TCREUR_Public/130704.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, July 4, 2013, Vol. 14, No. 131

                            Headlines



A U S T R I A

ALPINE BAU: Insolvency Takes Pressure Off From Overcrowded Sector


F R A N C E

NOVASAUR SAS: Creditors Set to Take Over After Restructuring Deal


G E R M A N Y

ENTERPRISE NETWORKS: S&P Affirms 'CCC+' CCR; Outlook Stable
FALCON GERMANY: Moody's Assigns B1 CFR; Outlook Stable
FALCON GERMANY: S&P Assigns Prelim. 'B' Corp. Credit Rating
HYPOTHEKENBANK FRANKFURT: Moody's Upgrades UT2 Instruments to B1
KION GROUP: Moody's Assigns Ba3 Corporate Family Rating

PROMISE-I MOBILITY: Fitch Affirms 'CC' Rating on Class E Notes
SEB IMMOINVEST: Investment Arm Makes Another EUR368-Mil. Payout


I R E L A N D

OPERA FINANCE: Hypothekenbank Set to Appoint E&Y as Receivers


N E T H E R L A N D S

CLONDALKIN ACQUISITION: Moody's Rates New US$360MM Term Loan 'B2'
CLONDALKIN INDUSTRIES: S&P Raises CCR to 'B'; Outlook Stable
ELM BV: Moody's Lowers Rating on NOK606MM CSO Notes to Caa2
GOLDENTREE CREDIT: S&P Assigns Prelim. BB Rating to Class E Notes
ORANGE LION 2013-10: Moody's Rates EUR33.907MM Notes '(P)Ba2'

ORANGE LION 2013-10: Fitch Rates Class E Notes 'BB+sf(EXP)'


R U S S I A

ACRON JSC: Fitch Affirms 'B+' Long-Term Issuer Default Ratings
* LENINGRAD REGION: Fitch Affirms 'BB+' LT Currency Ratings


S L O V A K   R E P U B L I C

NOVACKE CHEMICKE: EC Launches Inquiry Into Possible State Support


S W I T Z E R L A N D

TAURUS CMBS 2006-3: S&P Affirms D Ratings on Two Note Classes


T A J I K I S T A N

ESKHATA BANK: Moody's Affirms Caa2 For. Currency Deposit Ratings


U K R A I N E

VAB BANK: Moody's Outlook on Caa1 Deposit Ratings is Stable


U N I T E D   K I N G D O M

AA BOND: S&P Assigns 'BB' Rating to Class B Notes
NICOLE FARHI: Lack of Cash Prompts Collapse; Seeks Buyer
ROWECORD: Owes GBP23.7 Million to Creditors, Report Shows


X X X X X X X X

* Insurance Uncertainty Recedes with UK 'Flood Re' Proposal
* Upcoming Meetings, Conferences and Seminars


                            *********


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A U S T R I A
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ALPINE BAU: Insolvency Takes Pressure Off From Overcrowded Sector
-----------------------------------------------------------------
Michael Shields at Reuters reports that the insolvency of Alpine
Bau GmbH takes pressure off an overcrowded sector and could help
profits at rivals, the former head of market leader Strabag SE
told a newspaper.

According to Reuters, Hans Peter Haselsteiner, who is still a
major shareholder in Strabag, told Die Presse in an interview
printed on Tuesday, "In Austria, we certainly have an overstaffed
market.  If capacity is limited, that is certainly positive for
the market."

"The others will hopefully perceive the bankruptcy as a shock,
because then they will work somewhat more realistically with
their calculations.  I would at least hope so."

Alpine, the Austrian arm of Spanish construction group FCC, is
being broken up after talks to save the company in its current
form failed last month, Reuters relates.

As reported by the Troubled Company Reporter-Europe on June 20,
2013, The Associated Press disclosed that Alpine Bau GmbH said it
is insolvent.  The news agency related 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 relayed.

Alpine Bau GmbH is Austria's second-biggest construction group.



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F R A N C E
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NOVASAUR SAS: Creditors Set to Take Over After Restructuring Deal
-----------------------------------------------------------------
Michael Stothard at the Financial Times reports that Saur is set
to be taken over by its creditors later this month after securing
a restructuring deal with all its stakeholders that will see its
burdensome debt pile cut in half.

According to the FT, the state-backed company, which competes
with France's Veolia Environnement and Suez Environnement, has
negotiated a deal where its more than 60 bank lenders will take
ownership in return for writing off much of the debt.

The group had been struggling with EUR1.8 billion worth of debt
stemming from a 2007 leveraged buyout, which will come down to
EUR900 million, the FT relates.  The three biggest lenders -- BNP
Paribas, Natixis and RBS -- will hold a 45% equity stake in
return, the FT discloses.

The large group of banks will also inject EUR200 million worth of
new money into the company in exchange for control, the FT says.
The company, as cited by the FT, said interest payments will come
down from EUR90 million a year to EUR30 million a year.

Saur breached its covenants last year and has since been trying
to negotiate a restructuring with lenders and shareholders, the
FT recounts.  It risked being put under a court-sanctioned
reorganization if no deal was reached by this week, the FT
states.

The deal still needs final approval from the Versailles Commerce
Court later this month, the FT notes.  But if it goes ahead, it
would be the first restructuring of a pre-crisis leveraged buyout
in France, according to the FT.

Novasaur S.A.S., headquartered in Guyancourt, France, is the
third largest provider of water and sanitation services as well
as waste management services in France.



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G E R M A N Y
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ENTERPRISE NETWORKS: S&P Affirms 'CCC+' CCR; Outlook Stable
-----------------------------------------------------------
Standard & Poor's Ratings Services said it revised its outlook on
Germany-headquartered provider of enterprise communications-
related technology and solutions, Enterprise Networks Holdings
B.V. (ENH) to stable from negative.  At the same time, S&P
affirmed its 'CCC+' long-term corporate credit rating on the
company.

S&P also affirmed its 'CCC+' issue rating on ENH's senior secured
notes.  The recovery rating on these notes is unchanged at '4',
indicating S&P's expectation of average (30%-50%) recovery in the
event of a payment default.

"The outlook revision primarily reflects our view that ENH's
liquidity has improved owing to the recent liquidity support from
its 49% shareholder Siemens AG.  We think this cash injection
should enable ENH to fund continued operating cash losses and
about EUR115 million in restructuring costs from the new cost-
cutting program in the next 12 months.  We have therefore revised
up our assessment of ENH's liquidity to "less than adequate" from
"weak."  The assessment also reflects our expectation that
covenant headroom is likely to remain tight (potentially below
15%) in the next 12 months given the currently weak and unstable
industry demand, coupled with fierce competition," S&P said.

Siemens subscribed to the issue of EUR101.7 million in additional
preferred equity, of which ENH will receive EUR70 million in
cash, while the remainder is to cover the costs for the use of
the Siemens brand name.  In addition, in the third quarter of
fiscal 2013, ENH received EUR37 million in cash from Siemens for
the settlement of an outstanding contractual obligation.  In the
same quarter, ENH obtained EUR33.6 million in cash proceeds from
the sale of its shareholding in U.S.-based provider of cloud
contact center software solutions, inContact, Inc.

"In our base case, we forecast that ENH will generate negative
free operating cash flow (FOCF; defined as cash flow from
operations after capital expenditures and interest paid) of more
than EUR100 million in fiscal 2013, compared with negative
EUR110 million in fiscal 2012 and negative EUR24 million in the
first half of fiscal 2013.  This is primarily due to our
expectation of continued year-on-year revenue declines in the
second-half of fiscal 2013 and meaningful cash outflows from the
new restructuring program.  We anticipate that FOCF generation
will improve, but remain moderately negative at about
EUR25 million in fiscal 2014, primarily thanks to stabilizing
industry demand and margin improvements stemming from the
restructured cost base," S&P said.

The rating on ENH continues to reflect Standard & Poor's
assessment of the company's business risk profile as "weak" and
its financial risk profile as "highly leveraged."

ENH's business risk profile remains constrained, in S&P's view,
by the company's relatively weak operating margins, high
restructuring costs, volatile customer demand, and significant
competitive pressures from larger industry players such as Cisco
Systems Inc., Microsoft Corp., Alcatel-Lucent, and Avaya Inc., in
the dynamic and volatile enterprise communications market.  These
factors are partly offset by ENH's large and diverse customers
and its position as a leading provider of communications systems,
applications, and services for enterprise customers, with leading
market shares in Europe, particularly Germany, and Brazil.

The financial risk profile primarily reflects S&P's anticipation
of continued negative FOCF generation in fiscal 2013 and 2014,
ENH's less than adequate liquidity, as well as its very high
debt-to-EBITDA ratio, based on Standard & Poor's-adjusted gross
debt figures.

ENH is a joint venture between the former enterprise
communications business of Siemens AG and assets from private
equity investor The Gores Group (not rated; 51% ownership).

"The stable outlook reflects our view that ENH's cash balance
will remain above EUR100 million in the next 12 months, despite
the upcoming significant restructuring costs and operating cash
losses.  We factor in that the company is able to significantly
improve its FOCF generation toward only moderately negative
levels in fiscal 2014, thanks to stabilizing industry demand and
improving operating margins following its restructuring efforts.
In addition, we expect ENH to maintain covenant headroom of about
15%," S&P said.

"We could lower our rating on ENH if the group's liquidity
deteriorated, due to larger cash losses as a result of weaker-
than-expected industry demand or increased competition, or if we
forecast that covenant headroom would drop sustainably below
15%," S&P noted.

S&P could raise the ratings if ENH's owners provided the group
with significant additional funding and if S&P forecasts covenant
headroom of at least 20% under its base-case scenario.
Furthermore, prospects of about break-even FOCF generation could
support ratings upside.


FALCON GERMANY: Moody's Assigns 'B1' CFR; Outlook Stable
--------------------------------------------------------
Moody's assigned a B1 corporate family rating and a B1-PD
probability of default rating to Falcon (BC) Germany Holding 3
GmbH, the parent company of FTE Verwaltungs GmbH. At the same
time Moody's has assigned a provisional (P)B1 instrument rating
with an LGD4 52% to the Issuer's announced EUR240 million senior
secured notes and a provisional (P)Ba1 rating with an LGD1 5% to
the EUR42.5 million super senior revolving credit facility also
raised by the Issuer. The outlook on the ratings is stable.

Moody's issues provisional ratings for debt instruments in
advance of the final sale of securities or conclusion of credit
agreements. Upon a conclusive review of the final documentation,
Moody's will endeavor to assign a definitive rating to the
different capital instruments. A definitive rating may differ
from a provisional rating.

Ratings Rationale:

Falcon (BC) Germany Holding 3 GmbH ("Issuer") intends to raise
EUR240 million through the issuance of senior secured notes and
EUR42.5 million from a super senior revolving credit facility.
The proceeds from the senior secured notes and a EUR116 million
equity injection from the parent, Falcon (BC) Germany Holding 2
GmbH, in the form of share capital will be used to finance the
acquisition price for FTE Verwaltungs GmbH ("FTE"), repay all of
FTE's outstanding shareholder loans as well as part of FTE's debt
outstanding and to fund transaction fees and cash on FTE's
balance sheet of around EUR8.0 million. After successful
completion of the acquisition the Issuer will be the sole owner
of FTE, has no further equity interests in other companies and no
other debt instruments than the senior secured notes and super
senior revolving credit facility.

Falcon/FTE's corporate family rating (CFR) is supported by (i)
the group's clear business strategy focused on mission-critical
powertrain components and sub-systems with a product pipeline
which should benefit from overall market trends and OEM
requirements for weight, fuel and CO2 reductions; (ii) a
relatively broad client base with strong key customer
relationships and high repeat business with a historically over
90% win rate on bids for successor platforms according to the
company, (iii) the group's high global market share in manual
clutch actuation systems, (iv) a fairly high profitability with
Moody's adjusted EBITA margins of around 10% in four out of the
last five years and a resilient performance in 2009 with a
positive EBITA margin of 4% and (v) good revenue and earnings
visibility in 2013-17 thanks to a high percentage of revenues
already contracted, which, however, is subject to continued
positive development for new car registrations globally, and the
acceptance of FTE's new dual clutch transmission (DCT) system.

Negatively weighing on the rating are FTE's (i) estimated fairly
high leverage of around 5.0x on a proforma basis for the newly
implemented capital structure per end of December 2013 and taking
into account the volatility of the industry, (ii) the group's
high reliance on its passenger car segment (approximately 90% of
revenues) in general and on VW in particular (approximately 30%
of revenues), (iii) the relatively late market entry with regard
to the first generation dual clutch transmission products and
significant investment needs to support the future growth of the
DCT business and to sustain competitive advantages in the
existing manual clutch actuation business, (iv) a weak
competitive position in brake components and systems and (v) the
fairly small size of the organization, despite a global
footprint, with significant organizational risks in particular
given ambitious and required growth plans including product and
footprint extension.

