TCREUR_Public/130607.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

             Friday, June 7, 2013, Vol. 14, No. 112

                            Headlines


B U L G A R I A

UNITED BULGARIAN: Fitch Affirms 'B' Issuer Default Rating


F R A N C E

GROUPE SMCP: S&P Assigns Prelim. 'B' Corporate Credit Rating


G E R M A N Y

KION GROUP: Moody's Places 'B3' CFR Under Review for Upgrade


G R E E C E

EUROBANK ERGASIAS: S&P Lowers Rating on Debt Securities to 'D'
FREESEAS INC: Files Prospectus for Shares Held by Dutchess
FREESEAS INC: Hanover Stake Down to 0% as of May 28
NATIONAL BANK: S&P Lowers Ratings on 2 Preferred Stocks to 'C'
* GREECE: IMF Admits to Major Missteps in Handling Bailout


I R E L A N D

ION TRADING: S&P Assigns 'B' Corp. Credit Rating; Outlook Stable


I T A L Y

CAPITAL MORTGAGE 2007-1: S&P Lowers Rating on Class C Notes to D
ILVA PLANT: Government Puts Steel Mill in Administration
TEAMSYSTEM HOLDING: S&P Assigns 'B' Long-Term Corp. Credit Rating


K A Z A K H S T A N

HOUSING FINANCE: Bondholders Seek Changes to Investment Terms
* KAZAKHSTAN: Moody's Says Banking System Outlook Remains Neg.


L U X E M B O U R G

NORTHLAND RESOURCES: To Resume Ops After Bond Offering Okayed


N E T H E R L A N D S

GRAND HARBOUR I: S&P Assigns 'B' Rating to Class E Notes
GRAND HARBOUR: Fitch Expects Credit Quality in 'B'/'B-' Range
PROSPERO CLO I: Moody's Corrects May 29 Ratings Release
SMILE SECURITISATION: Fitch Affirms 'CC' Rating on Class E Notes


P O L A N D

CENTRAL EUROPEAN: U.S. Plan Declared Effective on June 5
GTI TRAVEL POLSKA: Declares Insolvency; Suspends Sales
LOT POLISH: Law May Help Ease Assessment of Restructuring Plan
OSRODEK SZKOLENIOWO: Declared Bankrupt by Noway Sacz Court


R U S S I A

ROSSIYA INSURANCE: Fitch Affirms 'B-' IFS Rating; Outlook Neg.
* KRASNODAR REGION: Fitch Affirms 'BB+' LT Currency Ratings
* CHUVASHIA: Fitch Rates Domestic Bond Issue at 'BB+(EXP)'
* Moody's Says Russian RMBS Continued Stable Performance in March


S P A I N

AYT FTPYME II: Moody's Confirms Ba3 Rating on Series F3 Notes
BLANCO: Goes Into Voluntary Receivership
INSTITUT CATALA: S&P Affirms 'BB/B' Issuer Credit Ratings


S W E D E N

UNILABS MIDHOLDING: Moody's Assigns 'B3' CFR, Outlook Stable


T U R K E Y

KAYI GROUP: Goes Bankrupt; SGST to Repay Holiday Bookings


U N I T E D   K I N G D O M

IAC PLASTICS: PAR Group Bus Firm Out of Administration
SANDWELL COMMERCIAL: S&P Raises Rating on Class C Notes to BB
SUPERGLASS: Switches to Aim After Refinancing Deal
TURNSTONE MIDCO 2: Fitch Assigns 'B+' Issuer Default Rating


X X X X X X X X

* Moody's: EMEA Spec.-Grade Issuers' Credit Quality Still Weak
* BOOK REVIEW: The Oil Business in Latin America: The Early Years


                            *********


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


UNITED BULGARIAN: Fitch Affirms 'B' Issuer Default Rating
---------------------------------------------------------
Fitch Ratings has affirmed United Bulgarian Bank A.D.'s (UBB)
Long-term foreign currency Issuer Default Rating (IDR) at 'B'
with a Negative Outlook.

KEY RATING DRIVERS: IDRS AND VR

UBB's IDRs are driven by its Viability Rating (VR), which
reflects the bank's high level of non-performing loans (NPLs,
loans overdue by more than 90 days) and the fact that they have
apparently yet to peak given the relatively unseasoned portfolio.
However, the ratings also take into account UBB's significant
loss absorption capacity, positive pre-impairment profit,
improved funding profile and currently satisfactory liquidity.

UBB's asset quality metrics continued to worsen in 2012 and Q113,
and compare unfavorably with those of the Bulgarian banking
system as a whole. NPLs were a high 33.1% of gross loans at end-
Q113 (32.4% at end-2012, 28.3% at end-2011), with restructured
loans equating to another 8.4%. Fitch does not expect UBB to
materially reduce its stock of problem loans through recoveries
because of the difficult operating environment, although recent
inflows of new problem loans have slowed compared with previous
periods.

UBB's Fitch core capital (FCC) ratio of 24.3% at end-2012 was
driven by low (42%) reserve coverage of NPLs, with unreserved
NPLs equal to a high 93% of FCC. The bank's Tier 1 ratio was a
lower 13.9% due to higher local regulatory reserves which in
total equaled a more adequate 80% of NPLs. In Fitch's view, the
substantial unreserved NPLs and the continued negative trends in
asset quality point to weaknesses in UBB's capital position.
However, the still reasonable Tier 1 ratio based on the higher
NPL coverage, coupled with positive pre-impairment profit (in
2012, equal to 2.5% of average total assets) suggest that the
bank may yet be able to maintain its solvency without external
support.

UBB's performance has been hit by a prolonged period of loan book
contraction (since 2009), continuously tightening interest
spreads and high loan impairment charges, as a result of which
the bank reported a BGN42m loss in 2012. Fitch believes that the
loan book expansion may prove challenging because of very weak
domestic loan demand, tougher competition in the market for good-
quality customers and the need for prudent liquidity management.
Profitability trends in the near term will be highly dependent on
NPL recognition and the bank's provisioning policy.

UBB's funding profile has improved. Facilities from National Bank
of Greece (NBG; B-/Stable) dropped to a low 5% of liabilities at
end-2012 from 26% at end-2010, and mostly comprised subordinated
debt maturing in 2017. Customer deposits are increasing and
accounted for 90% of total non-equity funding at end-2012 (end-
2010: 69%). Deposit stability is important for UBB given the weak
quality and cash generating capacity of its loan book. However,
at end-2012 liquid assets (defined as cash and balances with
banks, central bank reserves and unencumbered repo-able
securities) covered a reasonable 26% of customer funding.

RATING SENSITIVITIES - IDRS AND VR

UBB's ratings could be downgraded if the bank's asset quality and
capital positions continue to weaken. The ratings could stabilise
at their current levels if NPLs stop rising and the bank
continues to generate positive pre-impairment profit,
strengthening its loss absorption capacity.

KEY RATING DRIVERS - SUPPORT RATING

UBB's '5' Support Rating reflects Fitch's view that support
cannot be relied upon from the bank's owner, NBG, or the
Bulgarian authorities. Fitch does not factor in potential support
from NBG because of weaknesses in the latter's credit profile.

In respect to potential sovereign support, Fitch acknowledges
that the authorities would be likely to provide at least local
currency liquidity in case of need to UBB, given the bank's
sizable market shares in Bulgaria. However, in Fitch's view,
there is uncertainty as to whether the authorities would inject
capital into UBB, in case of need, or in all cases provide
foreign currency liquidity in sufficient volumes.

RATING SENSITIVITIES - SUPPORT RATING

The Support Rating could be upgraded if NBG was upgraded by at
least one notch. However, Fitch does not anticipate this in the
near term.

The rating actions are as follows:

Long-term foreign currency IDR: affirmed at 'B'; Outlook Negative

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

Viability Rating: affirmed at 'b'

Support Rating: affirmed at '5'



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F R A N C E
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GROUPE SMCP: S&P Assigns Prelim. 'B' Corporate Credit Rating
------------------------------------------------------------
Standard & Poor's Ratings Services said that it had assigned its
preliminary 'B' long-term corporate credit rating to France-based
affordable luxury apparel retailer Groupe SMCP S.A.S. and to its
holding company Soho Holding France S.A.S., (together SMCP).  The
outlook is stable.

At the same time, S&P assigned its preliminary 'B' issue rating
to the proposed EUR290 million fixed-rate secured notes to be
issued by special-purpose vehicle SMCP S.A.S.  The preliminary
recovery rating on the notes is '3', indicating S&P's expectation
of meaningful (50%-70%) recovery in the event of a payment
default.

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

The preliminary ratings primarily reflect S&P's view of the
group's financial profile as "highly leveraged".  On a Standard &
Poor's-adjusted basis, SMCP's preliminary capital structure
includes EUR290 million senior secured notes and EUR204 million
of preferred equity, alongside EUR52 million of operating-lease
adjustments.  Against this, SMCP's Standard & Poor's-adjusted
EBITDA was about EUR67 million in 2012 (which includes about
EUR5 million operating-lease adjustments).

"The ratings also reflect SMCP's "fair" business risk profile, as
the group operates in the highly fragmented affordable luxury
segment and focuses on existing trends to mitigate the fashion
risk.  SMCP is one of the few apparel retailers in Europe with
significant like-for-like sales growth in recent years (more than
12% per year in the last three years).  The robust growth trends
have enabled SMCP to enhance its bargaining power and improve its
EBITDA margin by 200bps in the last two years, despite almost
flat gross margins.  While current profitability trends are
therefore very favorable, we also believe that SMCP's operating
trends are not immune to fashion risk, which is a common
challenge for apparel retailers.  Besides that, SMCP's small size
compared with international peers and its focus on one local
market increases the risk to meet customer demand, in our view.
On balance, however, we think that, while the group has all
chances to sustain its strong earnings growth trend in the
future, fashion risk could relatively quickly dent SMCP's
profitability," S&P said.

The stable outlook reflects S&P's view that SMCP's future
earnings growth, fuelled by positive trading and successful
international expansion, should enable the company to mildly
improve financial measures over time, despite S&P's expectation
of marginally negative free cash flow in the next 18 months and a
challenging business environment for apparel retailers in Europe.

In particular, S&P believes that SMCP will be able to maintain
its adjusted EBITDA cash interest-coverage ratio of about 2.5x
and an adjusted debt-to-EBITDA ratio of 7.5x (below 5.0x
excluding the preferred equity) in the 12 months following the
implementation of the new capital structure.

S&P could upgrade Soho Holding France S.A.S. if the adjusted
EBITDA-to-cash interest ratio exceeded 3.0x and S&P's debt-to-
EBITDA ratio was about 6.0x (4.0x excluding the preferred
equity). This would likely accompany SMCP's successful
implementation of its international organic growth strategy,
especially in the
U.S.

Though S&P sees it as unlikely over the next 12 months, it could
lower the ratings if adjusted EBITDA cash interest cover were to
decline to below 2.0x.  This could occur as a result of
materially weaker-than-anticipated operating performance,
possibly as a result of weak French consumer sentiment or a poor
merchandise strategy.



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G E R M A N Y
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KION GROUP: Moody's Places 'B3' CFR Under Review for Upgrade
------------------------------------------------------------
Moody's Investors Service has placed the B3 Corporate Family
Rating (CFR) and Caa1-PD Probability of Default Rating of KION
Group GmbH (together with its subsidiaries "KION") under review
for upgrade. Concurrently, Moody's has placed the B2 rating of
all senior secured notes issued by KION Finance S.A. under review
for upgrade.

Ratings Rationale

The rating review has been triggered by the announcement of KION
Group GmbH to seek a public listing. Since we consider KION's
business profile to have characteristics which could position the
rating higher in the rating scale and the main factor
constraining the rating in the past was the group's high
leverage, a multi-notch upgrade of KION's ratings appears
possible should the envisaged IPO result in a significant
reduction of financial leverage.

KION's business profile benefits from the size of its operations
as evidenced by revenues of EUR 4.7 billion in 2012, the group's
strong market position as the world's second largest forklift
truck manufacturer, KION's diversified customer base and large
share of revenues from fairly stable service, aftermarket and
rental activities. Moreover, we believe KION is well positioned
for future growth in markets outside Europe.

