TCREUR_Public/130705.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

                           E U R O P E

              Friday, July 5, 2013, Vol. 14, No. 132

                            Headlines



A U S T R I A

ALPINE BAU: Strabag Mulls Buying Parts of Alpine
DAYLI: Declared Insolvency; 3,500 Jobs at Risk


C Y P R U S

* CYPRUS: S&P Raises Long-Term Sovereign Credit Ratings to CCC+


F I N L A N D

NOKIA OYJ: Moody's Puts 'Ba3' Corp. Rating on Downgrade Review


G E R M A N Y

JUNO ECLIPSE: Fitch Affirms 'D' Ratings on Two Loan Classes


G R E E C E

FREESEAS INC: Issues 550,000 Add'l Settlement Shares to Hanover
* GREECE: Finance Minister Expects Talks with Troika to Wrap Up


H U N G A R Y

* HUNGARY: Fitch Says New Bank Taxes May Lower Foreign Commitment


I R E L A N D

ALKERMES PLC: S&P Raises Corporate Credit Rating to 'BB'
* IRELAND: Business Failures Down 20% in First Six Months


I T A L Y

ATLANTE FINANCE: Moody's Cuts Rating on EUR28.8MM B Notes to Ba1
DONG ENERGY: S&P Assigns 'BB+' Rating to EUR500MM Securities
MARCHE MUTUI: Moody's Cuts Rating on EUR11.4MM C Notes to Ba3
PANSAC INT'L: Insolvency Administration Continues as Sale Fails


N E T H E R L A N D S

DALRADIAN EUROPEAN: Moody's Affirms 'B1' Rating on Class E Notes


P O R T U G A L

MILLENNIUMBCP AGEAS: S&P Affirms 'BB' Rating; Outlook Stable


R O M A N I A

HELLO SHOPPING: Bel Rom Files Insolvency Claim


R U S S I A

MTS BANK: Moody's Affirms 'B1' Deposit Ratings; Outlook Negative


S E R B I A   &   M O N T E N E G R O

KOMBINAT ALUMINIJUMA: Gov't In Talks with Lenders to Secure Funds


S P A I N

ACUINOVA SL: Files for Voluntary Bankruptcy
BANKIA: Moody's Lowers Debt & Deposit Ratings to 'B1'
TDA IBERCAJA 2: S&P Lowers Rating on Class D Notes to 'B+'
* SPAIN: Sareb to Select Investor Shortlist for Property Sale
* Moody's Lowers Ratings on Covered Bonds from 5 Spanish Programs


U K R A I N E

SOLWAY INVESTMENT: Fitch Publishes 'B' Issuer Default Rating
* Fitch Revises Outlook on 10 Ukrainian Corporates to Negative


U N I T E D   K I N G D O M

CELLULAR SYSTEMS: In Administration, Deloitte Handles Details
CO-OPERATIVE BANK: Parent to Launch Probe on GBP1.5B Capital Hole
COVENTRY CITY F.C.: Sale Completed; Set to Exit Administration
D&G RESIDENTIAL: Kudos Buys Firm Out Of Administration
DWELL: Co-Founder Rescues Business

HEARTS: Sanctions For Going Into Administration
* UK: Insurance Insolvencies Double in May 2013
* UK: More in Administration Despite Early Signs Of Recovery
* UK: Fitch Says Reform Positive for Utilities in Long Term
* UK: Moody's Says Regulatory Changes to Water Sector Credit Neg.


X X X X X X X X

* EMEA Auto ABS Loan Performance Remains Stable in April
* Exposure of US Money Market Funds to Euro Areas Rise in Q2 2013
* Moody's Sees Possible Default of a Fourth of European LBOs
* Moody's Outlook on Global Airline Sector Remains Stable
* BOOK REVIEW: Land Use Policy in the United States


                            *********


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A U S T R I A
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ALPINE BAU: Strabag Mulls Buying Parts of Alpine
------------------------------------------------
Reuters reports that Austrian construction group Strabag SE said
it is interested in buying parts of insolvent rival Alpine Bau.

The news agency relates that Strabag mentioned in particular
Alpine's Hazet, Universale and ARB Holding units, adding in a
statement it was not yet in talks with administrators but was
prepared to make offers at short notice.

Alpine Bau, the Austrian arm of Spanish construction group FCC,
faces being broken up after the failure of talks to save the
company in its current form, putting up to 5,000 jobs at risk.

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.


DAYLI: Declared Insolvency; 3,500 Jobs at Risk
----------------------------------------------
Albert Otto at Deutsche Presse-Agentur reports that Dayli
declared insolvency Thursday, one year after its former parent
company Schlecker in Germany closed down.

The fate of Dayli's 3,500 employees is still unclear, DPA notes.
The company said it wanted to continue operating but left it open
whether shops would be closed, DPA relates.

According to DPA, the company said its debts surpass its assets
by EUR49.2 million (US$63.8 million), in a worst-case valuation
that assumes the closure of Dayli.

Austrian businessman Rudolf Haberleitner bought Schlecker's
Austrian operation last year and renamed it Dayli, DPA discloses.
He planned to widen the product range to food and electronic
items, but the concept never got off the ground as suppliers and
banks were reluctant to deal with the cash-strapped firm, DPA
notes.  Mr. Haberleitner ceded ownership to another Austrian
investor Wednesday, just before insolvency proceedings were filed
in a court in Linz, DPA relates.

Last year, 23,000 German Schlecker staff lost their jobs when the
family-owned company became insolvent, DPA recounts.

According to DPA, Austrian analysts say Dayli's stores are too
small and their locations are too unattractive to make much
profit.

Dayli is an Austrian drugstore chain.



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C Y P R U S
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* CYPRUS: S&P Raises Long-Term Sovereign Credit Ratings to CCC+
---------------------------------------------------------------
Standard & Poor's Ratings Services raised its long-term foreign
and local currency sovereign credit ratings on the Republic of
Cyprus to 'CCC+' from 'SD' (selective default).  The outlook is
stable.

At the same time, S&P raised its short-term foreign and local
currency sovereign credit ratings on Cyprus to 'C' from 'SD'.

S&P has also raised its ratings on the government's existing debt
to 'CCC+'.

                             RATIONALE

On July 1, 2013, the Republic of Cyprus exchanged of a number of
local law bonds totaling EUR1 billion into five separate issues
with similar coupons and longer maturities (between six and 10
years).  The exchange included the tender of US$667 million of
US$715 million bonds due July 4, 2013.  Following the completion
of what S&P had viewed as a distressed exchange, it has raised
the long-term sovereign credit and issue ratings on Cyprus to
'CCC+'.

Under S&P's criteria, it views a default under a distressed
exchange as cured upon the completion of an exchange offer.  At
that point, S&P then set the sovereign rating at its forward-
looking assessment of the probability that the sovereign will pay
its debt in full and on time.

"This rating, one notch higher than the rating prior to default,
also reflects two other factors that we believe have eased the
government's immediate liquidity constraints.  First, that the
European Union, European Central Bank, and the International
Monetary Fund ("the Troika") have disbursed a second EUR1 billion
tranche under their Memorandum of Understanding (MoU) with the
government.  Second, the government has extended a EUR1.8 billion
bond (9% of GDP), which came due on June 28, for one year to
July 1, 2014, in accordance with the bond's original terms.  The
government had originally issued this bond in lieu of cash to
boost Cyprus Popular Bank's capital (subsequently transferred to
the Bank of Cyprus as part of Cyprus Popular Bank's resolution).
Fiscal reserves of approximately US$1.7 billion also suggest that
immediate liquidity pressures have lessened.  We note, however,
that the government will still need to rollover its stock of
EUR950 million Treasury bills (5% of GDP).  About EUR700 million
of local law governed bonds was untendered under this exchange
but will be met under the original terms of the MoU, the
government having satisfied the condition of financing EUR1
billion of the total EUR1.7 billion outstanding," S&P said.

"That said, we believe Cyprus' economic prospects will remain
difficult.  In our opinion, economic growth will depend on it
reorienting its economic base, likely including the development
of offshore gas fields.  Expected downsizing in the public and
financial services sectors, as well as the banking system, will
likely lead to significant job losses in these areas as well as
in real estate and tourism; these sectors account for over 50% of
Cyprus' GDP.  We project that Cyprus' economy will contract by
about 20% between 2013 and 2016.  Weak growth and employment
prospects may also weigh on public and political support for an
ambitious budgetary consolidation program, while creating
challenges for debt sustainability, in our view," S&P added.

                              OUTLOOK

The stable outlook balances what S&P views as the very
significant economic adjustment challenges Cyprus faces against
the time and resources provided by the Troika.  S&P could lower
the ratings if the government appeared unable to fulfill the
program's conditions.

S&P could raise the ratings if the economy were to stabilize
sooner and at higher levels than S&P currently projects, enabling
general government debt to GDP to stabilize earlier and at a
lower level.

In accordance with S&P's relevant policies and procedures, the
Rating Committee was composed of analysts that are qualified to
vote in the committee, with sufficient experience to convey the
appropriate level of knowledge and understanding of the
methodology applicable.  At the onset of the committee, the chair
confirmed that the information provided to the Rating Committee
by the primary analyst had been distributed in a timely manner
and was sufficient for Committee members to make an informed
decision.

After the primary analyst gave opening remarks and explained the
recommendation, the Committee discussed key rating factors and
critical issues in accordance with the relevant criteria.
Qualitative and quantitative risk factors were considered and
discussed, looking at track-record and forecasts.  The chair
ensured every voting member was given the opportunity to
articulate his/her opinion.  The chair or designee reviewed the
draft report to ensure consistency with the Committee decision.
The views and the decision of the rating committee are summarized
in the above rationale and outlook.

RATINGS LIST

Upgraded; CreditWatch/Outlook Action
                                        To                 From
Cyprus (Republic of)
Sovereign Credit Rating                CCC+/Stable/C   SD/--/SD
Transfer & Convertibility Assessment   AAA
Senior Unsecured                       CCC+            D
Senior Unsecured                       CCC+            CCC

Ratings Affirmed

Cyprus (Republic of)
Short-Term Debt                        C
Commercial Paper                       C



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F I N L A N D
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NOKIA OYJ: Moody's Puts 'Ba3' Corp. Rating on Downgrade Review
--------------------------------------------------------------
Moody's placed on review for downgrade the Ba3 corporate family
rating, Ba3-PD probability of default rating and long-term debt
ratings of Nokia Oyj (Nokia).

