rate is below 1% and the reserve has
been replenished to the required amount at the previous interest
payment date. Fitch stressed the structure with a reduced RF and
the ratings of the notes can withstand the potential step down in
the reserve at their current rating stress scenarios.

The portfolio had amortized to 14.3% of its initial balance, as
of the latest investor report in March 2013. Loans in arrears
more than 90 days have been increasing and currently account for
3.6% of outstanding balance compared to 2.4% since the last
review. Current defaults have increased to EUR34.3 million from
EUR32.3 million while recoveries from worked out assets increased
with the weighted average recovery rate currently at 54.4%,
compared to 50% as of the last review.

Rating Sensitivities

Applying a 1.25x default rate multiplier or applying a 0.75x
recovery rate multiplier to all assets in the portfolio would not
result in a downgrade for any of the notes due to CE cushions at
the current rating levels.

IM Grupo Banco Popular EMPRESAS 1 is a cash flow securitization
of an initial EUR1.8 billion static pool of SME loans granted by
six entities of Grupo Banco Popular which have since merged with
Banco Popular Espanol SA ('BB+' /Stable/'B').

* SPAIN: Credit Cooperatives Remain Resilient But Recession Bites
Fitch Ratings says the performance of the four Spanish credit
cooperatives rated by Fitch has remained resilient, supported by
their strong regional franchises, focused on rural areas. They
also benefit from adequate capitalization, a stable deposit base,
granular loan books with relatively limited exposure to the
troubled real estate sector and a prudent approach to risk
management. As a result, their ratings were affirmed by Fitch on
May 6, 2012.

In a newly-published special report Fitch outlines the factors
that support the credit cooperatives' ratings as well as the
challenges that they face. The report reveals that despite a
relatively resilient performance, these credit cooperatives are
not immune to the recession that Spain is facing. While the four
entities reported growth in pre-impairment income in 2012, large
loan impairment charges to meet regulatory provisioning
requirements wiped out bottom-line earnings. Low interest rates
and the recessionary environment in Spain will continue to put
pressure on revenues. In this environment, the implementation of
cost rationalization measures will be crucial to support

The credit cooperatives have played an active role in the
consolidation process that the Spanish banking market is
undergoing, with three of the four rated entities completing
integration processes between 2011 and 2012. In Fitch's view the
restructuring of the Spanish banking system has opened up
opportunities for the credit cooperatives, which did not need
state aid to absorb losses. This is for example supported by
reduced overcapacity in their core regions and the tainted
reputations of some of their competitors, for example stemming
from the recapitalization process, which includes burden sharing
for holders of junior debt instruments.

Three of the four Spanish credit cooperatives rated by Fitch
(GCI, CRN and Laboral Kutxa) have 'BBB' Long-Term IDRs driven by
their Viability Ratings (VRs). Grupo CRU's 'BB' IDR is at its
Support Rating Floor, although its VR is at the same level. Its
IDR is on a Stable Outlook, while those of the other cooperatives
are on a Negative Outlook, mirroring the sovereign rating.

* Moody's Notes Dip in Spanish RMBS Market Performance in March
The performance of the Spanish residential mortgage-backed
securities (RMBS) market continued deteriorating in the three-
month period leading up to March 2013, according to the latest
indices published by Moody's Investors Service.

Moody's index of cumulative defaults increased to 3.1% of the
original balance in March 2013, up from 2.9% in December 2012. In
March 2013, 60+ day delinquencies increased to 3.5% of the
current balance, up from 3.3% in December 2012 while 90+ day
delinquencies rose to 2.4% of the current balance, from 2.2% in
the same period.

The reserve funds of 98 transactions are currently below their
target levels, an increase from 79 transactions in December. 16
of these reserve funds are fully drawn down. 13 deals have
breached their interest deferral triggers, affecting 19 tranches.
Moody's also notes that the annualized constant prepayment rate
(CPR) increased to 4.1% in March 2013, up from 3.5% in December
2012, which is still notably lower than the CPRs recorded prior
to 2008, which were over 10%.

Overall, Moody's currently rates 186 transactions in the Spanish
RMBS market, with a total outstanding pool balance of EUR100.6
billion as of March 2013.

