TCREUR_Public/130620.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

                           E U R O P E

            Thursday, June 20, 2013, Vol. 14, No. 121



ALPINE BAU: Says It's Insolvent; Seeks to Reorganize


BAGHLAN GROUP: Fitch Assigns 'B-' Long-Term Issuer Default Rating
BAGHLAN GROUP: S&P Assigns 'B' Corp. Rating; Outlook Stable
MUGANBANK: S&P Affirms 'B-/C' Counterparty Ratings; Outlook Pos.


* CYPRUS: Pres. Calls for EU Leaders to Complete Bailout Revamp


SPIE BONDCO 3: S&P Affirms 'B' Corp. Rating; Outlook Stable


SOLARWORLD AG: Gets Capital Injection From Qatar Solar


SUNDAY BUSINESS: High Court Approves Survival Plan


PARMALAT SPA: Reborn Co. Is Still Fighting Legal Battles


BALVA: Licenses Withdrawn; Ordered to Appoint Liquidator


ULTIMA INTERMEDIATE: Moody's Assigns 'B3' CFR; Outlook Stable


INTERXION HOLDING: Moody's Assigns (P)B2 Rating to EUR300MM Notes
INTERXION HOLDING: S&P Assigns 'B+' Rating to EUR300MM Sr. Notes


CENTRAL EUROPEAN: Issues US$665 Million Secured Notes


HIDROELECTRICA SA: Creditors Approve Reorganization Plan


BAMI: Files Insolvency Petition After Debt Refinancing Fails


SUNTECH POWER: Moratorium on European Unit Claims Extended

U N I T E D   K I N G D O M

CAIRNDUFF DEVELOPMENTS: Two Shopping Centers in Administration
CO-OPERATIVE BANK: Moody's Lowers Deposit Ratings to 'Caa1'
CO-OPERATIVE GROUP: S&P Lowers Corporate Credit Rating to 'BB-'
HEARTS FC: Faces Deduction if it Fails to Reverse Administration
KYLE SHOPPING: Goes Into Administration

MEL DAVISON: Financial Pressures Prompt Administration
SMART PFI 2007: Fitch Affirms B- Rating on GBP7.3MM Class F Notes
UD SALAMANCA: Club Placed Into Liquidation


* Moody's Outlook on EMEA Chemical Sector Remains Negative
* Upcoming Meetings, Conferences and Seminars



ALPINE BAU: Says It's Insolvent; Seeks to Reorganize
Associated Press reports that Alpine Bau GmbH, one of Austria's
biggest construction companies, said it is insolvent.

The news agency relates that the company said it is seeking a
reorganization plan that would allow parts of the conglomerate to
continue functioning.

A statement issued by Alpine said it was not possible to
reorganize internally, "despite significant support from
financing banks and intensive efforts of the owner," AP relays.

According to the report, the company said if a feasible
reorganization plan can be devised, it will be reviewed and
implemented by insolvency administrators who are to be appointed.

Alpine Bau GmbH operates as a general contractor in Austria and
internationally.  The company focuses on project development
phase to planning and implementation and on to financing and


BAGHLAN GROUP: Fitch Assigns 'B-' Long-Term Issuer Default Rating
Fitch Ratings has assigned Baghlan Group FZCO a Long-term foreign
currency Issuer Default Rating (IDR) of 'B-'. The Outlook is

Baghlan is a privately owned, diversified Azerbaijani corporate
benefiting from the expected structural growth of the country
through its transport services, construction and oil & gas
activities. Although moderately leveraged for the rating category
recent investments into start-up oil and gas assets have
increased the debt quantum. The agency expects funds from
operations (FFO) gross leverage to remain below 2.5x into FY13.
Fitch expects on-going stability from its transport services
business to offset lumpy cash flow generation from its
construction segment. The oil and gas segment over FY13 & FY14 is
expected to be a modest drain on cash flows. However, the
potential for this unit to outperform and up-stream dividends to
the group - indicative of standalone strength - is a potential
positive rating event.


Diversified Operating Segments:
The operating risk profile benefits from its diversified nature,
although the concentration on large contracts is a weak point.
Transport and logistics services benefit from strong domestic
market share, recurrent cash flow and privileged contracts with
government bodies. Construction is primarily focused on one large
civil works contract with a few more contracts in the order book
coming on-stream over the next few years. Although this business
risk exhibits a higher risk with volatile working capital
movements and fragmented market share, profit margins and growth
prospects are strong. Oil and gas operations are in a run-up
phase and still required financial support from the group,
although expected to be cash flow positive from FY15 onwards.

Stable Transport Services Unit:
As the leading freight agent in Azerbaijan this operating segment
requires minimal debt funding and has a solid track record of
generating reasonable free cash flow (FCF) for the rest of the
group to grow. This stability stems from Baghlan's leading
position as the key freight agent for Azerbaijani Railways
selling on its behalf around 60% of all freight volume through
the Azerbaijani railway network. The unit has high barriers to
entry with Baghlan benefiting from an exclusive medium term
contract with Azerbaijani Railways.

Real Estate Divestments:
Strong FY13 expected FCF generation is dependent on the disposal
of this portfolio of primarily residential, multi-purpose units
in central Baku. The positive impact on FCF of around AZN60m from
these divestitures would aid de-leveraging, although not required
to maintain consolidated FFO gross leverage below 2.5x for FY13.
Baghlan is currently in negotiations with investors and banks to
sell these units in block sales.

Volatile Working Capital Movements:
Solid P&L profits posted in recent years have not fully converted
into cash flow. Negative working capital outflows during 2011 and
2012 have led Baghlan to fund a working capital requirement of
around AZN181m as at FY12 (inventory plus current receivables
less current payables). Although working capital is likely to
become positive in 2013 and 2014 it is closely linked to
divesting real estate assets, receiving payment from deferred
consideration following the sale of a JV interest (AISBG) and
successful execution of their construction contracts. Receivables
risk is largely contained with the majority of receivables linked
to Azerbaijani state authorities.

Reduced Bank Debt Dependency:
As typically for a private Azerbaijani issuer, access to long
term bank funding is constrained by the relatively under-
developed banking market. Positively, Baghlan used the
international debt markets issuing a secured USD150m note in 2012
to fund the increased stake in their existing oil and gas
business. Baghlan continues to refinance its bank debt largely
with the International Bank of Azerbaijan ('BB'/Stable) that has
in recent years shown solid support for the domestic non-oil


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

- Improved operating risk profile with reduced concentration on
   large single contracts.

- Positive working capital generation and successful divestment
   of real estate assets.

- Extension of existing debt maturities and diversifying sources
   of funding.

- Sustainable financial metrics with Fitch adjusted FFO gross
   leverage below 3.0x and FFO gross interest cover above 4.0x.

- Oil and gas activities to be self-sufficient and generate
   sustainable FCF to upstream dividends.

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

- Continued working capital outflows and increased requirement
   to use local bank funding.

- Failure to renew key contracts or loss of licenses in the
   Transport segment.

- Oil and gas activities to drain material cash flow from the
   overall group and /or an underperformance on the oil and gas

BAGHLAN GROUP: S&P Assigns 'B' Corp. Rating; Outlook Stable
Standard & Poor's Ratings Services assigned its 'B' long-term
corporate credit rating to Azerbaijan-based diversified company
Baghlan Group FZCO.  The outlook is stable.

The rating reflects S&P's assessment of Baghlan's business risk
as vulnerable and its financial risk as aggressive.

Baghlan generated Azerbaijan manat (AZN) 144 million (about
EUR137 million) in adjusted EBITDA in 2012.  It operates in five
key segments: freight forwarding, public transportation,
construction project management, equipment trading, and oil and

The rating is constrained by Baghlan's position as a small player
that relies heavily on a limited number of large contracts.
These are mainly in road construction for the government-related
Azeryolservice and in freight forwarding, where the company
enjoys a hefty 50% discount from Azerbaijan Railways thanks to
accumulating large transportation volumes.  Any changes to these
contracts could significantly affect Baghlan's profits or cash
flow, in S&P's view.  Baghlan also faces large working capital
fluctuations (notably related to the road construction project),
which may pressure cash flows and liquidity, despite some
cushioning from its back-to-back structuring with suppliers.
Lastly, Baghlan is undertaking a new oil and gas project that
will require sizable capital expenditures and may be subject to
execution risks.

The company has a concentrated shareholder structure, and S&P
believes that it may be subject to key man risk, as the company's
business may be exposed to the position of its core shareholder,
Mr.Hafiz Mammadov, in Azerbaijan's business and political
context. In addition, S&P considers that Baghlan is subject to
the risks of doing business in Azerbaijan, where it operates its
key activities.