"We have placed Nokia's rating on review for downgrade following
its announcement that it will acquire the 50% stake in Nokia
Siemens Networks B.V. it does not currently own," says Roberto
Pozzi, a Moody's Vice President - Senior Analyst and lead Analyst
for Nokia. "This transaction would be credit negative for Nokia,
bringing its net cash position close to the minimum net cash
levels expected for the Ba3 rating at a time when the group's
mobile phone business continues to generate negative free cash
flows."

Ratings Rationale:

The rating action follows Nokia's announcement on July 1, 2013
that it has agreed to acquire the 50% stake in Nokia Siemens
Networks B.V. (B2 positive; NSN) it does not yet own from Siemens
for EUR1.7 billion.

The review will focus on (1) Nokia's future policy with regard to
the treatment of its then 100% subsidiary NSN following the
closing of the transaction; (2) its liquidity position and cash
balance following this transaction; and (3) the group's cash flow
generation, performance and market share development in Q2 2013
and the visibility with regard to the development of its cash
flow and performance metrics for the remainder of the year.

Moody's expects a downgrade, if any, to be limited to one notch.

While Moody's views the transaction as credit negative, it
acknowledges that NSN has asset value and that NSN's own
financial performance has been improving recently. Moody's also
notes that Nokia retains a medium to long-term option to listing
NSN as Nokia stated, in conjunction with the transaction, that it
will continue to strengthen NSN as a more independent entity with
potentially positive implications for the group's debt metrics
and liquidity in the future. The transaction is expected to close
in the third quarter of 2013 and is subject to receipt of
customary regulatory approvals.

Moody's expects the acquisition to be funded through (1) a EUR500
million secured sellers loan from Siemens with a one year tenor
and (2) a EUR1.2 billion bridge loan facility with an undisclosed
maturity schedule. Moody's expects Nokia to address its short-
term debt maturities in due course to restore a well-balanced
debt maturity profile.

Based on reported figures per end-March 2013, Nokia had gross
cash of EUR10.1 billion and net cash of EUR4.5 billion, including
100%-consolidated NSN. Nokia estimates that at end of June 2013,
it had gross cash of EUR9.2-9.7 billion and net cash of EUR3.7-
4.2 billion. Pro forma for the purchase of the 50% stake from
Siemens, Nokia estimates that its gross cash would be unchanged
but net cash would be lower, at EUR2.0-2.5 billion at the end of
June 2013, reflecting the purchase price of EUR1.7 billion. After
the acquisition, Nokia's standalone liquidity would remain
satisfactory, especially when taking into account its EUR1.5
billion long-term revolving credit facility, which was fully
undrawn as of March 31, 2013, and its cash and marketable
securities position of EUR7.3 billion excluding NSN. Moody's
notes that as of March 31, 2013, NSN has an additional EUR750
million long-term revolving credit facility available which was
undrawn as well as EUR2.8 billion cash and marketable securities,
however Moody's understands that NSN retains an independent
financing structure after the transaction.

Nokia has yet to disclose its net cash position, or the free cash
flow that the group generated or absorbed, excluding NSN in Q2
2013. For its credit profile to remain commensurate with the
current Ba3 rating, Moody's would expect Nokia, excluding NSN, to
maintain a minimum net cash position of EUR1.5 billion, with
limited cash burn and the underlying operating margin (non-IFRS)
of the group's Devices & Services unit improving over the next
several quarters and trending towards at least 5% by 2014.

What Could Change The Rating Up/Down

There is currently limited potential for an upgrade of Nokia's
ratings. However, Moody's could upgrade the rating if all the
following conditions are met: (1) Nokia is able to restore and
sustain its underlying (non-IFRS) and, ultimately, reported
(IFRS) operating margins above 10% range in a sustainable way;
(2) the company generates meaningful positive free cash flow
whilst maintaining an adequate liquidity position; and (3) its
market shares in the broader mobile phone industry stabilize,
assuming that this potential stabilization would correspond to
more predictable profits and cash flows.

Moody's would consider downgrading Nokia's rating if (1) the
underlying operating margin (non-IFRS) of Nokia's D&S unit failed
to improve over the next several quarters and reach at least 5%
by 2014; (2) Nokia's performance during either the first or
second quarters of the year suggested significantly negative free
cash flow generation for the full year; or (3) the company's net
cash balance fell below EUR1.5 billion.

The principal methodology used in this rating was the Global
Communications Equipment Industry published in June 2008. Other
methodologies used include Loss Given Default for Speculative-
Grade Non-Financial Companies in the U.S., Canada and EMEA
published in June 2009.

Headquartered in Espoo, Finland, Nokia Oyj is a large
manufacturer of mobile communication devices and a leading
supplier of telecommunication network systems. Its net sales in
2012 amounted to approximately EUR30.2 billion.



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G E R M A N Y
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JUNO ECLIPSE: Fitch Affirms 'D' Ratings on Two Loan Classes
-----------------------------------------------------------
Fitch Ratings has affirmed Juno (Eclipse 2007-2) Limited due 2022
as follows:

  EUR255.8mm Class A (XS0299976323): affirmed at 'AAsf'; Outlook
  Stable

  EUR68.3m Class B (XS0299976752): affirmed at 'BBBsf'; Outlook
  Stable

  EUR73.3m Class C (XS0299976836): affirmed at 'Csf'; Recovery
  Estimate (RE) 50%

  EUR11.4m Class D (XS0299977057): affirmed at 'Dsf'; RE0%

  EUR0.0m Class E (XS0299977131): affirmed at 'Dsf'; RE0%

Key Rating Drivers

The affirmation is based on the stable performance of the
remaining 10 reference loans in the fully-funded synthetic
securitization, which has just under 10 years remaining until
legal bond maturity. Losses, estimated to be EUR39 million in
aggregate, resulting from the liquidation of the collateral
securing the EUR122.3 million Neumarkt loan and the EUR25 million
Senior Den Tir loans, are still to be applied to the notes.
Although the final figure is yet to be determined, Fitch
understands that it will see the class D notes written off and
the class C notes partially written down.

Of the eight other loans, the EUR82 million Obelisco portfolio is
the largest. The facility, maturing in 2015, is secured on 10
office properties located in peripheral areas surrounding Rome
and Milan. The collateral was revalued at EUR212 million in June
2012, resulting in a minor decrease in the reported loan-to-value
ratio (LTV) to 38% from the valuation conducted a year earlier.
Fitch estimates an LTV of approximately 50%, and as such expects
the loan to repay in full.

The EUR69 million Petersbogen loan, secured by a shopping center
and entertainment complex in Leipzig, Germany, has a senior and
whole loan LTV of 77% and 94%, respectively, both based on a 2010
valuation. A covenant test in February 2013 led to the loan
breaching its 87.5% whole LTV covenant, and although this
constitutes an event of default, no enforcement action has been
taken by the servicer to date. Fitch does not expect the loan to
repay at its maturity in November 2013 due to its estimated LTV
exceeding 100%.

If forbearance is applied, the combination of low interest rates
and a weighted average lease term of eight years should allow for
some deleveraging, although at the cost of declining residual
lease lengths. Other sources of credit risk include the EUR18.8
million Nordhausen loan (due August 2016: single tenancy in a
specialist property); the EUR11.6 million Prince Boudewijn loan
(due February 2015: secondary property with excessive leverage);
and the EUR11.5m Seaford Portfolio loan (due August 2014: short
lease lengths on logistics assets). However, given loan size,
cumulative losses should be comfortably absorbed by the remaining
subordination available to class A and B notes (estimated to be
no less than EUR45m).

Rating Sensitivities

Two loans facing balloon risk in 2013 are considered stable.
Monheim defaulted at August 2012 maturity, and in the intervening
standstill (expiring in September), an eight year extension of
the sole lease was secured. Le Croissant, due in November, is
secured over a refurbished Brussels office housing the European
Commission for a further seven years. In each case, Fitch expects
either loan refinancing or a non-distressed debt extension
featuring appropriate deleveraging conditions. Should this not
transpire, Fitch may revise the Outlook on the class B notes to
Negative.



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G R E E C E
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FREESEAS INC: Issues 550,000 Add'l Settlement Shares to Hanover
---------------------------------------------------------------
FreeSeas, Inc., delivered to Hanover Holdings I, LLC, 550,000
additional settlement shares pursuant to the terms of a
settlement agreement approved by the Supreme Court of the State
of New York, County of New York.

Hanover commenced the Action against the Company on May 31, 2013,
to recover an aggregate of US$5,331,011 of past-due accounts
payable of the Company, plus fees and costs.  The Order provides
for the full and final settlement of the Claim and the Action.
The Settlement Agreement became effective and binding upon the
Company and Hanover upon execution of the Order by the Court on
June 25, 2013.

Pursuant to the terms of the Settlement Agreement, the Company
issued and delivered to Hanover 890,000 shares of the Company's
common stock, US$0.001 par value, on June 26, 2013.

The matter is entitled Hanover Holdings I, LLC v. FreeSeas Inc.,
Case No. 651950/2013.

A copy of the Form 6-K is available for free at:

                        http://is.gd/PET5bZ

                        About FreeSeas Inc.

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

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

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

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


* GREECE: Finance Minister Expects Talks with Troika to Wrap Up
---------------------------------------------------------------
Stelios Bouras at The Wall Street Journal reports that Greece's
finance minister expressed optimism Thursday that talks with a
troika of international auditors will be wrapped up in time for
next week's meeting of euro-zone finance ministers that will
decide whether to unlock further aid to the country.

Racing against the clock, Greece's government has been locked in
talks with the troika -- from the European Commission, the
International Monetary Fund and the European Central Bank -- on
the reform steps Greece must take to receive its next EUR8.1
billion (US$10.54 billion) aid tranche ahead of Monday's meeting,
the Journal relates.  But the talks have stumbled in the last few
days over the delicate issue of civil-service cutbacks, an issue
that very nearly toppled Greece's coalition government last
month, the Journal recounts.