Moody's outlook for Spanish RMBS remains negative. The Spanish
economy is in recession and Moody's expects that it will contract
1.4% in 2013, the same rate as in 2012. Moody's expects that the
unemployment rate will continue to rise to 27.4% in 2013, up from
25.1% in 2012. Mortgage delinquencies will rise as more borrowers
are expected to lose their jobs. Against a backdrop of declining
property sales, the generally stagnant economic situation and
scarce financing availability, Moody's expects that house prices
in Spain will continue to fall at least during the next five
years as the disposal process of excess housing inventory takes

171 Spanish RMBS transactions (91.9% of the Spanish RMBS market)
were placed on review either on July 2, 2012, following Moody's
downgrade of Spanish government bond ratings to Baa3 from A3 on
June 2012 or on November 23, 2012, following Moody's revision of
key collateral assumptions for the entire Spanish RMBS market.
The review has been concluded for 137 transactions as of 15 May
2013, with average downgrades of 3 notches. Country risk exposure
and in some cases linkage to counterparties were the main drivers
for these rating actions.


SAAB AUTOMOBILE: Three Former Execs Arrested Over Fraud Charges
The Associated Press reports that a Swedish prosecutor says three
former executives of automaker Saab Automobile AB have been
arrested on accounting fraud charges.

Prosecutor Olof Sahlgren says the three are "suspected of
aggravated attempts to avoid tax controls" by allegedly
falsifying parts of Saab's accounts between 2010 and 2011 -- a
crime that carries a sentence of up to four years in prison, the
AP discloses.

Mr. Sahlgren wouldn't identify the three, who worked for Saab
while it was owned by Dutch luxury car maker Spyker, which had
bought the Swedish company off General Motors, the AP notes.

            About Saab Automobile AB and Saab Cars N.A.

Saab Automobile AB is a Swedish car manufacturer owned by Dutch
automobile manufacturer Swedish Automobile NV, formerly Spyker
Cars NV.  Saab halted production in March 2011 when it ran out of
cash to pay its component providers.  On Dec. 19, 2011, Saab
Automobile AB, Saab Automobile Tools AB and Saab Powertain AB
filed for bankruptcy after running out of cash.

Some of Saab's assets were sold to National Electric Vehicle
Sweden AB, a Chinese-Japanese backed start-up that plans to make
an electric car using Saab Automobile's former factory, tools and

On Jan. 30, 2012, more than 40 U.S.-based Saab dealerships filed
an involuntary Chapter 11 petition for Saab Cars North America,
Inc. (Bankr. D. Del. Case No. 12-10344).  The petitioners,
represented by Wilk Auslander LLP, assert claims totaling US$1.2
million on account of "unpaid warranty and incentive
reimbursement and related obligations" or "parts and warranty
reimbursement."  Leonard A. Bellavia, Esq., at Bellavia Gentile &
Associates, in New York, signed the Chapter 11 petition on behalf
of the dealers.

The dealers want the vehicle inventory and the parts business to
be sold, free of liens from Ally Financial Inc. and Caterpillar
Inc., and "to have an appropriate forum to address the claims of
the dealers," Leonard A. Bellavia said in an e-mail to Bloomberg

Saab Cars N.A. is the U.S. sales and distribution unit of Swedish
car maker Saab Automobile AB.  Saab Cars N.A. named in December
an outside administrator, McTevia & Associates, to run the
company as part of a plan to avoid immediate liquidation
following its parent company's bankruptcy filing.

On Feb. 24, 2012, the Court granted Saab Cars NA relief under
Chapter 11 of the Bankruptcy Code.

Donlin, Recano & Company, Inc., was retained as claims and
noticing agent to Saab Cars NA in the Chapter 11 case.

On March 9, 2012, the U.S. Trustee formed an official Committee
of Unsecured Creditors and appointed these members: Peter Mueller
Inc., IFS Vehicle Distributors, Countryside Volkwagen, Saab of
North Olmstead, Saab of Bedford, Whitcomb Motors Inc., and
Delaware Motor Sales, Inc.  The Committee tapped Wilk Auslander
LLP as general bankruptcy counsel, and Polsinelli Shughart as its
Delaware counsel.


* Moody's Takes Rating Actions on 13 Turkish Financial Groups
Moody's Investors Service has taken multiple rating actions on 13
Turkish financial groups, following the upgrade of Turkey's
government bond rating to Baa3 stable on May 16, 2013.