On the upside, Baghlan benefits from diversification by business
segment and favorable profitability levels under its existing
contracts.  Azerbaijan's developing business environment
currently creates barriers to entry to Baghlan's key niche
markets, although this could change in the future.  Baghlan's
debt of AZN233 million on Dec. 31, 2012, is quite manageable.  In
S&P's base-case scenario, it assumes that the company will
maintain its generally prudent approach to leverage.  Baghlan's
invests in its oil and gas project via a production sharing
agreement, which helps it to share capital expenditures with its
partners and enables it to recover investments relatively quickly
when production increases are achieved.  The company's projects
in other segments require only small maintenance capital

The stable outlook reflects S&P's expectation that Baghlan will
maintain manageable liquidity over the next few years, and avoid
any further large working capital outlays or any deterioration in
the key terms of its largest contracts.  S&P expects Baghlan to
maintain healthy headroom under the covenant that limits its
ratio of debt to EBITDA at 2.5x.  S&P has not factored any major
debt-financed acquisitions into its base-case scenario.

S&P could consider lowering the rating on Baghlan if it observed
a squeeze on liquidity, a significant negative change in the
profitability of key contracts, or the company made large debt-
financed acquisitions.  S&P has not factored these possibilities
into its base-case scenario, however.

In S&P's view, rating upside is limited in the short to medium
term because of the company's limited size and the inherent high
volatility in its business.

MUGANBANK: S&P Affirms 'B-/C' Counterparty Ratings; Outlook Pos.
Standard & Poor's Ratings Services said it revised its outlook on
Azerbaijan's Muganbank to positive from stable.  At the same
time, S&P affirmed its 'B-/C' long- and short-term counterparty
credit ratings on the bank.

The outlook revision reflects S&P's view that the recent capital
increase will strengthen Muganbank's balance sheet and provide
the bank with the capacity to increase its competitive position
in the domestic market.  If well managed, this could improve the
bank's future core profitability, which was fairly weak in 2012.
Muganbank has recently benefited from an additional capital
increase of Azerbaijan manat (AZN) 10 million.  S&P expects the
bank to gradually become one of Azerbaijan's top 10 banks in
terms of loans and assets, and even higher in the ranking in
terms of net profit.

S&P notes that the bank has successfully developed relationships
with international financial institutions and government funds,
attracting less expensive funding facilities and therefore
improving its franchise and, potentially, its profitability
ratios.  S&P's affirmation of its 'C' short-term rating reflects
the inherent risks for a small bank with an undiversified
business model in a high risk country, and certain liquidity

"We base our ratings on Muganbank on a 'bb-' anchor for banks
operating predominantly in Azerbaijan, and our view of the bank's
"weak" business position, "adequate" capital and earnings,
"moderate" risk position, "average" funding, "adequate"
liquidity, and "low systemic importance" in Azerbaijan, as our
criteria define the terms," S&P noted.

"We view the bank's business position as weak because of its
small market share, persistent strategic uncertainties, and very
compact management team that is in danger of placing too much
importance on key individuals.  However, we think there is
potential for the bank's business position to improve.  The bank
is among Azerbaijan's top 15 financial institutions and had about
285 million AZN in assets on Dec. 31, 2012.  It mostly lends to
small and medium businesses.  We note that the bank's owners, who
are Azeri businessmen, are now looking to sell a stake to
external foreign investors, which adds some uncertainty regarding
the bank's future development.  If any sale happens, we will
review the bank and may take a rating action based on the new
owner's strategic priorities," S&P added.

S&P raised its assessment of the bank's capital and earnings to
"adequate" following the AZN 10 million cash injection at the end
of 2012.  S&P thinks that the bank's earnings are going to
recover after one-off provisioning needs incurred in 2012 that
influenced the bottom line results.  The bank's trends in net
interest margin and fee and commission income are positive, in
S&P's view.

The positive outlook reflects S&P's expectation that the bank
will continue to grow in its current market niche, and that its
core banking profitability will improve gradually and give it an
enhanced buffer to cushion credit costs.

S&P might consider a positive rating action if it saw that the
bank's market share was increasing enough to push it into the top
10 in terms of loans and assets without harming its financial
profile, notably its asset quality indicators.

S&P might revise the outlook back to stable if asset quality
deteriorated sharply, with non-performing loans reaching double
digits, although this is not S&P's base-case expectation.  S&P
could also consider a negative rating action if the funding
profile deteriorated significantly, leading to depressed
liquidity and loss of confidence among some large depositors.


* CYPRUS: Pres. Calls for EU Leaders to Complete Bailout Revamp
Peter Siegel at The Financial Times reports that Cyprus'
president has asked euro zone leaders for a complete revamp of
his country's EUR10 billion (US$13.4 billion) bailout, warning
Nicosia may not be able to meet the rescue's current terms
because it has harmed the country's economy and banking system
even more than expected.

In a letter sent last week and obtained by the FT, Nicos
Anastasiades wrote that the restructuring of the country's two
largest banks, the centerpiece of the March rescue, was
"implemented without careful preparation", wiping out the working
capital of many Cypriot companies and requiring unprecedented
capital controls that were suffocating the island's economy.

"[T]he economy is driven into a deep recession, leading to a
further rise in unemployment and making fiscal consolidation all
the more difficult," Mr. Anastasiades wrote to the heads of three
EU institutions and the International Monetary Fund.  "I urge you
to review the possibilities in order to determine a viable
prospect for Cyprus and its people."

Mr. Anastasiades has asked EU leaders to unwind the complex
restructuring and partial merger of its two largest banks, which
account for 80 percent of the domestic banking sector, backed by
further euro zone loans, the FT relates.

The Cyprus bailout forced the closure of the island's second-
largest financial institution, Laiki bank, and a drastic
restructuring of its largest, Bank of Cyprus, the FT recounts.
Controversially, it required depositors with more than EUR100,000
in both banks to pay for the banks' bailout through seizures of
cash in their accounts, the FT discloses.  None of the EUR10
billion in rescue loans from the EU and IMF is to go to shoring
up either bank, bailout lenders stipulated, the FT notes.

But in his letter to the eurogroup of finance ministers and
"troika" of international lenders, Mr. Anastasiades, as cited by
the FT, said those terms had proven too onerous for Bank of
Cyprus, the island's only remaining "mega-systemic bank", and
were making it nearly impossible for the bank to raise the cash
needed to run its day-to-day operations.

"The success of the program approved by the eurogroup and the
troika depends upon the emergence of a strong and viable BOC," he

Although the letter does not request it explicitly,
Mr. Anastasiades is in effect asking for further euro zone loans
on top of the existing 10 billion euro sovereign bailout --
something specifically ruled out by a German-led group of
countries at the time, the FT states.

According to the FT, he asks for part of the EUR9 billion given
to Laiki in so-called emergency liquidity assistance by the
eurosystem's central banks to be converted into long-term bonds.
These bonds would be used to unwind the partial merger of the
"good" bit of Laiki with Bank of Cyprus, the FT says.


SPIE BONDCO 3: S&P Affirms 'B' Corp. Rating; Outlook Stable
Standard & Poor's Ratings Services revised its outlook to stable
from negative on Spie Bondco 3 S.C.A., a France-based multi-
technical services provider.  At the same time, S&P affirmed its
'B' long-term corporate credit rating on the company.

The rating on Spie reflects S&P's assessments of the group's
"fair" business risk profile and "highly leveraged" financial
risk profile.

Spie's 2012 results were resilient amid increasing economic
weakness in France and Europe as a whole.  In the first quarter
of 2013, although Spie's multitechnical service (MRS) activities
in France shrank by 8%, the decrease in this area was fully
offset by other divisions.  S&P believes that Spie will continue
to cope with the current economic weakness in the coming

S&P anticipates that demand for the group's services in France
and the rest of Western Europe will remain positive under its
base case for 2013 and 2014.  S&P assumes that in 2013, revenues
will grow by at least 3% and the reported EBITDA margin will be
about 6.5%, despite S&P's forecasts for a 0.5% decline in
eurozone GDP and 0.2% decline in France in 2013.  S&P's revenue
and EBITDA margin forecasts for 2014 are similar to its 2013
projections, based on its forecast for 0.6% GDP growth in France
and 0.8% GDP growth in the eurozone (European Economic and
Monetary Union).