However, since the leveraged buyout through KKR and Goldman Sachs
in 2006, KION's ratings have been constrained by high financial
leverage, private equity ownership and a challenging
macroeconomic environment in Europe. While KION has managed to
reduce leverage since 2009, debt/EBITDA in 2012 was still high at
to 6.7x on a Moody's adjusted basis and pro-forma the
deconsolidation of KION's hydraulics business, a 70% stake of
which was sold to Chinese engineering group Weichai in 2012.

Prior to the IPO announcement Moody's communicated that KION's
CFR could be upgraded to B2 if the company's leverage reduces
sustainably well below 7x debt/EBITDA, EBIT-margins reach high
single digits, EBIT/interest cover increases above 1.5x and free
cash flow/debt reaches 2% (all metrics as adjusted by Moody's).
Should a successful IPO result in an improvement of leverage and
interest cover metrics substantially beyond such hurdle ratios, a
multi-notch upgrade of KION's CFR appears possible as of June 5,
2013.

Downward rating pressure could build if the group is unable to
reap the benefits of its restructuring programme or if its
interest coverage falls below 1.0x. In addition, an unexpected
deterioration in KION's currently solid liquidity and covenant
headroom could exert pressure on the rating.

The principal methodology used in these ratings was the Global
Heavy Manufacturing Rating Methodology published in November
2009. Other methodologies used include Loss Given Default for
Speculative-Grade Non-Financial Companies in the U.S., Canada and
EMEA published in June 2009.

KION, headquartered in Wiesbaden, Germany, is a producer of
forklift trucks and material handling equipment. The group holds
the market-leading position in Europe and ranks second on a
global basis. KION, which was spun off from Linde AG in 2006, has
15 production sites across the world and follows a multi-brand
strategy (with global brands such as Linde and Still, and locally
with OM-Still in Italy, Fenwick in France, Baoli in China, and
Voltas in India). In 2012, KION generated revenues of EUR4.7
billion with a workforce of around 21,000 employees.



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G R E E C E
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EUROBANK ERGASIAS: S&P Lowers Rating on Debt Securities to 'D'
--------------------------------------------------------------
Standard & Poor's Ratings Services said it has lowered to 'D'
from 'CC' its issue ratings on Eurobank Ergasias S.A.'s existing
subordinated debt securities.  It has also lowered the issue
rating to 'C' from 'CC' on its Series A preferred securities
(ISIN: DE000A0DZVJ6); Series B preferred securities (ISIN:
XS0232848399); and noncumulative guaranteed nonvoting
exchangeable preferred securities (ISIN: XS0440371903).

These rating actions do not affect S&P's counterparty credit
ratings on Eurobank or any other related issue ratings.

S&P's downgrade of Eurobank's subordinated debt and above-
mentioned hybrid securities follows the bank's May 27
announcement of the launch of a tender offer on the outstanding
amount of its dated subordinated debt and its Tier 1 preferred
securities.  As of now, dated subordinated debt totaled EUR289
million and preferred securities totaled EUR313 million.

According to the offer, Eurobank is repurchasing for cash the
outstanding securities at a purchase price equal to the nominal
value.  At the same time, the proceeds of the repurchase will
have to be for the sole purpose of subscribing for new ordinary
shares of Eurobank, at an issue price set by the bank.

As such, S&P understands bondholders accepting the offer will not
have the option to retain the proceeds of the repurchase and will
be receiving securities which rank junior to the ones they
currently hold.

As a result, the downgrade reflects S&P's opinion that the
proposed tender offer constitutes a distressed exchange, as it
implies that investors will receive less value than the promise
of the original securities.  According to S&P's criteria, this
also occurs when the investors receive, in exchange, securities
that are ranked more junior, without adequate offsetting
compensation

S&P's long-term rating on Eurobank is 'CCC', with a negative
outlook.

"Our different ratings on both debt instruments reflect the
different features that we believe pertain to hybrid capital
instruments, compared with other instruments.  As we explain in
our criteria, an exchange offer on an equity hybrid instrument
may reflect the possibility that, absent the exchange offer
taking place, the issuer would exercise the coupon deferral
option under the terms of the instrument.  In this case, we would
revise the rating on the hybrid to 'C' rather than the 'D' rating
we would use for non-hybrids.  Since deferral on a hybrid under
its terms (outside the offer scenario) would result in a 'C'
rating, a distressed exchange offer would unlikely lead to a
lower rating than 'C'," S&P said.

On completion of the tender offer, S&P will review its ratings on
any untendered non-deferrable subordinated debt.


FREESEAS INC: Files Prospectus for Shares Held by Dutchess
----------------------------------------------------------
FreeSeas Inc. disclosed that Dutchess Opportunity Fund, II, LP,
may resell up to 2,304,662 shares of its common stock and Navar
may resell 136,925 shares of common stock.

The Company may from time to time issue up to 2,304,662 of shares
of its common stock to Dutchess at 98 percent of the market price
at the time of that issuance determined in accordance with the
terms of the Company's Investment Agreement dated as of May 29,
2013, with Dutchess.  The selling stockholders may sell these
shares from time to time in regular brokerage transactions, in
transactions directly with market makers or in privately
negotiated transactions.

The Company's common stock is currently quoted on the NASDAQ
Capital Market under the symbol "FREE."  On May 29, 2013, the
closing price of the Company's common stock was $0.66 per share.

A copy of the Form F-1 prospectus is available for free at:

                        http://is.gd/AZdIj7

                         About FreeSeas Inc.

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

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

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

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


FREESEAS INC: Hanover Stake Down to 0% as of May 28
---------------------------------------------------
In an amended Schedule 13G filing with the U.S. Securities and
Exchange Commission, Hanover Holdings I, LLC, and Joshua Sason
disclosed that, as of May 28, 2013, they do not beneficially own
any shares of common stock of Freeseas Inc.  Hanover previously
reported beneficial ownership of 560,000 common shares or 9.89
percent equity stake as of April 17, 2013.  A copy of the amended
regulatory filing is available at http://is.gd/VLGk2s

                        About FreeSeas Inc.

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

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

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

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


NATIONAL BANK: S&P Lowers Ratings on 2 Preferred Stocks to 'C'
--------------------------------------------------------------
Standard & Poor's Ratings Services corrected its ratings on two
preferred stocks (ISIN: XS0203171755 and ISIN: XS0203173298)
issued by National Bank of Greece Funding Ltd. by lowering them
to 'C' from 'CC' to reflect coupon nonpayment.

These two stocks are guaranteed by the parent, National Bank of
Greece S.A. (NBG).  The issuer was due to pay interest on these
stocks on May 7, 2013, but did not pay the amount due; instead,
it deferred the coupon without notifying S&P of its plans.  Had
S&P received the relevant information, it would have lowered the
issue ratings to 'C' from 'CC' on the due date, rather than now.

In addition, S&P lowered the rating to 'C' from 'CC' on NBG's
series A noncumulative preference shares (CUSIP: 633643507),
which are American depositary shares.  Due to an error, S&P did
not lower the ratings on these preferred securities when NBG
failed to pay the dividends in March 2011.  To S&P's knowledge,
NBG has not resumed payments.

NBG has recently launched a tender offer on the series A ADS,
which has an outstanding value of EUR25 million.  S&P would
consider this offer "distressed" under its criteria.  The offer
has no implications for the 'C' rating, which already
incorporates the suspension of the dividend payment and the
bank's announcement it will not make any payment in 2013.  Hence,
upon completion of the exchange, S&P would maintain the 'C'
rating on this instrument.


* GREECE: IMF Admits to Major Missteps in Handling Bailout
----------------------------------------------------------
Matina Stevis and Ian Talley at The Wall Street Journal report
that the International Monetary Fund has admitted to major
missteps over the past three years in its handling of the bailout
of Greece, the first spark in a debt crisis that spread across
Europe.

According to the Journal, in an internal document marked
"strictly confidential," the IMF said it badly underestimated the
damage that its prescriptions of austerity would do to Greece's
economy, which has been mired in recession for the last six
years.

The IMF conceded that it bent its own rules to make Greece's
burgeoning debt seem sustainable and that, in retrospect, the
country failed on three of its four criteria to qualify for aid,
the Journal relates.

But the fund also stressed that the response to the crisis,
coordinated with the European Union, bought time to limit the
fallout for the rest of the 17-nation euro area, the Journal
notes.

And while IMF officials said the lessons learned would lead them
to take a tougher stance in future bailouts, they also said that
there was little else the fund could have done at the time,
according to the Journal.

"If we were in the same situation . . . we would have done the
same thing again," the Journal quotes Poul Thomsen, the IMF's
lead negotiator in the bailout talks, as saying referring to its
signing on to the deal in 2010 despite the lack of any debt
relief.

In its review Wednesday, the IMF, as cited by the Journal, said
that it is questionable whether Greece will be able to pay its
obligations if it continues to hold unhealthy levels of debt well
into the next decade.

"Should debt sustainability concerns prove to be weighing on
investor sentiments even with the framework for debt relief now
in place, and strong program implementation by the Greek
authorities notwithstanding, a more front-loaded approach to debt
relief would need to be considered," the Journal quotes the fund
as saying.



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ION TRADING: S&P Assigns 'B' Corp. Credit Rating; Outlook Stable
----------------------------------------------------------------
Standard & Poor's Ratings Services said that it had assigned its
'B' corporate credit rating to ION Trading Technologies Ltd. (ION
Trading), an Ireland-headquartered provider of trading software
and solutions to financial institutions, and a wholly owned
subsidiary of ION Investment Group Ltd.  The outlook is stable.

At the same time, S&P assigned its 'B+' rating to the company's
US$50 million senior secured revolving credit facility (RCF) due
2018 and US$750 million first-lien term loan due 2020, both
issued by ION Trading's wholly-owned subsidiary, ION Trading
Technologies S.a.r.l.  The recovery rating on these notes and
this loan is '2', indicating S&P's expectation of substantial
(70%-90%) recovery in the event of a payment default.

S&P also assigned its 'CCC+' rating to the US$375 million second-
lien term loan due 2021, issued by ION Trading Technologies
S.a.r.l.  The recovery rating on this loan is '6', indicating
S&P's expectation of negligible (0%-10%) recovery in the event of
a payment default.

The rating reflects S&P's assessment of ION Trading's business
risk profile as fair, and its financial risk profile as highly
leveraged after the completion of the refinancing in May 2013.

ION Trading is a financial software and services company that
provides mission-critical trading infrastructure solutions to
financial institutions.

ION Trading's business risk profile is constrained by the group's
very narrow product focus on trading solutions for electronic
fixed-income markets and its resulting sole reliance on financial
institutions as end customers for its product offering.  Further
constraints include a high customer concentration (its top 10
clients accounted for 45% of revenues in 2012) and meaningful
competition from in-house solutions, a few larger-size
competitors such as SunGard, and many smaller competitors.

"These constraints are partly offset by the group's large
recurring revenue base (over 80% of total revenues) through non-
cancellable subscription agreements that typically last about
five years, and strong track record of profitable organic and
acquisitive growth helped by high client retention, successful
cross- and upselling efforts, and new customer wins.  Our
financial risk profile assessment primarily reflects the group's
very high Standard & Poor's-adjusted debt-to-EBITDA ratio of
about 7.2x at the closing of the refinancing and a moderate cash
interest cover ratio of 2.0x-2.5x.  Our leverage calculation is
pro forma the full-year consolidation of the US$10 million EBITDA
(about 7% of group EBITDA) from holding vehicle Pattington Ltd.,
which we understand will become a wholly owned subsidiary of ION
Trading by the end of June 2013, and including moderate operating
lease obligations of US$26 million.  We understand that
Pattington is a debt-free entity and has modest cash on its
balance sheet," S&P said.

These constraints are partly mitigated by S&P's expectations of
solid annual free operating cash flow (FOCF) of US$70 million-
US$85 million pro forma the refinancing, helped by very limited
capital expenditure requirements, which should allow ION Trading
to gradually deleverage to well below 6x over the next 24 months
if it applies excess cash to reduce debt.  In addition, ION
Trading's financial risk profile benefits from the group's
proposed long-term capital structure, with only modest annual
debt amortizations of US$7.5 million, and the lack of maintenance
covenants on its first-lien and second-lien debt.

The stable outlook incorporates S&P's belief that the company
will maintain a cash interest cover ratio of about 2x and utilize
its FOCF generation to gradually reduce leverage below 6x over
the next 24 months.