"We are heading for a political agreement on Monday," the Journal
quotes Yannis Stournaras as saying after a three-hour meeting
with troika officials and Greek Prime Minister Antonis Samaras.

His comments came after warnings from Brussels that if the two
sides don't work out their differences in time for Monday's
meeting -- the last before a planned summer break for euro-zone
finance ministers - then Athens could face up to three months
without aid from its EUR173 billion rescue package, the Journal
notes.

Senior Greek officials have been locked in tough negotiations
with international creditors for more than a week in a bid to end
a stalemate regarding Greece's failure to identify 12,500 public-
sector workers due to be transferred into a kind of labor
reserve, and which forms a part of broader reforms of the public
sector, the Journal discloses.

Although it is likely a solution will be found by Sunday, the
wrangling between Athens and Brussels comes as a political crisis
erupts in Portugal and threatens to reawaken the euro zone's debt
crisis, the Journal states.

Greece has several financing solutions available to it for the
summer if further aid isn't approved next week, the Journal says.
These include accessing short-term market financing, or being
paid the rescue money in sub-tranches until euro-zone finance
ministers meet again to assess the Greek program in mid-
September, according to the Journal.

But in a country where the security of a government job has long
been considered inviolable, the government has been struggling to
meet creditors' demands to shake up the hidebound bureaucracy and
introduce a system based more on merit, rather than privilege and
tenure, the Journal states.



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H U N G A R Y
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* HUNGARY: Fitch Says New Bank Taxes May Lower Foreign Commitment
-----------------------------------------------------------------
Additional unorthodox measures targeting banks, like the one-off
financial transaction tax (FTT) planned for 2013, could further
reduce foreign parents' commitment to Hungary's banking sector,
Fitch Ratings says. "This could ultimately lead to downward
revisions of parent support-driven ratings for the banks.
However, although parent banks with a large presence in Hungary
have generally rationed funding for their subsidiaries, they did
provide large capital injections in 2011 and 2012 and we expect
most to retain their presence in the market," Fitch says.

"High credit risks, weak economic activity and a punitive bank
levy are likely to lead to a third consecutive annual loss for
the sector in 2013, even before considering the new FTT. The new
charge (about HUF75 billion or EUR250 million) could wipe out
almost a quarter of the sector's pre-tax profits. But the impact
will vary significantly from bank to bank as a handful of lenders
generate most of the sector's profits.

"The banks are unlikely to be able to pass the one-off FTT on to
customers in full due to the retroactive nature of this charge,
as it is calculated as 208% of the financial transaction tax paid
by banks between January-April 2013. Consequently, we believe
that the tax will result in another one-off loss for the banks
and potentially further reduce foreign banks' willingness to
commit funding to their subsidiaries.

"The new one-off FTT is on top of a substantial special bank levy
of around HUF120 billion (about EUR400 million) paid annually
since 2010. The authorities planned to halve the special bank
levy in 2013 and then abandon it, but reversed this commitment to
make the levy permanent.

"Italy's Intesa has already indicated that it is ready to take
actions to further reduce its presence in the Hungarian market
because the operating and regulatory environment is challenging.
We believe there is somewhat greater uncertainty about the parent
bank's long-term commitment to its Hungarian subsidiary relative
to others in Central and Eastern Europe, resulting in a two-notch
difference between the ratings of Intesa and CIB Bank (BBB-
/Negative)."



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I R E L A N D
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ALKERMES PLC: S&P Raises Corporate Credit Rating to 'BB'
--------------------------------------------------------
Standard & Poor's Ratings Services said it raised its corporate
credit rating on Ireland-based Alkermes PLC to 'BB' from 'BB-'.
The outlook is stable.  At the same time, S&P raised the first-
lien issue-level rating to 'BB+' from 'BB'.  The recovery rating
of '2' is unchanged.

"The upgrade reflects Alkermes' performance in fiscal 2013, which
exceeded our expectation that leverage and funds from operations
to total debt would decline to 2.5x and increase to 35%,
respectively.  The upgrade also reflects our belief that
financial performance will continue to improve over the near
term.  In the fiscal year ended March 31, 2013, leverage was 1.9x
and FFO to total debt was 37%.  Free cash flow of $107 million at
March 31, 2013, was also higher than our base case.  The better-
than-expected organic performance also benefited from the sale of
intellectual property.  This resulted in adjusted EBITDA of
almost $208 million that, coupled with a reduction in debt in the
second quarter of fiscal 2013, brought leverage to less than 2x,"
S&P said.

"Our rating on Alkermes plc reflects a "weak" business risk
profile characterized by a relatively small portfolio of
products, product concentration, the absence of scale, and
susceptibility to the marketing priorities of their partners, and
manufacturing concentration," said credit analyst Michael
Berrian.  "The "intermediate" financial risk profile reflects
metrics commensurate with this qualifier such as debt leverage of
1.9x and FFO to total debt of 37% and our belief that leverage
will be maintained at less than 2x."

S&P's stable outlook on Alkermes reflects its expectation of low-
to mid-single-digit revenue growth over the near term.  S&P also
expects the company to continue generating sufficient free
operating cash flow, some of which will likely be used for
further debt reduction.

S&P could lower the rating if the company completes a debt-
financed acquisition.  This would decelerate the deleveraging and
call into question their conservative financial policy.  This
would occur if the company incurs an additional $250 million of
debt, absent any EBITDA contribution.  Based on expected EBITDA,
this would result in leverage of about 3x, implying significant
financial risk.  S&P could also lower the rating if revenue and
EBITDA grow at a slower rate than it expects, possibly from
decreased market acceptance of Vivitrol, or slower-than-expected
growth of Bydureon, Ampyra, or Invega Sustenna.

S&P could raise the rating if its perception of business risk
improves.  This would arise from greater scale and diversity,
which S&P do not expect over the near-term.


* IRELAND: Business Failures Down 20% in First Six Months
---------------------------------------------------------
According to the latest set of corporate insolvency statistics
published by www.insolvencyjournal.ie, business failures are down
20% for the first six months of the year compared with the same
period last year.

A total of 706 business failures were recorded year to date
compared with 887 for the first half of 2012,
InsolvencyJournal.ie discloses.  Business failures in June this
year totaled 95, a 33% drop compared to 145 insolvencies recorded
in June 2012, InsolvencyJournal.ie notes.  Total insolvencies for
Q2 (April, May June) 2013 stand at 359 compared to 454 for the
same period last year, a 21% drop, InsolvencyJournal.ie says.

Business failures in the construction sector have dropped by 22%,
with 217 recorded from January to June 2012 compared with 169
January to June 2013, InsolvencyJournal.ie discloses.  According
to InsolvencyJournal.ie, the services sector has also seen a
decrease in corporate insolvencies, falling 53% from 215 January
to June 2012 to 101 January to June 2013, InsolvencyJournal.ie
notes.

Both retail and hospitality sectors saw an increase in corporate
insolvencies for the first six months of 2013 compared with the
first six months of 2012, InsolvencyJournal.ie says.  Hospitality
increased 16% year on year from 77 to 89 while retail jumped 6%
from 109 to 115, InsolvencyJournal.ie states.

The motor industry saw a massive 130% increase in the level of
business failures from 10 recorded from January to June 2012 to
23 January to June 2013, according to InsolvencyJournal.ie.

Commenting on the outlook for the second half of 2013, Ken
Fennell, Partner with kavanaghfennell, the firm that compile the
data, as cited by InsolvencyJournal.ie, said, "We anticipate the
reduction in corporate insolvencies to continue into the second
half of 2013, however we expect this reduction to remain at the
current pace.  While the overall reduction in corporate
insolvencies is welcome, however, with the introduction of the
new personal insolvency legislation this good news could be
somewhat offset by a rise of personal bankruptcies.  The
continuing slide in the retail and hospitality sectors indicates
an ongoing lack of consumer confidence.  We envisage examinership
activity to increase with the new legislation and we will be
watching with interest the commencement of personal insolvency
applications."



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


ATLANTE FINANCE: Moody's Cuts Rating on EUR28.8MM B Notes to Ba1
----------------------------------------------------------------
Moody's Investors Service has downgraded a mezzanine note by five
notches in Atlante Finance Srl.

The affirmation of Class A and confirmation of Class C notes
reflect sufficient credit enhancement on the back of
deleveraging, which enables the notes to address sovereign risk
and exposure to counterparty risk. In contrast, Class B proved
more exposed to further portfolio deterioration or weaker levels
of recoveries, justifying its downgrade. Performance has been
weaker than anticipated since the July 2011 review, with
cumulative defaults now standing at 15% of original pool balance.

The rating action concludes the review for downgrade initiated by
Moody's, following the lowering of the Italian country ceiling to
A2 "Moody's downgrades to A2(sf) ratings of 257 Italian ABS and
RMBS securities", August 2, 2012.

Atlante Finance Srl is an Italian asset-backed securities (ABS)
transactions primarily backed by commercial mortgages to self-
employed, small and medium-sized enterprises (SMEs) and, public
sector debtors (a small portion) located in Italy, and originated
by Unipol Banca (Ba2/NP).

Ratings Rationale:

The downgrade on Class B primarily reflects the insufficiency of
credit enhancement to address sovereign risk, whereas the
affirmation and confirmation of Class A and C, respectively,
reflect the presence of adequate credit enhancement for Class A
and C to address sovereign risk and performance concerns. Class B
appeared sensitive to recovery assumptions and was therefore
downgraded to Ba1 (sf). The introduction of new adjustments to
Moody's modeling assumptions to account for the effect of
deterioration in sovereign creditworthiness has, to varying
degrees, affected the rating action. Moody's confirmed the
ratings of securities whose credit enhancement and structural
features provided enough protection against sovereign and
counterparty risk.

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

These rating actions also reflect correction of the interest
deferral triggers used in rating the transaction previously.

Additional Factors Better Reflect Increased Sovereign Risk

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

The Italian country ceiling, and therefore the maximum rating
that Moody's will assign to a domestic Italian issuer including
structured finance transactions backed by Italian receivables, is
A2. The portfolio credit enhancement represents the required
credit enhancement under the senior tranche for it to achieve the
country ceiling. By lowering the maximum achievable rating, the
revised methodology alters the loss distribution curve and
implies an increased probability of high loss scenarios.