S&P assumes that the Spie group will not be affected by the weak
economic environment because of the limited cyclicality of its
business and the generally low volatility of its earnings, both
of which support S&P's assessment of the group's "fair" business
risk profile.

Under S&P's base case, it anticipates that the ratio of funds
from operations (FFO) to Standard & Poor's-adjusted debt
(including preferred shares) will be more or less unchanged in
2013 with respect to 2012, at about 8%, thanks to Spie's positive
discretionary cash flow generation.  S&P also assumes that the
company will maintain Standard & Poor's-adjusted EBITDA interest
coverage at 2x.

The company's current level of debt is very high for the rating.
Under S&P's base-case scenario, it assumes that in the coming
years Spie should be able to improve and maintain its ratio of
FFO to adjusted debt at about 10%.  In 2013, S&P anticipates that
Spie's acquisition spending will increase, in line with the trend
observed in the last two years-- S&P assumes EUR60 million for
the year.  S&P assumes that Spie would be able to reduce its
expenditure in the event of financial stress over the next few

"The stable outlook reflects our opinion that in the current weak
economic conditions, Spie should be able to achieve at least 3%
revenue growth in 2013 and to maintain the reported EBITDA margin
at about 6.5%.  On the basis of these assumptions, the FFO-to-
debt ratio should be about 8% excluding the preferred shares from
debt and 10% including them as debt.  Spie should generate
sufficient free cash flow to cover its acquisition cash outflow.
We assume that over time Spie will maintain interest coverage at
about 2x, slowly improve FFO to debt, and continue to generate
free operating cash flow.  However, we do not expect significant
deleveraging in the next two years," S&P noted.

"We could consider a negative rating action if unexpected adverse
operating developments--such as sudden contract losses with
established clients resulting in a sizable shortfall in sales and
earnings--put pressure on Spie's ability to service its debt, in
turn reducing FFO to debt to below 7% and EBITDA cash interest
coverage to below 1.5x.  The ratings could also come under
downward pressure if Spie's free operating cash flow turns
negative following operating shortfalls," S&P noted.

S&P could consider a positive rating action if Spie's FFO to debt
moves permanently toward 15%--a level that S&P currently views as


SOLARWORLD AG: Gets Capital Injection From Qatar Solar
Middle East Online reports that Solarworld AG announced Tuesday a
capital injection by Qatar, a move which will save the company
from bankruptcy as the German sector struggles against Asian

Solarworld said in a stock exchange statement that it had agreed
several measures with its biggest creditors, including the
injection by Qatar Solar in return for a 29% stake in the
troubled company, Middle East Online relates.

According to Middle East Online, the statement said Solarworld
founder and chief Frank Asbeck will also end up with a 19.5%
share in the restructuring.

The investment by Qatar and the involvement of Mr. Asbeck,
amounting together to a EUR46 million (US$61 million) injection,
in effect wipes out much of the company's debt and inflicts major
losses on the company's current shareholders, Middle East Online

Faced with stiff competition, especially from Chinese solar panel
and cell producers, the German sector, formerly the world leader
in the technology, has seen several companies go bankrupt or be
bought by foreign companies, Middle East Online discloses.

SolarWorld AG is Germany's biggest solar-panel maker.  The
company is based in Bonn.


SUNDAY BUSINESS: High Court Approves Survival Plan
-------------------------------------------------- reports that the High Court has heard the
proposed takeover bid for the Sunday Business Post is lower than
hoped for but sufficient to ensure the newspaper's survival.

The court has approved the survival plan, which will see
EUR750,000 pumped into the business as a rescue scheme for the
company, relates.

Staff numbers will drop from 74 to 65, while staff will take a 6%
wage cut, says.

Mr. Justice Peter Kelly had expressed concern as to whether
creditors are aware that half of the investment comprises of a
loan that will have to be repaid, discloses.

Two factors helped sway Mr. Justice Peter Kelly's decision to
approve the survival plan, notes.

The first was better-than-expected results since the examiner
took over in March -- the second is that future projections show
the company can return to profitability, states.

Creditors have accepted a write down of debts and 9 staff members
have taken voluntary redundancy -- the remaining 65 members of
the workforce have agreed to a 6% cut in salary in exchange for
an interest in the newspaper, relates.

Examiner Michael McAteer made no secret of the fact that he'd
hoped to secure a larger investment but he's now of the view that
cost cuts mean 750 thousand is sufficient for the newspaper's
survival, notes.

The Sunday Business Post is an Irish national Sunday newspaper.
Accountant Michael McAteer of Grant Thornton was appointed as
interim examiner of Post Publishing Ltd., which owns the Sunday
Business Post' newspaper, at the High Court in Dublin by Mr.
Justice Peter Kelly, in March 2013.


PARMALAT SPA: Reborn Co. Is Still Fighting Legal Battles
Lisa Jucca and Valentina Accardo, writing for Reuters, reported
that ten years after its spectacular collapse in an accounting
scandal, reborn Italian dairy firm Parmalat is still struggling
to free itself from legal disputes that are clouding both its
prospects and those of its new French owner.

According to the report, in March, a local court put Parmalat
under the oversight of a special commissioner as part of an
investigation into its purchase of a business from its majority
owner Lactalis -- a deal which helped Lactalis to cut its debt,
but which some minority investors say was overpriced and makes
little strategic sense.

Parmalat may also have to fork out millions of euros to retain
ownership of a Rome-based dairy firm it acquired in 1998, after a
Roman court declared the purchase invalid, the report said.

That ruling forced Parmalat to take hefty provisions, slash its
dividend and push back the approval of its 2012 accounts to
Friday -- when minority investors are expected to vent their
displeasure at a shareholder meeting, the report related.

"The company is paralysed from this whole legal situation. We
work for the company during the daylight and for the court at
night," an insider told Reuters on condition of anonymity, the
report cited.

                      About Parmalat S.p.A.

Headquartered in Milan, Italy, Parmalat S.p.A. -- sells nameplate milk products that
can be stored at room temperature for months.  It also has about
40 brand product lines, which include yogurt, cheese, butter,
cakes and cookies, breads, pizza, snack foods and vegetable
sauces, soups and juices.

Parmalat S.p.A. and its Italian affiliates filed separate
petitions for Extraordinary Administration before the Italian
Ministry of Productive Activities and the Civil and Criminal
District Court of the City of Parma, Italy on Dec. 24, 2003.  Dr.
Enrico Bondi was appointed Extraordinary Commissioner in each of
the cases.  The Parma Court declared the units insolvent.

On June 22, 2004, Dr. Bondi, on behalf of the Italian entities,
sought protection from U.S. creditors by filing a petition under
Sec. 304 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Case No.

Parmalat's U.S. operations filed for Chapter 11 protection on
Feb. 24, 2004 (Bankr. S.D.N.Y. Case No. 04-11139).  Gary Holtzer,
Esq., and Marcia L. Goldstein, Esq., at Weil Gotshal & Manges
LLP, represented the U.S. Debtors.  When the U.S. Debtors filed
for bankruptcy protection, they reported more than US$200 million
in assets and debts.  The U.S. Debtors emerged from bankruptcy on
April 13, 2005.

Three special-purpose vehicles established by Parmalat S.p.A. --
Dairy Holdings Ltd., Parmalat Capital Finance Ltd., and Food
Holdings Ltd. -- commenced separate winding up proceedings before
the Grand Court of the Cayman Islands.  Gordon I. MacRae and
James Cleaver of Kroll (Cayman) Ltd. were appointed liquidators
in the cases.  On Jan. 20, 2004, the Liquidators filed a Sec. 304
petition (Bankr. S.D.N.Y. Case No. 04-10362).  Gregory M.
Petrick, Esq., at Cadwalader, Wickersham & Taft LLP, and Richard
I. Janvey, Esq., at Janvey, Gordon, Herlands Randolph,
represented the Finance Companies in the Sec. 304 case.

The Honorable Robert D. Drain presided over the Parmalat Debtors'
U.S. cases and Sec. 304 cases.  In 2007, Parmalat obtained a
permanent injunction in the Sec. 304 cases.


BALVA: Licenses Withdrawn; Ordered to Appoint Liquidator
-------------------------------------------------------- reports that unrated Latvian insurer Balva,
which is believed to provide professional indemnity (PI)
insurance to 1,300 UK firms, has had its operating licenses
withdrawn in a bid to protect customers.

According to the report, the Latvian Board of Financial and
Capital Market Commission (FCMC) has ordered the provider to
either appoint a liquidator and begin the winding-up process or
stop all insurance activities.

It comes after the FCMC banned the insurer from writing new
business in April due to a "lack of information" regarding the
company's UK business, the report relays.