S&P could lower the rating if:

   -- Sales fell as the result of a repeated severe financial
      crisis in Europe that hurt demand from ION Trading's
      Europe-based customers;

   -- ION Trading experienced significant margin compression to
      below 40% as a result of increasing competition;

   -- ION Trading pursued further debt-financed acquisitions or
      shareholder returns that precluded a reduction in leverage
      from the 7x pro forma level at closing of the refinancing;
      or

   -- EBITDA cash interest coverage fell to 1.5x.

Although unlikely over the next 12 months, S&P could raise the
rating by one notch if ION Trading were able to maintain profit
margins at about 50% while reducing leverage sustainably to about
5x.



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


CAPITAL MORTGAGE 2007-1: S&P Lowers Rating on Class C Notes to D
----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its credit rating on
Capital Mortgage S.r.l.'s series 2007-1's class C notes to 'D
(sf)' from 'CCC (sf)'.  S&P's ratings on the class A1, A2, and B
notes are unaffected.

The rating action follows the interest shortfall that occurred on
the last interest payment date (IPD) on April 30, 2013, for the
class C notes.

The transaction is structured with cumulative default triggers of
7% on the class B notes and 15% on the class C notes.  If these
triggers are breached, the interest due on the relevant class of
notes may be deferred.  This is because principal collections can
no longer be used to cover interest shortfalls until the prior-
ranking notes are fully redeemed.

As of the April 30, 2013, IPD, the cumulative default ratio
increased to 8.92%.  Consequently, the principal collections can
only be used to pay senior expenses and interest on the class A1,
A2, and B notes until the class B notes are repaid.  Because on
the last IPD there were not enough interest available funds to
clear the class B notes' principal deficiency ledger, which ranks
senior to the class C notes, the latter tranche of notes
subsequently recorded an interest shortfall.  S&P has therefore
lowered to 'D (sf)' from 'CCC (sf)' its rating on the class C
notes.

Capital Mortgage's series 2007-1 securitizes a pool of prime
performing mortgages secured over residential properties in
Italy. The originator is Banca di Roma (now part of UniCredit
SpA).

          STANDARD & POOR'S 17G-7 DISCLOSURE REPORT

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

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

            http://standardandpoorsdisclosure-17g7.com

RATINGS LIST

Class    Rating              Rating
         To                  From

Capital Mortgage S.r.l.
EUR2,479.35 Million Mortgage-Backed Floating-Rate Notes Series
2007-1

Rating Lowered

C        D (sf)              CCC (sf)

Ratings Unaffected

A1       AA+ (sf)
A2       AA+ (sf)
B        A (sf)


ILVA PLANT: Government Puts Steel Mill in Administration
--------------------------------------------------------
Business Recorder reports that Italy's government placed a
troubled steel mill temporarily into administration amid a long-
running legal dispute over toxic pollution in a move that was
immediately criticised by the main industry association as a
dangerous precedent.

The measure, which takes effect immediately but still has to be
confirmed by parliament, would last between 12 and 36 months and
would take control of the giant Ilva plant in Taranto in southern
Italy from its owners, the Riva family, according to Business
Recorder.  The report relates that a cabinet meeting also decided
to name as administrator Enrico Bondi, an experienced official
who has already worked for months on the Ilva case and helped
rescue the dairy giant Parmalat after its disastrous collapse in
2003.

Business Recorder notes that Antonio Gozzi, head of Federacciai,
the main steel industry lobby, said the decision was "mistaken
and disproportionate" and "a very dangerous precedent" for
Italian industry as a whole.  The draft decree adopted by the
cabinet would enable the state in extraordinary cases to take
over businesses with "national strategic interest", the
government said in a statement obtained by Business Recorder.

Business Recorder says that this would only apply in cases of
"grave and significant dangers for the environment and health
caused by a failure to observe environmental" regulations, the
statement said.  Economic Development Minister Flavio Zanonato
said the bill was "not an expropriation but an administration
with precise targets after which the current shareholders will
remain the owners," Business Recorder relays.

Business Recorder discloses that Mr. Zanonato earlier warned that
the site was threatened with closure in the current situation,
which would cost the Italian economy some EUR8.0 billion
(US$10.5 billion) a year.

Prosecutors last month ordered the seizure of EUR8.1 billion in
assets from the Rivas, after which the board of Ilva resigned in
protest, Business Recorder notes.

Business Recorder discloses that the Taranto plant and other Ilva
facilities around Italy employ a total of around 24,000 people
and a total of 40,000 steel sector jobs are affected.

Italy has western Europe's biggest steel sector and the Riva
Group as a whole accounts for around 80 percent of production in
the country, Business Recorder adds.


TEAMSYSTEM HOLDING: S&P Assigns 'B' Long-Term Corp. Credit Rating
-----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B' long-term
corporate credit rating to Italy-based software services provider
TeamSystem Holding SpA.  The outlook is stable.

At the same time, S&P assigned its 'B' issue rating to
TeamSystem's EUR300 million senior secured fixed-rate notes due
2020.  The recovery rating on the notes is '4', indicating S&P's
expectation of average (30%-50%) recovery for creditors in the
event of a payment default.

The rating primarily reflects S&P's assessment of TeamSystem's
financial risk profile as "highly leveraged."  TeamSystem's
private equity ownership has led the group to adopt aggressive
financial policies, including on acquisitions and cash dividends.
S&P also factors into the rating its assessment of TeamSystem's
business risk profile at the lower end of the "fair" category.
The group operates in the fragmented Italian small and midsize
enterprise market, and has smaller operations and weaker
geographic diversity than larger business services providers.

These weaknesses are partially offset by the fact that TeamSystem
is the market leader in Italy, with a broad, diverse client base.
The group benefits from profitable and cash-generative
operations, with minimal capital expenditure (capex) and working
capital requirements.  TeamSystem also benefits from high
barriers to entry due to its unique value-added reseller (VAR)
distribution model, which helps to protect its strong market
position.  New entrants would need to invest heavily in order to
replicate TeamSystem's software suite and regional branch and VAR
distribution network that the group has developed over many
years.

"In our base-case credit scenario, we anticipate that
TeamSystem's revenues will increase at a mid- to high-single-
digit rate to more than EUR160 million on Dec. 31, 2013.  At the
same time, we anticipate that TeamSystem's Standard & Poor's-
adjusted EBITDA margin will be more than 34%, with adjusted
EBITDA of about EUR55 million.  We forecast that the group will
continue to generate positive cash flows, with adjusted funds
from operations (FFO) of more than EUR18 million in the year to
Dec. 31, 2013," S&P said.

"The group's capital structure includes sizable shareholder loans
that generate payment-in-kind (PIK) interest at an aggressive
rate of 12%.  As such, we forecast adjusted debt to EBITDA of
slightly more than 14x (or slightly less than 6x excluding the
shareholder loans) and adjusted FFO to debt of slightly less than
3% (7% excluding the shareholder loans) on Dec. 31, 2013.  We
note that credit metrics remain at the "weak" end of the "highly
leveraged" financial risk profile category, even excluding our
adjustments to debt for shareholder loans.  We anticipate that
cash interest coverage will be about 2.5x on Dec. 31, 2013, and
will stay stable in the near to medium term.  However, if the
final interest rate for the proposed bond were to exceed the
target rate we assume in our base case, cash interest coverage
could immediately come under pressure," S&P added.

The stable outlook reflects S&P's view that demand for
TeamSystem's services should remain steady over the next two
years, and that margins will remain robust.

S&P could lower the rating if the group experiences severe margin
pressure or if poorer cash flows lead to weaker credit metrics.
Debt-financed acquisitions or an increase in shareholder
distributions could also result in weaker credit metrics, which
could in turn lead S&P to lower the rating.  S&P notes that the
group's sizable shareholder loans have an aggressive PIK interest
rate of 12%, which could outpace EBITDA growth and therefore
place pressure on the group's credit metrics.  If cash interest
coverage were to fall to less than 2x S&P could consider lowering
the rating.

S&P is currently unlikely to raise the rating because of the
group's capital structure, relatively modest absolute cash
generation, aggressive financial policies on leverage, potential
acquisitions, and dividends.



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


HOUSING FINANCE: Bondholders Seek Changes to Investment Terms
-------------------------------------------------------------
Omar R. Valdimarsson at Bloomberg News reports that bondholders
in Iceland's state-backed Housing Finance Fund are waiting for
the nation's biggest mortgage bank to change the terms of their
investment as the government looks for ways to keep the lender
afloat.

"It wouldn't surprise me if they tried to push through changes to
the terms of HFF bonds this summer," Bloomberg quotes Kari Arnor
Karason, chief executive officer at Stapi Pension Fund, as saying
in a phone interview.  "Usually they've already made up their
minds; the so-called consultations are often just statements."

Stapi, which holds ISK77 billion (US$630 million) in HFF and
government bonds, hasn't been approached by HFF and says that the
lender has a full and unlimited guarantee from the state,
Bloomberg discloses.

HFF, which has about US$4.1 billion in bonds outstanding, has
struggled to escape insolvency as its inflation-linked home loans
lose ground to regular mortgages sold by commercial banks,
Bloomberg notes.  The fund said in March HFF's capital adequacy
ratio was 3.2% at the end of last year, compared with a 5 percent
regulatory minimum, Bloomberg recounts.

Iceland's regulator said May 28 it was concerned HFF lacked the
necessary capital to protect it against losses, Bloomberg
relates.

According to Bloomberg, Welfare Minister Eyglo Hardardottir,
whose ministry is responsible for HFF, said in an interview last
week that Iceland will seek the participation of HFF bondholders
to bail out the state-owned lender.

The government and HFF have said they won't take any steps to
change the terms on the debt without the consent of bondholders,
Bloomberg relates.

A restructuring "has been discussed," HFF Deputy Chairman Sjofn
Ingolfsdottir, as cited by Bloomberg, said in an interview.  "But
I can't make any assertions about whether this will be the
outcome."

Moody's, which rates HFF seven steps below investment grade at
Caa1 on a stand-alone basis, said the lender needs to restore its
ability to generate operating profit and match its capitalization
to its risk profile, Bloomberg notes.

HFF is a lender based in Reykjavik.



* KAZAKHSTAN: Moody's Says Banking System Outlook Remains Neg.
--------------------------------------------------------------
The outlook for Kazakhstan's banking system remains negative,
unchanged since October 2008, says Moody's Investors Service in a
new report published on June 5, 2013.  The outlook reflects the
rating agency's view of the banking system's large overhang of
problem loans, insufficient loan-loss reserves, its poor
profitability and capital adequacy and limited credit growth.

The new report, entitled "Banking System Outlook: Kazakhstan", is
now available on http://www.moodys.com

Although the operating environment in Kazakhstan is relatively
stable, Kazakh banks derive little benefit from the growing
economy, as the better-performing industries (large state-owned
energy and mining companies) do not borrow from domestic banks.
As a result, Moody's expects modest credit growth of 5% (in real
terms) in 2013, pressured by limited credit demand from the non-
commodities companies.

Weak asset quality and capital adequacy will remain a key credit
challenge for the banking system over the outlook period. Moody's
expects problem loans to decline only marginally from its
estimate of 40% of gross loans as of year-end 2012. The rating
agency's scenario analysis indicates that banks need to create
additional loan-loss provisions equal to about 6% of gross loans
to fully cover expected losses, which could push the system's
total capital adequacy ratio down to 12.5% (modestly above the
12% regulatory minimum) in the next 12-18 months, from 14.9% at
year-end 2012.

Moody's expects the system-average return on average assets
(RoAA) to remain weak, in the 0.5%-1% range over the outlook
period, pressured by low earnings and significant loan loss
provisions.

Banks have improved their funding and liquidity structures,
supported by increasing customer funding, limited lending growth
and reduced market borrowings. However, Moody's note that some
large banks are highly dependent on large corporate deposits
(many of which are from state-controlled entities), which
represents an important refinancing risk.

Moody's sees a very low probability that the government would
extend support to banks' bond holders, as evidenced by the bail-
ins of a few large failed banks in the past several years.
However, depositors of large banks are still likely to receive
moderate systemic support, which results in bank deposit ratings
exceeding those institutions' senior unsecured debt ratings.