Specifically, Moody's has taken the following actions:

(1) upgraded the foreign-currency deposit ratings of 12 banks

(2) raised the standalone baseline credit assessments (BCAs) of
     four banks to baa3 and affirmed their D+ standalone bank
     financial strength ratings (BFSRs)

(3) affirmed the local-currency deposit, senior debt and
     currency senior debt ratings of 10 banks

(4) upgraded the subordinated debt rating of Turkiye Is Bankasi
     A.S. (Isbank) to Ba1 from Ba2

(5) upgraded the long-term issuer and senior debt rating of
     Export Credit Bank of Turkey A.S. (TurkExim), a government-
     related issuer (GRI), to Baa3 from Ba1 and raised the bank's
     BCA to baa3 from ba1

These actions are due to the improvement in Turkey's government's
credit profile, which the sovereign ratings upgrade reflects. The
sovereign's improved credit strength also bolstered the
standalone credit profiles of four banks, which led to the
raising of their standalone BCAs.

The outlooks for the bank ratings upgraded are stable. The
outlooks for those bank ratings that have been affirmed or are
unchanged remain unchanged.

This rating announcement does not affect the BFSRs or the ratings
of any of the Turkish banks or their affiliated entities, nor
does it affect the national-scale ratings (NSRs) of any of the
Turkish banks.

Ratings Rationale:

Foreign-Currency Deposit Ratings of 12 Banks Upgraded

The upgrades were triggered by Moody's decision to raise the
ceiling for the foreign-currency deposit ratings of Turkish
deposit-taking institutions. This ceiling, which defines the
highest foreign-currency deposit rating any Turkish bank can
achieve, increased to Baa3 from Ba2 following the sovereign
rating upgrade.

Of the 12 Turkish banks whose foreign-currency deposit ratings
were previously constrained by the foreign-currency deposit

(1) The ratings on ten banks were upgraded by two notches to a
    long-term foreign-currency deposit rating of Baa3/short-term
    rating of Prime-3 from Ba2/Not Prime.

(2) The ratings on another two banks were upgraded by one notch
     to Ba1/Not Prime from Ba2/Not Prime; these ratings are now
     the level of the banks' local currency deposit ratings.

The outlooks for these upgraded foreign-currency deposit ratings
are stable.

Standalone BCAS of Four Banks Raised to baa3

Moody's believes that the standalone credit strength of financial
institutions with low cross-border operational diversification
and/or high balance-sheet exposure to the debt of their domestic
sovereign is closely linked to the domestic sovereign's credit

Following the upgrade of the sovereign rating to Baa3, Moody's
raised to baa3 from ba1 the standalone BCAs of Akbank T.A.S.,
Turkiye Garanti Bankasi A.S., Turkiye Halk Bankasi A.S. and
Isbank to reflect these banks' strong standalone financial
profiles and franchises, thereby affirming the banks D+
standalone BFSRs with their stable outlooks. The banks' strong
franchises and financial profiles better equip them to address
the challenges of a fast-evolving Turkish banking system, in
comparison to their peers. Their strong core-capital base and
internal capital generation provide 1) solid loss-absorption
capacity in the event of economic downturns and 2) the internal
resources to continue to fund the growth of their franchise. In
Moody's view, these banks hold competitive advantages because of
their mature and established franchises, which offer regionally
diverse banking opportunities, allowing them to better exploit
economies of scale than smaller banks can, both with banks
currently undergoing organizational changes or with banks whose
franchises are evolving.

Isbank's Subordinated Debt Rating Upgraded to Ba1

Moody's upgraded Isbank's foreign-currency subordinated debt
rating to Ba1 stable from Ba2 stable. The upgrade followed the
increase of Isbank's standalone BCA to baa3 from ba1. The
subordinated debt rating is one notch lower than the bank's BCA.
The stable outlook is in line with the outlook on Isbank's
D+/baa3 standalone credit assessment.

Local-Currency Deposit and Senior Debt and Foreign-Currency
Senior Debt Ratings of Ten Banks Affirmed

Moody's has affirmed the senior debt and the local currency
deposit ratings and current outlooks for 10 banks, based on
unchanged support assumptions. In most cases, the ratings of the
banks affected by these actions benefit from several notches of
uplift because of government and/or parental support assumptions.

The rating affirmations reflect Moody's assessment of the
willingness and capacity of the banks' parent groups to provide
support in the event of need, as well as each bank's relative
systemic importance to the Turkish financial system as a deposit-
taker and lender.