The stable outlook incorporates Moody's expectation that FTE will
at least achieve an EBIT-margin above 8% as adjusted by Moody's
on a sustainable basis, a positive free cash flow generation
despite rising capex and interest payments and maintain an
adequate liquidity with sufficient covenant headroom under the
group's revolving credit facility. Additionally, the stable
outlook assumes FTE's adjusted debt/EBITDA ratio to remain well
below 5.0x. Moody's also notes that FTE has limited headroom for
a weaker than expected performance. The stable outlook also does
not factor in any larger debt-financed acquisitions or dividends.

FTE's rating could be upgraded if (i) the group was able to
generate substantial positive free cash flow as defined by
Moody's which would be applied to debt reduction and would (ii)
lead to a sustainably lower leverage as reflected in an adjusted
debt/ EBITDA ratio below 4.0 times. Moreover, an upgrade would
require (iii) a significant cushion in the group's liquidity to
fund working capital swings, capex and other cash needs.

The rating would come under pressure in a period of (i)
sustainably negative free cash flow generation, if (ii) leverage
increased significantly and permanently above 5.0 times based on
Moody's adjusted debt/EBITDA or if (iii) the group's liquidity
deteriorated significantly.

Liquidity

As of December 31, 2012 FTE has an adequate liquidity on a pro-
forma basis. Over the next 12 months the company's primary cash
sources comprise a pro-forma cash balance of around EUR8.0
million, an undrawn revolving credit facility of EUR42.5 million
and at least break-even free cash flow (as defined by Moody's).
These sources will be more than sufficient to cover the company's
working cash needs Moody's estimates to be EUR13 million to serve
its day-to-day operations.

There are no near term debt maturities through the re-financing
and the majority of debt is coming due after 5-7 years. The
EUR42.5 million revolving credit facility will have a covenant
with a net drawn RCF (i.e. drawn RCF net of any cash balance) /
LTM EBITDA test with a headroom of 45% in year one. This covenant
test stays flat over the lifetime of the revolving credit
facility.

Structural Considerations

Upon completion of the acquisition the senior secured notes are
guaranteed by operating subsidiaries contributing 95% of EBITDA
and 88% of gross assets and are secured by share pledges, bank
accounts and certain material real estate and other assets of FTE
and certain of its subsidiaries. The super senior revolving
credit facility has the same security package and guarantor
coverage as the senior secured notes but receives enforcement
proceeds in case of liquidation prior to senior secured note
holders. Hence, the senior secured notes rank behind the senior
secured revolving credit facility.

Trade creditors rank in line with the super senior revolving
credit facility as this represents the most senior significant
layer of indebtedness. Lease rejection claims and unfunded
pension obligations rank behind senior creditors and trade
creditors as they are unsecured.

Given its first priority on enforcement proceeds the senior
secured revolving credit facility has an instrument rating three
notches above the corporate family rating. The senior secured
notes have an instrument rating in line with the corporate family
rating.

Other Considerations

The principal methodology used in this rating was the Global
Automotive Supplier Industry published in May 2013. Other
methodologies used include Loss Given Default for Speculative-
Grade Non-Financial Companies in the U.S., Canada and EMEA
published in June 2009.

Falcon (BC) Germany Holding 3 GmbH is a limited liability company
(Gesellschaft mit beschrankter Haftung) incorporated and existing
under the laws of Germany. The Issuer is an entity indirectly
owned by Bain Capital.

Headquartered in Ebern, Germany, FTE automotive GmbH (FTE) is a
global Tier 1 automotive supplier specialized in the niche of
advanced clutch actuation components for powertrain systems (64%
of revenues in 2012) and components for brake systems (21% of
revenues) with revenues of EUR431 million in 2012. The Company's
products help improve vehicle performance, fuel efficiency,
stability and air quality and are primarily sold to original
equipment manufacturers (OEMs). In addition, the Company also
sells its products to the automotive aftermarket (~25% of sales
in 2012), which is in general less cyclical compared to the OEM
business. FTE has a broad customer base and is present in all
major markets: in 2012, Western Europe represented 60% of group
sales, Eastern Europe 8%, North America 14%, Asia 12% and South
America 6%. In 2012, the Company had 3,460 employees (of which
2,260 in Germany), 11 production sites and numerous technical
support offices worldwide. FTE was 100%-owned by French private
equity group PAI Partners from 2005 to 2013 when it will be
acquired by Bain Capital, subject to completion.


FALCON GERMANY: S&P Assigns Prelim. 'B' Corp. Credit Rating
-----------------------------------------------------------
Standard & Poor's Ratings Services said it assigned its long-term
preliminary 'B' corporate credit rating to Falcon (BC) Germany
Holding 3 GmbH, the holding company of German auto parts
manufacturer FTE.  The outlook is stable.

At the same time, S&P assigned its preliminary 'B' issue rating
to FTE's EUR240 million proposed seven-year senior secured notes
and S&P's 'BB-' rating to the super senior revolving credit
facility (RCF).  The recovery rating of '3' on the notes
indicates S&P's expectation of meaningful (50%-70%) recovery for
the bondholders in the event of a payment default.  The recovery
rating of '1' on the RCF indicates S&P's expectation of very high
(90%-100%) recovery for the bondholders in the event of a payment
default.

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

The ratings are primarily constrained by S&P's view of FTE's
"highly leveraged" financial risk profile and "aggressive"
financial policy, reflecting that the company was acquired
through a leveraged buyout.  S&P's assessment is based on its
expectation that the proposed refinancing transaction will be
completed as presented to S&P by FTE and its new owner, Bain
Capital.

"We assume that the current capital structure will be replaced by
a EUR240 million senior secured seven-year bond, a EUR42.5
million six-year super senior revolving credit facility at
inception and a shareholder payment-in-kind securities (PIK) loan
sitting at Falcon Germany Holding 1 GmbH ("Holdco") level, i.e.
above the restricted group, amounting to EUR60 million which we
add to total adjusted debt in our ratios.  This will translate
into a Standard & Poor's-adjusted debt-to-EBITDA ratio of around
5.5x in 2013 and 2014, about 4.5x if we exclude the shareholder
loan, and funds from operations (FFO) to debt close to 10%, or
close to 12% excluding the shareholder loan, which is in line
with our assessment of a "highly leveraged"" financial risk
profile," S&P said.

"We anticipate that free operating cash flow generation will be
positive in 2013 and 2014, but continue to be insufficient to
ensure significant deleveraging over that period, despite our
anticipation of a continuously solid operating performance.  We
expect FTE's EBITDA cash conversion to be hampered by cash
interest payments of about EUR17 million per year that weigh on
FFO generation.  Nonetheless, we note that the cash interest
cover that we expect to be close to 4x at the end of 2013, is
strong for this rating level," S&P added.

In addition, the capital-intensive nature of the company's
business--S&P expects capital expenditure (capex) to represent
around 6% of revenues every year--to further weigh on FOCF
generation.

S&P views FTE's business risk profile as "fair," as defined in
its criteria.  The business risk is restricted by the company's
modest size and limited business diversity as well as the
competitive, cyclical, and capital-intensive nature of the
markets in which it operates.

On the positive side, S&P sees that the company has strong niche
market positions in the hydraulic clutch actuation systems,
particularly in Europe and North America, with increasing market
shares in emerging markets.  S&P's business risk assessment is
also supported by its expectation that the company will maintain
resilient operating margins, with an adjusted EBITDA margin, net
of capitalized development costs, in the 14-15% range over 2013-
2014, above the industry average.  This anticipation is supported
by the company's margin stability and resilience in downturns, as
shown by the adjusted EBITDA margin of 9.8% in 2009.

FTE is a German automotive supplier focused on the development
and production of hydraulic clutch and brake systems and
hydraulic manual transmissions.  The company had revenues of
EUR430 million in fiscal 2012.

"Owing to the depressed economy in Europe, where FTE generated
68% of its 2012 sales, auto production fell 5% last year, and we
forecast an additional decline in 2013 and limited recovery in
2014.  For FTE, this risk is partly mitigated by positive growth
prospects for auto production in North America, which accounted
for14% of sales in fiscal 2012,  and Asia, accounting for 12% of
sales, this year and next, and robust growth momentum for FTE's
latest dual clutch transmission technology.  We also see that the
trend towards increasing demand for more carbon dioxide efficient
vehicles should support medium-term growth for FTE's dual clutch
technology business," S&P noted.

The outlook is stable, based on S&P's anticipation that FTE will
maintain its solid market shares and operating margins while
gradually expanding its business in emerging markets and
developing its dual clutch technology business.  In S&P's view,
rating-commensurate credit measures include adjusted FFO to debt
of about 10% and positive discretionary cash flow.

S&P might consider raising the ratings in the medium term if FTE
were to report an extended, sustainable strengthening of its
operating performance and stronger credit measures, such as
adjusted debt to EBITDA of below 5x, including shareholder loans.

S&P might consider lowering the ratings if FTE reported weaker
revenues and profitability than it currently achieves.
Additionally, ratings downside could occur if the company were to
adopt a more shareholder-friendly financial policy as a result of
its private equity ownership.  Ratings downside could also stem
from acquisitions and tight credit ratios for the current rating
level.


HYPOTHEKENBANK FRANKFURT: Moody's Upgrades UT2 Instruments to B1
----------------------------------------------------------------
Moody's Investors Service has upgraded to B1(hyb) from C(hyb) two
Upper Tier 2 instruments (Genussscheine) of Hypothekenbank
Frankfurt (HF). The upgrade reflects the ruling of the German
Federal Court of Justice that these instruments' principal has to
be written back to par and deferred coupons retroactively paid
for all financial years since 2009.

The rated instruments affected are

- Genussschein (profit participation certificate, ISIN:
  DE000EH091Z4) issued by HF, repayable on 1 July 2018

- Genussschein (profit participation certificate, ISIN:
  DE0005568380) issued by the former Hypothekenbank in Essen
  (which was merged in 2008 with the former Eurohypo AG - now
  HF), repayable on July 1, 2014

The outlook on the B1(hyb) ratings for the affected subordinated
instruments is stable.

All other ratings of HF are unaffected by this rating action.

Ratings Rationale:

The upgrade of HF's two Upper Tier 2 instruments (UT2/
Genussscheine) to B1(hyb) was prompted by HF's announcement on
June 25, 2013 that it will replenish and retroactively service
these instruments, based on a court decision on May 28, 2013 that
enforces HF's full retroactive and future servicing of these
instruments. As per the court's ruling, the contractual payment
obligations include (1) the write-back to par of principal, which
had been written down by 70.35% in prior years; (2) retroactive
coupon payments for the four financial years since 2009; and (3)
future coupon payments until the instruments' respective
maturities, irrespective of HF's profitability on a local GAAP
basis. As a consequence, the risk profile of these instruments
resembles that of HF's existing senior subordinated debt, which
Moody's currently rates B1, i.e., two notches below HF's adjusted
BCA of ba2.

In its ruling -- which Moody's understands is final -- the court
ascertained that earlier write-downs and coupon deferrals were
not in compliance with the bank's legal obligations. This
decision reflects (1) the existing profit-and-loss transfer
agreement established with Commerzbank Inlandsbanken Holding AG
(unrated) in 2007, which entails the parent bank's obligation to
absorb any annual loss incurred by HF (according to financial
statements based on local GAAP); and (2) the expectation of HF
generating sufficient (local GAAP) profits to service these
instruments at the time when the profit-and-loss transfer
agreement was established.

The rating upgrade to B1(hyb) represents a seven-notch upgrade
from the previous C(hyb) ratings that had been positioned to
capture the impairment of these instruments, in particular coupon
deferrals between 2009-12, and principal write-downs by more than
70%. The B1(hyb) ratings follows the agency's approach to notch
these hybrid ratings off HF's adjusted BCA, after the previous
ratings had been based on the instruments' present value,
combined with an expected-loss calculation.

Rating Outlook

The rating outlook for the affected instruments is stable, in
line with the outlook on HF's other rated obligations.

What Could Move The Ratings Up/Down

The B1(hyb) ratings of the UT2 instruments depend on -- and
therefore will move in tandem with -- the ba2 adjusted BCA of HF,
which includes Moody's assumptions of parental support available
to HF, but not systemic support. An improvement in the bank's
standalone credit strength might lead to an upgrade of the UT2
instruments, whereas deterioration could prompt a downgrade. In
addition, a change in Moody's expectation of available support
from HF's ultimate parent, Commerzbank AG (deposit Baa1 stable,
standalone bank financial strength rating D+/BCA ba1 stable),
could positively or negatively affect HF's ratings for its
performing profit-participation certificates.