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


NORTHLAND RESOURCES: To Resume Ops After Bond Offering Okayed
-------------------------------------------------------------
Karl-Axel Waplan, President & CEO, Northland Resources S.A., on
June 4 disclosed that existing bondholders voted in favor of the
revised terms for the Bond Offering.

Northland announced in a press release dated May 30, 2013, that
the previously announced Bond Offering of US$335 million was
successfully subscribed.  The settlement of the Bond Offering
were subject to the approval of a 2/3 majority of the existing
holders of the US$370 million bond.

On June 4, 2013, the bondholder's meeting was held.  There were
sufficient bondholders present at both meetings to form a quorum.
The proposed resolution obtained 75.29% of the votes in respect
of the 13% bonds and 100% of the votes in respect of the 12.25%
bonds.  The proposal was adopted according to the voting
requirements of the bond agreement for both bonds.

Northland Resources S.A. disclosed that following the recently
announced approval of the Bondholders regarding the long term
financial solution for Northland, the Board of Northland decided
to resume operations at 13:00 on June 4.

Subsequently, Norsk Tillitsmann has decided to withdraw the
acceleration and enforced bank account pledge effective since
May 24, 2013, whereby the Group has regained full access to its
funds in bank accounts.  Since the Group by the June 4
resolutions has secured long-term financing for its operations,
as well as immediate disposal of funds required for short-term
use, The Board of Directors has decided to rescind the previously
adopted moratorium on purchases of goods and services of May 24
and to resume the operations of the Group.

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



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


GRAND HARBOUR I: S&P Assigns 'B' Rating to Class E Notes
--------------------------------------------------------
Standard & Poor's Ratings Services assigned its credit ratings to
Grand Harbour I B.V.'s EUR355.0 million floating-rate class A-1,
A-2, B, C, D, and E notes.  At closing, Grand Harbour I also
issued an unrated subordinated class of notes.

S&P's ratings reflects its assessment of the collateral
portfolio's credit quality.  The portfolio is diversified,
primarily comprising broadly syndicated speculative-grade U.S.
and European senior secured term loans and senior secured bonds.

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

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

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

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

Grand Harbour I is a European cash flow corporate loan
collateralized loan obligation (CLO) securitization of a
revolving pool, comprising euro-denominated senior secured loans
and bonds issued by European and U.S. borrowers. Blackstone/GSO
Debt Funds Europe Ltd. is the collateral manager.

          STANDARD & POOR'S 17G-7 DISCLOSURE REPORT

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

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

         http://standardandpoorsdisclosure-17g7.com/1582.pdf

RATINGS LIST

Grand Harbour I B.V.
EUR403.35 Million Floating-Rate And Subordinated Notes

Class                 Rating           Amount
                                     (mil. EUR)
A-1                   AAA (sf)         240.00
A-2                   AA (sf)           15.00
B                     A (sf)            35.00
C                     BBB (sf)          22.50
D                     BB (sf)           32.50
E                     B (sf)            10.00
Sub                   NR                48.35

NR-Not rated.


GRAND HARBOUR: Fitch Expects Credit Quality in 'B'/'B-' Range
-------------------------------------------------------------
Fitch Ratings has assigned Grand Harbour I B.V.'s notes final
ratings, as follows:

EUR240.0m Class A-1 (ISIN XS0927882026): 'AAAsf'; Outlook Stable
EUR15.0m Class A-2 (ISIN XS0927883180): not rated
EUR35.0m Class B (ISIN XS0927883776): not rated
EUR22.5m Class C (ISIN XS0927884402): not rated
EUR32.5m Class D (ISIN XS0927884667): not rated
EUR10.0m Class E (ISIN XS0927884824): not rated
EUR48.4m subordinated notes (No ISIN): not rated

KEY RATING DRIVERS

Sufficient Credit Enhancement:
Credit enhancement (CE) for the rated notes, in addition to
excess spread, is sufficient to protect against portfolio default
and recovery rate projections in the applicable rating scenario.
The level of CE for the rated notes is higher than the average
for Fitch-rated legacy CLOs.

'B'/'B-' Portfolio Credit Quality:
Fitch expects the average credit quality of obligors to be in the
'B'/'B-' range. Fitch has credit opinions on 54 of the 58
obligors in the indicative portfolio.

Above-Average Recoveries:
At least 90% of the portfolio will be composed of senior secured
obligations. Recovery prospects for these assets are typically
more favorable than for second-lien, unsecured, and mezzanine
assets. Fitch has assigned Recovery Ratings to 89.4% of the
indicative portfolio.

Limited Basis/Reset Risk:
Basis and reset risk is naturally hedged for most of the
portfolio through the floating rate, semi-annually paying
liabilities. Fixed rate assets can account for no more than 10%
of the portfolio and no more than 5% of the assets can pay
interest less frequently than semi-annually.

Limited FX Risk:
Asset swaps are used to mitigate any currency risk on non-euro-
denominated assets. The transaction is allowed to invest up to
10% of the portfolio in assets denominated in a currency other
than EUR, provided that suitable asset swaps can be entered into.

TRANSACTION SUMMARY

Grand Harbour I B.V. is an arbitrage cash flow collateralized
loan obligation (CLO). Net proceeds from the issuance of the
notes will be used to purchase a EUR400 million portfolio of
European leveraged loans and bonds. The portfolio is managed by
Blackstone/GSO Debt Funds Europe Limited. The reinvestment period
is scheduled to end in 2016.

The transaction documents may be amended subject to rating agency
confirmation or note holder approval. Where rating agency
confirmation relates to risk factors, Fitch will analyze the
proposed change and may provide a rating action commentary if the
change does not have a negative impact on the then current
ratings. Such amendments may delay the repayment of the notes as
long as Fitch's analysis confirms the expected repayment of
principal at the legal final maturity.

If in the agency's opinion the amendment is risk-neutral from the
perspective of the rating Fitch may decline to comment.
Noteholders should be aware that the structure considers the
confirmation to be given if Fitch declines to comment.

RATING SENSITIVITIES

A 25% increase in the expected obligor default probability or a
25% reduction in the expected recovery rates would lead to a
downgrade of the class A-1 notes to 'AA+sf'.

Key Rating Drivers and Rating Sensitivities are further described
in the accompanying new issue report.


PROSPERO CLO I: Moody's Corrects May 29 Ratings Release
-------------------------------------------------------
Moody's Investors Service on June 5, 2013, revised a press
release on Prospero CLO I B.V.  The corrected release is as
follows:

Moody's Investors Service announced that it has upgraded the
ratings of the following notes issued by Prospero CLO I B.V.:

USD15,300,000 Class A-2 Senior Secured Floating Rate Notes Due
2017, Upgraded to Aaa(sf); previously on Sep 6, 2011 Upgraded to
Aa1(sf)

Moody's also downgraded the ratings of the following notes issued
by Prospero CLO I B.V.:

USD15,300,000 Class C Senior Secured Deferrable Interest Floating
Rate Notes Due 2017, Downgraded to Ba2(sf); previously on Sep 6,
2011 Upgraded to Ba1(sf)

USD7,700,000 Class D Senior Secured Deferrable Interest Floating
Rate Notes Due 2017, Downgraded to Caa2(sf); previously on Sep 6,
2011 Upgraded to B3(sf)

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

USD130,250,000 Class A-1-A Senior Secured Floating Rate Notes Due
2017, Affirmed Aaa(sf); previously on Apr 13, 2005 Assigned
Aaa(sf)

EUR35,600,000 Class A-1-B Senior Secured Floating Rate Notes Due
2017, Affirmed Aaa(sf); previously on Apr 13, 2005 Assigned
Aaa(sf)

GBP 24,500,000 Class A-1-C Senior Secured Floating Rate Notes Due
2017, Affirmed Aaa(sf); previously on Apr 13, 2005 Assigned
Aaa(sf)

USD15,300,000 Class B Senior Secured Deferrable Interest Floating
Rate Notes Due 2017, Affirmed A1(sf); previously on Sep 6, 2011
Upgraded to A1(sf)

Prospero CLO I B.V., issued in April 2005, is a multi-currency
Collateralised Loan Obligation ("CLO") backed by a portfolio of
mostly high yield US and European loans, managed by Alcentra.
This transaction has ended its reinvestment period in March 2010.
The portfolio is predominantly composed of senior secured loans,
and is exposed to 47 obligors with a reported diversity score of
26.


SMILE SECURITISATION: Fitch Affirms 'CC' Rating on Class E Notes
----------------------------------------------------------------
Fitch Ratings has affirmed Smile Securitisation Company 2007 B.V.
as follows:

Class A (NL0000169142): affirmed at 'BBBsf'; Outlook Stable

Class B (XS0288450736): affirmed at 'BBsf'; Outlook revised to
Negative from Stable

Class C (XS0288453599): affirmed at 'Bsf'; Outlook Negative

Class D (XS0288455370): affirmed at 'CCCsf'; RE0%

Class E (XS0288455883): affirmed at 'CCsf'; RE0%

KEY RATING DRIVERS

The affirmation reflects low defaults and losses, high historical
recoveries and an uptick in credit enhancement (CE) across the
capital structure since the last review in June 2012. Cumulative
defaults as a percentage of the initial portfolio balance have
increased slightly to 1.99% from 1.68% as of the last review.
Additionally, cumulative net losses have only marginally
increased to 0.29% of the initial portfolio balance compared with
0.27%.

The revision of the Outlook on the class B notes to Negative was
driven by negative migration in the portfolio's credit quality
and a consequent increase in the lowly rated asset bucket to
11.59% of the outstanding portfolio balance compared with 9.2% a
year ago. The lowly rated asset bucket typically consists of
loans that the originator either classifies as doubtful or in
restructuring. Furthermore, 44% of the portfolio consists of
loans with a bullet maturity and 31% of these bullet loans are
due to mature during 2015 and 2016, which may result in
refinancing stress for the transaction.

The transaction currently has a pro-rata amortization profile for
scheduled repayments. As all notes receive principal repayments
under pro-rata amortization, the transaction has not benefited
from as much de-leveraging as a purely sequential amortization
transaction. If cumulative defaults exceed 2.2% of the initial
portfolio balance, the notes will schedule repayments
sequentially rather than pro rata. Cumulative defaults are
currently 1.99% and Fitch expects the trigger to be breached next
year, which would result in sequential amortization.

Class A notes will build up CE once sequential amortization
starts and thereby have increased protection against further
deterioration in the portfolio credit quality and any refinancing
stresses. Furthermore, the weighted average recovery rate for
defaulted assets that have been worked out is high at 75% and a
positive for the transaction.

The structure has sufficient liquidity in the form of an uncapped
reserve account that is topped up by 15bp per annum through
excess spread in the structure. The balance of the reserve
account is EUR10,124,782 (0.71% of the capital structure).

RATING SENSITIVITIES

Applying a 1.25x default rate multiplier to all assets in the
portfolio would result in a downgrade of one to two notches for
the all the notes.

Applying a 0.70x recovery rate multiplier to all assets in the
portfolio would result in a downgrade of one rating category for
the senior and mezzanine notes.



===========
P O L A N D
===========


CENTRAL EUROPEAN: U.S. Plan Declared Effective on June 5
--------------------------------------------------------
Central European Distribution Corporation disclosed that CEDC's
Prepackaged Plan of Reorganization, which won approval from the
U.S. Bankruptcy Court for the District of Delaware on May 13,
2013, was declared effective on June 5.

Pursuant to the Plan, CEDC will make a cash payment to holders of
its 2013 Convertible Notes and certain of its 2016 Senior Secured
Notes, will issue new notes to holders of its 2016 Senior Secured
Notes and has issued new shares to Roust Trading Ltd.  All of the
previously issued 2013 Convertible Notes and 2016 Senior Secured
Notes and shares of outstanding CEDC common stock have been
cancelled.  The Plan will result in a reduction of approximately
US$665.2 million of debt of CEDC.  As a result of the
cancellation of CEDC's common stock, as of June 5 CEDC has ceased
to be a public company in Poland and its common stock is no
longer subject to listing and trading on the Warsaw Stock
Exchange.  RTL, owned by Roustam Tariko, has received 100% of the
outstanding stock of the reorganized CEDC in exchange for funding
CEDC's cash payments under the Plan and the cancellation of
CEDC's existing debt obligations to RTL.  Distributions to
holders of the 2013 Convertible Notes are expected to be
completed on or about June 6, 2013.