Moody's recognizes that government (or systemic) support is a
function of evolving social, political, economic and financial
developments in a country. At present, systemically important
Turkish banks can achieve local-currency deposit, senior debt and
issuer ratings of up to Baa2, one notch above the Baa3 sovereign
rating. This reflects Moody's view that the Turkish government's
ability and willingness to support domestic banks is stronger
than, for example, that of countries whose banking systems are
large relative to their economies, because it increases the
potential cost of government support in the event of a systemic
banking crisis.

However, Moody's believes that the Turkish banking system and its
financial obligations will continue to grow strongly relative to
the country's economy and the government's own financial
resources in the coming years. Strong bank growth will increase
the potential cost of any government support. Given a potential
rise in burden, further improvement in the Turkish sovereign's
creditworthiness and rating could have only a muted or no impact
on the support-driven uplift factored into Turkish bank ratings.
Moody's expects that over time, the maximum rating level a
Turkish bank can achieve as a result of government support will
converge towards the sovereign rating.

Turkexim's Issuer Rating Upgraded To Baa3, In Line With Sovereign

The upgrade of TurkExim's BCA, its issuer and foreign-currency
senior debt ratings follows the rating upgrade of the sovereign.
Moody's believes that as a government-related issuer (GRI),
TurkExim's credit profile is closely interrelated with the
sovereign's creditworthiness because of the following:

(1) TurkExim's full ownership by the Turkish Treasury

(2) TurkExim's policy mandate to support the Turkish economy by
    promoting export growth

(3) The bank's conservative risk profile

(4) The government's track record of injecting funds as well as
    implicit and at times explicit guarantees on the bank's

(5) Government presence at board level

The outlooks on the bank's issuer and debt ratings are stable,
consistent with the outlook for the government's bond rating.

What Could Move The Ratings Up/Down

Because the key drivers of these actions are largely structural
in nature, upwards rating pressure in the near term is unlikely,
as the unchanged stable or negative outlooks on the banks'
ratings reflect. However, an improvement in the credit risk
profiles of some of the individual banks or the national
government could affect Turkish bank ratings positively.

Conversely, deterioration in the banks' operating environment or
a weakening of their standalone financial fundamentals or those
of their parents or the national government could exert downwards
pressure on the ratings.

Principal Methodologies

The methodologies used in these ratings were Moody's Consolidated
Global Bank Rating Methodology (July 2012) and Government-Related
Issuers: Methodology Update (July 2010).


SHORTLINE PLC: Fitch Rates US$500MM Loan Participation Notes 'B-'
Fitch Ratings has assigned Shortline Plc's US$500 million loan
participation notes due 2018 a final 'B-' Long-term foreign
currency rating.

Key Rating Drivers

Shortline Plc issued the notes for the purpose of funding six
five-years loans (the loans) to the following state-owned
Ukrainian railway companies (together the borrowers):

Southwest Railway
Lviv Railway
South Railway
Odesa Railway
Donetsk Railway
Prydniprovska Railway

The loans have the benefit of the suretyship agreement entered
into on a joint and several basis by the borrowers, their
auxiliaries enterprises and a state-owned entity the State
Administration of Railway Transport of the Ukraine
(Ukrzaliznytsia; 'B-'/Stable/'B'). The liability of Shortline Plc
to the noteholders is limited to its cash flow from repayment of
the principal of, and payments of interest on the loans by the
borrowers to Shortline Plc.

The notes will mirror the terms and conditions of the loans. Like
the loans, the notes will mature in five years, and interest
payments will be made semi-annually. The notes have a 9.5% fixed
interest rate, and the principal amount of the notes will be
repaid on the maturity of the loans. Proceeds from the issue will
be used solely for the purpose of making the loans to the
borrowers. Should any of the borrowers fail to make an interest
or principal payment under the terms of the notes, noteholders
will benefit from the suretyship agreement entered into by the
borrowers and Ukrzaliznytsia.

The notes' rating is equalised with Ukrzaliznytsia's Long-term
foreign currency rating reflecting Fitch's view that default risk
on the notes and on Ukrzaliznytsia's other senior unsecured
obligations is essentially the same. It is not clear under
Ukrainian law whether Ukrzaliznytsia has the right and authority
to enter into suretyships. It may therefore be challenging for
noteholders to enforce the suretyship agreement in a court
against Ukrzaliznytsia, in case of need. However, the agency
believes that, given the strategic importance of the national
railways to the Ukrainian economy, Ukrzaliznytsia will perform is
obligations under the suretyship agreement and that, if needed,
extraordinary support from the central government would be
forthcoming to ensure that Ukrzaliznytsia performs those

Ukrzaliznytsia's Long-term ratings reflect the entity's key role
in the management of the national railway system and its strong
legal, strategic and operational links with the Ukrainian
government, which has approval powers on all strategic decisions,
including tariff setting, investment and debt planning. Although
Ukrzaliznytsia is the sole rated entity, its ratings also factor
in the opacity of links with the railway entities it manages and
contingent risk stemming from the liabilities of those entities.