Despite being unrated, relates, the insurer is
estimated to have a 9% share of the UK solicitors' PI market,
approximately 1,300 firms, amounting to GWP of some GBP20m. It
entered the PI market via broker Bar Professions.

"Balva was requested to provide the FCMC with the required
information and eliminate indentified violations of the law,"
the FCMC said in a statement cited by

"However, having examined the situation the FCMC came to
conclusion that over the period until withdrawal of licences the
company had failed to carry out the necessary improvements and
the insurance company was incapable to ensure fulfilment of the
regulatory requirements, i.e. the levels of provisions and
capital adequate to its business volumes."

The regulatory body added that Balva is "obliged" to continue
fulfilling the terms of contracts entered into with its
customers, meanings all its insurance policies are still
effective, the report adds.


ULTIMA INTERMEDIATE: Moody's Assigns 'B3' CFR; Outlook Stable
Moody's Investors Service has assigned a B3 corporate family
rating and B3-PD probability-of-default rating to Ultima
Intermediate S.a.r.l. (Armacell or UIS) the holding company
established for the purpose of acquiring Armacell Group. The
holding company is beneficially owned by private equity investor
Charterhouse Capital Partners IX.

Concurrently, Moody's has assigned a provisional (P)B2 rating to
the holding company's proposed US$340 million 7 year first lien
term loan (EUR260 million) and US$65 million 5 year revolving
credit facility (EUR50 million) and (P)Caa2 to the holding
company's proposed US$85 million 7.5 year second lien term loan
(EUR65 million). The rating outlook is stable. This is the first
time that Moody's has rated UIS and Armacell.

The ratings are contingent upon LHU's success in closing its
proposed acquisition of Armacell. USI does not have any other
business activities other than those carried out by Armacell.

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

Ratings Rationale:

The B3 CFR is supported by: i) Armacell's leading position in a
niche market with attractive longer-term growth prospects driven
by the need to save energy e.g. in the construction of buildings;
ii) ability to generate relatively high margins and positive free
cash flows through the cycle despite the cyclicality of its end
markets; and iii) a track record of the current management
operating in an LBO environment.

The rating is constrained by: i) very high leverage and large
"non-recurring" costs items; ii) exposure to volatile raw
material prices and hence the need to fully adjust product
pricing on a timely basis; and iii) the limited size of the
business with relatively limited product and end market

The B3 CFR reflects Moody's expectation that, following the
closing of the transaction, the Company will exhibit a very high
leverage, as exemplified by Moody's adjusted debt/EBITDA ratio of
approximately 6.6x based on 2012 EBITDA (as adjusted by Moody's)
of EUR66 million. With over 60% of sales in the construction
sector, demand for Armacell products is necessarily linked to
general levels of economic activity, even if the demand is also
broadly supported by energy efficiency trends and material
substitution factors which should be less cyclical. Whereas the
Company has in the past experienced significant declines in
Southern Europe that necessitated the closure of two plants,
favorable growth in North America and Asia allowed the Company to
compensate the negative impact and deliver moderate organic
EBITDA growth. Adjusted EBITDA margins have remained stable over
the last 5 years and are expected by management to increase due
to an ongoing shift in Armacell's geographic/product mix towards
a stronger contribution from the higher margin North American,
PET and engineering systems segments.


Moody's views Armacell's liquidity position as adequate. In
addition to some EUR10 million of cash balances to be available
at closing, the Company will have access to a $65 million undrawn
revolver line and is expected to generate positive free cash
flow, which is seasonally higher in the second half of the
calendar year. Moody's notes, however, that initial cash balances
are at least partly earmarked for potential anti-trust settlement
payment that may become due in 2014 and is limited to a maximum
exposure of EUR6.5 million for the company per the purchase

Structural Considerations

The EUR260 million senior secured first lien term loan benefits
from senior ranking guarantees from all material group entities,
representing a minimum of 80% of Consolidated EBITDA. Sizeable
second lien funding of US$85 million, which is subordinated,
results in upward notching for the senior instrument rating of
(P)B2 (Loss Given Default rating of LGD3, 33.9%) and is a
reflection of the instrument's seniority in the event of an
enforcement of the collateral. Accordingly, the second lien
tranche is notched down to (P)Caa2 (LGD5, 87.5%) .

Rating Outlook And Triggers

The stable outlook reflects Moody's expectation that despite
leverage metrics remaining very high and even increasing to an
estimated leverage level of around 7.0x (based on inclusion of up
to EUR6.5 million of related to potential aforementioned
antitrust settlement payment), attractive levels of cash flow
generation can still be achieved.

Negative pressure could be exerted on the rating in the event of
increasing margin pressure, weakening liquidity profile and gross
adjusted leverage remaining above 7.0x on a sustainable basis.

A positive rating action is currently unlikely. An upgrade would
require a sustained period of maintaining profitability and cash
flow generation at a high level, with a subsequent reduction in
leverage, as illustrated by gross adjusted debt/EBITDA trending
towards 5.0x.

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

Armacell is a global producer of engineered foam used primarily
for insulation across building and industrial applications. In
2012 the Company generated annual net sales of EUR423 million.


INTERXION HOLDING: Moody's Assigns (P)B2 Rating to EUR300MM Notes
Moody's Investors Service has assigned a provisional (P)B2 long-
term rating to Interxion Holding N.V.'s proposed issuance of
EUR300 million senior guaranteed and secured notes due 2020.
Moody's understands that Interxion will use the bond issuance
proceeds to refinance existing debt.

Concurrently, Moody's has affirmed the company's B1 corporate
family rating, B1-PD probability of default rating and the B2
rating of its EUR260 million senior secured notes due 2017, and
changed the outlook on the ratings to positive from stable.

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

Ratings Rationale:

The provisional (P)B2 rating assigned to the proposed EUR300
million 2020 guaranteed senior secured notes is one notch below
the company's CFR and reflects their contractual subordination
under the terms of an intercreditor agreement to the proposed
EUR100 million super senior guaranteed and secured revolving
credit facility (RCF) that replaces the existing EUR60 million
RCF. The company reports that as of March 31, 2013, the notes'
guarantors represented 86% of the company's reported consolidated
adjusted EBITDA and 91% of consolidated net asset value.

Interxion's B1 CFR is supported by (1) the company's leading
position in Europe as a provider of collocation data center
services, providing connectivity with reduced response times to
businesses that work with each other; (2) the favorable medium-
term demand/supply dynamics of the data center industry; and (3)
the stability of Interxion's profitability and cash flows given
the limited customer churn.

However, the CFR is constrained by (1) the modest size and scope
of the company's operations relative to its globally rated peers;
(2) the risk of oversupply in the industry; (3) the risks
relating to the returns on the company's developments and its
ability to increase utilization rates; and (4) the negative free
cash flow that is generated by Interxion as it pursues those
development opportunities.

Rationale For The Positive Outlook

The positive outlook on the ratings is supported by a
strengthening of Interxion's positioning within its B1 rating
category. In Moody's view, the company has demonstrated prudent
financial policy and disciplined business practices, whereby
growth capital expenditure is focused on demand-led expansion.
The positive outlook is further supported by the rating agency's
view that the scale of Interxion's business is moving closer to
the inflection point where its organic growth strategy can be
self-financed, which will reflect in improved financial metrics.
In addition, Moody's expects the company will maintain sound
liquidity despite the continued high level of capital expenditure
it has made to realize its expansion plan.

What Could Change The Rating Up/Down

Positive pressure on the ratings or outlook could develop if
demand and supply dynamics continue to support pricing and high
utilization rates in the medium term, leading to an adjusted
Debt/EBITDA ratio towards 3.5x and positive free cash flow
generation. Conversely, negative pressure could emerge if the
company is unable to sustain levels of profitability and
utilization rates such that adjusted Debt/EBITDA were to trend
above 4.5x.

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

Interxion Holding N.V. is a provider of carrier-neutral internet
data-center services and leases out collocation space in 34 data
centers located in 11 European countries, providing its customers
with power, cooling and a secure environment to house their
servers, network, storage and IT infrastructure. Interxion
reported last 12-months revenues of EUR286 million and total
assets of EUR823 million as at March 31, 2012.

INTERXION HOLDING: S&P Assigns 'B+' Rating to EUR300MM Sr. Notes
Standard & Poor's Ratings Services said that it assigned its 'B+'
issue rating to the proposed EUR300 million senior secured notes
to be issued by Interxion Holding N.V.  The recovery rating on
the proposed notes is '3', indicating S&P's expectation of
meaningful (50%-70%) recovery in the event of a payment default.