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


KION GROUP: Moody's Assigns 'Ba3' Corporate Family Rating
---------------------------------------------------------
Moody's Investor Services has assigned a corporate family rating
of Ba3 and probability of default rating of B1-PD to KION Group
AG (previously KION Holding 1 GmbH) and withdrawn the CFR of B3
and PDR of Caa1-PD of KION Material Handling GmbH (previously
KION Group GmbH).

The reassignment of the CFR to the KION Group AG level is due to
the fact that, going forward; there may not be sufficient
information available to monitor the rating at KION Material
Handling GmbH level. In essence, this rating action translates
into an upgrade of KION's CFR by three notches to Ba3 from B3
previously.

Concurrently, Moody's has upgraded the rating of the debt
instruments issued by KION Finance S.A. to Ba3 (LGD3, 35%) from
B2 (LGD2, 23%). These rating actions conclude the rating review,
initiated on June 5, 2013, and the outlook on all ratings is now
stable.

Ratings Rationale:

"The three-notch upgrade of KION's CFR reflects the significant
improvement in KION's group net leverage following the successful
IPO with around EUR0.9 billion of the proceeds being applied to
net debt reduction" says Martin Fujerik, Moody's lead analyst for
KION.

Successful IPO Has Improved Kion's Leverage

At the share price of EUR24, KION closed the IPO with gross
proceeds of EUR413 million from the public offer. At the same
time, KION raised EUR328 million via increased shareholder
participation from Chinese engineering group Weichai Power, which
held 25% of KION's share capital before the IPO. KION intends to
use these cash proceeds, together with cash and cash equivalents
of EUR193 million (as per end-March 2013) at KION Group AG and
drawings under a new revolving facility of around EUR1 billion,
to repay all outstanding term loans under the Senior Facilities
Agreement. According to Moody's calculations, this leads to
Moody's-adjusted leverage for 2012 pro-forma to around 4.6x for
the deconsolidation of the recently sold hydraulics business and
the capital increase. This compares with 6.7x, excluding the
assumption of a successful capital increase. The pro-forma
leverage remains somewhat high for the Ba3 category and hence the
assigned CFR assumes that the leverage will improve further
towards 4.0x in the next 12-18 months.

Solid Business Profile Supports Ba3 Ratings

The Ba3 ratings are supported by KION's solid business profile,
as evidenced by (1) the size of its operations with revenues of
EUR4.7 billion in 2012; (2) the group's strong market position as
the world's second-largest forklift truck manufacturer; and (3)
KION's diversified customer base and large share of revenues from
fairly stable service, aftermarket and rental activities (40% in
2012). Moreover, Moody's believes that KION is well positioned
for future growth in markets outside Europe.

Driven by the change in the level of the CFR, Moody's will no
longer treat Facility G (EUR118 million), which is part of the
company's financing structure, as debt-like, although it
continues to enter the restricted group at KION Material Handling
GmbH level as intercompany debt. This is due to the fact that
this is part of a structure that Moody's expects will be
streamlined once the restricted group is dissolved or moved to
the KION Group AG level.

The EUR650 million of senior secured notes due 2020 and EUR500
million of senior secured notes due 2018 are secured by a first-
ranking pledge over the issuer's shares, a first-ranking charge
over all of its bank accounts and a first-priority assignment
over its rights under the tranche of Term Loan Facility H, which
is used to onlend the proceeds from the bonds issued by KION
Finance S.A. to the KION group. Facility H ranks equally in right
of payment and security with all other currently outstanding debt
under the senior credit agreement other than Facility G. Given
that Facility G is no longer viewed as debt and all remaining
debt ranks pari passu, Moody's will no longer notch-up the
instruments' rating from the CFR.

Rationale For The Stable Outlook

The stable outlook reflects Moody's assumption that over the next
12-18 months, KION will be able to broadly maintain its margins,
FCF generation and strong liquidity, and to deleverage further
towards 4.0x debt/EBITDA.

What Could Move The Ratings Up/Down

Upwards pressure on the ratings would develop if KION further
develops a track record of resilient operational performance and
conservative financial policy. This would be evidenced by KION
being able to maintain its margins above 8% (Moody's-adjusted
EBITA margin of 8.2% in 2012) over the next 12-18 months in a
normal economic environment and an EBITA margin above 5%, if
market sentiment deteriorates. Upwards pressure would also
require leverage to improve below 3.5x (Moody's-adjusted
debt/EBITDA for 2012 of 4.6x pro forma for IPO), positive free
cash flow and maintenance of a strong liquidity profile.

Downwards pressure might develop on the ratings if KION's EBITA
margins were to decline below 5%, its debt/EBITDA failed to
improve below 4.5x, or if free cash flow turned negative.

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, produces 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 local
brands such as 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.


PROMISE-I MOBILITY: Fitch Affirms 'CC' Rating on Class E Notes
--------------------------------------------------------------
Fitch Ratings has upgraded Promise-I Mobility 2005-2 (2005-2) and
affirmed Promise-I Mobility 2006-1's (2006-1) notes.

Key Rating Drivers

The 2005-2 deal reached its scheduled maturity in February 2013.
All notes except the class E have been paid in full. The
redemption of the class E notes has been deferred. The
outstanding portfolio balance equals EUR35 million and consists
of defaulted assets currently undergoing the workout process.

To redeem the class E notes (EUR1.3 million according to the
investor report as of April 15, 2013), a recovery rate of 3.7% of
the outstanding pool would need to be obtained until legal final
maturity in February 2015. Given the relatively high historical
recovery rate (89% since closing), this appears to be possible,
although material default risk remains, as all the assets are
non-performing. The class E notes have been upgraded to 'Bsf'
from 'CCCsf', which, in the agency's view, is commensurate with
the current situation.

The 2006-1 transaction started amortizing in December 2010 and
has reached a portfolio factor of 33% (investor report as of 15
May 2013). The amortization has led to an increase in obligor
concentrations. Currently, the largest obligor equals 3.0% of the
outstanding portfolio, as opposed to 1.8% at the last review in
July 2012. The top 10 obligors together account for 18.3% of the
outstanding portfolio, compared with 13.4% at the last review.

Portfolio amortization has also led to an increase in credit
protection. For example, compared with the last review, the
credit enhancement of the class A+ note has increased to 27.9%
from 16.3%. Fitch used its Portfolio Credit Model to derive the
portfolio loss rates for different rating scenarios. The current
credit enhancement levels of the notes are commensurate with the
loss rates for their respective ratings, which has led to their
affirmation.

Since the last rating action, EUR7.4 million of defaults (six
loans) have occurred Total defaults since closing equal roughly
4.3% of the initial pool balance. Currently, defaulted assets in
the portfolio amount to EUR41.5 million or 5.17% of the
outstanding pool.

Rating Sensitivities

For the 2005-2 deal, recoveries obtained from the non-performing
loans will be the main factor driving the redemption of the
outstanding class E notes.

The 2006-1 transaction remains sensitive to an increase in
portfolio concentrations as a result of pool amortization, which
would lead to higher risk of performance volatility. At the same
time, credit enhancement of the notes will also increase as the
transaction deleverages. Given the transaction's stable
performance, Fitch expects the latter effect to dominate the
former and has therefore revised the Outlook on the class A+, A
and B notes to Positive from Stable .

The Promise transactions are synthetic securitizations with
exposures to small- and medium-sized enterprises in Germany. The
reference pools were originated by IKB Deutsche Industriebank
Aktiengesellschaft (not rated), which bought protection under a
bank swap in respect of the reference portfolios from KfW. The
rated notes of Promise-I Mobility 2005-1, which is similar to the
above two transactions, were paid in full.

Fitch assigns Recovery Estimates (REs) to all notes rated 'CCCsf'
or below. REs are forward-looking, taking into account Fitch's
expectations for principal repayments on a distressed structured
finance security.

The rating actions are:

Promise-I Mobility 2005-2

  EUR1.3m class E (DE000A0GJ9F8): upgraded to 'Bsf' from 'CCCsf';
  Outlook Stable

Promise-I Mobility 2006-1

  EUR0.13m class A+ (DE000A0LDYH4): affirmed at 'BBBsf'; Outlook
  revised to Positive from Stable

  EUR67.2m class A (DE000A0LDYJ0): affirmed at 'BBsf'; Outlook
  revised to Positive from Stable

  EUR21.6m class B (DE000A0LDYK8): affirmed at 'Bsf'; Outlook
  revised to Positive from Stable

  EUR36m class C (DE000A0LDYL6): affirmed at 'CCCsf'; assigned
  RE80%

  EUR46.8m class D (DE000A0LDYM4): affirmed at 'CCCsf'; assigned
  RE65%

  EUR10.8m class E (DE000A0LDYN2): affirmed at 'CCsf'; assigned
  RE0%


SEB IMMOINVEST: Investment Arm Makes Another EUR368-Mil. Payout
---------------------------------------------------------------
Property Investor Europe reports that Frankfurt-based SEB Asset
Management, the real estate investment arm of the Swedish bank
group, has distributed another EUR368 million from its German
open-ended property fund SEB ImmoInvest currently in liquidation,
taking total payout to over EUR1.7 billion so far.

The figure comprises about 29% of total fund assets of EUR6.3
billion before the start of the liquidation process in May 2012,
Property Investor Europe notes.  The third payout last month
corresponds to EUR3.16 per share, Property Investor Europe says.

According to Property Investor Europe, SEB said the cash-flow
came mainly from property disposals in first half, including the
sale of a EUR420 million German portfolio to Canadian Dundee
International REIT, two hotel assets in Berlin to ARTIC, a
subsidiary of Qatari Faisal Holding, and another two asset sales
in Berlin and Prague.  At end-May, the fund still held 119 assets
worth EUR4.4 billion in 17 countries, Property Investor Europe
states.

SEB AM was forced last year to liquidate SEB Immoinvest as
redemption requests far outstripped liquidity on re-opening the
fund for one day only, Property Investor Europe relates.  It had
closed during the financial crisis along with many other German
open-end property funds during the massive run on liquidity, only
to be hit again by market uncertainty from Berlin draft
legislation on investor protection in May 2010, which was
eventually amended or withdrawn completely, Property Investor
Europe recounts.



=============
I R E L A N D
=============


OPERA FINANCE: Hypothekenbank Set to Appoint E&Y as Receivers
-------------------------------------------------------------
Neil Callanan at Bloomberg News reports that special servicer
Hypothekenbank Frankfurt was set to appoint David Hughes and Luke
Charleton of Ernst & Young as joint receivers of Opera Finance
(CMH) yesterday.

Ernst & Young will sell the 16 Irish properties linked to CMBS,
Bloomberg discloses.  According to Bloomberg, the statement said
that Kennedy Wilson and Vaerde, preferred bidders with EUR306
million offer, will buy the properties.

Bloomberg relates that Hypo Frankfurt said Northwood's
alternative proposal "is not deliverable" due to "high level of
opposition" from Class A and B note holders.

Opera Finance (CMH) is an Irish commercial mortgage-backed
securities deal.



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


CLONDALKIN ACQUISITION: Moody's Rates New US$360MM Term Loan 'B2'
-----------------------------------------------------------------
Moody's assigned a definitive B2 (LGD 3, 41%) rating to
Clondalkin Acquisition B.V.'s US$360 million first lien term loan
and a Caa2 (LGD 6, 91%) rating to its US$95 million second lien
term loan. The positive outlook and the B3 corporate family
rating (CFR) of Clondalkin Industries B.V. remain unchanged.

Ratings Rationale:

Moody's definitive ratings are in line with the provisional
ratings assigned on May 8, 2013.

Clondalkin's B3 CFR reflects its solid business profile,
especially its diversified product portfolio with an increasing
focus on higher margin specialty products. While recent disposals
have reduced Clondalkin's scale and diversification, it allows
the group to focus on its higher margin, less commoditized
secondary pharma packaging business. The rating also benefits
from Clondalkin's strong market position in several niche markets
with solid geographical diversification as well as good substrate
diversity. Moody's also notes positively that the company has
managed to remain Free Cash Flow positive over the past years
despite extensive capex spending, challenges from volatile raw
materials and a difficult economic environment.

At the same time, Moody's notes that pro forma for the
refinancing, leverage will remain elevated at above 6x
Debt/EBITDA as adjusted by Moody's, including the new
securitization facility. In addition, Moody's cautions that
volatile input costs will remain a potential risk factor for
Clondalkin, considering that the group can pass on higher costs
only with a time lag of several months. While Clondalkin suffered
from margin compression on the back of a highly competitive
market environment, management needs to prove the turnaround on
the back of a more focused and less commoditized product
portfolio following sizable disposals in 2013. For its
calculations, Moody's has treated the amended shareholder loan
instrument issued by Clondalkin Industries B.V. to its parent
holding company (situated outside of the restricted group) as
100% equity.