Ukrzaliznytsia's mandate is to manage the six state-owned
regional operating railway entities and a number of auxiliary
enterprises (the group). Although it has no legal ownership ties
with those entities, Ukrzaliznytsia acts as the group's
management company. It controls most of the group's financial
flows and sets the group's debt policy. In its capacity as the
group's management company, Ukrzaliznytsia signed certain loan
agreements of the borrower operating entities. The Ukrainian
Government plans to streamline this complex organizational
structure by grouping Ukrzaliznytsia, the six railway operating
entities and other auxiliary enterprises under a new 100% state-
owned joint stock during 2013-2014.


The notes' rating is likely to move in tandem with
Ukrzaliznytsia's Long-term foreign currency rating, which is
credit linked to the Issuer Default Rating of Ukraine

UKRSOTSBANK: Fitch Rates Unsecured UAH-Denominated Bonds B+(EXP)
Fitch Ratings has assigned Ukrsotsbank's (Ukrsots) upcoming issue
of senior unsecured UAH-denominated bonds an expected Long-term
local currency rating of 'B+(EXP)', Recovery Rating of 'RR4' and
an expected National Long-term rating of 'AAA(ukr)(EXP)'. Bonds
will be issued during 2013 - Q114 in eight series (series I
through P), of UAH250 million each, totaling UAH2 billion. All
proceeds from the bond issues will be used to finance the bank's
lending operations.

Series I-L bonds will have a fixed interest rate of 12% p.a.
until maturity in 2015, with no put option available to
bondholders. Series M-P bonds, maturing in H116, will bear a
fixed 12% p.a. interest rate for the first three interest periods
with put option set at the end of the third interest period.

The claims of the bondholders will rank at least equally with the
claims of other senior unsecured and unsubordinated creditors of
Ukrsots, save those preferred by relevant Ukrainian legislation.
Under Ukrainian law, the claims of retail depositors rank above
those of other senior unsecured creditors. At end-Q113, retail
depositors accounted for around 39% of Ukrsots' non-equity
funding, according to the bank's local GAAP reporting.

At end Q1 2013, Ukrsots was the sixth largest bank in Ukraine by
total assets with a market share of 3.4%.

Key Rating Drivers

The issue's Long-term local currency and National ratings
corresponds to Ukrsots' Long-term local currency Issuer Default
Rating (IDR; 'B+'/Stable) and National Long-term rating
('AAA(ukr)'/Stable), respectively. The issue's Recovery Rating of
'RR4' reflects average recovery prospects for bondholders in case
of default.

Ukrsots' IDRs, Support and National Ratings are driven by the
likelihood of support it may receive from Italy-based UniCredit
S.p.A. ('BBB+'/Negative), which owns 98.36% of Ukrsots via its
Vienna subsidiary UniCredit Bank Austria AG ('A'/Stable).

Rating Sensitivities

Any changes to Ukrsots' Long-term local currency IDR and National
Long-term Rating would impact the issue's ratings. Changes to the
bank's IDRs would likely be driven by changes in the sovereign
rating. Any change in the propensity and willingness of the
bank's majority shareholder to continue operating in Ukraine
would also affect the IDRs and National Long-term Rating.

Fitch rates Ukrsotsbank's as follows:

-- Long-term IDR: 'B', Outlook Stable
-- Short-term IDR: 'B'
-- Local Currency Long Term IDR: 'B+'; Outlook Stable
-- Viability Rating: 'ccc'
-- Support Rating: '4'
-- National Long-term rating: 'AAA(ukr)'; Outlook Stable

UKRZALIZNYTSIA: Fitch Affirms B Shortterm Foreign Currency Rating
Fitch Ratings has affirmed the State Administration of Railways
Transport of Ukraine's (Ukrzaliznytsia) (UZ) Long-term foreign
and local currency ratings at 'B-', National Long-term rating at
'BBB+(ukr)' and Short-term foreign currency rating at 'B'. The
Outlooks for the Long-term ratings are Stable.