On May 31, 2013, CEDC completed its confirmation of elections
under the Plan's cash option for holders of 2016 Senior Secured
Notes.  As a result, distributions under the Plan's cash option
to holders of the 2016 Senior Secured Notes are expected to be
completed within approximately five business days from the
effective date, on or about June 12, 2013.  Based on its
tabulations, holders of CEDC Finance Corporation International,
Inc.'s 9.125% Senior Secured Notes due 2016 and 8.875% Senior
Secured Notes due 2016 who submitted bid prices of up to and
including US$820.00 or EUR820.00, respectively, will receive a
cash payment in respect of their 2016 Senior Secured Notes.
Approximately EUR90.8 million of Euro 2016 Notes and
approximately US$93.1 million of USD 2016 Notes, equal to an
aggregate of approximately US$209.6 million principal amount of
2016 Senior Secured Notes, will be repurchased for cash.
Approximately EUR339.2 million of Euro 2016 Notes and
approximately US$286.9 million of USD 2016 Notes will remain
unpurchased and will receive new secured notes and new
convertible notes issued by CEDC FinCo pursuant to the Plan.  The
New Notes will be denominated in U.S. dollars.

The distribution of New Notes is expected to be completed within
ten business days from the effective date, on or about June 19,
2013. Based on CEDC's tabulations, holders of Euro 2016 Notes
will receive US$1,181.07 principal amount of New Notes per
EUR1,000 principal amount of Euro 2016 Notes currently held by
such holders.  Holders of USD 2016 Notes will receive US$919.77
principal amount of New Notes per US$1,000 principal amount of
USD 2016 Notes currently held by such holders.

The Plan marks the culmination of more than a year's worth of
work to bolster CEDC's financial structure and create a long-term
business alliance with Mr. Tariko's Russian Standard Vodka.
During that process, two entities shared responsibility for
safeguarding the interest of all CEDC constituencies from a
corporate governance standpoint: the Special Committee of
independent directors, headed by CEDC Vice Chairman N. Scott
Fine, and the Restructuring Committee, consisting of Mr. Tariko
and Mr. Fine and his fellow independent Director Markus Sieger.
These committees were assisted by the firm of Skadden, Arps,
Slate, Meagher and Flom LLP as legal advisor, the firm of
Houlihan Lokey Capital Inc. as financial advisor, and the firm of
Alvarez & Marsal LLC as chief restructuring officer.

CEDC and its U.S. subsidiaries, CEDC Finance Corporation
International, Inc. and CEDC Finance Corporation LLC
(collectively CEDC FinCo), on April 7, 2013, commenced voluntary
proceedings under Chapter 11 of the U.S. Bankruptcy Code.

The Chapter 11 filing did not involve CEDC's operating
subsidiaries in Poland, Russia, Ukraine or Hungary.  Those
operations, which are independently funded and generate their own
revenues, have continued normally and without interruption during
the U.S. restructuring process.

The terms of the Plan were described in the Amended and Restated
Offering Memorandum, Consent Solicitation Statement and
Disclosure Statement, dated March 8, 2013 (the Offering
Memorandum), filed as an exhibit to a tender offer statement on
Schedule TO-I/A on March 8, 2013, as amended and supplemented by
Supplement No. 1 to the Offering Memorandum, dated March 18, 2013
(the Supplement), filed as an exhibit to the Form 8-K filed on
March 19, 2013.

                            About CEDC

Mt. Laurel, New Jersey-based Central European Distribution
Corporation is one of the world's largest vodka producers and
Central and Eastern Europe's largest integrated spirit beverages
business with its primary operations in Poland, Russia and
Hungary.

On April 7, 2013, CEDC and two subsidiaries sought bankruptcy
protection under Chapter 11 of the Bankruptcy Code (Bankr. D.
Del. Lead Case No. 13-10738) with a prepackaged Chapter 11 plan
that reduces debt by US$665.2 million.

Attorneys at Skadden, Arps, Slate, Meagher & Flom LLP serve as
legal counsel to the Debtor.  Houlihan Lokey is the investment
banker.  Alvarez & Marsal will provide the chief restructuring
officer. GCG Inc. is the claims and notice agent.

The Bankruptcy Court approved the Disclosure Statement and
confirmed the Second Amended and Restated Joint Prepackaged Plan
of Reorganization.


GTI TRAVEL POLSKA: Declares Insolvency; Suspends Sales
------------------------------------------------------
Warsaw Business Journal reports that after German travel agency
GTI Travel declared bankruptcy on Monday, its Polish unit has
decided to suspend sales and declare insolvency.

The Polish company has said it is looking for new flights for its
clients as Sky Airlines, a member of the Kayi Group that also
includes GTI Travel, has also gone bankrupt, WBJ discloses.

According to WBJ, the authorities of the Mazowieckie voivodship
said there are currently 750 GTI Travel Polska customers on
holiday abroad, with 538 of them due to return on June 5.

GTI Polska's insurance coverage is worth PLN7.25 million, WBJ
notes.


LOT POLISH: Law May Help Ease Assessment of Restructuring Plan
--------------------------------------------------------------
Robert Wall and Chris Jasper at Bloomberg News report that LOT
Polish Airlines SA Chief Executive Officer Sebastian Mikosz said
the company's plan to shrink operations and slash costs with the
help of state aid should be eased by a law change allowing an end
to government control.

According to Bloomberg, Mr. Mikosz said in an interview in Cape
Town that the move to waive a long-standing law requiring Poland
to hold an absolute majority of LOT's stock was set to go before
the Senate for endorsement on June 5, leaving only the president
to sign off.

The change should help smooth the European Commission's
assessment of a restructuring plan due to be submitted June 20 as
the regulator evaluates a bailout application, Bloomberg
discloses.  LOT hasn't made a profit in five years and booked a
PLN200 million (US$62 million) operating loss in 2012, even after
it cut headcount by 9.8% and boosted the passenger count 7%,
Bloomberg notes.

Mr. Mikosz, as cited by Bloomberg, said that the latest revamp
plan for LOT, as Polskie Linie Lotnicze LOT SA is known, may be
less drastic in terms of fleet and route cuts than first
signaled.

Proposals in January had suggested the carrier would operate 25
planes instead of 40 and cut 30% of jobs in seeking approval for
a PLN1 billion aid package, Bloomberg discloses.  It got a PLN400
million rescue loan in December, Bloomberg recounts.

The CEO said that with the restructuring and relaxation of the
ownership cap, LOT, which is being advised by Rothschild, should
be more attractive to potential buyers, given growth in its home
market that could see passenger numbers triple to 20 million in
coming decades, Bloomberg relates.

Headquartered in Warsaw, Poland, Polskie Linie Lotnicze LOT, or
LOT Polish Airlines -- http://www.lot.com-- serves about a dozen
cities in Poland and about 120 destinations across Europe and
North America.  Subsidiaries include regional carrier EuroLOT and
charter operator Centralwings.  Overall, LOT and its affiliates
maintain a fleet of about 55 aircraft, consisting of Embraer
regional jets, Boeing 767s and 737s, and ATR turboprops.  The
airline is a member of the Star Alliance marketing group, and LOT
serves many of its North American destinations through code-
sharing with Star partners United Airlines and Air Canada.
(Code-sharing allows airlines to sell tickets on one another's
flights and thus extend their networks.) The Polish government
owns 68% of the company.


OSRODEK SZKOLENIOWO: Declared Bankrupt by Noway Sacz Court
----------------------------------------------------------
In reference to current report No. 11/2013 of April 2, 2013, the
Management Board of TAURON Polska Energia S.A. disclosed that on
June 5, 2013 they received decision of the District Court in
Nowy Sacz V Commercial Division - Economic Court dated June 3,
2013 and announcing bankruptcy of company Osrodek Szkoleniowo-
Wypoczynkowy "JAGA" sp. z o.o., i.e. indirect subsidiary of the
Issuer, including liquidation of assets of OSW Jaga.  At the same
time, the Court appointed Mr. Jacek Steindl as the trustee in
bankruptcy trustee Dominik Skoczen as bankruptcy judge.  The
decision will be binding within 7 days of its submission to OSW
Jaga.



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


ROSSIYA INSURANCE: Fitch Affirms 'B-' IFS Rating; Outlook Neg.
--------------------------------------------------------------
Fitch Ratings has affirmed OJSC Rossiya Insurance Company's
Insurer Financial Strength (IFS) rating at 'B-' and National IFS
rating at 'BB-(rus). The Outlook is Negative.

Key Rating Drivers

The affirmation reflects continued financial support received by
Rossiya from its beneficiary individual shareholder. Offsetting
this is uncertainty in the strategic positioning of the company
in the absence of a clear strategy and implementation plan.

The Negative Outlook reflects Rossiya's weakened business
position following the compulsory MTPL license suspension in June
2012 (the second suspension in four years) and its continued
dependence on significant shareholder support. In Fitch's view,
the strategic importance of Rossiya to its shareholder remains
uncertain as the agency views Rossiya as a non-core portfolio
investment

Rossiya continues to receive financial aid from the beneficiary
individual shareholder (a form of capital injection), which
totaled RUR2.9 billion in 2012 (2011: RUR2.1 billion). This
helped to offset the write-off of RUR2 billion of bad debt
relating to insurance receivables. The injection also
strengthened Rossiya's capital position, which Fitch views as
adequate for the current rating. The shareholder injected an
additional RUR750 million in Q113.

Fitch believes Rossiya faces significant strategic challenges as
the company does not plan to diversify away from the highly
competitive motor segment, and at the same time has no unique
competitive advantages to differentiate itself from peers and
reduce dependence on intermediaries with strong bargaining power
in this segment.

Underwriting performance improved in 2012 based both on statutory
and IFRS accounts. The IFRS combined ratio calculated by Fitch
(excluding the reinsurance commission) improved to 104.5% from
123.4% in 2011 following the decrease in the loss ratio component
to 53.1% from 70.3%. However, this improvement was more than
offset by the write-off of insurance receivables, which totaled
RUR2 billion (23% of total assets at end-2012).

Gross written premiums were relatively stable and despite the
temporary license suspension, decreased by only 2% compared to
2011. However, Fitch believes that the license suspension has
weakened the franchise of the company within the Russian
insurance market.

Rating Sensitivities

The ratings could be downgraded if there is an indication the
risk of an interruption of payments has materially increased, or
if the shareholder proves unwilling to provide continued support
to the company.

The Outlook could be revised to Stable if Rossiya proves able to
self-finance its operations and growth for a sustained period and
becomes less reliant on support from its shareholder.


* KRASNODAR REGION: Fitch Affirms 'BB+' LT Currency Ratings
-----------------------------------------------------------
Fitch Ratings has affirmed Krasnodar Region's Long-term foreign
and local currency ratings at 'BB+', National Long-term rating at
'AA(rus)' and Short-term foreign currency rating at 'B'. The
Outlooks on the Long-term ratings are Stable.

The rating action also affects Krasnodar Region's two outstanding
senior unsecured domestic bonds of RUB16 billion.

Key Rating Drivers

The affirmation reflects the region's well-diversified economy,
strong liquidity and manageable level of direct risk. The ratings
also reflect the minor deterioration of budgetary performance and
rapid growth of debt.

Krasnodar Region has a strong and well-diversified economy, which
provides a broad tax base and growing tax revenue flows. The
region has eight international sea ports with their cargo
turnover representing about 40% of Russia's total seaports'
turnover. The region is home to a developed agricultural sector,
a wide range of industries, seaside and ski resorts.

The region has witnessed a rapid rise of debt since 2009
primarily due to preparations for the 2014 Winter Olympic Games.
Loans from the federal government amounted to RUB38.5 billion or
52% of the total direct risk at end-2012. Federal budget loans
have subsidized interest rates and long maturities. However the
federal government further improved the terms of the loans in
2012 by cutting the rates to 0.5% p.a. and extending maturities
to 2032.

The region has domestic bonds with a total outstanding value of
RUB16 billion and maturities spread in 2013-2017. Bank loans
totaled RUB19.4 billion, of which RUB8.2 billion mature in 2013.
Fitch believes the region will not face any difficulty in
repaying some of the expiring loans and rolling over others. Its
cash balance was about RUB22 billion at end-2012. However, a
significant portion of the region's liquidity is committed to
capital projects.