However, on May 14, 2013, Moody's has published a Request for
Comment ('RfC') for a new proposed approach for assigning debt
and equity treatment to hybrid securities of speculative-grade
non-financial companies with a Corporate Family Rating (CFR) of
Ba1 or below. At this juncture, Moody's believes that the
shareholder loan instrument meet the criteria highlighted by the
RfC for full equity credit. That said, this assessment will
remain preliminary until the new methodology is implemented.

The B2 rating for the first lien term loan due 2020 is one notch
above the B3 CFR and reflects the preferential ranking of the
loan in the overall debt structure with no priority debt ranking
ahead and a security package that encompasses upstream guarantees
from all material operating companies and an essentially all
asset pledge, shared equally with lenders under the new USD35
million revolving credit facility. The Caa2 rating of the second
lien term loan due 2020 is two notches below the group rating,
reflecting the sizeable amount of secured debt and structurally
preferred obligations ranking ahead of the second lien facility.

The positive outlook reflects Moody's expectation of gradually
improving credit metrics on the back of lower restructuring
charges which should allow Clondalkin to improve its EBITDA
margin to around 10%, and continued positive though moderate free
cash flow generation, both of which should help reducing its
leverage to around or below 6x over the next 12 months.

Upwards pressure could build should Clondalkin manage to
materially reduce leverage to clearly below 6 times on a
sustainable basis on the back of improvements in operating
profitability. Furthermore, the rating could enjoy upwards
pressure were Clondalkin to improve free cash flow generation
towards 5% of total debt and interest cover towards 1.5 times.

The rating could be downgraded should Clondalkin's profitability
deteriorate materially, such as for example on the back of higher
input costs that the group might not be able to recover.
Quantitatively, Moody's would consider downgrading Clondalkin's
rating if its EBITDA margin were to decline below the high single
digit percentages, with its leverage increasing to materially
above 7x Debt/EBITDA. Also, a weakening liquidity profile
including incurrence of materially negative free cash flow would
put pressure on the rating.

The principal methodology used in this rating was the Global
Packaging Manufacturers: Metal, Glass, and Plastic Containers
published in June 2009. Other methodologies used include Loss
Given Default for Speculative-Grade Non-Financial Companies in
the U.S., Canada and EMEA published in June 2009.

Clondalkin is among the leading converters for a number of niche
packaging products. In the last twelve months ending March 2013,
the company recorded sales of EUR695 million (pro forma for
disposals), which were generated in Europe (69%), North America
(27%) and other countries (4%). Clondalkin Industries B.V., which
is owned by Warburg Pincus Funds and management, is domiciled in
Amsterdam, Netherlands.


CLONDALKIN INDUSTRIES: S&P Raises CCR to 'B'; Outlook Stable
------------------------------------------------------------
Standard & Poor's Ratings Services raised its long-term corporate
credit rating on Netherlands-based packaging group Clondalkin
Industries B.V. to 'B'.  The outlook is stable.

At the same time, S&P assigned issue ratings of 'B' to the
US$35 million revolving credit facility (RCF) due 2018, and
US$360 million senior secured first-lien term loan due 2020,
issued by Clondalkin Acquisition B.V.  The issue ratings on these
facilities are 'B' in line with the corporate credit rating on
Clondalkin.  The recovery rating on this debt is '3', indicating
S&P's expectation of meaningful (50%-70%) recovery in an event of
payment default.

S&P also assigned a 'CCC+' issue rating to the US$95 million
secured second-lien term loan, due 2020, issued by Clondalkin
Acquisition. The issue rating is two notches below the corporate
credit rating on Clondalkin.  The recovery rating on this loan is
'6', indicating S&P's expectation of negligible (0%-10%) recovery
in an event of payment default.

As Clondalkin's EUR19 million senior secured RCF, EUR300 million
and US$150 million senior secured notes, and EUR170 million
senior subordinated notes have now been fully repaid, S&P no
longer rates these facilities.

The upgrade follows Clondalkin's successful refinancing of its
existing senior secured notes, the first of which was due in
December 2013.  Through doing this, S&P considers that Clondalkin
has addressed its near-term refinancing risk and S&P now views
the group's liquidity as "adequate," under its criteria.  (The
corporate credit rating is, as a result, no longer capped at 'B-'
by the previously "weak" liquidity score.)

The group has repaid its existing senior secured notes by issuing
a new US$360 million first-lien term loan, due 2020, and a new
US$95 million second-lien term loan, due 2020.  Proceeds from
these new debt facilities totaled US$455 million.  Clondalkin
also issued a new US$35 million RCF due 2018, which S&P assumes
will remain undrawn.

In addition, Clondalkin realized proceeds of about EUR136 million
(net of fees) from the completion of the disposals of its North
American Flexible Packaging and Dutch Van der Windt businesses.

Clondalkin also raised about EUR60 million from the
securitization of its receivables book.  S&P adds the facility
value of EUR60 million to the group's total debt, in accordance
with S&P's criteria.

The group has used the proceeds of these disposals, together with
the proceeds from the US$360 million first-lien loan, the
US$95 million second-lien loan, the new EUR60 million receivables
securitization facility, and about EUR110 million of existing
cash on the group's balance sheet, to repay the existing
EUR585 million-equivalent of fixed and floating-rate notes.

Finally, Clondalkin's parent has converted E130 million of
shareholder loans and accrued interest into equity, which S&P
views as credit-positive.  The issue rating on the US$35 million
RCF due 2018 and US$360 million senior secured first-lien term
loan due 2020, borrowed by Clondalkin Acquisition, is 'B', in
line with the corporate credit rating on Clondalkin.  The
recovery rating on this debt is '3', indicating S&P's expectation
of meaningful (50%-70%) recovery in an event of payment default.

The issue rating on the US$95 million secured second-lien term
loan due 2020, borrowed by Clondalkin Acquisition, is 'CCC+', two
notches below the corporate credit rating on Clondalkin.  The
recovery rating on this loan is '6', indicating S&P's expectation
of negligible (0%-10%) recovery in an event of payment default.
The weak recovery prospects reflect the high level of prior-
ranking debt claims under S&P's stressed valuation.

"Clondalkin has borrowed these credit facilities to refinance the
existing EUR19 million super senior RCF, US$115 million and
EUR300 million floating-rate notes due 2013, and EUR170 million
fixed-rate notes due 2014.  Following the refinancing, the new
term loans and RCF, together with a EUR60 million receivables
securitization facility, will be the main debt in the restricted
group.  Other than that, there will be EUR173 million of
shareholder loans and accrued interest due not less than six
months later than the proposed rated debt.  These shareholder
loans are borrowed by Clondalkin Group Holdings, the parent
company, and are therefore structurally and contractually
subordinated to the proposed new term loans," S&P said.

"The recovery ratings on the new RCF and the senior secured
first-lien term loan are supported by our valuation of the group
as a going concern, owing to its strong positions in a number of
niche markets and its modern asset base.  The recovery ratings on
this debt also reflect its comprehensive security and guarantee
package.  At the same time, the rating on this proposed debt is
constrained at '3' by the existence of some material prior-
ranking liabilities, including a new EUR60 million securitization
facility and a pensions deficit," S&P added.

The recovery rating on the secured second-lien term loan reflects
its subordination to the group's other debt facilities.  S&P
considers that the insolvency regime in The Netherlands and the
group's exposure to the U.K., the U.S., and Germany--where most
of its assets are located and its EBITDA is generated--are
broadly favorable from a recovery perspective.

The term loans benefit from security composed of substantially
all assets of the borrower and its subsidiaries.  The RCF
contains maintenance financial covenants whereas the term loans
do not have financial covenants.  The documentation allows for a
receivables securitization facility of up to EUR100 million.

To calculate recoveries, S&P simulates a payment default.  Under
S&P's hypothetical default scenario, a payment default results
from Clondalkin being unable to service its interest obligations.
S&P estimates that Clondalkin's EBITDA would be about
EUR58 million by the time of S&P's hypothetical default in 2017.

"Our going-concern valuation envisages a stressed enterprise
value of about EUR291 million at the hypothetical point of
default, assuming a 5x stressed EBITDA multiple.  After deducting
priority liabilities of about EUR95 million, primarily comprising
enforcement costs, 50% of the group's pension deficit, and a
EUR60 million securitization facility, we calculate a residual
value of about EUR196 million for the EUR298 million first-lien
debt outstanding at default (including six months of prepetition
interest).  This results in our expectation of meaningful
recovery in the upper end of the 50%-70% range for the senior
secured notes, which equates to a recovery rating of '3'," S&P
said.

The residual value results in negligible (0%-10%) recovery
prospects for the US$95 million (EUR71 million) of second-lien
loan outstanding, including six months' prepetition interest.
This equates to a recovery rating of '6' on the subordinated
loan.

The stable outlook reflects S&P's view that demand for
Clondalkin's services will remain steady and that the group's
margins will stay robust over the next 12 months.  S&P
anticipates that the group will be able to maintain cash interest
coverage of more than 2x over this rating horizon.

Further rating upside is currently limited, given the group's
aggressive financial policies, including tolerance for a highly
leveraged capital structure.

S&P could lower the rating if deterioration in the macroeconomic
environments in Western Europe and North America significantly
weakens Clondalkin's operating performance beyond S&P's base-case
forecast, leading to a sustained deterioration in the group's
credit metrics.  Specifically, S&P could lower the rating if cash
interest coverage drops to less than 2x.


ELM BV: Moody's Lowers Rating on NOK606MM CSO Notes to 'Caa2'
-------------------------------------------------------------
Moody's Investors Service has downgraded the rating of the
following notes issued by ELM B.V.:

Issuer: ELM B.V.

Series 42 NOK606,000,000 Secured Fixed Rate Notes due 2016,
Downgraded to Caa2 (sf); previously on Aug 13, 2009 Downgraded to
B1 (sf)

This transaction is a managed synthetic CDO referencing corporate
entities.

Ratings Rationale:

Moody's explained that the rating action taken is the result of
the overall credit deterioration of the portfolio. In particular,
over the last year, 28.2% of the exposures in the portfolio were
downgraded and two credit events occurred.

In total six credit events occurred since the last rating action
in August 2009, resulting in a current credit enhancement of
2.38% (originally 6.5%). In addition, 2.9% of the portfolio is
exposed to obligors rated in the Caa range and the current
thickness of the tranche is 4.56%. The 10 year weighted average
rating factor (WARF) of the current portfolio, excluding the Ca
exposure, is 690.11, equivalent to Ba1. This compares to a 10-
year WARF of 517.22 from the last rating action. The notes have a
remaining life of 3 years.

Key model inputs used by Moody's in its analysis may be different
from the manager/arranger's reported numbers. In particular,
rating assumptions for all publicly rated corporate credits in
the underlying portfolio have been adjusted for "Review for
Possible Downgrade", "Review for Possible Upgrade", or "Negative
Outlook".

In the process of determining the final rating, Moody's took into
account the results of several sensitivity analysis including
overwriting the portfolio weighted average rating on one entity
for which the rating has been withdrawn by Moody's as well as
taking into account that approximately 10% of the reference
portfolio is exposed to subordinated debt mainly in the banking
industry. The corresponding outcomes of these sensitivity
scenarios are consistent with the rating assigned.

Moody's notes that this transaction is subject to a high level of
macroeconomic uncertainty, which could negatively impact the
ratings of the notes, as evidenced by uncertainties of credit
conditions in the general economy. CSO notes' performance may
also be impacted either positively or negatively by 1) variations
over time in default rates for instruments with a given rating,
2) variations in recovery rates for instruments with particular
seniority/security characteristics, 3) uncertainty about the
default and recovery correlations characteristics of the
reference pool and 4) divergence in legal interpretation of CDO
documentation by different transactional parties due to embedded
ambiguities. Given the tranched nature of Corporate CSO
liabilities, rating transitions in the reference pool may have
leveraged rating implications for the ratings of the Corporate
CSO liabilities, thus leading to a high degree of volatility. All
else being equal, the volatility is likely to be higher for more
junior or thinner liabilities.

The principal methodology used in this rating was "Moody's
Approach to Rating Corporate Collateralized Synthetic
Obligations" published in September 2009.

In rating this transaction, Moody's used CDOROM to model the cash
flows and determine the loss for each tranche. The Moody's CDOROM
is a Monte Carlo simulation which takes the Moody's default
probabilities as input. Each corporate reference entity is
modeled individually with a standard multi-factor model
incorporating intra- and inter-industry correlation. The
correlation structure is based on a Gaussian copula. In each
Monte Carlo scenario, defaults are simulated. Losses on the
portfolio are then derived, and allocated to the notes in reverse
order of priority to derive the loss on the notes issued by the
Issuer. By repeating this process and averaging over the number
of simulations, an estimate of the expected loss borne by the
notes is derived. As such, Moody's analysis encompasses the
assessment of stressed scenarios.