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

Moody's Revises Key Collateral Assumptions

Moody's maintained the default rate and its recovery rate
assumptions for Atlante Finance, which it updated on December 18,
2012. According to the updated methodology, Moody's increased the
CoV, which is a measure of volatility.

For Atlante Finance Srl, the current default assumption is 26% of
the current portfolio and the assumption for the fixed recovery
rate is 60%. Moody's has increased the CoV to 79.19% from 52%,
which, combined with the revised key collateral assumptions,
resulted in a portfolio credit enhancement of 29.5%.

Moody's Has Considered Exposure to Counterparty Risk

The conclusion of Moody's rating review also takes into
consideration exposure to Unipol Banca, which acts as the
servicer and collection account bank, as well as exposure to BNP
Paribas (A2/P-1) where the transaction account is held and to The
Royal Bank of Scotland N.V. (A3/P-2).

The rating action incorporates exposure to commingling risk with
Unipol Banca. The collections of the portfolios are transferred
daily from Unipol Banca to the transactions' accounts at BNP
Paribas. This mitigates considerably the exposure to Unipol
Banca.

As part of its analysis, Moody's also assessed the exposure to
Royal Bank of Scotland N.V. as swap counterparty for the
transaction. The second trigger (loss of P-1) was breached on
June 21, 2012 when Royal Bank of Scotland N.V. was downgraded to
P-2. No posting of collateral has occurred up to now.

The revised/confirmed ratings of the notes are consistent with
exposure to transaction counterparties.

Other Developments May Negatively Affect the Notes

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

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

Moody's describes additional factors that may affect the ratings
in its Rating Methodology, "The Temporary Use of Cash in
Structured Finance Transactions: Eligible Investment and Bank
Guidelines", March 18, 2013; and the Request for Comment,
"Approach to Assessing Linkage to Swap Counterparties in
Structured Finance Cashflow Transactions: Request for Comment",
July 2, 2012.

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

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

In the context of the rating review, Moody's has remodeled the
transactions and adjusted a number of inputs to reflect the new
approach. In addition, Moody's has corrected the setting of the
interest deferral triggers. In the model used for the July 2011
rating action, interest deferral triggers were comparing the
amount of the PDL to current pool amount rather than to original
pool amount. This error overestimated the likelihood of a breach
of trigger for Classes B and C. The error has now been corrected,
and these rating actions reflect that change.

Methodologies

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

The revised approach to incorporating country risk changes into
structured finance ratings forms part of the relevant asset class
methodologies along with the publication of its Special Comment
"Structured Finance Transactions: Assessing the Impact of
Sovereign Risk" published in March 2013.

List Of Affected Ratings

Issuer: Atlante Finance Srl

EUR1202.5M A Notes, Affirmed A2 (sf); previously on Aug 2, 2012
Downgraded to A2 (sf)

EUR28.8M B Notes, Downgraded to Ba1 (sf); previously on Aug 2,
2012 Downgraded to A2 (sf)

EUR136.8M C Notes, Confirmed at B3 (sf); previously on Aug 2,
2012 B3 (sf) Placed Under Review for Possible Downgrade


DONG ENERGY: S&P Assigns 'BB+' Rating to EUR500MM Securities
------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB+' long-term
issue rating to the EUR500 million long-dated, optionally
deferrable, and subordinated hybrid capital securities issued by
Danish integrated power and gas company utility DONG Energy A/S
(BBB+/Negative/A-2).  The maturity date is in July 3013.

The issuance of the new securities does not affect S&P's view of
the "intermediate" equity content of DONG Energy's existing
EUR1.1 billion hybrid securities due 3005, of which about
EUR600 million is outstanding, and the EUR700 million hybrid
securities due 3013.

S&P considers the securities to have "intermediate" equity
content until their first call date in 2018 because they meet its
hybrid capital criteria in terms of their subordination,
permanence, and optional deferability during this period.

S&P arrives at its 'BB+' issue rating on the securities by
notching down from its 'bbb' stand-alone credit profile (SACP) on
DONG Energy.  The two-notch differential between the issue rating
and the SACP reflects S&P's notching methodology, which calls
for:

   -- A one-notch deduction for subordination because the rating
      on DONG Energy is investment-grade (that is, 'BBB-' or
      above); and

   -- An additional one-notch deduction for payment flexibility
      to reflect that the deferral of interest is optional.

The notching of the securities reflects S&P's view that there is
a relatively low likelihood that the issuer will defer interest.
Should S&P's view change, it may increase the number of downward
notches that it applies to the issue rating.

In addition, to reflect S&P's view of the intermediate equity
content of the securities, we allocate 50% of the related
payments on these securities as a fixed charge and 50% as
equivalent to a common dividend, in line with S&P's hybrid
capital criteria.  The 50% treatment of principal and accrued
interest also applies to S&P's adjustment of debt.

KEY FACTORS IN S&P'S ASSESSMENT OF THE INSTRUMENT'S PERMANENCE

Although the securities mature in 3013, they can be called at any
time for tax, rating, or accounting events.  Furthermore, the
issuer can redeem them for cash as of their first call date, and
every coupon payment thereafter.  If any of these events occur,
S&P understands the issuer intends, but is not obliged, to
replace the securities.  In S&P's view, this statement of intent
mitigates the issuer's ability to repurchase the notes on the
open market. Furthermore, S&P sees the repurchase as unlikely
owing to DONG Energy's commitment to deleveraging.

S&P understands that the interest to be paid on the securities
will increase by 25 basis points 10 years from issuance, and by a
further 75 basis points 20 years after the first call date.  S&P
considers the cumulative 100 basis points as a material step-up,
which is currently unmitigated by any commitment to replace the
instrument at that time.  This step-up provides an incentive for
the issuer to redeem the securities on their first call date.

"Consequently, in accordance with our criteria, we will no longer
recognize the securities as having intermediate equity content
after the first call date, because the remaining period until the
economic maturity would, by then, be less than 20 years.
However, we classify the securities' equity content as
intermediate until its first call date, as long as we believe
that the loss of the beneficial intermediate equity content
treatment will not cause the issuer to call the securities at
that point.  The issuer's willingness to maintain or replace the
securities in the event of a reclassification of equity content
to minimal is underpinned by its statement of intent," S&P said.

KEY FACTORS IN S&P'S ASSESSMENT OF THE INSTRUMENT'S DEFERABILITY

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

The issuer retains the option to defer coupons throughout the
life of the securities.  The deferred interest on the securities
is cash cumulative, and will ultimately be settled in cash.

KEY FACTORS IN S&P'S ASSESSMENT OF THE INSTRUMENT'S SUBORDINATION

The securities (and coupons) are intended to constitute direct,
unsecured, and subordinated obligations of the issuer, ranking
senior to its common shares.  They rank pari passu with the
existing hybrid securities due 3005, and 3013.


MARCHE MUTUI: Moody's Cuts Rating on EUR11.4MM C Notes to Ba3
-------------------------------------------------------------
Moody's Investors Service has downgraded the ratings of one
senior and four junior and mezzanine notes in two Italian
residential mortgage-backed securities (RMBS) transactions:
Marche Mutui 2 S.r.l., and Marche Mutui Societa per la
Cartolarizzazione S.r.l.  At the same time, Moody's has confirmed
the rating of the senior note in Marche Mutui 4 S.r.l. and Marche
Mutui 2 S.r.l. Insufficiency of credit enhancement to address
sovereign risk, counterparty exposure and revision of key
collateral assumptions have prompted the downgrade.

This rating action concludes the review of four notes placed on
review on August 2, 2012, following Moody's downgrade of Italian
government bond ratings to Baa2 from A2 on July 13, 2012. This
rating action also concludes the review of three notes placed on
review on March 13, 2013, due to the insufficiency of credit
enhancement to address sovereign risk following the introduction
of additional factors in Moody's analysis to better measure the
impact of sovereign risk on structured finance transactions.

Ratings Rationale:

This rating action primarily reflects the insufficiency of credit
enhancement to address sovereign risk, counterparty exposure and
revision of key collateral assumptions. Moody's confirmed the
ratings of securities whose credit enhancement and structural
features provided enough protection against sovereign and
counterparty risk.

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

Additional Factors Better Reflect Increased Sovereign Risk

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

The Italian country ceiling, and therefore the maximum rating
that Moody's will assign to a domestic Italian issuer including
structured finance transactions backed by Italian receivables, is
A2. Moody's Individual Loan Analysis Credit Enhancement (MILAN
CE) represents the required credit enhancement under the senior
tranche for it to achieve the country ceiling. By lowering the
maximum achievable rating for a given MILAN, the revised
methodology alters the loss distribution curve and implies an
increased probability of high loss scenarios.

Revision of Key Collateral Assumptions

Moody's has revised its lifetime loss expectation (EL) assumption
in Marche Mutui 2 S.r.l. to 2.32% from 2.20% and maintained its
assumption for Marche Mutui 4 S.r.l. at 9% and Marche Mutui
Societa per la Cartolarizzazione S.r.l. at 2%. Moody's maintains
the MILAN CE assumption at 8.5% for Marche Mutui 2 S.r.l., 22.2%
for Marche Mutui 4 S.r.l. and 9% for Marche Mutui Societa per la
Cartolarizzazione S.r.l. .

Exposure to Counterparty Risk

This rating action takes into consideration the set-off and
commingling risk arising from exposure to Banca delle Marche
S.p.A. (B3/NP), acting as servicer and originator in the three
transactions. The revised ratings in Marche Mutui 2 S.r.l. and
class C in Marche Mutui Societa per la Cartolarizzazione S.r.l.
were negatively affected by this exposure. Moody's confirms the
Class A notes in Marche Mutui 4 S.r.l. noting that the Issuer is
currently in the process of transferring the Issuer Collection
Account, Expenses Account, Payment Account, Debt Service Reserve
Account and Securities Account currently held with Deutsche Bank
S.p.A. to Deutsche Bank AG, London Branch (A2). The downgrade of
Class A2 and B notes in Marche Mutui Societa per la
Cartolarizzazione S.r.l. reflects the lack of back-up serving
arrangements in the transaction. In the case of Marche Mutui 2
S.r.l. and Marche Mutui 4 Italfondiario is the appointed back-up
servicer.