At the same time, the issue rating on the new Interxion's super
senior revolving credit facility (RCF) due 2018, is 'BB'.  The
recovery rating on the RCF is '1', indicating S&P's expectation
of very high (90%-100%) recovery in the event of a payment

S&P understands that Interxion will use the proceeds of the
proposed notes to repay its existing senior secured notes,
maturing in 2017, and a redemption premium.

                         RECOVERY ANALYSIS

The recovery and issue ratings are primarily supported by S&P's
valuation of the company as a going concern, its leading market
position, and the relatively creditor-friendly jurisdiction of
the Netherlands.

The recovery rating on the notes is, however, constrained by
their contractual subordination to the sizable super senior RCF
(as per the intercreditor agreement to be put in place).  It is
also limited by the comprehensive but relatively weak security
package, given the asset-light nature of the company, which would
significantly hamper recovery prospects in the event of

The proposed senior secured notes' documentation restricts, among
other things, Interxion's ability to raise additional debt, pay
dividends, sell certain assets, or merge with other entities.
However, the documentation for the proposed notes allows
Interxion to raise new debt if the pro forma consolidated fixed-
charge coverage ratio is higher than 2.0x, and allows the
issuance of additional senior debt if the consolidated senior
leverage ratio is less than 4.0x.  Aside from these conditions,
the permitted liens covenant allows for liens securing, among
other things, obligations of no more than EUR50 million in
aggregate at any time.

The proposed notes benefit from a change-of-control clause and a
cross-default clause (for any unpaid amount of more than
EUR20 million), and will not have any financial maintenance

S&P considers the documentation's protection for noteholders to
be relatively weak, since the issuer and guarantors can--without
seeking consent--conduct ordinary activities with respect to the
collateral such as selling, factoring, abandoning, or otherwise
disposing of it, which would reduce the pool of assets securing
the notes.

The RCF includes only one financial maintenance covenant; a
leverage one.  The documentation does not include a negative
pledge provision and therefore restrictive covenants are provided
by the notes' indenture.  Finally, the documentation includes a
change of control clause as well as a cross-default clause (for
any amount unpaid of more than EUR10 million).

S&P values Interxion as a going concern, given its leading market
position in Europe's key Internet hub markets, valuable long-term
relationships and contracts with a fragmented and established
customer base, and specific beneficial industry characteristics.
These include moderate barriers to entry and the cash-generative
nature of the business.  At S&P's hypothetical point of default
in 2018, it envisage a stressed enterprise value of about
EUR385 million, equivalent to 5.5x EBITDA.

After deducting priority liabilities of about EUR160 million--
comprising the costs associated with enforcement, finance leases,
various mortgages, as well as the fully drawn super senior RCF
(including six months of prepetition interest)-- S&P foresees
about EUR225 million remaining for the senior secured
noteholders. S&P envisage about EUR310 million of senior secured
debt outstanding at default (including six months of prepetition
interest).  This equates to recovery prospects of between 50%-70%
for the senior secured debt.  Even though the numerical coverage
slightly exceeds the 70% debt coverage, S&P assigns a recovery
rating of '3' to reflect that the hypothetical EBITDA at default
is sensitive, and subject to hypothetical capital expenditure at
the time, which could hinder recovery.  It also reflects S&P's
view of the notes' relatively weak security package.


CENTRAL EUROPEAN: Issues US$665 Million Secured Notes
Central European Distribution Corporation along with CEDC Finance
Corporation International, Inc., an indirect wholly-owned
subsidiary of the Company, as issuer, on June 5, 2013, entered
into an Indenture with US Bank, N.A., as Trustee.  In connection
with the Senior Secured Notes Indenture, the Issuer issued US$465
million Senior Secured Notes due 2018 to holders of the Issuer's
Senior Secured Notes due 2016, which were cancelled pursuant to
the Company and the Issuer's plan of reorganization.  The
issuance of the Senior Secured Notes to holders of Existing 2016
Notes is expected to take place on or about June 19, 2013.

Also on June 5, 2013, the Company and the Issuer, entered into an
Indenture, between the Company, the Issuer, certain subsidiary
guarantors named therein, and US Bank, N.A., as Trustee.  In
connection with the Convertible Notes Indenture, the Issuer
issued US$200 million Convertible Junior Secured Notes due 2018
to holders of Existing 2016 Notes, which were cancelled pursuant
to the Company and the Issuer's plan of reorganization.  The
issuance of the Convertible Notes to holders of Existing 2016
Notes is expected to take place on or about June 19, 2013.

The Convertible Notes will be junior in ranking as a result of
the Intercreditor Agreement, dated June 5, 2013, between the
trustee for the Senior Secured Notes and the trustee for the
Convertible Notes, and agreed and acknowledged by, inter alios,
the Company and the Issuer.

Unregistered Sales of Equity Securities

On June 5, 2013, in connection with the effectiveness of the
Plan, the Company issued an aggregate of 10,000 shares of New
Common Stock.

Modification to Rights of Security Holders

Pursuant to the Plan, as of the Effective Date, all Pre-Emergence
Common Stock issued by the Company was cancelled.  Each holder of
an equity interest in the Pre-Emergence Common Stock neither
received nor retained any property or interest in property on
account of such equity interest.

Changes in Control of the Company

Pursuant to the Plan, all of the Company's Pre-Emergence Common
Stock was cancelled on the Effective Date.  Holders of such Pre-
Emergence Common Stock did not and will not receive any
distributions under the Plan.  In accordance with the terms of
the Plan, Roust Trading Limited and its affiliates have acquired
control of 100 percent of the New Common Stock.  As a result of
the Company's emergence from Chapter 11 and in accordance with
the Plan, the identity of several of the directors on the
Company's board of directors has changed.

New Directors

Pursuant to the New Charter, the following persons have been
named as directors of the Company:

   * Mr. Roustam Tariko
   * Mr. N. Scott Fine
   * Mr. Jose L. Aragon
   * Judge Joseph Farnan
   * Mr. Alessandro Picchi
   * Mr. Pavel Merkul
   * Mr. Eberhard von Lohneysen

Amendments to Bylaws

Pursuant to the Plan, the Company has filed an Amended and
Restated Certificate of Incorporation with the Secretary of State
of the State of Delaware and has adopted Amended and Restated By-
Laws, each of which became effective as of June 5, 2013.  Changes
implemented by the New Charter and New By-Laws include the

   * The authorized share capital of the Company is 90,000 shares
     of common stock of US$0.01 par value per share and 10,000
     shares of preferred stock of US$0.01 par value per share.

   * The number of authorized shares of preferred stock may be
     increased or decreased (but not below the number of shares
     thereof then outstanding) by the affirmative vote of the
     holders of a majority in voting power of the stock of the
     Company entitled to vote, without the separate vote of the
     holders of the preferred stock as a class, unless a vote of
     any such holders is required pursuant to the terms of any
     certificate of designation.

   * A director may be removed with or without cause, but in any
     case that removal will only be effective if accomplished by
     the affirmative vote of holders of not less than a majority
     of the shares of the capital stock the Company issued and
     outstanding and entitled to vote generally in the election
     of directors cast at a meeting of the stockholders called
     for that purpose, notwithstanding the fact that a lesser
     percentage may be specified by law.

   * Certain provisions have been added to provide stockholder
     protections to Minority Stockholders.

   * Minority Stockholders have been provided tag along rights,
     drag along rights and preemptive rights in respect of share
     transfers by RTL.

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


                             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

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.  CEDC's Plan, which won approval from the
U.S. Bankruptcy Court for the District of Delaware on May 13,
2013, was declared effective on June 5.


HIDROELECTRICA SA: Creditors Approve Reorganization Plan
Ioana Tudor at Ziarul Financiar reports that the creditors of
Hidroelectrica SA approved the reorganization plan of the company
on Tuesday.

Hidroelectrica SA is a Romanian state-owned hydropower producer.

Hidroelectrica entered the insolvency process on June 20, 2012,
in order to be re-organized.  Euro INSOL was appointed the
judicial administrator.  On March 31, 2013, Hidroelectrica had
some 4,900 employees, down from over 5,200 recorded when the
company entered the insolvency process.


BAMI: Files Insolvency Petition After Debt Refinancing Fails
Reuters reports that Bami has filed to begin insolvency

According to Reuters, unlisted Bami, 49%-owned by French property
firm Gecina, has EUR620 million (US$830 million) of debt with

"A year ago we began negotiations with our syndicate of creditors
to refinance the debt and we have not been able to reach an
agreement," Reuters quotes a Bami spokesman as saying.