Fitch expects the region's sound operating performance to
continue in 2013-2015 with margins at about 10% thanks to a
vibrant tax base. Tax revenue has grown by about 20% yoy since
early 2000s with the exception of 2009. The operating balance is
strong and is well above the region's debt-servicing liabilities.

Capital expenditure peaked at 40% of total expenditure or RUB92
billion in 2012. Fitch expects close to balanced budgets starting
in 2014 as all major infrastructure projects will be completed by
end-2013 causing a sharp decline of capex.

Indebtedness of public sector entities was low at about 4% of the
region's current revenue. However an extensive public sector
consisting of 147 companies creates additional risks for the
regional budget.

Krasnodar Region is located in the southwest of the Russian
Federation on the coast of the Black Sea and the Sea of Azov. The
region is among the top 10 Russian regions by nominal gross
regional product (GRP). It is the third most populated Russian
region with 5.3 million inhabitants.

Rating Sensitivities

Strong budgetary performance with an operating margin at about
20% in the medium term coupled with the stabilization of direct
risk would lead to an upgrade.

Growth of debt leading to a sharp deterioration of direct debt to
current balance above the average maturity of the region's debt
would lead to a downgrade.


* CHUVASHIA: Fitch Rates Domestic Bond Issue at 'BB+(EXP)'
----------------------------------------------------------
Fitch Ratings has assigned the Russian Republic of Chuvashia's
upcoming RUB1.5 billion domestic bond issue due June 7, 2018, an
expected Long-term local currency rating of 'BB+(EXP)' and an
expected National Long-term rating of 'AA(rus)(EXP)'.

The final rating is contingent upon the receipt of final
documents conforming to information already received.

Key Rating Drivers

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

Fitch expects Chuvashia to demonstrate a stable budgetary
performance with current balance at about 10% of current revenue
in 2013-2014. Fitch also expects the republic's direct risk will
remain moderate, representing about 30% of current revenue in
2013-2014.

Chuvashia is located in the eastern part of European Russia. The
region contributed 0.4% of the Russian Federation's GDP in 2011
and accounted for 0.9% of the country's population.

The bond has 20 coupon periods while coupons are fixed and step-
down. The annual rate of the first two coupons is set at 8.5%.
The principal will be amortized by 15% of the initial bond issue
value on September 7, 2015, March 8, 2016, September 7, 2016, 8
March 2017, September 6, 2017 and March 8, 2018. The remaining
10% of the initial bond issue value will be repaid on June 7,
2018. The proceeds from the new bond will be used to finance the
region's capital expenditure.

Rating Sensitivities

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


* Moody's Says Russian RMBS Continued Stable Performance in March
-----------------------------------------------------------------
The performance of Russian residential mortgage-backed securities
(RMBS) transactions remained relatively stable during the six-
month period leading up to March 2013, according to the latest
indices published by Moody's Investors Service.

In March 2013, the worst performing transactions in the market
were City Mortgage MBS Finance and Moscow Stars B.V. Both
transactions are made up of assets denominated in US dollars.
City Mortgage MBS Finance's 60+ day delinquency levels, which are
the highest in the market, rose to 15.49% in March 2013 from
12.17% in March 2012. This transaction's portfolio now comprises
only 342 loans, the senior notes have been repaid in full and
Moody's has withdrawn the ratings on the notes. In terms of
outstanding defaults, Moscow Stars B.V. remained the worst
performer in the past 12 months. While the transaction's default
level slightly decreased from the overall high reached in
September 2012 at 13.71% to 12.01% in March 2013, it remains the
highest in the market.

In most other Russian RMBS deals, outstanding defaults remain
stable in the 12-month period leading up to March 2013.

On November 21, 2012, Moody's upgraded the credit ratings of
subordinated notes issued by Closed Joint Stock Company First
Mortgage Agent of AHML, Closed Joint Stock Company Second
Mortgage Agent of AHML and National Mortgage Agent VTB 001. The
rating action concludes the review for upgrade initiated by
Moody's on August 13, 2012, which was prompted by the credit
enhancement build-up in the transactions since closing and the
good performance of the portfolios backing the transactions.

As of March 2013, the 24 Moody's-rated Russian RMBS transactions
had an outstanding pool balance of US$3.365 billion, a 65.2%
year-over-year increase due to rising new emissions volumes
following stimulation of the Russian RMBS market. Moody's
included the new transaction CJSC Mortgage Agent VTB24-1, which
closed in December 2012, into the index. After their first
payment dates, the rating agency will include in the index a
further five new Russian RMBS transaction that closed in the
period from November 2012 to March 2013.



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


AYT FTPYME II: Moody's Confirms Ba3 Rating on Series F3 Notes
-------------------------------------------------------------
Moody's Investors Service has confirmed at A3 (sf) the rating of
the Series F2 and T2 notes issued by AyT FTPYME II and at Ba3(sf)
the rating of the Series F3 notes in this deal. Sufficient credit
enhancement, which protects against sovereign and counterparty
risk, primarily drove the confirmation actions.

The rating action concludes the review for downgrade initiated by
Moody's on 2 July 2012. This transaction is a Spanish asset-
backed securities transactions backed by loans to small and
medium-sized enterprises (SME ABS) originated by six saving banks
which have now been consolidated into Bankia (Ba2/NP/Uncertain),
Caixabank (Baa3/P-3), Banco Mare Nostrum (NR), BBVA(Baa3/P-3) and
Kutxabank (Ba1/NP) (Caja de Ahorros y Monte de Piedad de Madrid,
Caja de Ahorros de Vitoria y Alava, Caixa d'Estalvis de Terrassa,
Caja de Ahorros y Monte de Piedad de Navarra, Monte de Piedad
Caja Ahorros Huelva, Jerez y Sevilla, and Caja de Ahorros de
Granada).

Ratings Rationale

The confirmations primarily reflect the availability of
sufficient credit enhancement to address sovereign and increased
counterparty risk. The introduction of new adjustments to Moody's
modeling assumptions to account for the effect of deterioration
in sovereign creditworthiness and the revision of key collateral
assumptions and increased exposure to lowly rated counterparties
has had no negative effect on the ratings of the notes in this
transaction.

- Additional Factors Better Reflect Increased Sovereign Risk

Moody's has supplemented its analysis to determine the loss
distribution of securitised portfolios with two additional
factors, the maximum achievable rating in a given country (the
local currency country risk ceiling) and the applicable portfolio
credit enhancement for this rating. With the introduction of
these additional factors, Moody's intends to better reflect
increased sovereign risk in its quantitative analysis, in
particular for mezzanine and junior tranches. See "Structured
Finance Transactions: Assessing the Impact of Sovereign Risk" for
a more detailed explanation of the additional parameters.

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

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

- Moody's Revises Key Collateral Assumptions

Moody's maintained its default and recovery rate assumptions for
the two transactions, which it updated on December 18, 2012 (see
"Moody's updates key collateral assumptions in Spanish ABS
transactions backed by loans to SMEs and leases"
[http://www.moodys.com/research/Moodys-updates-key-collateral-
assumptions-in-Spanish-ABS-transactions-backed--PR_262512]).
According to the updated methodology, Moody's increased the CoV,
which is a measure of volatility.

The current default assumption is 13% of the current portfolio
and the assumption for the fixed recovery rate is 37.5%. Moody's
has increased the CoV to 70% from 38%, which, combined with the
revised key collateral assumptions, resulted in a portfolio
credit enhancement of 21.5%.

- Moody's Has Considered Exposure to Counterparty Risk

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

Bankia (Ba2/NP), Caixabank (Baa3/P-3), Banco Mare Nostrum (NR),
BBVA (Baa3/P-3) and Kutxabank (Ba1/NP) acts as servicers and
transfers collections every day to the issuer's account which
reside at Barclays Bank PLC (A2/P-1). The reserve funds are also
held at Barclays Bank PLC. Moody's has incorporated into its
analysis the potential default of the servicers which could
expose the transaction to a commingling loss on the collections.

Bankia and Cecabank (Ba1 Possible Downgrade/NP) act as swap
counterparties in the transaction. As part of its analysis,
Moody's assessed the exposure to the swap counterparties, which
does not have a negative effect on the rating levels at this
time.

- Other Developments May Negatively Affect the Notes

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

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

Moody's describes additional factors that may affect the ratings
in its Request for Comment, "Approach to Assessing Linkage to
Swap Counterparties in Structured Finance Cashflow Transactions:
Request for Comment", 02 July 2012.

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

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

When remodeling the transactions affected by Moody's rating
actions, some inputs have been adjusted to reflect the new
approach described above.

Methodologies

The methodologies used in this rating were " Moody's Approach to
Rating EMEA SME Balance Sheet Securitisations" published in May
2013, and "The Temporary Use of Cash in Structured Finance
Transactions: Eligible Investment and Bank Guidelines" published
in March 2013.

List of Affected Ratings

Issuer: AyT FTPYME II, FTA

EUR22.6M F2 Notes, Confirmed at A3 (sf); previously on Jul 2,
2012 Downgraded to A3 (sf) and Placed Under Review for Possible
Downgrade

EUR90.1M T2 Notes, Confirmed at A3 (sf); previously on Jul 2,
2012 Downgraded to A3 (sf) and Placed Under Review for Possible
Downgrade

EUR34M F3 Notes, Confirmed at Ba3 (sf); previously on Jul 2, 2012
Ba3 (sf) Placed Under Review for Possible Downgrade


BLANCO: Goes Into Voluntary Receivership
----------------------------------------
thinkSPAIN reports that Blanco has gone into voluntary
receivership amid serious financial and economic problems.

According to thinkSPAIN, the company says it is hoping to
refinance itself with credits from banks and shareholding
directors.

This decision was made in a bit to achieve economic viability for
the firm, which is headed up by Bernardo Blanco, and to protect
the interests of creditors, staff, customers and suppliers,
thinkSPAIN says.

A massive restructure has meant scaling down to reflect the
current economic climate as well as searching for finance and
renegotiating its debts with its main creditors, thinkSPAIN
discloses.

Since April this year, Blanco has been closing down stores in
Madrid, Barcelona, Badajoz and the southern region of Andalucia,
and staff in these shops have not been redeployed, thinkSPAIN
relates.

They have also been attempting to renegotiate rent prices for
some of its premises, thinkSPAIN notes.

Blanco is a Spanish clothing chain.  The budget high-street store
has 300 shops in 27 countries and 2,000 employees.  It still has
almost 300 shops in Spain and abroad, particularly in France,
Portugal, the United Arab Emirates, the UK, Greece, Qatar,
Morocco, Russia, Mexico and Holland, among others, together with
its online shopping service which delivers throughout Spain,
Portugal and France.


INSTITUT CATALA: S&P Affirms 'BB/B' Issuer Credit Ratings
---------------------------------------------------------
Standard & Poor's Ratings Services said that it had affirmed its
'BB/B' long- and short-term issuer credit ratings on financial
agency Institut Catala de Finances (ICF), based in Spain's
Autonomous Community of Catalonia.  The outlook is negative.

"We rate ICF in accordance with our criteria for government-
related entities (GREs).  Our rating on ICF reflects our opinion
that there is an "almost certain" likelihood that ICF's owner,
the Autonomous Community of Catalonia (BB/Negative/B) would
provide timely and sufficient extraordinary support to ICF in the
event of financial distress.  As a result, we equalize the
ratings on ICF with those on Catalonia.  Our opinion is based on
our view of ICF's "integral" link with the Catalan government
(the Generalitat) and "critical" role for the government," S&P
said.

"The rating also factors in our assessment of ICF's stand-alone
credit profile (SACP), which is 'bb-', based on our criteria for
rating finance companies.  The SACP reflects our view of ICF's
creditworthiness before taking into account the potential for
extraordinary government intervention, but factoring in the
effect of regular ongoing interactions with the regional
government, especially the regular capital and liquidity
injections provided by the regional government as needed.  We
consider ICF's business profile to be weak due to its meaningful
business and geographic concentration and its very small size in
Catalonia," S&P noted.

S&P also assess ICF's financial profile as weak.  S&P considers
that the company's liquidity position remains under significant
pressure, given deteriorating conditions in the wholesale funding
markets.  This is despite the deleveraging strategy that ICF is
following, which S&P acknowledges is likely to improve its
liquidity position.