Other Developments May Negatively Affect The Notes

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

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

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

In reviewing these transactions, Moody's used ABSROM/ ABSCORE 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.

List of Affected Ratings

Issuer: Marche Mutui 2 S.r.l.

EUR511.45M A2 Notes, Confirmed at A2 (sf); previously on Mar 13,
2013 A2 (sf) Placed Under Review for Possible Downgrade

EUR12M B Notes, Downgraded to Baa2 (sf); previously on Mar 13,
2013 A2 (sf) Placed Under Review for Possible Downgrade

EUR15.8M C Notes, Downgraded to Ba1 (sf); previously on Aug 2,
2012 Baa1 (sf) Placed Under Review for Possible Downgrade

Issuer: Marche Mutui 4 S.r.l.

EUR1505.55M A Notes, Confirmed at A2 (sf); previously on Mar 13,
2013 A2 (sf) Placed Under Review for Possible Downgrade

Issuer: Marche Mutui Societa per la Cartolarizzazione S.r.l.

EUR281.8M A2 Notes, Downgraded to A3 (sf); previously on Aug 2,
2012 Downgraded to A2 (sf) and Remained On Review for Possible
Downgrade

EUR16.2M B Notes, Downgraded to A3 (sf); previously on Aug 2,
2012 Downgraded to A2 (sf) and Remained On Review for Possible
Downgrade

EUR11.4M C Notes, Downgraded to Ba3 (sf); previously on Aug 2,
2012 Baa2 (sf) Placed Under Review for Possible Downgrade


PANSAC INT'L: Insolvency Administration Continues as Sale Fails
---------------------------------------------------------------
David Vink at EuropeanPlasticsNews.com reports that Pansac
International is continuing to operate under insolvency
administration after the failure of a sale process earlier this
year.

EuropeanPlasticsNews.com notes that the company, which has been
under insolvency administration since December 2011, was created
from the restructuring of Nuova Pansac's PE films business. Under
the terms of the rearrangement reached in November 2010, most
debts remained with Nuova Pansac, with business continuing under
the Pansac International name, the report relates.

Four of the original five plants are still running and there are
orders for "several months", according to a statement by Massimo
Meneghetti, secretary of the Femca Cisl trade union in Venice,
which was published on 5 June by the local newspaper La Nuova
Venezia, EuropeanPlasticsNews.com reports. The company has
operating plants in Mira, Ravenna, Zingonia and Marghera. The
fifth plant in Portogruaro is no longer operating.

Marco Cappelletto, the insolvency administrator for Pansac
International, had been seeking a three-month extension of the
special layoff conditions upon their expiry on 22 June, the
newspaper, as cited by EuropeanPlasticsNews.com, reported.

EuropeanPlasticsNews.com says information on Pansac
International's website and in the Registro Imprese public
records shows that Mr. Cappelletto faces a difficult situation in
finding a solution for Pansac International.

In January this year, EuropeanPlasticsNews.com relates, he
invited offers for apartments, houses and land owned by Pansac
International. In February, Mr. Cappelletto invited tenders for
the operating units of the company.

EuropeanPlasticsNews.com relates that the local La Nuova Venezia
newspaper reported Cappeletto as saying tenders offered by the 10
April deadline had been "completely out of line with the value of
the assets offered". He received two bids for the Mira operation,
one for Zingonia, one for Ravenna and one for land on the former
fifth production site in Portogruaro.

Following a meeting with the ministry for economic development in
Rome, it was decided to issue a further tender involving
separation of the business from property and leasing of
facilities, EuropeanPlasticsNews.com adds.

EuropeanPlasticsNews.com says no announcements have since been
made on the sale process.

Pansac International is a polyethylene film producer based in
Italy.



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


DALRADIAN EUROPEAN: Moody's Affirms 'B1' Rating on Class E Notes
----------------------------------------------------------------
Moody's Investors Service has upgraded the ratings of the
following notes issued by Dalradian European CLO III B.V.:

EUR36M Class B Deferrable Secured Floating Rate Notes due 2023,
Upgraded to Aa2 (sf); previously on Oct 13, 2011 Upgraded to A1
(sf)

EUR27M Class C Deferrable Secured Floating Rate Notes due 2023,
Upgraded to Baa1 (sf); previously on Oct 13, 2011 Upgraded to
Baa2 (sf)

Moody's also affirmed the ratings of the following notes issued
by Dalradian European CLO III B.V.:

EUR112.5M Senior Secured Floating Rate Variable Funding Notes due
2023 (currently EUR62.6M outstanding), Affirmed Aaa (sf);
previously on Mar 30, 2007 Assigned Aaa (sf)

EUR114.75M Class A1 Senior Secured Floating Rate Notes due 2023
(currently EUR 73.5M outstanding), Affirmed Aaa (sf); previously
on Mar 30, 2007 Assigned Aaa (sf)

EUR67.5M Class A2 Senior Secured Floating Rate Notes due 2023,
Affirmed Aaa (sf); previously on Oct 13, 2011 Upgraded to Aaa
(sf)

EUR28.125M Class D Deferrable Secured Floating Rate Notes due
2023, Affirmed Ba2 (sf); previously on Oct 13, 2011 Upgraded to
Ba2 (sf)

EUR16.875M Class E Deferrable Secured Floating Rate Notes due
2023 (currently EUR 15M outstanding), Affirmed B1 (sf);
previously on Oct 13, 2011 Upgraded to B1 (sf)

EUR8M Class W Combination Notes due 2023 (currently EUR 6.5M
rated balance outstanding), Affirmed Ba1 (sf); previously on Oct
13, 2011 Upgraded to Ba1 (sf)

EUR6.5M Class X Combination Notes due 2023 (currently EUR 5.3M
rated balance outstanding), Affirmed Ba3 (sf); previously on Oct
13, 2011 Downgraded to Ba3 (sf)

Dalradian European CLO III B.V., issued in March 2007, is a
multi- currency Collateralized Loan Obligation ("CLO") backed by
a portfolio of mostly high yield European loans. The portfolio is
managed by N M Rothschild & Sons Limited. This transaction passed
its reinvestment period in April 2013. It is predominantly
composed of senior secured loans.

Ratings Rationale:

According to Moody's, the rating actions taken on the notes
result primarily from an improvement in the overcollateralization
ratios of the rated notes pursuant to amortization of the
portfolio. The variable funding notes and the Class A-1 notes
have amortized by approximately EUR34 million in the last twelve
months and by approximately EUR47 million (or 26%) since the last
rating action in October 2011.

As a result of this deleveraging, the overcollateralization
ratios (or "OC ratios") have increased since the rating action in
October 2011. As of the latest trustee report dated April 30,
2013, the Class A, Class B, Class C, Class D and Class E OC
ratios are reported at 159.13%, 135.22%, 121.53%, 109.93% and
104.60%, respectively, versus July 2011 levels of 146.18%,
127.82%, 116.82%, 107.11% and 102.55%, respectively. All OC tests
are currently in compliance.

In consideration of the reinvestment restrictions applicable
during the amortization period, and therefore the limited ability
to effect significant changes to the current collateral pool,
Moody's analyzed the deal assuming a higher likelihood that the
collateral pool characteristics will continue to maintain a
positive buffer relative to certain covenant requirements. In
particular, the deal is assumed to benefit from a shorter
amortization profile and higher spread levels compared to the
levels assumed at the last rating action in October 2011.

In its base case, Moody's analyzed the underlying collateral pool
to have a performing par and principal proceeds balance of
EUR311 million, defaulted par of EUR20.8 million, a weighted
average rating factor of 2918 (corresponding to a default
probability of 19.23% over 3.85 years), a weighted average
recovery rate upon default of 44.89% for a Aaa liability target
rating, a diversity score of 33 and a weighted average spread of
3.81%. The default probability is derived from the credit quality
of the collateral pool and Moody's expectation of the remaining
life of the collateral pool. The average recovery rate to be
realized on future defaults is based primarily on the seniority
of the assets in the collateral pool. For a Aaa liability target
rating, Moody's assumed that 85.4% of the portfolio exposed to
senior secured corporate assets would recover 50% upon default,
while the remainder non-first-lien loan corporate assets would
recover 15%. In each case, historical and market performance
trends and collateral manager latitude for trading the collateral
are also relevant factors. These default and recovery properties
of the collateral pool are incorporated in cash flow model
analysis where they are subject to stresses as a function of the
target rating of each CLO liability being reviewed.

In addition to the base case analysis, Moody's also performed
sensitivity analyses on key parameters for the rated notes:
Deterioration of credit quality to address the refinancing and
sovereign risks -- Approximately 16% of the portfolio are
European corporate rated B3 and below and maturing between 2014
and 2016, which may create challenges for issuers to refinance.
Approximately 1.4% of the portfolio are exposed to obligors
located in Ireland and Spain. Moody's considered a model run
where the base case WARF was increased to 3256 by forcing ratings
on 25% of such exposure to Ca. This run generated model outputs
that were within two notches from the base case results.

The ratings of the Combination Notes address the repayment of the
Rated Balance on or before the legal final maturity. For Class W,
the 'Rated Balance' is equal at any time to the principal amount
of the Combination Note on the Issue Date increased by the Rated
Coupon of 0.25% per annum respectively, accrued on the Rated
Balance on the preceding payment date minus the aggregate of all
payments made from the Issue Date to such date, either through
interest or principal payments. For Class X, the 'Rated Balance'
is equal at any time to the principal amount of the Combination
Note on the Issue Date minus the aggregate of all payments made
from the Issue Date to such date, either through interest or
principal payments. The Rated Balance may not necessarily
correspond to the outstanding notional amount reported by the
trustee.

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 1) uncertainties of credit
conditions in the general economy and 2) the large concentration
of speculative-grade debt maturing between 2014 and 2016 which
may create challenges for issuers to refinance. CLO notes'
performance may also be impacted either positively or negatively
by 1) the manager's investment strategy and behavior and 2)
divergence in legal interpretation of CDO documentation by
different transactional parties due to embedded ambiguities.