In addition to the quantitative factors that are explicitly
modeled, qualitative factors are part of the rating committee
considerations. These qualitative factors include the structural
protections in each transaction, the recent deal performance in
the current market environment, the legal environment, specific
documentation features, the collateral manager's track record,
and the potential for selection bias in the portfolio. All
information available to rating committees, including
macroeconomic forecasts, input from other Moody's analytical
groups, market factors, and judgments regarding the nature and
severity of credit stress on the transactions, may influence the
final rating decision.


GOLDENTREE CREDIT: S&P Assigns Prelim. BB Rating to Class E Notes
-----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its preliminary
credit ratings to GoldenTree Credit Opportunities European CLO
2013-1 B.V.'s floating- and fixed-rate class A-1, A-2, A-3, B, C,
D, and E notes.  At closing, GoldenTree Credit Opportunities
European CLO 2013-1 will also issue an unrated subordinated class
of notes.

GoldenTree Credit Opportunities European CLO 2013-1 LLC is the
transaction's co-issuer.  GoldenTree Asset Management LP acts as
collateral manager.

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

S&P's ratings also reflect the credit enhancement available to
the rated notes through the subordination of cash flows payable
to the subordinated notes.  S&P subjected the preliminary capital
structure to a cash flow analysis to determine the break-even
default rate (BDR) 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,
the covenanted weighted-average recovery rates, and the initial
foreign exchange rate.  S&P applied various cash flow stress
scenarios, using four different default patterns, in conjunction
with different interest rate and foreign exchange 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 the scenario default rates and defaults applicable
under the supplemental tests outlined in its corporate
collateralized debt obligation (CDO) criteria.

At closing, S&P considers that GoldenTree Credit Opportunities
European CLO 2013-1, incorporated in the Netherlands, will likely
comply with its bankruptcy-remoteness criteria for special-
purpose entities (SPEs) under S&P's European legal criteria.

GoldenTree Credit Opportunities European CLO 2013-1 is a cash
flow corporate loan CLO securitization of a revolving pool,
comprising senior secured loans and bonds issued by European and
U.S. borrowers.

          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/1586.pdf

RATINGS LIST

GoldenTree Credit Opportunities European CLO 2013-1 B.V.
EUR285 Million, GBP15.32 Million Floating-Rate, Fixed-Rate, And
Subordinated Notes

Class                 Prelim.         Prelim.
                      rating           amount
                                       (mil.)

A-1                   AAA (sf)        EUR82.000
A-2                   AAA (sf)        EUR35.000
A-3                   AAA (sf)        GBP15.320
B                     AA (sf)         EUR39.000
C                     A (sf)          EUR21.000
D                     BBB (sf)        EUR21.000
E                     BB (sf)         EUR28.000
Sub                   NR              EUR59.000

NR--Not rated.


ORANGE LION 2013-10: Moody's Rates EUR33.907MM Notes '(P)Ba2'
-------------------------------------------------------------
Moody's Investors Service has assigned provisional credit ratings
to the following classes of notes to be issued by Orange Lion
RMBS 2013-10 B.V.:

EUR1,866.916M Class A Floating Rate Mortgage Backed Notes due
June 2045, Assigned (P) Aaa (sf)

EUR57.538M Class B Floating Rate Mortgage Backed Notes due June
2045, Assigned (P) Aa1 (sf)

EUR46.236M Class C Floating Rate Mortgage Backed Notes June 2045,
Assigned (P) Aa3 (sf)

EUR40.071M Class D Floating Rate Mortgage Backed Notes due June
2045, Assigned (P) Baa1 (sf)

EUR33.907M Class E Floating Rate Mortgage Backed Notes due June
2045, Assigned (P) Ba2 (sf)

Moody's has not assigned any rating to the EUR 10.275M Class F
Mortgage Backed Notes.

The notes are backed by a pool of Dutch residential mortgage
loans originated by WestlandUtrecht Bank N.V. (Not rated) a fully
owned subsidiary of ING Bank N.V. (A2/P-1). The portfolio will be
serviced by ING Bank (A2/P-1) with WUB acting as sub-servicer.
There will be no back-up servicer facilitator, or back-up
servicer appointed at closing, however there is a rating trigger
for appointing a stand by servicer if the servicer rating falls
below Baa3. The cash manger is ING Bank (A2/P-1).

The structure provides for an excess spread feature to turbo down
the repayment of the rated notes in reverse order and a cash
reserve building up over time up to 1.85% of the notes' amount as
of closing, available to cover shortfall on the rated notes.
Funding of the reserve fund is through the revenue available
funds and ranks junior to the Class F coupon.

Ratings Rationale:

The expected portfolio loss of 1.0% of original balance of the
portfolio at closing and the MILAN required Credit Enhancement of
6.5% served as input parameters for Moody's cash flow model,
which is based on a probabilistic lognormal distribution as
described in the report "The Lognormal Method Applied to ABS
Analysis" published in July 2000.

The key drivers for the MILAN Credit Enhancement number, which is
in line with the average Dutch RMBS transaction, are: (i) Months
Current data which shows that 79.52% of the loans have never been
in arrears since they were disbursed which together with
relatively high seasoning (WA seasoning of 5.55 years) is
considered as particularly positive; (ii) around 24.87% of the
pool comprise NHG loans; while (iii) the relatively high weighted
average Loan-to-Foreclosure-Value (WALTFV) of 94.22% and that
44.75% of the pool has an LTFV above 100% and 22.26% of the pool
has an LTFV above 110%; (iv) 17.72% of the borrowers being self-
employed; and (vi) the proportion of interest only loans (38.92%)
are considered as more negative features.

The key drivers for the expected loss which is higher than the
average Dutch RMBS transaction, are: (i) the steep increase in
60+ delinquencies, up to twice as high as the Dutch RMBS Index ;
(ii) nine years of default data on loans in the seller's book for
loans with characteristics similar to the securitized ones, split
by loans with or without an NHG guarantee; (iii) lower recovery
rates and lengthier recovery process since 2009; (iv) vintage
composition of the securitized pool; and (v) benchmarking with
comparable transactions in the Dutch market.

Approximately 4.43% of the portfolio is linked to life insurance
policies (including 0.36% of mortgage loans that can switch to
life insurance policies), which are exposed to set-off risk in
case an insurance company becomes insolvent. The originator (WUB)
has provided loan-by-loan insurance company counterparty data.
Moody's considered the set-off risk in the cash flow analysis.
The potential set-off risk stemming from premium deposits has
been mitigated through a mechanism by which the amount of premium
deposits has to be cash collateralized in case ING Bank's rating
falls below P-1. The amount of premium deposits is monitored in
the Investor Report.

The transaction benefits from a swap with ING Bank (A2/P-1) as
swap counterparty. The swap covers the rated notes coupons on the
outstanding balance of the same rated notes reduced by any unpaid
amounts on the Principal Deficiency Ledgers (PDLs), together with
senior fees and expenses and an excess spread of 0.70% per annum
of the pool amount at closing for the first five years, 0.50% per
annum on the then outstanding pool balance afterwards.

The V Score for this transaction is Low/Medium, which is in line
with the score assigned for the Dutch Prime RMBS sector. Two
components scored differently compared to the sector score: (i)
Issuer/Sponsor/Originator's Historical Performance Variability
which is assessed to be Low/Medium, higher than the Low sector's
average, because of the higher delinquencies on WUB's books and
the lower recovery rates; and (ii) Analytic Complexity which is
assessed to be Medium due to the fact that the capital structure
contains some unusual features. V Scores are a relative
assessment of the quality of available credit information and of
the degree of dependence on various assumptions used in
determining the rating. High variability in key assumptions could
expose a rating to more likelihood of rating changes. The V Score
has been assigned accordingly to the report "V Scores and
Parameter Sensitivities in the Major EMEA RMBS Sectors" published
in April 2009.

Moody's Parameter Sensitivities provide a quantitative/model-
indicated calculation of the number of rating notches that a
Moody's structured finance security may vary if certain input
parameters used in the initial rating process differed. The
analysis assumes that the deal has not aged and is not intended
to measure how the rating of the security might migrate over
time, but rather how the initial rating of the security might
have differed if key rating input parameters were varied.
Parameter Sensitivities for the typical EMEA RMBS transaction are
calculated by stressing key variable inputs in Moody's primary
rating model.

If the portfolio expected loss was increased to 3.0% from 1.0%,
and all other factors remained the same, the model output
indicated that the Class A Notes would still have achieved Aaa
(sf).

The ratings of the notes take into account the credit quality of
the underlying mortgage loan pool, the dynamic delinquency data,
the dynamic recovery data and the vintage data for defaults
received from the originator as well as the transaction structure
and legal considerations. Based on the different data-sources
Moody's has determined the MILAN Credit Enhancement and the
portfolio expected loss.

The principal methodology used in this rating was Moody's
Approach to Rating RMBS Using the MILAN Framework published in
May 2013.

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

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

The ratings address the expected loss posed to investors by the
legal final maturity of the notes. In Moody's opinion, the
structure allows for timely payment of interest and ultimate
payment of principal with respect to the Class A Notes by legal
final maturity. Moody's ratings address only the credit risk
associated with the transaction. Other non-credit risks have not
been addressed, but may have significant effect on yield to
investors.


ORANGE LION 2013-10: Fitch Rates Class E Notes 'BB+sf(EXP)'
-----------------------------------------------------------
Fitch Ratings has assigned Orange Lion 2013-10 RMBS B.V.'s notes
expected ratings, as follows:

EUR1,866,916,000 Class A: 'AAAsf(EXP)'; Outlook Stable

EUR57,538,000 Class B: 'AA+sf(EXP)'; Outlook Stable

EUR46,236,000 Class C: 'A+sf(EXP)'; Outlook Stable

EUR40,071,000 Class D: 'BBB+sf(EXP)'; Outlook Stable

EUR33,907,000 Class E: 'BB+sf(EXP)'; Outlook Stable

EUR10,275,000 Class F: 'NRsf(EXP)'

The transaction is a true sale securitization of Dutch
residential mortgage loans originated by WestlandUtrecht Bank
(WUB), a wholly owned subsidiary of ING Bank N.V. (ING;
A+/Negative). Credit enhancement for the class A notes will be
provided by the subordination of the junior notes (9.15%), a
reserve fund funded with excess spread up to a non-amortizing
target of 1.85% of the initial note balance, and an interest rate
swap.

Key Rating Drivers

Portfolio Composition

The portfolio has a higher proportion of self-employed borrowers
(17.72%), jumbo properties (8.05%) and investment loans (20.77%)
compared with other recent Dutch deals, because WUB targets
affluent borrowers. Additionally, while the debt-to-income ratio
(DTI) at 30.97% is typical of Fitch-rated Dutch RMBS
transactions, the original loan-to-market-value (LTMV) of 91.67%
is slightly higher. 24.87% of the portfolio comprises loans that
benefit from the national mortgage guarantee scheme (Nationale
Hypotheek Garantie or NHG).

Swap Providing Liquidity Support

The deal has a substantially-sized and unusual swap in that the
issuer owes actual received interest instead of scheduled
interest to the counterparty. In this way, the swap will also be
providing liquidity support to the deal. Upon a downgrade of the
swap counterparty to below the requisite ratings, a liquidity
ledger will be funded for an amount estimated to be the next
interest payment date's (IPD) senior fees and class A interest.
The swap also has a higher than usual notional and spread as it
relates to the guaranteed excess spread.

Atypical Structure

While Dutch deals are typically structured so that there is a
high likelihood of being called after five years, this deal has
been structured to be more long dated. There are no step-up
margins and the notes may only be redeemed if the pool can be
auctioned at a price sufficient to pay senior fees, unwind the
swap, repay the notes at par (including accrued and unpaid
interest), and provide a pre-set return to the class F notes. The
excess spread available after replenishing the reserve fund will
be used to reverse-turbo the notes.

Counterparty Exposure

This transaction relies strongly on the creditworthiness of ING,
which fulfills a number of roles. In respect of the deposit set-
off risk and commingling risk, Fitch gave full credit to
mitigating structural features embedded in the transaction.

Rating Sensitivities

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

Fitch was provided with loan-by-loan information on the
securitized portfolio as of 31 May 2013. The data fields included
in the pool cut were of good quality.

Fitch performed an onsite file review at the time of Orange Lion
2013-8 during which it checked a selection of 12 mortgage files.
During this review, the agency checked if the files were complete
and if the data was identical to the information provided. There
were a small number of negative findings from the file review,
which was further reflected in the agreed upon procedures report
which showed errors, especially in the foreclosure value and
income fields. Fitch increased the pool's expected default
assumptions as a result of these findings.

Based on the received repossession data, analysis showed that the
performance was at or slightly better than Fitch's standard Dutch
RMBS assumptions; therefore, the agency did not adjust its quick
sale, market value decline or foreclosure timing assumptions.