Key Rating Drivers

UZ's ratings reflect the company's key role in the management of
the national railways system and its strong legal, strategic and
operational links with the Ukrainian government, which has
approval powers on all strategic decisions, including tariff
setting, investment and debt planning. Although UZ is the sole
rated entity, its ratings also factor in the opacity of links
with railways companies it manages and contingent risk stemming
from the liabilities of those railways companies.

UZ's mandate is to manage the six state-owned regional operating
railways companies and a number of auxiliary enterprises (UZ
Group). Although there are no legal ownership ties with these
companies, UZ acts as a Group's management company. It controls
most of the Group's financial flows and sets debt policy of the
Group, and, in its capacity of group manager, signed certain loan
agreements jointly with borrowing operating entities. UZ is also
a guarantor of recently issued by Shortline Plc loan
participation notes (LPN).

The government plans to streamline this complex structure
grouping UZ and the six railways operators under a new 100%
state-owned joint stock company as part of the reform process
during 2013-2014. Fitch believes the government's grip over UZ
Group will be unchanged after the completion of reform.

Exploiting its profitable freight business, with EBITDA at
UAH11.6 billion (US$1.45 billion) in 2012, UZ group plans to
spend about UAH28.5 billion of cumulative investments in 2013-
2015 for the upgrade of the railway network and rolling stock. To
support its capex program, UZ group expect tariffs increase in
the range 10%-13% annually in 2013-2015. However, Fitch believes
that long-term visibility on tariff increases is limited as the
government has frozen tariffs in the past.

UZ's group debt is concentrated on the balance sheet of six
operating railway companies and the long-term nature of its asset
structure does not fit well with the short-term nature of its
debt, about 42% of which matures within one year. UZ group did
not comply several covenants under long-term loan agreements of
operating companies in 2010 and 2011. However, the companies had
obtained respective waivers from the lender. In December 2012 the
respective agreement were amended and covenants, which caused the
breaches were reset.

Group liquidity is tight as it needs to refinance UAH8.4bn of
maturing debt, including financial lease in 2013. Part of this
amount was already refinanced during Q113 while, in mid-May 2013,
the UZ Group issued US$0.5 billion (UAH4 billion) LPN with five
years maturity via a shell company Shortline Plc. Relevant LPN's
proceeds should be used both to refinance existing short-term
debt and fund capex program of UZ Group. However, since short
term debt maturities should remain material in the medium term,
Fitch believes that a stable access to banks and capital markets
remains essential for UZ Group, although the existing capex
flexibility partly mitigates the risk.

Rating Sensitivities

Weaker links with the government reflected in changes in legal
status or other factors, which would lead to dilution of control
or likelihood of support by the sovereign would result in a
downgrade as would any negative rating action on the sovereign.

Conversely, evidence of more formalized state support of
Ukrzaliznytsia, including the explicit government guarantee on
its financial debt would be positive for the ratings. An upgrade
of Ukraine could also trigger a positive rating action.

U N I T E D   K I N G D O M

HEART OF MIDLOTHIAN: Awaits Update on Reportedly UBIG Collapse
-------------------------------------------------------------- reports that the Heart of Midlothian Football
Club, known as Hearts, face an anxious wait to discover the
effects of the apparent financial collapse of their majority
shareholder, UAB Ukio Banko Investicine Grupe (UBIG), amid fears
it could lead to their relegation.

The report relates that the Lithuanian investment firm, on May
16, was listed on a government website of insolvent firms after
reportedly declaring itself unable to meet its liabilities.

The club is no longer reliant on the company for external funding
but they do owe it GBP10 million, the report says.

And the insolvency of club owners can lead to a points deduction
under Scottish Premier League rules.

According to, the SPL declined to comment but
it is understood league officials are consulting with lawyers as
to the facts of this case and whether they impinge on their

If deemed to fall foul of insolvency rules before Sunday's season
finale, Hearts would be deducted a third of last season's total -
- 18 points, says  Hearts are 13 points above
bottom club Dundee and would be relegated.

"Heart of Midlothian Football Club can today acknowledge it is
aware of a report circulating in Lithuania relating to its parent
company UAB Ukio Banko Investicine Grupe (UBIG)," the club said
in statement obtained by

"The club is seeking clarification regarding UBIG's current
situation and as such, it would be inappropriate to comment
further at this stage."

Heart of Midlothian Football Club is a Scottish professional
football club based in Edinburgh.