Bami, as cited by Reuters, said France's Natixis, Spain's Banco
Popular and German lender Eurohypo are the company's main

Separately, Gecina said all assets and liabilities linked to Bami
have been depreciated and are no longer consolidated in its
accounts, Reuters notes.

Dozens of property firms have collapsed in Spain, where house
prices have fallen 40% from their 2007 peak, and banks that have
set aside money to cover losses in the sector are becoming
tougher with firms still in business, Reuters relates.

Bami is a Spanish property developer.


SUNTECH POWER: Moratorium on European Unit Claims Extended
NewNet reports that Suntech Power, which is currently involved in
bankruptcy proceedings, said authorities in Switzerland have
extended a moratorium on creditor claims on its European unit.

According to NewNet, Suntech said in a statement that the
moratorium is for a six month period for its European subsidiary
Suntech Power International and may be extended thereafter.

"SPI has already met important milestones in the restructuring
process.  The definitive moratorium allows SPI time to
restructure debt and reach an agreement with creditors.  SPI will
continue normal operations during this process," NewNet quotes
David King, Suntech's CEO, as saying.

Suntech last month formed an agreement with lenders to defer
payment obligations on a US$541 million loan, NewNet relates.

The company first defaulted on three per cent convertible notes
on March 15, NewNet recounts.

                           About Suntech

Wuxi, China-based Suntech Power Holdings Co., Ltd. (NYSE: STP)
produces solar products for residential, commercial, industrial,
and utility applications.  With regional headquarters in China,
Switzerland, and the United States, and gigawatt-scale
manufacturing worldwide, Suntech has delivered more than
25,000,000 photovoltaic panels to over a thousand customers in
more than 80 countries.

As reported by the TCR on March 20, 2013, Suntech Power Holdings
Co., Ltd., has received from the trustee of its 3% Convertible
Notes a notice of default and acceleration relating to Suntech's
non-payment of the principal amount of US$541 million that was
due to holders of the Notes on March 15, 2013.  That event of
default has also triggered cross-defaults under Suntech's other
outstanding debt, including its loans from International Finance
Corporation and Chinese domestic lenders.

U N I T E D   K I N G D O M

CAIRNDUFF DEVELOPMENTS: Two Shopping Centers in Administration
BBC News reports that Glasgow-based Cairnduff Developments Ayr
Limited-owned shopping centres in Ayr, Kyle Shopping Centre and
Arran Mall, have been placed into administration, after suffering
a drop in footfall.

The two shopping centers will continue to trade as normal while
administrators Begbies Traynor look at ways to improve footfall
before seeking a buyer, according to BBC News.  The report
relates that the administrators said no jobs had been affected by
the move.

Kyle Centre, which is located in the heart of Ayr, includes 27
shop units with a total of 95,000 sq ft of retail space.  The
Arran Mall has 22 units totaling 42,000 sq ft.

"Like many regional towns, headline rental values for retail
units have fallen dramatically over the last few years. . . .
Unfortunately, these shopping centres have suffered from the fall
in consumer spending combined with increased competition from
other retail venues such as Ayr Central Shopping Centre,
Heathfield Retail Park and the Silverburn Mall in Glasgow. . . .
However, we believe that with their excellent town centre
location, both the Kyle Centre and the Arran Mall have appeal for
local shoppers," the report quoted Paul Dounis, from Begbies
Traynor, as saying.

"We will continue to trade the centres while we explore the
options for improving visitor numbers. . . . This includes
potentially reconfiguring the Kyle Centre to make it more
attractive to shoppers and embarking on discussions with other
large space retailers," Mr. Dounis added, the report notes.

CO-OPERATIVE BANK: Moody's Lowers Deposit Ratings to 'Caa1'
Moody's Investors Service has downgraded Co-Operative Bank's
senior unsecured debt and deposit ratings to Caa1, from Ba3 and
assigned a developing outlook, and downgraded the bank's
standalone bank Financial Strength Rating to E from E+,
equivalent to a baseline credit assessment (BCA) of ca, from the
previous BCA of b1. Moody's has also downgraded Co-Operative
Bank's subordinated debt and junior subordinated debt ratings to
Ca and Ca (hyb) from B2 and B3 (hyb) respectively with a negative
outlook. The short-term ratings have been affirmed at Not-Prime.

The rating action follows the bank's announcement of a regulatory
capital shortfall requiring a recapitalization via burden-sharing
with junior creditors and asset disposals (primarily of its
parent's insurance businesses). The announcement confirms Moody's
view that the Co-operative Bank may only return to being a fully
solvent, operational entity through a substantial
recapitalization, which as proposed would involve a bail-in of
junior creditors, together with a very significant restructuring
of the bank's operations.

The downgrade of the bank's BCA to ca reflects the imminence of
Co-Operative Bank's default on its junior debt alongside the lack
of clarity on the implications for the bank's future standalone
strength given (1) the uncertainty over whether the proposed
liability management exercise with junior creditors will achieve
the forecast level of recapitalization and (2) the execution
risks that the entirely new senior management structure will face
in completing the significant, far-reaching restructuring that
the bank will need to undertake over the course of several years.

The downgrade of the bank's senior ratings to Caa1 reflects a
material risk that, particularly until completion of the
recapitalization plan, further burden sharing may be required at
some point if these efforts to recapitalize and restructure the
bank prove unsuccessful. The potential for burden-sharing
involving senior creditors under that scenario is partly
mitigated, from a rating perspective, by the possibility of some
systemic support. The downgrades of the bank's subordinated and
junior subordinated instruments to Ca and Ca (hyb) are based on
Moody's expectations that investors in these instruments will
only be able to recover between 35% and 65% of their original
investment, with the negative outlook indicating the risk that
the final loss faced by investors may be greater.

The rating action concludes Moody's review for downgrade that
commenced on May 9, 2013.

Ratings Rationale:

ca standalone financial strength reflects high likelihood of

The downgrade of the standalone BCA to ca from b1 reflects the
high likelihood that the Co-Operative Bank will shortly default
on its junior debt. The proposed distressed exchange, which is
intended to complement the external support expected from its
parent in order to allow the bank to remain a going concern,
constitutes a default under Moody's rating methodology. Moody's
defines a distressed exchange as an offer by an issuer to
creditors of a new or restructured debt, or a new package of
securities, cash or assets, that amounts to a diminished
financial obligation compared to the original obligation, with
the effect of allowing the issuer to avoid becoming insolvent.
Moody's includes these exchanges in its definition of default to
capture credit events whereby issuers effectively fail to meet
their debt service obligations, but do not actually file for
bankruptcy or miss an interest or principal payment. The bank's
decision to propose this exchange to junior bondholders follows
regulatory scrutiny of the adequacy of its capital levels, as
well as the Co-operative Group's difficulty to fully mitigate the
identified capital shortfalls from within the group. This
intensified scrutiny was triggered by the regulator's growing
recent concerns about the bank's exposure to commercial real
estate, due to the bank's deteriorating asset quality following
the acquisition of the Britannia Building society in 2009.

The lowering of the standalone BCA also incorporates the current
uncertainty as to whether the recapitalization via a liability
management exercise with junior creditors and the sale of its
insurance businesses will be successfully executed. Moody's
acknowledges the steps being taken by management to address Co-
Operative Bank's capital deficit and ensure the long-term
viability of the bank. The bank expects to generate about GBP1
billion from the exchange offer in 2013, alongside an additional
GBP500 million of capital in 2014 from the sale of Co-Operative
Banking Group's insurance businesses and the ongoing deleveraging
of the bank's non-core portfolio, which could include the
disposal of other assets. In addition, the bank will undertake a
cost savings plan to improve profitability. In Moody's opinion,
the recapitalization plan and the asset disposals and the cost-
saving plan need to be successful for the bank to remain a going
concern. However, significant execution risks exist around this
strategy, introducing a level of uncertainty which is
incompatible with a standalone financial strength assessment
above E/ca.