Sources of additional performance uncertainties:

1) Portfolio Amortization: The main source of uncertainty in this
transaction is whether delevering from unscheduled principal
proceeds will continue and at what pace. Delevering may
accelerate due to high prepayment levels in the loan market
and/or collateral sales by the liquidation agent, which may have
significant impact on the notes' ratings. Typically, fast
amortization would usually benefit the ratings of the senior
notes.

2) Recovery of defaulted assets: Market value fluctuations in
defaulted assets reported by the trustee and those assumed to be
defaulted by Moody's may create volatility in the deal's
overcollateralization levels. Further, the timing of recoveries
and the manager's decision to work out versus sell defaulted
assets create additional uncertainties. Moody's analyzed
defaulted recoveries assuming the lower of the market price and
the recovery rate in order to account for potential volatility in
market prices.

3) The deal has significant exposure to non-EUR denominated
assets. Volatilities in foreign exchange rate will have a direct
impact on interest and principal proceeds available to the
transaction, which may affect the expected loss of rated
tranches.

The principal methodology used in this rating was "Moody's Global
Approach to Rating Collateralized Loan Obligations" published in
May 2013.

Moody's modeled the transaction using the Binomial Expansion
Technique, as described in Section 2.3.2.1 of the "Moody's Global
Approach to Rating Collateralized Loan Obligations" rating
methodology published in May 2013.

Under this methodology, Moody's used its Binomial Expansion
Technique, whereby the pool is represented by independent
identical assets, the number of which is being determined by the
diversity score of the portfolio. The default and recovery
properties of the collateral pool are incorporated in a cash flow
model where the default probabilities are subject to stresses as
a function of the target rating of each CLO liability being
reviewed. The default probability range is derived from the
credit quality of the collateral pool, and Moody's expectation of
the remaining life of the collateral pool. The average recovery
rate to be realized on future defaults is based primarily on the
seniority of the assets in the collateral pool.

The cash flow model used for this transaction is Moody's EMEA
Cash-Flow model.

This model was used to represent 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 binomial 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. Therefore,
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.

On March 12, 2013, Moody's released a report, which describes how
sovereign credit deterioration impacts structured finance
transactions and the rationale for introducing two new parameters
into its general analysis of such transactions. In the coming
months, Moody's will update its methodologies relating to multi-
country portfolios including the one for Collateralized Loan
Obligations (CLOs) as well as for other types of collateralized
debt obligations (CDO), asset-backed commercial paper (ABCP) and
commercial mortgage-backed securities (CMBS). Once those
methodologies are updated and implemented, the rating of the
notes affected by these rating actions may be negatively
affected.



===============
P O R T U G A L
===============


MILLENNIUMBCP AGEAS: S&P Affirms 'BB' Rating; Outlook Stable
------------------------------------------------------------
Standard & Poor's Ratings Services said that it affirmed its 'BB'
insurer financial strength and counterparty credit ratings on the
three core operating entities of Portuguese insurer Millenniumbcp
Ageas Grupo Segurador S.G.P.S. (together, MAGS).  The outlook on
all entities is stable.

"The ratings reflect our view of MAGS' fair business risk profile
and upper adequate financial risk profile, from which we derive
the anchor of 'bbb', the starting point of the ratings.  MAGS'
business profile is built on an adequate competitive position and
moderate industry and country risk.  Its financial profile
reflects very strong capital and earnings, high risk owing to
investment risk exposures, and less-than-adequate financial
flexibility.  We consider ERM and management and governance
neutral rating factors, and liquidity to be exceptional," S&P
said.

"Under our criteria, MAGS' high exposure to Portugal constrains
its stand-alone credit profile (SACP) at 'bb', in line with the
long-term sovereign credit rating on Portugal.  Virtually all of
MAGS' premiums and liabilities stem from Portugal, where it also
holds about 44% of its assets.  Because of this high
concentration, we generally cap our ratings on insurers at the
local currency sovereign credit ratings on the country of
domicile.  We classify MAGS as strategically important to AGEAS,
but this does not translate into a rating uplift, owing to this
sovereign rating cap.  MAGS contributed a substantial proportion
of the Ageas group's premium income as of Dec. 31, 2012," S&P
added.

"Overall, we assess MAGS' industry and country risk as moderate.
This partly reflects our view of moderate country risk for both
its life and property/casualty (P/C) operations.  In addition, we
believe that MAGS' operations are exposed to high industry risk,
reflecting our assessment of the historical and prospective
growth and profitability of Portugal's insurance market, which we
view as negative for life insurance and neutral for P/C business.
The current crisis in Portugal's banking industry is having a
direct impact on the life insurance market because bancassurance
is by far the main distribution channel.  Furthermore, economic
conditions have depressed volumes of single-premium life business
and pushed up the number of policy lapses.  They also impede
growth potential for P/C business, both in non-compulsory private
lines and commercial lines," S&P noted.

"MAGS has an adequate competitive position in our view,
constrained by its limited geographic diversification.  Although
we think MAGS' business fundamentals are strong, Portugal's weak
economic environment and negative growth prospects are weighing
heavily on growth and earnings.  Our economists project that GDP
will contract by 1.4% this year, and the unemployment rate was a
high 15.8% as of September 2012.  In addition to the banking
industry crisis that affected MAGS' bancassurance partner, Banco
Comercial Portugues S.A. (BCP), the withdrawal of fiscal
advantages for traditional life business in Portugal further
restricts MAGS' competitiveness.  This is because life policies
still accounted for 77% of premiums as of September 2012. MAGS'
sizable controlled distribution network and well-recognized
brands, as well as its business diversification toward non-life
lines of business (23% of non-life premium as of September 2012),
represent offsetting positive factors, however," S&P said.

"In our view, MAGS has very strong capital and earnings.  We see
capital adequacy as a relative strength as the company benefits
from lower capital needs, having reduced the volume of capital-
consuming savings business.  We view quality of capital as
strong, since about 94% of total adjusted capital comprises core
shareholder funds.  In addition, MAGS' reserving policies are
consistent with those of the Ageas group, implying annual testing
of claims reserves at a 90% confidence level.  However, we are
uncertain about the shareholders' long-term dividend plans, and
MAGS' capital base is relatively small.  In our base-case
scenario, we anticipate MAGS' capital and earnings remaining
extremely strong.  We forecast earnings exceeding EUR50 million
in each of the next two years, sufficient to cover capital
needs," S&P added.

"MAGS' risk position is high risk, in our opinion, mainly
reflecting our assessment of significant investment and risk
exposures.  We see a high likelihood that MAGS' capital base
could become volatile, as a large portion of its assets are
exposed to several Portuguese banks, the main one being BCP.  In
addition, 26% of MAGS' bond investments were issued by the
Portuguese government as of Sept. 30, 2012.  Despite these
higher-risk exposures, average credit quality is satisfactory,
with 42% of the bond portfolio rated 'A' or higher, reflecting
the increasing diversification of investments outside Portugal.
We also view equity risk as low and asset-liability management
practices as good," S&P added.

S&P regards MAGS' financial flexibility as less than adequate,
based on its view that any capital support from Ageas could
change MAGS' future shareholding structure, resulting in lengthy
negotiations that delay the support.  The likelihood of such a
scenario has, in S&P's view, increased, given the deterioration
of BCP's credit strength since 2011.  Nevertheless, MAGS is
virtually debt free, which somewhat mitigates the risk.

MAGS' enterprise risk management (ERM) and management and
governance practices are neutral rating factors.  MAGS' risk
management culture and controls for the most significant risks
support S&P's view of adequate ERM.  S&P considers that MAGS'
risk management culture benefits from its ownership by Ageas and
is in line with that of the parent group.  S&P views the
importance of ERM to the ratings as low, owing to MAGS' focus on
one country and the preponderance of lower-risk insurance lines
(unit-linked, health, and protection) in its portfolio.

S&P views MAGS' management and governance as satisfactory.  In
S&P's opinion, MAGS' management reflects the group's value-
oriented approach, and its strategic initiatives highlight its
willingness to adapt to the changing environment.  However, S&P
do not believe such measures will completely insulate MAGS from
adverse conditions.

S&P regards MAGS' liquidity as exceptional, with positive
underwriting cash flows and a strong liquidity ratio.  This
highlights the entities' ability to convert assets to cash to
meet their needs.  S&P also believes MAGS closely monitors
liquidity risk.

The stable outlook on MAGS mirrors that on Portugal, reflecting
MAGS' meaningful exposure to Portuguese assets and insurance
business, and indicating that any rating action on the sovereign
could lead to a similar action on MAGS.

S&P might raise the ratings on MAGS if S&P was to raise its
sovereign ratings on Portugal, which would indicate lower
sovereign risk.

S&P might lower the ratings on MAGS if it was to lower its
ratings on Portugal or the economic environment further
deteriorated and materially hampered MAGS' business or financial
profiles.  S&P could also lower the ratings if a key financial
institution counterparty were to pose heightened credit risks
that materially weakened MAGS' financial risk profile.



=============
R O M A N I A
=============


HELLO SHOPPING: Bel Rom Files Insolvency Claim
----------------------------------------------
Ecaterina Craciun at Ziarul Financiar reports that Bel Rom Cinci
SRL, the firm through which Belgian group Bel Rom developed the
retail park Hello Shopping Park in Bacau, northeastern Romania,
filed an insolvency claim Tuesday targeting the shopping center.



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


MTS BANK: Moody's Affirms 'B1' Deposit Ratings; Outlook Negative
-----------------------------------------------------------------
Moody's Investors Service has affirmed the B1 long-term local-
and foreign-currency debt and deposit ratings of MTS Bank, as
well as the standalone bank financial strength rating (BFSR) of
E+, equivalent to a baseline credit assessment (BCA) of b2. The
bank's Not Prime short-term local- and foreign-currency deposit
were also affirmed. The outlook on the bank's BFSR is stable,
while the long-term ratings carry a negative outlook.