To analyze the CE levels, Fitch evaluated the collateral using
its default model, details of which can be found in the reports
entitled 'EMEA Residential Mortgage Loss Criteria', dated June
2013, and "EMEA Criteria Addendum - Netherlands", dated 13 June
2013, available at www.fitchratings.com. The agency assessed the
transaction cash flows using default and loss severity
assumptions under various structural stresses including
prepayment speeds and interest rate scenarios. The cash flow
tests showed that each class of notes could withstand loan losses
at a level corresponding to the related stress scenario without
incurring any principal loss or interest shortfall and can retire
principal by the legal final maturity.



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R U S S I A
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ACRON JSC: Fitch Affirms 'B+' Long-Term Issuer Default Ratings
--------------------------------------------------------------
Fitch Ratings has affirmed JSC Acron's (Acron) Long-term foreign
and local currency Issuer Default Ratings (IDR) at 'B+'. The
Outlook on the Long-term IDRs is Stable.

The affirmation reflects Fitch's view that Acron's financial
profile continues to offer sufficient headroom to withstand raw
material cost inflation in Russia and expected supply-driven
pricing pressure for its core products, and to support its capex
plans over the next three years.

Key Rating Drivers

Phosphate Self-Sufficiency: The Oleniy Ruchey mine produced 105kt
of apatite concentrate in Q113 and met all internal phosphate
needs at Acron (Veliky Novgorod) and Dorogobuzh at the end of
June. Production is expected to ramp up to 1mtpa by end-2013,
compared with Acron's internal requirements of 700ktpa. Fitch
regards this as a critical step for the group as dependency on
monopolistic supplier OAO Apatit had been identified as a key
constraint for the credit.

Leverage Forecast to Increase: Under Fitch's rating case, Acron's
net funds from operations (FFO) leverage increases to around 3.0x
in 2014-2015 from 2.2x at end-2012, reflecting sustained high
levels of investments and pressure on operating cash flow from
rising raw material costs and erosion in selling prices. Free
cash flow (excluding the equity-funded portion of the potash
project) is expected to remain negative over the next three years
and the agency's base case assumes that Acron will be successful
in raising new debt to refinance upcoming maturities and fund its
investments.

Pressure on Prices in Base Case: The 2013 base case also assumes
supply-driven pricing pressure for Acron's core products, with a
resulting low single digit drop in revenues yoy. The continued
increases in natural gas prices in Russia and other cost
inflation in the country will only be partly compensated by the
group's ongoing efficiency measures and the EBITDA margin is
forecast to gradually reduce from the 28% reported in 2012.
Acron's sales and EBITDA were down 10% and 9% yoy respectively in
Q113, due primarily to unfavorable weather conditions in China
and south Asia experiencing falling complex fertilizer prices and
volumes.

Financing of the Potash Project: The part-equity financing of the
Talitsky mine alleviates Fitch's concerns about the potential
impact of a fully debt-financed expansion on Acron's leverage.
Acron raised RUB12.8 billion (US$406 million) for the project in
2012 through the sale of interests in Verkhnekamsk Potash Company
(VPC), the subsidiary developing the potash deposit, to
Vnesheconombank (VEB) (20% minus one share), Eurasian Development
Bank (9.1%) and ZAO Raiffeisenbank (11%). VEB will also provide a
credit facility of US$1.1 billion (RUB33 billion equivalent) to
support the project from 2014 onwards. Excluding the cost of the
license acquired in 2008, total capex is estimated at US$2
billion with commissioning in 2016.

High Capex: Excluding VPC, capex is assumed at around RUB12
billion in 2013. Acron will invest RUB18.6 billion (US$600
million) in the development of an underground phosphate mine at
Oleniy Ruchey in 2012-2017 and plans to double its apatite
concentrate capacity to 2mtpa. The group also plans to spend
around RUB12.4 billion (US$400 million) in 2012-2015 in a new
ammonia unit with a capacity of 700ktpa. Fitch believes that the
expansion program offers some flexibility to preserve cash should
market conditions deteriorate significantly, as some of the
project could be delayed.

Opportunistic Strategy: The rating also captures the risks
associated with Acron's opportunistic strategy. In May 2012, the
group launched a US$440 million bid for a 66% stake in Polish
fertilizer producer, Azoty Tarnow (ZAT). Acron subsequently
increased its offer by 25% and acquired 12% of the stock of the
company in July for US$102 million. At end-2012, Acron owned
13.78% of the company. In September, ZAT increased its charter
capital by 75% to merge with chemicals producer Zaklady Azotowe,
thus diluting Acron's interest to 8.91%. Acron has since acquired
additional shares and owns 15.3% of the polish group. Fitch's
rating base case assumes further investments in ZAT, with a cap
at 20% based on the regulatory limit on voting rights in the
company.

Adequate Liquidity: Liquidity is adequate, with cash balances of
RUB27.5 billion at end-Q113 against short-term debt of RUB22.3
billion. Acron's 2.9% stake in Uralkali ('BBB-'/Stable) was worth
RUB17.8 billion at end-Q113 and could also offer additional
flexibility. Fitch forecasts mildly negative free cash flow
(excluding the potash project) in 2013. The rating case also
assumes dividend distributions of 30% of net profit, in line with
the new policy.

RATING SENSITIVITIES

Positive:

-- Neutral free cash flow (excluding potash mining capex
    financed via equity injections), leading to FFO net
    adjusted leverage maintained below 2.5x on a sustained
    basis

Negative:

-- Continued negative free cash flow generation (excluding
    potash capex financed via equity injections)

-- Significant cash outflows supporting aggressive distributions
    to shareholders and/or financial investments leading to FFO
    net adjusted leverage sustained above 3.5x

-- A sharp deterioration in market conditions or Acron's cost
    position with a sustained drop in EBITDAR margin below 20%.

The rating actions are:

-- Long-term local and foreign currency IDR affirmed at 'B+';
    Outlook Stable

-- Long-term National Rating affirmed at 'A (rus)'; Outlook
    Stable

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

-- Local currency senior unsecured rating affirmed at 'B+' for
    the RUB3.5bn (series 02), RUB3.5bn (series 03), RUB3.75bn
    (series 04), RUB3.75bn (series 05) and RUB5bn (BO-01 series)
    bond issues, Recovery Rating 'RR4',

-- Local currency senior unsecured rating of' B+'/RR4 assigned
    to the three-year RUB15bn exchange-traded rouble bond
    program


* LENINGRAD REGION: Fitch Affirms 'BB+' LT Currency Ratings
-----------------------------------------------------------
Fitch Ratings has revised Leningrad Region's Outlooks to Positive
from Stable and affirmed its 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 rating action also affects Leningrad Region's outstanding
senior unsecured domestic bonds of RUB1.3 billion.

Key Rating Drivers

The Positive Outlook reflects Fitch's forecast of continued
growth of Leningrad's economy at rates above the national
average, maintenance of its low level of debt, sound operating
performance and strong liquidity and growing economy.

The region has a well-diversified economy based on the processing
industries and transport sector. Its wealth indicators are above
the national average. The region's location on the Baltic sea-
shore makes it Russia's strategic export and import hub. Gross
regional product expanded 4.7% in 2012, above the national
average of 3.4%. Fitch expects continuing economic growth at
about 5% yoy in 2013-2015.

Fitch expects the region's operating margin to remain sound in
2013-2015, averaging 14%-15%. Operating revenue will increase,
driven by the growth of industrial output and a broadening of the
tax base. In 2012 the margin was slightly below 16% despite high
pressure on opex caused by the federal government's pre-election
promises. The region has low reliance on transfers from the
federal budget. Tax revenue represents about 90% of the region's
total operating revenue.

Fitch expects the region will maintain a low level of debt in
2013-2015. In relative terms the region's direct risk will not
exceed 15% of current revenue. Debt coverage ratio will remain
strong and will not exceed one year in 2013-2015. The region's
direct risk amounted to a modest 5.4% of current revenue at end-
2012. Debt coverage ratio was 0.3 - one third of the current
balance was enough to repay all debt in 2012.

Leningrad Region had a sound liquidity balance of RUB3.5 billion
at end-2012. The region has established its own reserve fund in
2012 to ensure smooth cash management during potential financial
instability. It keeps outstanding liquidity in commercial banks
and earned RUB0.5bn interest revenue from the deposits - 2.7x the
interest charges it paid to its creditors in 2012.

Guarantees outstanding at end-2012 totaled RUB2.4 billion or less
than 4% of operating revenue. The financial debt of the public
sector companies (excluding guaranteed amounts) was an immaterial
RUB15 million at end-2012. The companies are mostly self-financed
and there were no cases where the region had to cover public-
sector entity obligations.

The region is located in the north-west of the Russian
Federation. It accounted for 1.2% of the country's GRP in 2011
and 1.2% of its population.

Rating Sensitivities

Continued sound budgetary performance coupled with maintenance of
low indebtedness at below 15% of current revenue would lead to an
upgrade.

A sharp growth of debt leading to significant deterioration of
debt coverage would lead to a downgrade.



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S L O V A K   R E P U B L I C
=============================


NOVACKE CHEMICKE: EC Launches Inquiry Into Possible State Support
-----------------------------------------------------------------
CTK reports that the European Commission has launched inquiry
into possible state support to the bankrupt Slovak company
Novacke chemicke zavody (NCHZ).

According to CTK, a controversial law on the basis of which the
then government of Prime Minister Robert Fico put NCHZ on the
list of strategic firms is at the core of the investigation.

The law, in force for 13 months only, ordered receivers to
maintain operations of strategic firms and prevent ungrounded
mass dismissals, CTK discloses.  The law was only applied in the
case of the chemical company NCHZ, CTK notes.

The EC claims the firm did not pay mandatory social security
payments and other payments to the state during the bankruptcy,
CTK states.  That is why the Commission wants to examine whether
this was not the case of an illegal state support, according to
CTK.

The EC said in a statement it assumes that by using the law on
strategic firms the Slovak government had protected NCHZ against
the outcome of the standard bankruptcy proceedings, CTK relates.

The EC also pointed out that after the legislation expired the
creditor committee of NHCZ made a decision on a further operation
of the loss-making company, CTK discloses.

Four years ago NCHZ went bust following a fine of EUR19.6 million
from the EC for a cartel agreement with other firms, CTK
recounts.

Novacke Chemicke Zavody is a Slovakian chemical firm.



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S W I T Z E R L A N D
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TAURUS CMBS 2006-3: S&P Affirms D Ratings on Two Note Classes
-------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its credit ratings on
Taurus CMBS (Pan-Europe) 2006-3 PLC's class A, B, C, and D notes.

The rating actions follow S&P's review of Taurus CMBS (Pan-
Europe) 2006-3's credit quality following the full repayment of
one of the two remaining loans.

        THE SOUDRONIC LOAN (0% OF THE POOL BY LOAN BALANCE)

The securitized loan (CHF32.7 million) has fully repaid at
maturity on April 8, 2013.  The proceeds were applied pro rata
between the class A, B, C, and D notes.

        THE TRIUMPH LOAN (100% OF THE POOL BY LOAN BALANCE)

The loan has an outstanding balance of EUR52.1 million and
represents the senior portion within a whole loan.  The
subordinated portion of the whole loan does not form part of this
transaction.

The servicer transferred the loan to special servicing because
the borrower failed to repay the whole loan balance at maturity
(on Jan. 30, 2013).  The servicer has also entered into a
temporary standstill agreement with the borrower.

This loan is secured by a multitenanted single asset located in
Markisches Viertel (northern Berlin), which is primarily used for
retail purposes.  The occupancy rate has decreased to 67% from
91% at closing.  The top five tenants account for only 19% of the
property's overall income.  The property's weighted-average lease
term is 5.7 years.

The servicer reported a May 2013 securitized loan-to-value ratio
of 72% (based on a December 2010 valuation), and a securitized
interest coverage ratio of 1.41x.

Although S&P's base-case scenario currently shows no losses,
further market value decline would likely result in losses, in
S&P's view.

                          LIQUIDITY RISK

The May 2013 cash manager report shows that the issuer failed to
pay the interest due under the notes on the May 2013 interest
payment date (IPD).  The class C and D notes continue to accrue
unpaid interest, whereas the class B notes have fully repaid
previous interest shortfalls.  The class C and D notes accrued a
cumulative interest shortfall amount of EUR130,908 on the May
2013
IPD.

The earlier repayment of five of the seven initial loans caused a
spread compression between the two remaining loans and the
remaining notes.  Although the two remaining loans paid full
interest, the weighted-average cost of the remaining notes
(including the unrated class X1 and X2 notes) exceeded the
weighted-average loan coupon on the May 2013 IPD.