Deposit and senior unsecured debt ratings reflect elevated risk
over the medium term

The downgrade to Caa1 of the senior unsecured and deposit ratings
for Co-operative Bank also reflects Moody's assessment that the
bank's standalone strength has weakened, as reflected in the
lowering of the BCA. The long-term debt ratings balance the steps
being taken to support the long-term viability of the bank,
against the significant medium-term execution risk in completing
the recapitalization and restructuring plans, which imply a
material risk that further burden-sharing may be required at some
point, including, potentially, senior creditors. In addition,
notwithstanding the current emphasis on private sector
participation and parental support, the deposit and unsecured
debt ratings reflect some potential for systemic support from the
UK authorities in the event the recapitalization does not proceed
as envisioned. This view reflects the bank's nationwide network
and market shares, especially in the local authority sector, as
well as its role in the UK's clearing system. The developing
outlook reflects Moody's view that Co-Operative's plan to improve
its current and longer-term capitalization could, if successful,
lower the risks of burden-sharing on its senior unsecured

Downgrade of subordinated debt ratings reflects expected recovery
of 35% to 65% for bondholders

The downgrades of Co-Operative Bank's subordinated debt and
junior subordinated debt ratings to Ca and Ca (hyb) reflect
Moody's expectation that investors in these instruments will be
able to recover between 35% and 65% of their initial investment
over time. The negative outlook for the ratings reflects the
possibility of higher losses if the bank's exchange offer is

What Could Move The Ratings Down/Up

Negative pressure on Co-operative Bank's deposit and senior
unsecured rating would stem from either the bank's failure to
execute the proposed recapitalization and the cost saving and
restructuring plans or a significant deterioration of its
liquidity, which could lead to higher losses for these

Upward pressure on the ratings could develop upon successful
conclusion of the liability management exercise as well as
following successful completion of the full recapitalization plan
and significant progress being made in the bank's restructuring,
deleveraging and cost-saving initiatives.

The principal methodology used in this rating was Global Banks
published in May 2013.

CO-OPERATIVE GROUP: S&P Lowers Corporate Credit Rating to 'BB-'
Standard & Poor's Ratings Services said that it has lowered its
long-term corporate credit and senior unsecured debt ratings on
The Co-operative Group Ltd. to 'BB-' from 'BB+'.  S&P also placed
the ratings on CreditWatch with negative implications.

The recovery rating on the group's senior unsecured debt is
unchanged at '3', indicating S&P's expectation of meaningful
(50%-70%) recovery for debtholders in the event of a payment

The downgrade reflects S&P's view of the new management's recent
decision to incur debt at the trading group level to support the
bank in its capital requirements.  In S&P's view, the added
leverage will put pressure on the Co-operative Group's financial
covenants, which has led S&P to revise the liquidity assessment
to "less than adequate" as defined under its criteria, and to
revise the Co-operative Group's financial risk profile to

S&P believes the additional debt at the trading group level
raises the question of how far the group will commit to provide
further financial support to the bank.  Management has stated
that the financial services businesses remain, in effect, ring-
fenced from the rest of the group, for regulatory purposes.  In
any case, S&P believes the trading group would have limited
capacity to provide any further capital support to the bank once
this transaction is completed, and, in S&P's view, no meaningful
capacity to support the bank's liquidity.

The bank has announced it requires an additional aggregate Common
Equity Tier 1 capital of GBP1.5 billion.  With this in mind,
management has agreed the sale of the life insurance business to
Royal London Mutual Insurance Society Ltd., a deal that is due to
close in August 2013 subject to regulatory approval.  It is also
seeking a buyer for the general insurance business, and intends
to further reduce noncore banking operations and assets.  These
actions will, however, take time to execute and would not of
themselves be sufficient to ensure sufficiency of the bank's
regulatory capital ratios.  The bank has therefore now announced
plans for a GBP1 billion exchange offer for holders of the bank's
capital securities.  In return, these investors are set to
receive the GBP500 million senior unsecured bonds being issued by
the group and ordinary shares in the bank.  S&P also notes that
the Co-operative Group's contribution to the bank's capital,
through the senior unsecured bonds of GBP500 million, is subject
to an approval process from its banking syndicate.  S&P
understands from management that it has already engaged with the
banking syndicate and has received some indicative support,
although it awaits a formal approval.

S&P has also revised its assessment of the group's management and
governance to "weak" from "fair," as defined in its criteria.
This is based on S&P's view of strategic and financial missteps
leading to losses and recapitalization of the bank, substantial
recent turnover in several key roles in top management at both
the group and the bank level, and a relative lack of visibility
in terms of future financial policy for the trading group.  The
Co-operative Group views these management changes as a positive
development, which will result in a stronger and more experienced
management team with a proven track record.

S&P continues to assess the Co-operative Group's business risk
profile as "satisfactory," based on its position as the U.K.'s
largest consumer co-operative and fifth-largest food retailer.
The Co-operative Group also has a well-recognized brand and large
store network, comprising local, convenience, and midsize stores.
Our base-case forecasts factor in nominal growth in group
revenues of less than 1%, with the adjusted EBITDA margin
remaining less than 7% in 2013 and 2014, given an intensely
competitive trading climate and subdued macroeconomic conditions
in the U.K.

"We now assess the Co-operative Group's financial risk profile as
"aggressive" under our criteria, reflecting our view of the
group's high debt levels; its inability to raise public equity
due to its status as a co-operative; and substantial off-balance-
sheet liabilities, such as operating lease commitments.
Following this transaction, we believe the group's 2013 credit
ratios will weaken, with adjusted debt to EBITDA close to 5.0x at
year-end and adjusted funds from operations (FFO) to debt at
around 15%," S&P said.

S&P views the Co-operative Group's liquidity as "less than
adequate," as its criteria define the term.  S&P bases its
opinion primarily on the trading group's tightening headroom
under financial covenants, while taking into account its proposed
debt-funded capital injection to the bank.

S&P understands that management will engage with the various
stakeholders to obtain a waiver or a reset of consent headroom.
If such approvals are not received S&P could reassess its view of
the group's liquidity position, which could put further downward
pressure on the ratings.  However, S&P forecasts the trading
group's sources of liquidity, including cash and facility
availability, will exceed its uses by 1.2x or more over the next
12 months.

S&P estimates that the trading group's liquidity sources amount
to more than GBP1.4 billion for the ensuing 12 months.  These

   -- Ongoing cash balances of about GBP200 million in the
      trading group;

   -- Cash inflow from disposals of about GBP200 million;

   -- Ongoing availability of at least GBP500 million under
      revolving credit facilities maturing in 2017;

   -- FFO of more than GBP500 million; and

   -- A neutral to moderately positive working capital position.

S&P estimates the trading group's liquidity uses over the next 12
months to be about GBP700 million, comprising:

   -- Capex of less than GBP400 million;

   -- Near-term debt maturities of GBP250 million relating to
      Eurobond notes maturing in December 2013; and

   -- Member payments of approximately GBP50 million.

The issue rating on the Co-operative Group's GBP450 million and
GBP350 million unsecured notes due 2020 and 2026, respectively,
is 'BB-', in line with the corporate credit rating.

The recovery rating on these unsecured notes is '3', indicating
S&P's expectation of meaningful (50%-70%) recovery for
debtholders in the event of a payment default.  In line with
S&P's recovery rating criteria, it generally caps its recovery
ratings on unsecured debt issued by corporate entities with
corporate credit ratings of 'BB-' or higher at '3'.  This
reflects S&P's view that their recovery prospects are at greater
risk of being impaired by the issuance of additional priority or
pari passu debt prior to default.

The issue and recovery ratings on the unsecured debt instruments
are supported by S&P's valuation of the Co-operative Group as a
going concern.  S&P's recovery analysis is also underpinned by
the large portfolio of stores owned by the group.  However, the
recovery ratings also reflect the unsecured status of the notes.

"Our hypothetical default scenario assumes a decline in sales and
profits, as well as increasing competition from large grocery
stores moving into convenience food retailing.  In our scenario,
rising food commodity prices and energy costs could also reduce
the group's profit margin.  We assume a payment default in 2017,
under our scenario, which corresponds to the maturity year of the
GBP950 million bank facilities.  That said, a default could occur
earlier if the group is unable to progress plans to increase the
capital of the bank, and there is "an event of default" involving
the bank as defined under the GBP200 million Eurobond notes
documentation.  These Eurobond notes mature in December 2013,"
S&P said.

"In calculating our estimated stressed enterprise value of the
Co-operative Group, we exclude any value from the banking group.
Therefore, we do not include any debt facilities that sit at the
banking group level in our post-default recovery waterfall.  Our
going-concern valuation leads to a stressed enterprise value of
the Co-operative Group, excluding the banking group, of
approximately GBP1.9 billion, equivalent to 6x stressed EBITDA,"
S&P noted.

S&P will review its recovery analysis once it receives the terms
of the GBP500 million senior unsecured bond issued by the group
to support the bank's capital.