Ratings Rationale:

Moody's affirmation of MTS Bank's ratings with negative outlook
reflects the bank's strong capital base, which is constrained
both by weak asset quality that suppresses already modest
profitability, by high risk appetite (as measured by high credit
risk concentrations and rapid growth in unsecured retail lending)
and by low transparency of its foreign operations. Moody's notes
positively that the rating action takes into account MTS Bank's
franchise development through the re-branding and partnership
with a sister company of the bank, Mobile TeleSystems (Ba2
positive), a leading telecommunications operator in Russia, which
is likely to improve the bank's financial metrics albeit over the
long-term rating horizon (i.e., the next 2 to 5 years).

Strong Capital Base

Moody's says that MTS Bank's adequate loss absorption capacity is
one of the key drivers of the rating affirmation. Supported by
Tier 1 and Tier 2 capital injections, MTS Bank reported a Tier 1
capital ratio and total capital adequacy ratio at 11% and 16.7%,
respectively, as at December 31, 2012. In addition, in early 2013
Mobile TeleSystems acquired a 25.095% stake in the bank by
injecting capital amounting to RUB5.1 billion, which should
support the bank's capital going forward.

Weak Asset Quality Supresses Modest Profitability

Risks associated with MTS Bank's loan portfolio -- with
consolidated top-six loans and standalone top-twenty loans
accounting for over 200% and 150% of Tier 1 capital,
respectively, as at year-end 2012 -- crystallized in 2012.
Against this background, the loan portfolio deteriorated (mainly
driven by corporate loans originated in 2008-09 together with
seasoning of rapidly growing retail portfolio), leading to the
90+ days overdue portfolio increasing to 8.8% of the loan book as
at December 31, 2012 (2011: 5.8%). As a result, MTS Bank's
provisioning charges absorbed around 30% of regular consolidated
operating revenue in 2012.

At the same time, Moody's notes that MTS Bank's recurring income
generation capacity remains weak. The bank posted a net income
(under IFRS) of RUB324 million in 2012 which translated into a
negligible return on average assets of 0.15%. Net income was
mainly driven by one-off and unusual items, absent which the bank
would have remained loss making for three out of the past four
years, while an improved net interest margin (2012: 3.8% vs.
2011: 2.6%) and cost-to-income ratio (2012: 70% vs. 2011: 92%)
were not sufficient to compensate for increased provisioning
charges.

High Risk Appetite

MTS Bank's displays high risk appetite as measured by (1) high
borrower concentration, with the six largest groups of borrowers
exceeding 200% of Tier 1, although top loans are mainly
collateralized by pledges of cash; (2) high exposure to the
finance and real estate industries (146% and 41% of Tier 1
capital, respectively, at year-end 2012), which the rating agency
regards as relatively risky and vulnerable to market downturns;
and (3) rapid growth of the retail loan book, which represents a
potential risk especially amid Russia's current volatile
operating environment and intense competition in this segment.

Foreign Operations Are Not Fully Transparent

Furthermore, approximately one third of MTS Bank's total
consolidated loan book represents loans issued by its 66% owned
subsidiary East-West United Bank S.A. (based in Luxembourg).
These loans are predominantly classified as loans to the
financial services industry category in the bank's IFRS
statements, and are mainly collateralized by pledges of cash (as
reported in MTS Bank's 2012 IFRS statements). However, since the
purpose of these lending operations have not been disclosed to
Moody's in all the necessary details, the rating agency is unable
to assess the ultimate quality of this portion of the group's
loan book.

What Could Change The Rating - Up

There is currently little scope for upwards pressure, given that
MTS Bank's ratings carry a negative outlook. Over the next 1 to 3
years, the ratings could be upgraded if the bank (1) reduces
corporate loan concentrations; (2) succeeds in building retail
franchise while materially improving and sustaining good asset
quality; (3) enhances internal capital generation capacity from
recurring sources and (4) improves transparency of its foreign
operations. These developments would serve to both improve MTS
Bank's credit risk profile and enhance its loss absorption
capacity.

What Could Change The Rating - Down

Downward pressure could be exerted on MTS Bank's ratings as a
result of further deterioration in asset quality, as well as any
weakening of its capitalization or profitability, or failure to
execute expansion into the retail segment and subsequent
weakening of the bank's franchise.

Domiciled in Moscow, Russia, MTS Bank reported total consolidated
assets of RUB210 billion (US$6.9 billion) and total equity of
RUB17 billion under audited IFRS at year-end 2012. In the same
reporting period, the bank posted net IFRS profits of RUB324
million (US$10 million).

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



=====================================
S E R B I A   &   M O N T E N E G R O
=====================================


KOMBINAT ALUMINIJUMA: Gov't In Talks with Lenders to Secure Funds
-----------------------------------------------------------------
Petar Komnenic at Reuters reports that Montenegro's finance
ministry said on Tuesday the government is in talks with
unspecified lenders to secure funds to pay two banks owed EUR102
million (US$132.96 million) by Kombinat Aluminijuma Podgorica,
the country's loss-making aluminium smelter.

According to Reuters, Montenegro had guaranteed the debts of the
comany and the banks -- Hungary's OTP and Russia's VTB bank --
have asked the government to pay up.

The government had expected the banks to do this and last week
revised its 2013 budget to secure extra borrowing, Reuters
discloses.

The smelter, which employs 1,200 people and accounted for 4.7
percent of the country's economic output last year, soaks up 3
million euros of state subsidies every month and lost EUR16.2
million in the first quarter of the year, Reuters recounts.

The state has a 29% stake in the plant, as does Russian
billionaire Oleg Deripaska's Central European Aluminium Co. Small
shareholders own the rest, Reuters states.

"Refusal of the state to honor its obligations would have
unforeseen consequences," Reuters quotes the finance ministry as
saying.

The draft budget revision, which awaits parliamentary approval,
looks for payment of EUR61 million (US$79 million) for the
smelter's unpaid electricity bills to power company
Elektropirvreda Crne Gore and a 46.4%  increase in borrowing from
a previously established EUR220 million, Reuters notes.

In June, the government had asked a local commercial court to
consider whether the smelter fulfilled the conditions needed for
bankruptcy proceedings to start over its total debt of some
EUR350 million, including electricity bills, Reuters relates.

Kombinat Aluminijuma Podgorica is an aluminium plant.  The
company is Montenegro's single biggest industrial employer.  It
is jointly owned by the state and the Central European Aluminium
Company of Russian billionaire Oleg Deripaska.



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


ACUINOVA SL: Files for Voluntary Bankruptcy
-------------------------------------------
Eva Tallaksen at Undercurrent News reports that Acuinova S.L.,
one of Pescanova's subsidiaries in Spain, on Wednesday filed for
voluntary bankruptcy with the Spanish stock exchange regulator,
La Comision Nacional del Mercado de Valores (CNMV).

It is the first bankruptcy to hit outside of Pescanova's business
in Latin America, where there have been two bankruptcy filings in
recent months, Undercurrent News says.

Pescanova told Undercurrent News that the bankruptcy affects only
Acuinova SL, which operates a small shrimp processing plant in
Ayamonte, Huelva, with 25 employees.  It does not affect its
Portuguese turbot operations, known as Acuinova Act. Piscicolas
SA, Undercurrent News states.

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

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


BANKIA: Moody's Lowers Debt & Deposit Ratings to 'B1'
-----------------------------------------------------
Moody's Investors Service has downgraded the ratings of the three
Spanish banking groups owned by the Fund for the Orderly
Resolution of the Banking System (FROB). The debt and deposit
ratings of Bankia were downgraded by two notches to B1 with a
negative outlook. The debt and deposit ratings of the other two
banks, Catalunya Banc S.A. (Catalunya Banc) and NCG Banco S.A.
(NCG Banco) were both downgraded by two notches to B3 from B1
with a negative outlook.

This rating action concludes the review for downgrade initiated
on October 24, 2012.

The actions on the banks' debt and deposit ratings were prompted
by Moody's downgrades of their standalone credit assessments
(Baseline Credit Assessments, BCA). Moody's has downgraded by
three notches the standalone credit assessment of Catalunya Banc
and NCG Banco and by one notch the standalone credit assessment
of Bankia. The downgrade of the standalone BCAs reflects the
remaining vulnerabilities of these banks' credit profiles even
after receiving extensive public-sector support packages. This is
largely due to (i) their continuing very weak asset quality; (ii)
weak profitability levels; and (iii) very challenging
restructuring requirements.

At the same time, Moody's has downgraded the long term issuer
rating of Banco Financiero y de Ahorros (BFA; the parent of
Bankia) to Caa1 from B2 with a negative outlook.

Rating Actions Overview

Bankia: The Bank Financial Strength Rating (BFSR) was confirmed
at E+, the standalone credit assessment was lowered to b3 from b2
and the debt and deposit ratings were downgraded to B1/Not Prime
from Ba2/Not Prime. All ratings except the junior instruments
(which continue to be rated C) have a negative outlook.

Banco Financiero de Ahorros (BFA): the bank's long-term issuer
rating was downgraded to Caa1 from B2. The rating now carries a
negative outlook.

Catalunya Banc: The standalone credit assessment was downgraded
to E/caa2 from E+/b2 and the debt and deposit ratings were
downgraded to B3/Not Prime from B1/Not Prime. The long-term debt
and deposit ratings have a negative outlook, while the BFSR has a
stable outlook. The junior instruments continue to be rated at C
with no outlook.

NCG Banco: The standalone credit assessment was downgraded to
E/caa2 from E+/b2 and the debt and deposit ratings were
downgraded to B3/Not Prime from B1/Not Prime. The long-term debt
and deposit ratings have a negative outlook, while the BFSR has a
stable outlook. The junior instruments continue to be rated at C
with no outlook.

Ratings Rationale:

Rationale For Downgrades Of Standalone Credit Assessments

In downgrading the standalone credit assessment of Bankia,
Catalunya Banc and NCG Banco, Moody's has taken into account the
benefits of the extensive public sector support delivered to the
three banks, which included (1) the transfer of real estate-
related assets to SAREB (Spain's so-called "bad bank"), which
were amongst the most seriously impaired assets at these banks;
and (2) the public capital injection from the European Stability
Mechanism (ESM) in December 2012 and the mandatory burden-sharing
exercises on the banks' junior instruments. Moody's has also
taken into account the banks' improved funding and liquidity
positions, albeit challenged by the continued lack of access to
market funding.