S&P understands from the reporting agent that the transaction's
excess spread, if any, is not available to pay overdue interest
on the class A to D notes.  Instead, the issuer distributes
excess spread to the class X1 and X2 noteholders.  Therefore, the
class C and D notes' existing interest shortfall is unlikely to
be repaid, in S&P's opinion.

The payment of certain nonrecurring expenses, if not spread over
the quarters, may constrain the issuer's capacity to pay full
interest to the class B noteholders in a timely fashion, in S&P's
view.

                          RATING ACTIONS

S&P's ratings in this transaction address timely payment of
interest, payable quarterly in arrears, and payment of principal
no later than the legal final maturity date (in May 2015).

S&P considers the available credit enhancement for the class A
notes as adequate to mitigate the risk of losses from the
remaining underlying loan in higher stress scenarios.  However,
S&P has affirmed its 'BBB- (sf)' rating on this class of notes
for cash flow reasons.  S&P's current rating on the class A notes
already incorporates its view of current liquidity risks
associated with this class of notes.

S&P also considers the available credit enhancement for the class
B notes as adequate to mitigate the risk of losses from the
remaining underlying loan in higher stress scenarios.  However,
S&P has affirmed its 'B- (sf)' rating on this class of notes for
cash flow reasons.  The class B notes, which previously
experienced an interest shortfall, are still vulnerable to cash
flow disruption on future IPDs, in S&P's opinion.

S&P has affirmed its 'D (sf)' ratings on the class C and D notes
because they continue to experience interest shortfalls.

Taurus CMBS (Pan-Europe) 2006-3 closed in November 2006 with a
note balance of CHF0.1 million and EUR447.75 million.  The
underlying pool initially held seven loans secured on real estate
assets in Switzerland, France, and Germany.  On the May 2013 IPD,
the Triumph loan remained outstanding, and the outstanding note
balance had decreased to CHF0.1 million and EUR52.2 million,
respectively.

           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

Taurus CMBS (Pan-Europe) 2006-3 PLC
CHF0.1 Million, EUR447.75 Million Commercial
Mortgage-Backed Floating-Rate Notes

Ratings Affirmed

A           BBB- (sf)
B           B- (sf)
C           D (sf)
D           D (sf)



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T A J I K I S T A N
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ESKHATA BANK: Moody's Affirms Caa2 For. Currency Deposit Ratings
----------------------------------------------------------------
Moody's Investors Service has affirmed Eskhata Bank's B3 long-
term local-currency deposit rating, and Caa2 foreign-currency
deposit ratings with a stable outlook. At the same time, Moody's
affirmed the bank's standalone bank financial strength rating
(BFSR) of E+ -- equivalent to a standalone baseline credit
assessment (BCA) of b3 with a stable outlook -- and the Not-Prime
short-term local- and foreign-currency deposit ratings.

Ratings Rationale:

According to Moody's, Eskhata's ratings remain constrained by
weaknesses associated with a potentially volatile operating
environment in Tajikistan stemming from the country's limited
economic development, weak institutions and high levels of
dollarization. Given the country's heavy dependence on
remittances from Russia (in 2011-12 remittances accounted for
around 50% of Tajikistan's GDP), the local economy and the
banking sector are highly vulnerable to external shocks --
particularly to a drop in international commodity prices which
would undermine a major source of foreign exchange (FX), economic
growth and household income.

In recent years, Eskhata has materially improved its market
franchise and became the fifth-largest bank in Tajikistan in
terms of assets at year-end 2012. In addition, Eskhata has become
one of the leading players on the money transfer market,
servicing remittance payments and accounting for 30% of all cash
transfers to Tajikistan in 2012.

In 2012, Eskhata reported a material increase in net income,
which translated into a strong return on average assets (RoAA) of
7.4% (2011: 3.6%). This improvement was largely driven by a
significant increase in income from FX operations, while
Eskhata's recurring profit from net interest income and fees and
commissions together increased by 38% compared to 2011.

Moody's notes that Eskhata's profitability benefited from healthy
net interest margin of 9.3% in 2012 (2011: 9.7%) and a strong
fees-generating capacity. Its fee and commission income accounted
for around 26% of the total operating income at year-end 2012,
mostly generated by the remittance business. FX operations are
another important source of earnings for Eskhata, considering the
high dollarization of the Tajik economy and the banking system.

In light of Eskhata's highly profitable lending business, Moody's
views the bank's asset quality as adequate. According to the
bank, the level of loans overdue for more than 90 days and
restructured loans was relatively low: 1% and 1.5% of the gross
loan portfolio, respectively, as at December 31, 2012. Loan loss
reserves were maintained at 4.2% of gross loans, providing
adequate coverage of problem loans.

Moody's also notes that Eskhata's asset quality has benefited
from the high granularity of the loan portfolio and the
accelerating inflows of remittances in recent years which, in
turn, had positive implications for the overall economy,
including the microfinance and retail sectors.

Furthermore, the affirmation of Eskhata's ratings reflects the
bank's historically satisfactory liquidity profile which has been
supported by growing retail deposits and sufficient level of
liquid assets which exceeded 30% of total assets in recent years.

What Could Move The Ratings Up/Down

According to Moody's, an upgrade of Eskhata's ratings is unlikely
in the next 12-18 months, given the weaknesses associated with
the operating environment in which the bank operates. However,
downward pressure could be exerted on Eskhata's ratings if
economic conditions were to worsen beyond current expectations,
leading to materially weaker asset-quality profiles, impaired
profitability and weaker capitalization levels.

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

Headquartered in Khudjand, Tajikistan, Eskhata reported -- as at
December 31, 2012 -- total assets of TJS712 million (US$150
million), shareholders' equity of TJS68 million (US$14 million)
and net income of TJS45 million (US$9.4 million), according to
its audited IFRS.



=============
U K R A I N E
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VAB BANK: Moody's Outlook on Caa1 Deposit Ratings is Stable
-----------------------------------------------------------
Moody's Investors Service has changed to stable from positive the
outlook on VAB Bank's global local currency deposit ratings,
which have been affirmed at Caa1. At the same time, Moody's has
changed to stable from positive the outlook on the bank's
standalone bank financial strength rating (BFSR) at E, which is
equivalent to a baseline credit assessment (BCA) of caa1. The
National Scale Rating (NSR) of Ba1.ua has been affirmed with no
specific outlook.

Ratings Rationale:

Moody's change in outlook of VAB Bank's long-term deposit ratings
reflects the bank's weak loss absorption capacity driven by weak
capital adequacy metrics, low -- albeit improving -- recurring
profitability and aggressive lending strategy.

Weak Loss Absorption Capacity

Moody's says that VAB Bank's weak capital adequacy metrics is one
of the key drivers for the change of the outlook on the deposit
ratings to stable. As a result of the bank's loss-making
performance in five consecutive years and the aggressive pace of
lending in recent years, its capital adequacy -- with a reported
ratio of Tier 1 capital to risk-weighted assets of 9.5% as at
December 31, 2012 -- was mainly supported by injections from the
ultimate shareholder -- Ukrainian businessman Mr. Oleg
Bakhmatyuk.

Although VAB Bank received new Tier 1 capital (amounting to
UAH700 million ($87.6 million) in January-May 2013, Moody's
anticipates further pressure on the bank's capital adequacy as
its pre-provision profitability is unlikely to be sufficient to
capture seasoning risks of associated with the loan portfolio
which grew rapidly in 2011-12, coupled with VAB Bank's plans to
increase its lending volumes at above-market levels.

Low -- Albeit Improving -- Recurring Profitability

VAB Bank's loss-making performance in 2008-12 was driven by high
provision charges that absorbed 60%-250% of operating income
during that period. Moody's notes that problem loans accumulated
since 2008 -- accounting for around 30% of gross portfolio as at
December 31, 2012 -- are 60% covered by provisions, and could
require additional provisions as challenging credit conditions in
Ukraine provides limited scope for recovery.

The rating agency also notes that VAB Bank's pre-provision
profitability is constrained by low interest margins and weak --
albeit improving -- efficiency metrics VAB Bank is pre-dominantly
funded by expensive customer deposits which it re-channels to the
low-yielding corporate book, resulting in low (compared to market
peers) net interest margin of 2.8% in 2012 (unchanged versus
2011).

VAB Bank's cost-cutting initiatives have led to improvements in
operating efficiency, and following a 24% decrease in operating
expenses, the cost-to-income ratio was reported at 75% in 2012
(2011: 150%). In light of these improvements, Moody's anticipates
further improvements in VAB Bank's efficiency.

Aggressive Lending Strategy

Moody's notes that VAB Bank demonstrated a high appetite for
credit risk as measured by loan growth in 2011-12. In 2012, the
bank's loan book grew by a very high 40% and by 20% in 2011
(compared to the market average contraction of 1.2% in 2012 and
market average growth of 9% in 2011). Moody's expects the bank's
loan book growth to exceed that of the sector, given its targeted
strategy to increase visibility on the market. Thus Moody's notes
the continued risks associated with the bank's future asset
quality against the background of a seasoning loan book.

In addition, VAB Bank's rapid loan growth was driven by (1) 'big-
ticket' transactions, with top-10 credit exposures accounting for
as high as 305% of Tier 1 capital as at December 31, 2012 (2011:
319%); (2) growing risks associated with the bank's
profitability, and (3) capital dependence on the performance of a
handful of borrowers. However, Moody's notes positively that this
growth was attributable to one of the best-performing industries
in Ukraine -- agriculture and food production -- that partially
mitigates the risks.

Headquartered in Kyiv, Ukraine, VAB Bank reported consolidated
total assets of $1.6 billion as of December 31, 2012 (in
accordance with audited IFRS).

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

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



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


AA BOND: S&P Assigns 'BB' Rating to Class B Notes
-------------------------------------------------
Standard & Poor's Ratings Services assigned its credit ratings to
the fixed-rate secured class A1, A2, and B notes issued by AA
Bond Co. Ltd.

The transaction is a corporate securitization of the Automobile
Association's (AA) operating business.  The AA Group operates a
roadside assistance service in the U.K. and Ireland and provides
complementary services such as insurance, driving services and
home emergency response.  The AA provides breakdown services
either to its own members or to customers of its corporate
clients, as part of a business service agreement.  Business
customers typically include fleet operators and motor
manufacturers.  The AA Group is also a large U.K. personal lines
insurance broker and distributes motor and home insurance.

The debt issued refinances part of the present liabilities of the
Acromas Group; it entered into these in 2007, when the AA Group
merged with Saga under the parent company Acromas.  Acromas is
owned by private equity companies Permira, CVC, and Charterhouse.

The two class A notes have equal seniority with the borrower's
bank facilities, while the class B notes are contractually
subordinated.  At closing, AA Bond Co. onlent proceeds from the
issuance of the three classes to the borrower, AA Senior Co Ltd.,
via intercompany loans that feature an expected maturity date
designed to accelerate amortization upon failure to refinance.

"In our opinion, AA Bond Co. functions as two separate
transactions.  The class A and class B notes share the same
ultimate security, but are each subject to separate terms and
conditions, governed by an intercreditor agreement.  The class A1
notes are expected to mature five years after closing, the class
A2 notes are expected to mature 12 years after closing, and the
class B notes are expected to mature six years after closing.  If
the class B loan defaults for any reason, including that the
business fails to repay the class B loan at expected maturity,
the topmost company (Topco) in the AA Group corporate structure
will be required to redeem the class B loan along with all
accrued interest, thus ensuring that the class B notes are
redeemed. Failure to do so will give the class B noteholders the
right to enforce the Topco share security," S&P said.

In line with S&P's criteria "Methodology For Rating And
Surveilling European Corporate Securitizations," published on
Jan. 23, 2008, S&P has assessed the business risk profile,
evaluated the risks embedded in the transaction (including
structural and legal risks), and submitted the securitized
business to a set of cash flow stresses based on the
characteristics of the specific
industry/sector and business.

                       BUSINESS RISK PROFILE

S&P views the AA's business risk profile as satisfactory,
reflecting the following key business strengths:

   -- AA's clear market-leading position in the U.K., which has
      high barriers to entry;

   -- Mass membership model with excellent renewal rates and
      revenue visibility;

   -- High profitability, which is superior to that of closest
      competitor;

   -- Good revenue visibility because of the loyal individual
      membership base and contracts on corporate service deals
      lasting three to five years; and

   -- Good cash flow due to a) minimal working capital needs as a
      high percentage of members pay their annual membership fees
      up front, and b) low capital expenditure requirements, with
      strong cash flow conversion.

However, these strengths are tempered by:

   -- High dependence on a single country--almost all revenues
      are sourced in the U.K.;

   -- Some vulnerability to potential reputational damage and
      subsequent risk of litigation in the insurance and
      financial services businesses; and

   -- Some sensitivity to macroeconomic factors such as consumer
      confidence, driver habits, fuel prices, and weather
      patterns.