S&P also considers that ICF's credit risk remains high.  S&P
believes that asset quality will keep deteriorating from its
current level of 9.8% nonperforming loans.  A continued weak
economic environment is likely to make ICF more vulnerable to
this deterioration because it has a sizable exposure to
inherently riskier SMEs.  S&P also take into account that,
despite some reduction, single-name concentration remains
significant.

In S&P's opinion, high ratios of loan-loss provisions to
nonperforming loans of over 80% and ICF's strong capitalization
(its Tier 1 ratio stood at 24.26% on Dec. 31, 2012) partially
offset these risks.  S&P's assessment of ICF's capitalization
takes into account Catalonia's ongoing capital support in the
past, which S&P believes will continue underpinning ICF's
solvency if necessary.

The negative outlook on the long-term rating on ICF mirrors that
on Catalonia.  A downgrade of Catalonia would result in a
downgrade of ICF.

The negative outlook on Catalonia mainly reflects the risk that
the institutional framework for Spain's normal-status regions
could weaken, as well as the risk that Catalonia's fiscal
consolidation could lose momentum, hampering the region's already
weakened individual credit profile.

S&P could also lower the ratings on ICF independently of any
action on Catalonia.  This could occur if, over the next 12
months, S&P reassessed ICF's role for and link with Catalonia,
and thus the likelihood of support from the Catalan government.
In S&P's view, it could revise its assessment of the likelihood
of support from "almost certain" currently if ICF's public status
were changed or if the Catalan government stopped guaranteeing
ICF's debt or injecting capital to support the entity's capital
ratio.  However, S&P currently sees these scenarios as unlikely.

S&P believes that ICF cannot be rated above its government
because:

   -- According to its criteria for rating GREs, it doesn't
      fulfill the conditions to be rated higher than its
      government, which include, among others, that the GRE
      should be a fairly independent enterprise operating in a
      competitive environment; and

   -- ICF receives ongoing capital injections from Catalonia that
      underpins ICF's SACP.



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


UNILABS MIDHOLDING: Moody's Assigns 'B3' CFR, Outlook Stable
------------------------------------------------------------
Moody's Investors Service has assigned a B3 corporate family
rating (CFR) and a B3-PD probability of default (PDR) to Unilabs
Midholding AB ("Unilabs"). Concurrently, Moody's has assigned a
(P)Caa2 rating, with a loss given default (LGD) assessment of
LGD5, 87%, to Unilabs' proposed EUR175 million of second lien PIK
toggle notes and a (P)B3 rating, LGD3 44%, to the proposed EUR510
million worth of senior secured notes issued by Unilabs
Subholding AB ("Subholding"). The outlook on the ratings is
stable. This is the first time that Moody's has assigned a rating
to Unilabs.

Moody's issues provisional ratings in advance of the final sale
of securities and these reflect Moody's credit opinion regarding
the transaction only. Upon closing of the refinancing and a
conclusive review of the final documentation, Moody's will
endeavour to assign definitive ratings to Unilabs. A definitive
rating may differ from a provisional rating. The ratings assigned
to Unilabs assume the successful refinancing of the company's
current financing package.

Ratings Rationale

"The B3 rating assigned to Unilabs is reflecting the company's
highly leveraged capital structure with gross adjusted
debt/EBITDA expected to be around 7.0x by the end of 2013," says
Knut Slatten, Moody's lead analyst for Unilabs. The rating also
reflects our expectations of Unilabs continuing to play an active
role in the consolidation of the industry, notably within the
routine test market, with anticipated annual acquisitions
expected to surpass the company's free cash flow generation.
Finally, the rating also incorporates the potential for further
pricing pressure in the company's key markets, which drives the
need to grow the company externally to achieve economies of
scale.

These factors are balanced to some extent by (1) Unilabs'
geographical diversification where the company through leading
positions in several of its key markets has established itself as
a pan-European player, (2) a diversified product portfolio which
includes some types of specialty tests, and helps to mitigate
pricing pressure, (3) longer-term contracts -- representing
around 35% of 2012-revenues -- which provide the company with
some revenue-visibility, and (4) an established track-record in
acquiring and integrating smaller and larger acquisitions. These
positives are, however, not enough to balance for the company's
high leverage and Moody's considers Unilabs to be weakly
positioned in its rating-category.

Unilabs operates laboratory and medical diagnostic facilities
throughout 11 countries in Europe. It has a particular strong
positioning in Switzerland and the Nordics. In addition, the
company's European footprint is further underpinned by its
positioning as one the leading players within the French routine
test segment and within certain areas of specialty tests.

The company's strong pan-European competitive positioning has
largely been achieved through a number of acquisitions undertaken
since the company was founded in 1987. Whilst we acknowledge that
Unilabs has built a track record in acquiring and integrating
acquisitions, we would expect the company to take further part in
the consolidation of the industry. As such, the company's
acquisitive nature could represent a risk factor should it face
challenges in terms of integration of future targets. Ongoing
acquisition activity will also prevent Unilabs from meaningfully
reducing debt over time. Therefore the ability to reduce the high
leverage is largely dependent on the ability to increase earnings
notwithstanding the fact that this industry is exposed to
continuous price pressure.

Unilabs' capital structure contains two restricted groups. The
first one relates to SubHolding, which is a holding-company
issuing the senior secured notes and the EUR125 million super-
senior revolving credit facility (RCF), and its subsidiaries. The
second one also comprises MidHolding -- which is the entity
proposing the PIK notes, and which is the parent company of
SubHolding.

Moody's understands the senior secured notes and the RCF to
largely benefit from the same collateral and benefit from
upstream guarantees representing around 67% of consolidated
EBITDA for the twelve months ending March 31, 2013. Furthermore,
the guarantor coverage may be enhanced within six months of the
issuance through the addition of Spanish guarantors (5.0% of
EBITDA as of March 2013), subject to completion of jurisdictional
requirements under Spanish law. The PIK notes will share the same
collateral as the secured notes on a second lien basis, and will
benefit from guarantees from Subholding and the operating
entities guaranteeing the secured notes on a subordinated basis.
As per the provisions of an intercreditor-agreement, the RCF will
rank ahead of the secured notes in the waterfall. Equally, the
secured notes will contractually rank ahead of the PIK notes.
Moody's also notes the structure contains EUR190 million of
shareholder loans issued outside of the restricted groups. These
are treated as equity in our metrics-calculation.

"We would expect Unilabs to have an adequate liquidity profile
post the transaction supported by expectations of continued
positive free cash flow generation. However, the quality of the
company's liquidity profile is likely to depend on Unilabs
overall pace of acquisitions. Whereas the PIK is a toggle and
such opens up for potential interest payments in cash, we would
expect eventual interest payments in cash towards the PIK to be
overall small due to provisions captured by the restricted
payment tests in the secured notes indenture. Unilabs is subject
to a financial maintenance covenant under which the company is
expected to have ample headroom," Moody's said.

The company is controlled by Nordic Capital, Apax and Apax
France, three principal shareholders. However, the proposed notes
permit an exception to the general change of control clause,
whereby a change of control would not trigger an investor put if
the company's consolidated reported leverage is below 6.5x during
the first 18 months after the refinancing (6.6x on a proforma
basis per Q1/2013), and 5.75x thereafter.

The stable outlook reflects Moody's expectations that Unilabs
will be able to demonstrate a trend of deleveraging allowing for
leverage to come down below 7.0x over the next 12-18 months while
at all times maintaining a satisfactory liquidity profile. The
current rating and outlook leaves limited room for deterioration
in operating performance because of the company's weak
positioning in the rating-category.

What Could Change The Rating Up/Down

Positive pressure on the rating could develop if Unilabs'
operating performance improves, allowing for leverage, measured
by debt/EBITDA, to be around 6.0x on a sustained basis.
Conversely, negative pressure could develop if leverage remains
above 7.0x for an extended period of time or if Moody's became
concerned about the company's liquidity.

Principal Methodology

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

Unilabs is a pan-European diagnostics company operating within
laboratory testing and medical imaging. In financial year 2012,
the company recorded revenues of EUR547.6 million and adjusted
EBITDA of EUR95.5 million.



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


KAYI GROUP: Goes Bankrupt; SGST to Repay Holiday Bookings
---------------------------------------------------------
DutchNews.nl reports that Kayi Group has gone bankrupt, leaving
thousands of Dutch holidaymakers without a holiday and hundreds
stranded in Turkey.

According to DutchNews.nl, Kayi Group subsidiaries DTI in the
Netherlands, GTI in Germany and Sky Airlines are all affected and
ceased trading on Tuesday.

The Turkish travel agents guarantee fund SGST says it will repay
all down payments on booked holidays, reports the Telegraaf,
DutchNews.nl discloses.

Kayi Group is a Turkish travel company.



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


IAC PLASTICS: PAR Group Bus Firm Out of Administration
------------------------------------------------------
PRW Staff report that rubber and plastics engineering company PAR
Group has purchased the assets previously owned by IAC Plastics.

Burnley-based Industrial Anti-Corrosion (IAC Plastics) went into
administration late last month.

IAC Plastics division will continue to operate from the 27,000
square feet premises in Dunnockshaw, according to PRW Staff.  The
report relates that it has an extensive range of plastics
engineering facilities including CNC machining, cutting, routing,
drilling, milling and lathe facilities, the report relates.

PRW Staff says that the acquisition will also provide the new
owners with the capability to manufacture Corromide (cast Nylon)
rods, sheets and tubes.

PRW Staff discloses that PAR Group operates from two
manufacturing locations in Chorley and Ashton-Under-Lyne and has
more than 25 years of experience serving clients in the UK,
Europe and worldwide.

The report adds that the IAC Plastics division will be a
significant addition to the plastic machining and fabricating
capability already in place within PAR Group, the latter said in
a statement.


SANDWELL COMMERCIAL: S&P Raises Rating on Class C Notes to BB
-------------------------------------------------------------
Standard & Poor's Ratings Services raised and removed from
CreditWatch negative its credit ratings on Sandwell Commercial
Finance No. 2 PLC's class A, B, and C notes.  At the same time,
S&P has affirmed its ratings on the class D and E notes.

The rating actions follow S&P's review of the underlying loans'
credit quality by applying its updated European commercial
mortgage-backed securities (CMBS) criteria.

On Dec. 6, 2012, S&P placed its ratings on the class A, B, and C
notes on CreditWatch negative following the update to its
European CMBS criteria.

Sandwell Commercial Finance No. 2 is a true sale CMBS transaction
backed by 89 U.K. loans (down from 187 at cut off).  The majority
of these loans either fully amortize over the loan term or
partially amortize.  These loans have various maturity dates,
with the latest being in June 2030.  The notes' legal final
maturity date is in September 2037.

The loans are secured on 97 U.K. properties with the majority of
the assets consisting of retail (54%) and office properties
(24%). The properties are located within 12 U.K. and welsh
regions.  Most of the properties are located in London (14.2%
based on market value).

The loan's portfolio balance has reduced substantially since
closing in 2005 to GBP137,500,746 from GBP344,860,291.  This has
resulted from scheduled amortization payments, loans repaying at
loan maturity, and unscheduled amortization payments following
enforcement of covenant breaches.  The weighted-average reported
loan-to-value ratio is 99% and the weighted-average reported
interest coverage ratio (ICR) is 2.77x.  As a result of low
interest rates, the ICR has increased from 1.31x since cut off.

The note redemption type on each interest payment date (IPD)
depends on the transaction meeting certain triggers.  If all
triggers are met, the notes pay pro rata (all classes of notes
paying at the same time, according to their proportion of the
total outstanding balance); if not, they pay sequentially (one
class of notes paying at a time, starting with the most senior).
Sequential payment on the last three IPDs (September 2012,
December 2012, and March 2013) has increased the available credit
enhancement for the class A to D notes.

                         RATING RATIONALE

S&P's analysis indicates that the available credit enhancement
for the class A, B, and C notes is sufficient to support higher
rating levels than those currently assigned.  S&P has therefore
raised and removed from CreditWatch negative its ratings on these
classes of notes.

In S&P's opinion, the class D and E notes remain vulnerable to
principal losses under its base case scenario, despite the
available reserve fund and excess cash.  S&P has therefore
affirmed its 'B- (sf)' ratings on these classes of notes.