S&P expects to resolve the CreditWatch when it has more clarity

   -- The sufficiency of the GBP1.5 billion capital raise of the
      bank and the execution risks associated with its
      restructuring plans;

   -- The revised deleveraging plan for the trading group that
      new management is now compiling; and

   -- The associated implications for the trading group's capital
      structure and liquidity.

S&P could lower the ratings further if it revises the financial
risk profile of the Co-operative Group to the "highly leveraged"
category, which could happen if the adjusted debt-to-EBITDA ratio
increases to more than 5x or if S&P assess its liquidity position
as "weak" under its criteria.  S&P could also lower the ratings
if the group is unable to demonstrate a clear deleveraging path,
which could come from stabilized operating performance
accompanied by credible financial policy measures.

To resolve the CreditWatch placement, over the next three months
S&P will also consider management's longer-term financial policy
with respect to the need or willingness to provide any further
support to the bank, and any potential plans for debt reduction
at group level.  S&P will form a view on the credibility of the
group's deleveraging plan based in particular on the degree of
visibility in the sufficiency and execution of the bank's
recapitalization.  On completion of S&P's review, it could affirm
the ratings or lower them further.

HEARTS FC: Faces Deduction if it Fails to Reverse Administration
Fox Sports reports that Heart of Midlothian Football Club faces
15-point deduction if they fail to reverse administration order.

Problems at one of Scotland's most historic sides Hearts deepened
as it was revealed that they will go into administration,
according to Fox Sports.  The report relates that papers have
been lodged with judicial authorities in Edinburgh to formally
begin the process.

The report notes that it is the latest blow to hit the club as
last week they announced that all their players were up for sale
as they sought to raise some money to alleviate their huge
financial worries.

The report adds that if Hearts remain in administration by the
opening of season 2013-2014 in August, a points deduction of 15
points would be incurred.

KYLE SHOPPING: Goes Into Administration
BBC News reports that two shopping centers in Ayr have been
placed into administration, after suffering a drop in footfall.

The Kyle Shopping Centre in Ayr and the nearby Arran Mall are
both owned by Glasgow-based Cairnduff Developments Ayr Limited,
BBC discloses.

They will continue to trade as normal while administrators
Begbies Traynor look at ways to improve footfall before seeking a
buyer, according to BBC.

The administrators said no jobs had been affected by the move,
BBC notes.

MEL DAVISON: Financial Pressures Prompt Administration
Margaret Canning at Belfast Telegraph reports that Mel Davison
Construction has gone into administration blaming increased
financial pressures.

Workers at MDC had staged a sit-in at premises on Shankill Road,
Belfast, after they were told on Monday that all 150 of their
jobs had been lost, Belfast Telegraph relates.

According to Belfast Telegraph, a spokeswoman for administrators
Cavanagh Kelly said: "Tightening margins in MDC's activities have
resulted in increased financial pressures that have proven

Mel Davison Construction is a building firm which carried out
repair work for the Northern Ireland Housing Executive.

SMART PFI 2007: Fitch Affirms B- Rating on GBP7.3MM Class F Notes
Fitch Ratings has affirmed SMART PFI 2007 GmbH as follows:

  GBP 0.08m class A+ notes affirmed at 'A+sf', Outlook Stable

  GBP 5.0m class A notes affirmed at 'BBB+sf', Outlook Stable

  GBP 3.25m class B notes affirmed at 'BBBsf', Outlook Stable

  GBP 2.55m class C notes affirmed at 'BBB-sf', Outlook Stable

  GBP 4.75m class D notes affirmed at 'BB+sf', Outlook revised to
  Negative from Stable

  GBP 5.7m class E notes affirmed at 'BB-sf', Outlook revised to
  Negative from Stable

  GBP 7.3m class F notes affirmed at 'B-sf', Outlook revised to
  Negative from Stable

Key Rating Drivers

The revision of the Outlook on the junior notes reflects the
transaction's exposure to 7% bullet loans related to local
improvement finance trust (LIFT) projects in addition to a highly
concentrated portfolio. LIFT projects have been assigned a
Negative Outlook due to uncertainties about the replacement of
the primary care trust as obligors. These projects make up 19% of
the portfolio. All underlying projects are located in the UK,
with the majority in England. The largest sector is healthcare,
which makes up over 40% of the portfolio, followed by education,
which contributes 35% of the loans.

The affirmation reflects the transaction's stable performance
since the last annual review in June 2012. Since then the
reference portfolio has reduced to GBP336 million from GBP349
million through natural amortization. Consequently, credit
enhancement has increased throughout the capital structure. The
class A notes are currently supported by 7.98% credit enhancement
compared with 7.83% at the last review. However, this effect has
been partially off-set by moderate negative rating migration of
the underlying portfolio. The weighted average rating remains

The estimated recovery rates on the underlying portfolio range
between 70% and 90%. The analysis is based on asset-specific
recovery assumptions with tiering of 85% (base case) to 60%
('AAA' stress case). Additionally, the correlation assumptions
for the analysis were based on a relative ranking of project
finance correlations, which are lower than for corporate debt
obligations due to structural features. The pair-wise correlation
for projects within the UK, but from different sectors is
considered to be 7%, whereas the correlation for two projects in
the UK and the same sector, such as healthcare can be up to 13%.

Rating Sensitivities

Fitch included two additional stresses to test the transaction's
sensitivity to changes in recovery rates, as well as underlying
credit opinions. The first scenario addressed a reduction of
recovery rate assumptions by 25% and demonstrated a high
sensitivity that would be likely to lead to a further rating
action. The second scenario tested the transaction's sensitivity
to a downgrade of one notch throughout the portfolio and suggests
less sensitivity, but a rating action on the senior notes.
Additionally, the ratings of the notes are linked to the credit
quality of the certificates of indebtedness (Schuldscheine)
issued by KfW (AAA/Stable/F1+). Therefore, if KfW was downgraded
below 'AAA'/'F1+', any note rated higher than the then-
outstanding rating of KfW would be downgraded accordingly.

UD SALAMANCA: Club Placed Into Liquidation
------------------------------------------ reports that Spanish side UD Salamanca have been
placed into liquidation after an agreement between creditors
could not be reached at a meeting on June 18.

"Unfortunately, it can now be officially said that UD Salamanca
has ceased to be," the report quotes administrator Maximo Mayoral
as saying.  The club's main creditor Banco Popular failed to
attend the meeting meaning that a quorum could not be achieved
and nullifying the opportunity for an agreement between the
creditors to be reached, according to

Assets pertaining to the club such as their 17,000 capacity
Helmantico stadium are now due to be sold off at an auction
arranged for today, June 20, the report notes.

The club, founded in 1923, played in the third tier of Spanish
football last season, but did compete in the top flight for 12
seasons -- the last time coming in the 1998/1999 season, says


* Moody's Outlook on EMEA Chemical Sector Remains Negative
Moody Investors Service's outlook for the North American and EMEA
chemical industry remains negative, based on the ratings agency's
depressed economic forecast for Europe, uncertainty around
China's growth rate and the modest pace of economic recovery in
the US.

"The North American and EMEA chemical industry will continue to
be pressured primarily by poor industrial activity in Europe,"
says Vice President -- Senior Analyst James Wilkins in the new
report, "European Weakness and Uncertain Demand from Asia Keep
Chemicals in Doldrums."

"Sales volumes declined for many European chemical firms in the
second half of 2012, with disappointing financial results in
early 2013 a reflection of the region's contracting GDP and
industrial production," Mr. Wilkins says.

Moody's projects that economic recovery will begin to take hold
in Europe in the second half of this year, but the firm does not
foresee a large increase in demand for chemicals there over the
next 12 to 18 months.

In addition, much depends on the strength of China's economy,
since China accounts for a large portion of global growth and has
supported the North American and EMEA chemical industry in recent
years. Moody's expects stable growth in China, Wilkins says, but
demand for chemicals has not broadly reflected the country's
recent economic growth statistics.

Meanwhile, over the next year or so modest economic growth and
low natural gas feedstock prices will support sales and margins
for North American chemical producers, continuing to allow them
to export to Latin America and Asia. Low natural gas prices in
North America will benefit producers of ethylene, methanol and

Higher agricultural production and low natural gas prices will
boost North American producers of nitrogen-based fertilizers and
methanol, according to the report. Chemicals sold in certain non-
cyclical end markets such as food, beverages, medical products
and personal care, should also continue to perform well through
this year and next, the report says.

* Upcoming Meetings, Conferences and Seminars

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

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

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

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

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

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

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

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


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

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

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

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


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

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

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

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

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

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

                 * * * End of Transmission * * *