                   LEGAL AND STRUCTURAL FEATURES

The creditors are considered to hold a qualifying floating
charge; that is, under English law, they can stop the AA Group
from going into administration by appointing an administrative
receiver. However, because the AA Group's principal operating
subsidiary (TAAL) is incorporated in Jersey, the creditors are
unable to appoint an administrative receiver for TAAL.

TAAL has signed a legally binding agreement to sell its assets,
business, and undertakings to a U.K.-incorporated sister company,
AADL.  TAAL will continue to trade while the business transfer
takes place; this could take 18 months or more.  Therefore, to
eliminate any continuing credit dependency on TAAL while the
business transfer completes, the transaction documents state that
TAAL must also declare a trust over all of its assets in favor of
AADL.  In addition, TAAL has executed a security power of
attorney in favor of AADL.  This enables AADL, as attorney, to
take action in TAAL's name against any entity that failed to meet
its obligations to TAAL, and to complete the business transfer if
TAAL did not do so.

The effect of the declaration of trust is to transfer the
beneficial interest (but not the legal title) and the credit
exposure on all of the assets of TAAL to AADL.  Based on S&P's
legal analysis, it has established that the effect of the
declaration of trust and the power of attorney is to enable AADL
to "step into the shoes of TAAL" for all the assets within the
trust, using the security power of attorney.  If an
administrative receiver were appointed for AADL, it would have
all the powers of the obligor security trustee to run TAAL and to
complete the business transfer.

Principal on the class A and B notes is not scheduled to amortize
before their expected maturity dates.  To reduce refinancing risk
at the various expected maturity dates, the structure includes a
feature to give the AA's management and the equity holders an
incentive to refinance the debt before expected maturity.  If the
business cannot refinance the intercompany loans associated with
the class A1 notes or bank debt in year 5, all the AA's excess
cash flow may be used to pay down the class A and class B notes
before the legal final maturity date.

However, the failure to refinance will also be considered an
event of default under the common terms agreement.  After such an
event, the creditors could choose to enforce their security and
accelerate the debt, i.e., make it immediately payable in full.
In S&P's view, the incentives of the bank lenders at this time
may not be aligned with the incentives of the noteholders.  The
transaction therefore gives the class A noteholders a veto over
the option to accelerate the debt.  Over 50% of the class A
noteholders would need to vote for acceleration.

None of the agreements for the swap counterparties, liquidity
facility provider, and obligor account providers in the
transaction provide a commitment to mitigate a potential
downgrade, in line with S&P's criteria.  S&P do not consider this
a limiting factor for the rating as all counterparties are rated
above the rating on the notes.  However, if any of the
counterparties are downgraded, this may trigger a negative rating
action on the notes.

The AA Group operates defined benefit pension plans that are
currently underfunded.  The pension trustee is therefore granted
super senior security up to a value of GBP150 million in the
post-acceleration waterfall.  However, S&P anticipates that this
security arrangement will only remain in place for a limited
timeframe.  S&P expects that once the final pension deficit is
calculated pursuant to the 2013 valuation, the AA Group and the
pension trustee will enter into an asset-backed funding structure
over a 25-year period.  At this point, the pension trustee's
security would be a GBP200 million first fixed charge over the AA
brands.  If the AA Group were not able to continue to make the
required payments under this agreement, the pension trustee could
enforce this fixed charge security and the AA group might no
longer have use of its brands.

The borrower, AA, is highly leveraged.  The securitization
structure encourages reduction of leverage by sweeping 50% of
excess free cash flow to pay down the bank debt while the bank
debt is outstanding.  In addition, the transaction documents
contain restrictions that limit payments to entities outside of
the securitization (for example, dividends to shareholders) while
the bank debt remains outstanding.

If the AA cannot refinance the loan associated with the class B
notes by the expected maturity date, all payments to the class B
notes will be delayed.  The class B noteholders will not receive
interest payments while the class A notes are outstanding.  The
interest missed will be capitalized and must be repaid by the
legal final maturity date.  S&P has incorporated this transaction
feature in its modeling by verifying that all capitalized
interest is repaid by legal final maturity under a stress
scenario commensurate with its preliminary rating on the class B
notes.

"Our cash flow stresses have been tested under the assumption
that the borrower is unable to refinance either the term
facilities or the bullet notes.  We have therefore incorporated
in our modeling all transaction features aimed at facilitating
the repayment of the issuer's and borrower's liabilities.  These
include mandatory cash sweeps, lock-up triggers, and liquidity
enhancements.  Our modeling validates that interest and principal
are repaid as promised under a stress scenario commensurate with
our preliminary ratings on the notes," S&P said.

In S&P's view, this transaction incorporates some key features
such as the concept of expected and legal final maturity dates,
credit enhancement in the form of a liquidity facility, and
covenants that restrict payments outside of the securitization
group or facilitate reduction of leverage by sweeping excess cash
flow to pay down debt.  However, S&Ps believes the presence of a
material obligor incorporated outside the U.K. and the
possibility that the debt may be accelerated if the borrower
fails to refinance make this transaction more complex than
traditional whole-business securitizations.

RATINGS LIST

Class        Rating            Amount
                           (mil. GBP)

AA Bond Co. Ltd.
British Pound Sterling-Denominated Fixed-Rate Secured Notes

A1           BBB- (sf)            300
A2           BBB- (sf)            325
B            BB (sf)              655
A            NR                 1,775

NR-Not rated.


NICOLE FARHI: Lack of Cash Prompts Collapse; Seeks Buyer
--------------------------------------------------------
Julia Werdigier at The New York Times reports that Nicole Farhi
has run out of money and filed for a form of bankruptcy
proceedings in the latest sign of trouble for British retailers.

According to the New York Times, Zolfo Cooper said yesterday that
the company, named after the designer who founded the label in
1982, appointed the restructuring adviser Zolfo Cooper to take
over the business and find a buyer.  If no buyer can be found, it
may have to close, the New York Times notes.

The label ran into trouble because of dwindling demand from
consumers as some opted for less expensive fashion items during a
difficult economic environment, the New York Times discloses.

Zolfo Cooper, as cited by the New York Times, said it was already
in discussions with "a number of interested parties" with regard
to the fashion house.

According to The Daily Telegraph's Steve Hawkes, Nicole Farhi has
collapsed just a day after high street king Sir Philip Green
urged the government to "rebalance" the business rates system,
putting 120 staff at risk.

Nicole Farhi, sold by French Connection in 2010, runs five stores
and 10 concessions, The Daily Telegraph discloses.

According to The Daily Telegraph, industry insiders said Nicole
Farhi, the entrepreneur who founded the label back in 1983, could
take back control of the business.

Experts blame spiraling business rates and the inexorable rise of
the internet, The Daily Telegraph discloses.

Nicole Farhi is an upmarket fashion chain.


ROWECORD: Owes GBP23.7 Million to Creditors, Report Shows
---------------------------------------------------------
Wales Online reports that Rowecord, which went into
administration in April with the loss of more than 400 jobs, owes
creditors GBP23.7 million.

According to Wales Online, a meeting of creditors -- none of
which are secured -- will be held in Newport today, July 4.

Wales Online relates that a report compiled by joint
administrators for the failed business, Alistair Wardell and
Nigel Morrison of the Cardiff office Grant Thornton, shows that
Rowecord owes GBP2.7 million in PAYE and national insurance.

Trade creditors include sister company Andrew Scott which is owed
GBP2.7 million, Wales Online discloses.  In total there are
nearly 400 creditor including Dafen-based Dyfed Steels which is
owned GBP67.822 and law firm Hugh James GBP10,349, Wales Online
notes.

The report to creditors shows that directors of the 68m turnover
business, based in Newport had initially filed a notice of
intention to appoint administrators in March this year, according
to Wales Online.

During a moratorium period the directors negotiated a commercial
settlement with one of its major creditors to the value of GBP10
million, which they believed was sufficient to safeguard the
immediate future of the business, Wales Online relates.

However, a further deterioration in its profit and loss position
and failure to reach agreement on other contracts, saw the
directors filing a second notice of intention to appoint joint
administrators in April.

The creditor report also confirms that Welsh Government had
offered to provide Rowecord with a GBP5 million commercial loan,
secured against other group company assets, to assist it through
its financial difficulties, Wales Online notes.

Efforts were explored to secure other potential sources of
finance, but failed to materialize in the required timeframe,
Wales Online recounts.  Two parties were also approached with a
view to selling the business as a going concern, but neither
party made any offer, Wales Online states.

The directors of Rowecord have identified assets, including plant
and machinery, of GBP9.3 million, Wales Online discloses.

According to Wales Online, a spokesman for Grant Thornton said it
was too early to say how much in the pound creditors could expect
to receive.

To date only a small part of the company has been sold with the
major assets still the subject for negotiation, Wales Online
says.

There is, however, a potential deal pending for the business with
a buyer currently in negotiations with the administrators, Wales
Online notes.

Rowecord is a Newport-based engineering company.



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


* Insurance Uncertainty Recedes with UK 'Flood Re' Proposal
-----------------------------------------------------------
A proposal to pool flood risk among UK insurers will remove
uncertainty from this market by ensuring availability and
increased pricing stability for customers while allowing insurers
to balance exposure to high-risk properties, Fitch Ratings says.

Risk pools of the type proposed by the UK government and the
Association of British Insurers have been successfully adopted in
many other European countries. The plan, known as Flood Re, means
customers in high-risk areas will not be forced to remain with
their existing insurer, as happens under the expiring deal that
was first agreed with the government in 2003. This had resulted
in some insurers, which were covered by that agreement, holding a
disproportionate number of high flood-risk properties.

The most beneficial option for insurers' credit profiles would
have been to allow the current agreement to insure high flood-
risk areas to expire, because it would have provided greater
flexibility in determining prices and risk exposure. But we
believe this was always politically unacceptable as it would have
resulted in insurance being unavailable, or prohibitively
expensive, for thousands of households. It could also have had
unintended consequences, such as a sharp drop in the value of
affected properties.

The new risk-pool will be funded by a levy on insurers that is
equivalent to the cross-subsidy that lower-risk homeowners
already pay to support insurance on higher-risk properties.
However, it will also limit insurers' potential exposure because
it won't cover catastrophic floods above a 1-in-200 year
probability. The exclusion of properties built since January 1
2009 should discourage building on flood plains, which was a
major factor in creating the insurance problem in the first
place.

There are still significant challenges in agreeing the detail of
the scheme but we believe there is a strong incentive for
insurers to find a solution, as the government's fall-back of
direct regulation would be much more burdensome. Regulation would
force insurers to take a specific share of high-risk households
or face penalties. This would increase costs and limit insurers'
freedom to choose the market sectors they target and their
ability to price appropriately for risk.


* Upcoming Meetings, Conferences and Seminars
---------------------------------------------

July 11-13, 2013
   AMERICAN BANKRUPTCY INSTITUTE
      Northeast Bankruptcy Conference
         Hyatt Regency Newport, Newport, R.I.
            Contact:   1-703-739-0800; http://www.abiworld.org/

July 18-21, 2013
   AMERICAN BANKRUPTCY INSTITUTE
      Southeast Bankruptcy Workshop
         The Ritz-Carlton Amelia Island, Amelia Island, Fla.
            Contact:   1-703-739-0800; http://www.abiworld.org/

Aug. 8-10, 2013
   AMERICAN BANKRUPTCY INSTITUTE
      Mid-Atlantic Bankruptcy Workshop
         Hotel Hershey, Hershey, Pa.
            Contact:   1-703-739-0800; http://www.abiworld.org/

Aug. 22-24, 2013
   AMERICAN BANKRUPTCY INSTITUTE
      Southwest Bankruptcy Conference
         Hyatt Regency Lake Tahoe, Incline Village, Nev.
            Contact:   1-703-739-0800; http://www.abiworld.org/

Oct. 3-5, 2013
   TURNAROUND MANAGEMENT ASSOCIATION
      TMA Annual Convention
         Marriott Wardman Park, Washington, D.C.
            Contact: http://www.turnaround.org/

Nov. 1, 2013
   AMERICAN BANKRUPTCY INSTITUTE
      NCBJ/ABI Educational Program
         Atlanta Marriott Marquis, Atlanta, Ga.
            Contact:   1-703-739-0800; http://www.abiworld.org/

Dec. 2, 2013
   BEARD GROUP, INC.
      19th Annual Distressed Investing Conference
          The Helmsley Park Lane Hotel, New York, N.Y.
          Contact:   240-629-3300 or http://bankrupt.com/

Dec. 5-7, 2013
   AMERICAN BANKRUPTCY INSTITUTE
      Winter Leadership Conference
         Terranea Resort, Rancho Palos Verdes, Calif.
            Contact:   1-703-739-0800; http://www.abiworld.org/


                            *********

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 * * *