PARAGON HOTEL: Namir El Buys Firm Out of Administration
Emma Eversham at Big Hospitality News reports that the Paragon
Hotel in Birmingham has been bought out of administration by
Iraqi businessman Namir El Alakbi.

The 250-bedroom Grade II Listed hotel, previously part of the
Dhillon Hotels group, was bought by El Alakbi for around GBP6
million, six months after it went into administration, according
to Big Hospitality News.

The report relates that Gavin Wright, director of Christie & Co,
which brokered the deal on behalf of administrators BDO LLP,
said: "This imposing Victorian Gothic building was previously
part of the Dhillon Hotels group, and generated enormous interest
resulting in a highly-competitive, 'best and final', offers
process.  We understand that the new owner plans to breathe some
further life into this fine hotel with a full refurbishment,
which should guarantee its success well into the future."

SUPERGLASS: Wins Shareholder Backing for GBP12.9MM Survival Plan
Perry Gourley at The Scotsman reports that Superglass on Monday
won shareholder backing for a survival plan which will see it
raise GBP12.9 million and significantly reduce its debts.

The company had warned earlier this month that it would go into
administration if it could not complete the share issue and
conversion of about half of its debt into equity, the Scotsman

Under the agreement, Clydesdale Bank will convert GBP5.7 million
of debt into shares, while GBP3 million will be paid off, leaving
the group in a cash-positive position, the Scotsman discloses.

The company, which employs about 170 people, reported a pre-tax
loss of GBP2.9 million in the six months to the end of February,
as sales shrank by a fifth in the face of the on-going
construction slump, the Scotsman recounts.

Measures approved by shareholders at the general meeting also
included a capital reorganization and a share consolidation, the
Scotsman notes.

The company, as cited by the Scotsman, said completion of the
refinancing will provide it with a "considerably strengthened,
long-term capital structure as a platform upon which to build a
sustainable, strong and resilient business that is better
positioned to compete more effectively in challenging markets".

According to the Scotsman, the debt conversion and the early
repayment of debt will together result in a reduction of GBP8.73
million in Superglass' core debt to GBP2.5 million.

Superglass is a Stirling-based insulation materials company.

TURNSTONE MIDCO: Moody's Assigns 'B2' CFR; Outlook Stable
Moody's assigned a B2 corporate family rating and a B2-PD
probability of default rating to Turnstone Midco 2 Limited (owner
of Integrated Dental Holdings or "IDH"). At the same time Moody's
assigned provisional (P)B2 instrument ratings with an LGD
assessment of LGD4 (51%) to the proposed GBP200 million senior
secured fixed rate notes due 2018 and the GBP125 million senior
secured floating rate notes due 2018 as well as a provisional (P)
Caa1 /LGD 6 (96%) instrument rating for GBP75 million of second
lien notes due 2019, all of which will be issued by IDH finance
plc, a subsidiary of Turnstone Midco 2 Limited. The outlook on
the ratings is stable.

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.


Issuer: IDH Finance plc

GBP200 million Senior Secured Regular Bond/Debenture, Assigned
(P)B2 with a range of LGD4, 51 %

GBP125 million Senior Secured Regular Bond/Debenture, Assigned
(P)B2 with a range of LGD4, 51 %

GBP75 million Second Lien Senior Secured Regular Bond/Debenture,
Assigned (P)Caa1 with a range of LGD6, 96 %

Issuer: Turnstone Midco 2 Limited

Corporate Family Rating, Assigned B2

Issuer: Turnstone MidCo2 Limited

Probability of Default Rating, Assigned B2-PD

Ratings Rationale:

IDH's B2 corporate family rating is reflective of (1) the group's
small scale compared to other rated companies, with revenues of
GBP349 million in fiscal year ending March 31, 2013; (2) high
financial leverage pro-forma the refinancing of around 7.1x as
adjusted by Moody's (5.7x on a pro-forma EBITDA basis,
considering the full year effect of acquisitions made during
fiscal year 2013) with modest interest coverage; and (3) the
group's largely debt-funded acquisition growth strategy, which
will constrain future debt reduction and free cash flow
generation after taking into account acquisition related capital
expenditures. The CFR recognizes nevertheless, the discretionary
nature of the group's acquisition strategy which Moody's
understands could be scaled back to preserve financial
flexibility if needed as well as the company's good track record
of integrating acquired dentistries.