          STANDARD & POOR'S 17G-7 DISCLOSURE REPORT

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

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

            http://standardandpoorsdisclosure-17g7.com

RATINGS LIST

Class       Rating              Rating
            To                  From

Sandwell Commercial Finance No. 2 PLC
GBP350 Million Commercial Mortgage-Backed Floating-Rate Notes

Ratings Raised And Removed From CreditWatch Negative

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

Ratings Affirmed

D          B- (sf)
E          B- (sf)


SUPERGLASS: Switches to Aim After Refinancing Deal
--------------------------------------------------
Gareth Mackie at The Scotsman reports that Superglass has started
its new life on the junior Alternative Investment Market (Aim)
after completing a make-or-break GBP12.2 million fundraising to
cuts its debts.

The firm switched from a main market listing on Wednesday after
finalizing its refinancing deal, which also saw lender Clydesdale
Bank convert some of its debt into equity, the Scotsman relates.

According to the Scotsman, presenting its half-year results last
month, the company said trading conditions were "extremely
challenging" because the recent transition from one government
incentive scheme to another has caused a major gap in activity
for fitting loft and cavity insulation, while housebuilding
activity remained "abnormally low".

Shareholders had been warned that the firm would go into
administration if it could not complete the share issue and
conversion of about half of its debt into equity, the Scotsman
recounts.

The company, which employs about 170 people at its Stirling
factory, said on Wednesday that its core debt had been
"substantially" reduced to GBP2.5 million following the
refinancing, while its cash balances stood at about GBP9.2
million, the Scotsman discloses.

Superglass is a Stirling-based insulation materials company.


TURNSTONE MIDCO 2: Fitch Assigns 'B+' Issuer Default Rating
-----------------------------------------------------------
Fitch Ratings has assigned Turnstone MidCo 2 and its associated
debt instruments issued under IDH Finance plc the following final
ratings:

Turnstone MidCo 2
Long-term Issuer Default Rating (IDR): 'B+'; Outlook Stable

IDH Finance plc
GBP200m 6% senior secured notes due 2018: 'BB-'/'RR3'
GBP125m senior secured FRN due 2018: 'BB-'/'RR3'
GBP75m 8.5% second lien notes due 2019: 'B-'/'RR6'

The notes refinance the existing senior loans (GBP330m in total)
and partially repay the shareholder loan (GBP50m).

IDH Finance plc, the issuer of the notes, is 100% owned by
Turnstone Midco 2. The notes as well as the new super-senior
revolving credit facility (RCF) of up to GBP100 million (which is
undrawn at closing) is secured substantially by all of the
issuer's and guarantors' assets representing 86.6% of the group's
consolidated sales and 83.1% of consolidated EBITDA as of
March 31, 2013. Pearl Topco Limited (Predecessor IDH) was
acquired on May 11, 2011 by Carlyle and Palamon and was
simultaneously merged with Associated Dental Practices (ADP
Primary Care Services Limited or Predecessor ADP), together
referred to as IDH.

The 'B+' IDR reflects Turnstone Midco 2's solid market
positioning as the number one player in the GBP3.3 billion UK NHS
dental care market, where it operates via 550 practices and
serves about 5 million patients per annum. IDH is more than
double the size of its next biggest competitor Oasis Healthcare.
The notes issue and refinancing improves the financial
flexibility for IDH allowing it to continue pursuing its
acquisition-driven growth strategy.

Key Rating Drivers

Strong Market Position
IDH's solid market position allows economies of scale in terms of
sourcing of equipment/ material, administration, controlling and
national advertisement.

NHS Funded Sales
Further support to the ratings is given by IDH's revenues derived
from NHS contracts which are the source of 87% of its revenues.
90% of these contracts are so-called 'evergreen contracts' (GDS
contracts) which provide stability to the group's profitability
and cash flows. As the NHS target is to improve the access to NHS
dentistry, there is not much incentive for the NHS to withdraw
those contracts, unless the dentists who are awarded these
contracts are underperforming.

Low Risk Acquisition Strategy
The acquisition strategy for IDH reflects the group's ability to
take advantage of the fragmented dentistry market in the UK.
Fitch considers that such strategy carries an inherent execution
risk, albeit limited in light of management's past experience in
completing acquisitions. Fitch notes that the acquisition of
small practices with GDS contracts with the NHS is relatively
well matched to the group's operations and thus does not bear
major integration costs.

Regulatory Reforms Broadly Neutral
The ratings also reflect the risks associated with the regulatory
reforms impending in the dentistry market in the UK. Fitch
recognizes the risk that the reimbursement method from the NHS to
private dental service providers is likely to change. However,
any changes in contracts -- away from current UDA (Units of
Dental Activity) based contracts -- are only likely to be
introduced around 2017. Protection to the value of the contract
is also provided by the current involvement of IDH in the
government's pilot scheme in the design of contracts as well as
its incumbent position.

Weak Credit Metrics
The business strengths are offset by Turnstone Midco 2's
relatively weak credit metrics. Based on its conservative
projections, Fitch considers Turnstone Midco 2 as highly
leveraged, with funds from operations (FFO) adjusted net leverage
at 6.0x at closing of the refinancing but expects the group to
delever over time to 5.2x by 2016, which is adequate to the
assigned rating given the sector.

Treatment of Shareholder Debt
In its analysis, Fitch has classified the various shareholder
instruments present in the group's structure as equity because,
as per Fitch's understanding of the legal documentation received,
the main features of these instruments combined with the inter-
creditor principles match Fitch's assessment of equity-like
instruments.

Adequate Liquidity
Fitch anticipates that post refinancing, Turnstone Midco 2's
liquidity will be adequate with around GBP5 million of cash, a
fully undrawn GBP100 million RCF due in 2018, and without short-
term debt maturities.

Above Average Senior Recovery Ratings
Turnstone Midco 2's recovery ratings reflect Fitch's expectations
that the enterprise value of the company would be maximized in a
restructuring scenario (going concern approach), rather than a
liquidation due to the asset-light nature of the business. Fitch
believes that a 6.0x distressed EV/EBITDA multiple and 25%
discount to EBITDA resulting from unsustainable financial
leverage, possibly as a result of increasingly aggressive
acquisition activity or contract losses, are fair assumptions
under a distress scenario. Fitch estimates that the recovery rate
for the senior secured notes would fall within the 51%-70% range
('RR3'), leading to a one-notch uplift from the IDR to 'BB-'. The
recovery rate for the second lien notes would fall within 0%-10%
range ('RR6') leading to a two-notch downgrade from the IDR to
'B-'.

Rating Sensitivities

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

- Reduced free cash flow margin below 4% of sales due to
  significant profitability erosion, as a result of an
  unsuccessful acquisition strategy

- FFO adjusted net leverage above 6.0x on a sustained basis

- FFO fixed charge coverage below 1.5x on a sustained basis

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

- IDH's ability to increase its diversification and scale
  via acquisitions whilst maintaining financial flexibility

- FFO adjusted net leverage below 4.5x on a sustained basis

- FFO fixed charge coverage above 2.5x on a sustained basis



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


* Moody's: EMEA Spec.-Grade Issuers' Credit Quality Still Weak
--------------------------------------------------------------
The credit quality of first-time rated EMEA speculative-grade
corporate issuers is weakening as average leverage at rating
assignment has increased considerably since 2010, says Moody's
Investors Service in a Special Comment published today.

"Average leverage at first-time ratings assignment increased to
5.4x in the first quarter of 2013 from 4.5x in 2010. These new
issuers, which are dominated by LBOs, have less room to
underperform on financial forecasts and will be more vulnerable
to external shocks including weaker economic growth or changes in
the interest rate environment," says Tobias Wagner, an analyst in
Moody's Corporate Finance Group and author of the report.

The new report, entitled "Credit Quality of EMEA First-Time
Speculative-Grade Issuers Continues To Fall", is now available on
www.moodys.com.

The report's conclusions are based on Moody's analysis of the
financial projections of 175 first-time rated non-financial
speculative-grade corporations in the EMEA region, most notably
Western Europe including the UK, Netherlands and France.

As a result of weakening initial credit quality, the average new
rating assigned to EMEA speculative-grade issuers is lower in
2013 than in previous years and it may fall further if the
average credit quality of issuers when first rated continues to
decline. Moody's notes that the proportion of first-time issuers
rated single-B rose to 85% in the first quarter of 2013 from 73%
in 2010, primarily driven by LBOs. Similarly, Caa-rated first-
time issuers represented 7% of new issuers in the first quarter
of 2013 compared with only 2% in 2010.

Moody's also notes that these issuers rely significantly on
margin growth, for example through cost cutting, to improve their
credit profile. However, issuers rated the first time in 2013
also have slightly higher annual revenue growth expectations than
those rated in 2012, at 6.6% versus 5.4%, but this is well below
the expectations of issuers rated in 2010 and 2011.


* BOOK REVIEW: The Oil Business in Latin America: The Early Years
-----------------------------------------------------------------
Author: John D. Wirth Ed.
Publisher: Beard Books
Softcover: 282 pages
List price: $34.95
Review by Gail Owens Hoelscher
Buy a copy for yourself and one for a colleague on-line at
http://is.gd/DvFouR

This book grew out of a 1981 meeting of the American Historical
Society. It highlights the origin and evolution of the stateowned
petroleum companies in Argentina, Mexico, Brazil, and
Venezuela.

Argentina was the first country ever to nationalize its
petroleum industry, and soon it was the norm worldwide, with the
notable exception of the United States. John Wirth calls this
phenomenon "perhaps in our century the oldest and most
celebrated of confrontations between powerful private entities
and the state."

The book consists of five case studies and a conclusion, as
follows:

* Jersey Standard and the Politics of Latin American Oil
Production, 1911-30 (Jonathan C. Brown)
* YPF: The Formative Years of Latin America's Pioneer State
Oil Company, 1922-39 (Carl E. Solberg)
* Setting the Brazilian Agenda, 1936-39 (John Wirth)
* Pemex: The Trajectory of National Oil Policy (Esperanza
Duran)
* The Politics of Energy in Venezuela (Edwin Lieuwen)
* The State Companies: A Public Policy Perspective (Alfred
H. Saulniers)
The authors assess the conditions at the time they were writing,
and relate them back to the critical formative years for each of
the companies under review. They also examine the four
interconnecting roles of a state-run oil industry and
distinguish them from those of a private company. First, is the
entrepreneurial role of control, management, and exploitation of
a nation's oil resources. Second, is production for the private
industrial sector at attractive prices. Third, is the
integration of plans for military, financial, and development
programs into the overall industrial policy planning process.
Finally, in some countries is the promotion of social
development by subsidizing energy for consumers and by promoting
the government's ideas of social and labor policy and labor
relations.

The author's approach is "conceptual and policy oriented rather
than narrative," but they provide a fascinating look at the
politics and development of the region. Mr. Brown provides a
concise history of the early years of the Standard Oil group and
the effects of its 1911 dissolution on its Latin American
operations, as well as power struggles with competitors and
governments that eventually nationalized most of its activities.

Mr. Solberg covers the many years of internal conflict over oil
policy in Argentina and YPF's lack of monopoly control over all
sectors of the oil industry. Mr. Wirth describes the politics
and individuals behind the privatization of Brazil's oil
industry leading to the creation of Petrobras in 1953. Mr. Duran
notes the wrangling between provinces and central government in
the evolution of Pemex, and in other Latin American countries.

Mr. Lieuwin discusses the mixed blessing that oil has proven for
Venezuela., creating a lopsided economy dependent on the ups and
downs of international markets. Mr. Saunders concludes that many
of the then-current problems of the state oil companies were
rooted in their early and checkered histories." Indeed, he says,
"the problems of the past have endured not because the public
petroleum companies behaved like the public enterprises they
are; they have endured because governments, as public owners,
have abdicated their responsibilities to the companies."


                            *********

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

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

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

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


                            *********


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

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

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

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

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

The TCR Europe subscription rate is US$775 per half-year,
delivered via e-mail.  Additional e-mail subscriptions for
members of the same firm for the term of the initial subscription
or balance thereof are US$25 each.  For subscription information,
contact Peter Chapman at 215-945-7000 or Nina Novak at
202-241-8200.


                 * * * End of Transmission * * *