On a more positive note the B2 CFR considers (1) the group's good
position in the fragmented UK dental healthcare market with
around 87% of revenues being generated through evergreen UK NHS
(National Health Service) contracts, providing good revenue
visibility; and (2) the group's ability to generate positive free
cash flow after interest expenses as a result of low maintenance
capital expenditures and working capital needs. Furthermore, the
CFR incorporates the positive long-term industry trend in the UK
dental care market as a result of an increasing need for dental
care for an aging population, the NHS's intention to increase
access to dental care in the UK and increased public perception
of the importance of good dental health in the UK. Despite the
positive long-term industry trends, the CFR reflects the
regulatory and legal risks associated with the UK dental
healthcare market, for instance the risk of budget cuts or a
change in the currently for IDH favorable terms of existing and
future NHS contracts.

Moody's believes that it might be challenging for the group to
recruit and retain dentists for its branches while at the same
time maintaining a tight control on cost inflation.

The rating also considers that future deleveraging of the group
will be dependent on management's ability to acquire new dentist
branches at similar Ebitda multiples to those achieved
historically (below 6x) and significantly below the multiple of
IDH's merger with ADP for 9.8x in 2011, and on integrating new
dentist branches in time and at limited costs.

Moody's expects IDH to maintain adequate liquidity over the next
12 months, recognizing the discretionary nature of acquisition
capital expenditures. The liquidity profile is supported by a GBP
100 million super senior revolving credit facility, maturing in
2018 and internally generated cash before acquisition capex with
sufficient levels of operating cash flow to fund minimal working
capital requirements and maintenance capex. Moody's expects IDH
to hold minimum cash on balance sheet and will use any free cash
flow and drawdowns under the GBP 100 million RCF to fund
acquisitions. In Moody's view restrictions on dividend payments
under the super senior facility agreement are relatively lenient,
such that additional pressure on the liquidity profile could
arise in case of larger dividend payments to IDH's sponsors.

The stable outlook considers Moody's expectation of revenue
growth and EBITDA improvement mainly from newly acquired branches
supporting a gradual reduction in leverage to 6.0x, measured by
Moody's adjusted debt/EBITDA, over the next 12 months.

While Moody's recognizes that management focuses on pro-forma
EBITDA, Moody's adjusted credit metrics are based on reported
audited EBITDA. The pro-forma EBITDA assumes that acquisitions
made throughout the year have contributed already 12 months to
the company's performance, also with certain management
assumptions on the profitability of the acquired branches.

Structural Considerations

The debt instruments of the proposed new capital structure
consist of a GBP100 million super senior revolving credit
facility (not rated) issued by Turnstone Bidco 1 limited, GBP200
million senior secured fixed rate notes due 2018 and GBP125
million senior secured floating rate due 2018 (together the
senior secured notes) and GBP75 million of second lien notes due

The senior secured notes will rank behind the GBP100 million
senior revolving credit facility, but ahead of GBP75 million
second lien notes. The senior secured notes and the second lien
notes will benefit from guarantees by the parent company and
certain subsidiaries representing more than 80% of the group's
EBITDA, all issued debt instruments will share the same
collateral package.

Moody's understands that shareholder funding into the top holding
company of the restricted group, Turnstone MidCo2 Limited, will
be in the form of common equity.

What Could Change The Rating Up/Down

The ratings could be downgraded in case of a deterioration in
operating performance or increasingly aggressive financial policy
that would result in Moody's adjusted debt/EBITDA not falling
below 6.0x by year-end of fiscal year 2014, negative free cash
flow and/or a depletion of its liquidity buffer.

An upgrade of the ratings is unlikely over the near term due to
the company's aggressive growth strategy which will constrain
free cash flow and limit debt reduction, as well as the forward
looking nature of the assigned ratings. The rating could be
upgraded in case of revenue growth and EBITDA improvement from
newly acquired branches supporting a sustained reduction in
leverage to below 5.0x and positive free cash flow generation
being sufficient to fund acquisitions.

Principal Methodology

The principal methodology used in these ratings was the Global
Healthcare Service Providers Industry Methodology published in
December 2011. Other methodologies used include Loss Given
Default for Speculative-Grade Non-Financial Companies in the
U.S., Canada and EMEA published in June 2009.

Headquartered in Manchester (UK), IDH provides dentistry services
in England, Scotland and Wales employing 4,931 people and
generated GBP349 million of sales in the fiscal year ending March
2013. IDH is owed by private equity firms The Carlyle Group and
Palamon Capital Partners.


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
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re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers.

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

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

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