Moody's has also taken into consideration the slightly more
benign economic outlook of its current baseline scenario (which
is in line with the Bank of Spain or the International Monetary
Fund or IMF).  In this central scenario, Moody's expects the
current economic contraction in Spain to bottom out in the third
or fourth quarter of 2013, with flat or slightly positive growth
from then onwards. Moody's cautions however that banks may not
fully benefit from this primarily export-driven (very modest)
economic recovery, as domestic demand is set to remain subdued
and unemployment elevated. Bank assets related to the non-
exporting sector are therefore expected to remain under pressure.

Against this background, Moody's is concerned that the credit
profiles of these three banks' remain very vulnerable, primarily
due to the following three factors:

1) Asset quality of all three banks remains weak both in absolute
terms and relative to the system. Further credit deterioration is
likely especially in the non-export oriented corporate segment
and more broadly over the next twelve to eighteen months as asset
quality improvements are likely to lag well behind the expected
modest economic recovery.

2) Moody's also believes that profitability will continue to be
subdued: The banks' ongoing balance-sheet deleveraging, low
interest rates and sizeable non-earning assets have significantly
diminished their capacity to generate recurring earnings, which,
combined with the very modest expected economic growth, will
continue to weigh on their profitability. Though Moody's expects
2013 results to improve from the record losses recorded in 2012,
bottom-line profitability will also remain pressured by the need
to increase provisions against weakening assets, reducing their
internal capital generation capacity.

(3) Restructuring and deleveraging plans: The deleveraging goals
required in the restructuring plans approved by European
Commission (EC) for the three banks are challenging as they have
to significantly reduce their branch network and staffing, and in
the case of Catalunya Banc and NCG Banco to restrict their
geographical footprint to their home regions of Catalunya and
Galicia. The ability to execute a drastic restructuring of these
banks' operations, while important to ensuring their long-term
financial viability, presents further risk to franchises that
have already been subject to an extended period of government
ownership.

The successful completion of the restructuring plans is
particularly relevant for Catalunya Banc and NCG Banco, as the
FROB is required to sell the two banks before year-end 2016. If
the FROB fails to find a buyer for Catalunya Banc and/or NCG
Banco it will have to present a resolution plan for the banks
according to the royal decree RD 9/2012.

Moody's also notes all three banks' weak quality of capital, with
Deferred Tax Assets (DTAs) net of deferred tax liabilities,
equaling 77% of post-recapitalization Tier 1 capital at Bankia,
50% at Catalunya Banc, and 61% at NCG Banco. The rating agency
recognizes that the authorities have the option to provide
further extraordinary support by transforming these assets into
other forms which can be more readily monetized.

Rationale For Standalone Credit Assessments By Bank

Bankia

The downgrade by one notch of Bankia's standalone credit
assessment to E+/b3 reflects Bankia's weak credit profile even
after receiving extensive public support, together with the
execution risks associated to its restructuring plan against a
backdrop of a weak operating environment and very low interest
rates that will continue to put pressure on the bank's modest
recurring earning power. The rating action also reflects Bankia's
high level of non-earning assets that persists despite the
transfer of real estate related assets to SAREB at end-December
2012.

Non-Performing loans stood at 12.9% of total loans at the end of
December 2012 (13.03% at end-March 2013), compared to the system
average of 10.44% (10.47% as of March 2013). Including real
estate assets the bank has acquired over the last years, this
ratio increases to 15.88%. Furthermore, Moody's notes the high
percentage of refinanced loans at Bankia (13.33% of total loans).
The aggregation of refinanced loans (that are not already
captured in the Non-Performing Loan ratio) to the overall
problem-loan ratio (rising to 22.8%) indicates the magnitude of
the existing balance sheet pressures for Bankia, even before
considering any possible further deterioration of the loan book.

Moody's notes positively that, in contrast to the deteriorating
trend growth in NPLs for most other Spanish banks in Q1 2013,
Bankia's NPL ratio was flat for the same period. And, as part of
its restructuring plan, Bankia has significantly increased its
reserves for problem loans. The bank's resulting coverage ratio
(defined as loan loss reserves/ non-performing loans) of 62% at
end-March 2013 remains below the system-wide average of 70.4%,
but the rating agency noted that the difference is partly offset
by Bankia's substantially reduced real estate exposures. Despite
the improvement in its reserves, Bankia continues to carry a high
level of problematic assets (broadly defined to include NPLs plus
real estate assets plus refinanced loans) that in aggregate total
150% of the bank's shareholders equity and loss reserves.

Bankia's restructuring plan aims to achieve a 10% ROE and EUR2.2
billion in pre-provision profits in 2015, and requires a
headcount reduction of 28% and a reduction of its national branch
network by 39% over the 2012-2015 period. The success of this
plan hinges on Bankia's capacity to improve the profitability of
its SME loan book, maintaining its cost of risk at low levels and
achieving significant cost efficiency gains arising from the
expected 26% reduction of its cost base. Given Spain's current
recessionary environment and the weak economic growth expected
for 2014, with risks to the downside, Moody's thinks execution
risks are sizeable.

Bankia's standalone credit assessment has a negative outlook to
reflect the bank's vulnerability to a further weakening of its
credit profile in light of the anticipated modest economic
recovery of the Spanish economy.

Catalunya Banc

The three notch downgrade of Catalunya Banc's standalone credit
assessment to E/caa2, was prompted by Moody's view that the
bank's credit fundamentals are very weak despite recent public
sector support. Catalunya Banc displays a very weak loss
absorption capacity, as reflected by the bank's (1) very modest
profitability indicators (at end-March 2013 the bank reported a
net loss of EUR18.5 million and a decline of more than 90% in the
pre-provision income relative to end-March 2012), and (2) severe
asset quality weaknesses across broad categories beyond those
assets transferred to SAREB (i.e., residential mortgages, other
household debt, the commercial real estate exposures which has
remained on the bank's books, and non-real-estate corporate
exposures) which show no signs of abating.

In the context of severe deleveraging imposed as part of its
restructuring plan, weak loan demand and the ongoing low
interest-rate environment, Moody's believes that achieving a
recovery of Catalunya Banc's earnings capacity will be very
challenging. The rating agency notes that the bank's pre-
provision income should benefit from the significant reduction in
operating costs expected following the drastic restructuring plan
approved for the bank, but also believes that it will be a
challenge for the bank to preserve a viable franchise, and hence
maintain adequate profitability, in the face of such far-reaching
restructuring over a relatively short period of time.

Catalunya Banc's NPL ratio stood at 17.4% at end-March 2013,
compared to 16.4% at end-December 2012. Despite the positive
impact of the transfer of the bank's real estate related assets
to SAREB, its NPL ratio remains high compared with the average
for the Spanish system (10.5% at end-March 2013), reflecting
weakness in the other asset classes that have remained on its
balance sheet and have experienced further deterioration in
performance.

Despite the benefits of the capital reinforcement measures
(public-sector support and burden-sharing on its junior
instruments), Moody's notes that Catalunya Banc displays
significant downside risks to the country's negative
macroeconomic scenario that are likely to put additional pressure
on its capital and pose significant challenges to the achievement
of the deleveraging goals contemplated in the restructuring plan
approved by the EC. In such an event, the rating agency believes
that there is a very high likelihood that further public-sector
support will be needed to ensure that the sale process by the
FROB is successfully completed in due time.

At the E/caa2 rating level, the standalone BFSR carries a stable
outlook.

NCG Banco

The downgrade by three notches of NCG Banco's standalone credit
assessment to E/caa2 is a reflection of its weak revenue
generation capacity, with earnings expected to remain low given
the bank's ongoing deleveraging, the high level of non-earning
assets retained on balance sheet even following the transfer of
toxic assets to SAREB, and the impact of the very low interest
rates on asset re-pricing rates, which will not be offset by the
bank's declining funding costs and operating expenses.

Moody's also notes that despite the transfer of real-estate
related assets to SAREB, the continuing deterioration in NCG
Banco's NPL ratio signals ongoing asset-quality challenges: it
increased to 14.9% at-end March 2013 from 13.9% at end-December
2012. In the poor economic environment expected to persist
through 2013 and beyond, the performance of loans to households
(mortgages and unsecured lending to individuals) and to the non-
real-estate corporate segment is likely to continue to
deteriorate, which Moody's expects will translate into a further
increase of NPLs across these asset classes for NCG Banco.

Moody's downgrade reflects the risks to creditors associated with
these pressures, notwithstanding the enhancement to capital
ratios following the public capital injection from the ESM and
the mandatory burden-sharing exercise on the bank's junior
instruments. Similar to Catalunya Banc, Moody's is concerned that
these risks will pose substantial hurdles to achieve the severe
restructuring targets imposed by the EC as well as to the
successful completion of the sale process by the FROB, increasing
the likelihood that further public sector support will be
required for NCG Banco.

At the E/caa2 rating level, the standalone BFSR carries a stable
outlook.

Rationale For Debt Ratings And Support Assumptions

The two-notch downgrade of Bankia's senior debt and deposit
ratings partly reflects the one notch downgrade of its standalone
credit assessment to b3. In addition, the one notch reduction in
systemic support uplift reflects Moody's view that the Spanish
government is likely to find itself increasingly constrained in
providing further support for Spanish banks, including those
which have already received public support. While Moody's
continues to reflect the potential for support given Bankia's
size and systemic importance, in the two notch uplift from BCA to
debt rating, Moody's believes that the probability of further
shortfalls being met at least partly through burden-sharing has
risen.

The two-notch downgrades of Catalunya Banc's and NCG Banco's
senior debt and deposit ratings reflect the further deterioration
of their standalone credit profiles as well as Moody's current
expectation of a certain likelihood of support by the Spanish
government for the banks in case of need. As with Bankia, the
rating uplift is limited by the rising risk of burden-sharing in
the event that further support is required.

The negative outlook on the three banks debt and deposit ratings
reflect both the currently negative outlook on the Spanish
government's Baa3 bond rating and, in the case of Bankia, the
negative outlook on its standalone credit assessment.

Rationale For Downgrade Of BFA

BFA's (holding company of Bankia) issuer ratings have been
downgraded by two notches to Caa1 from B2 reflecting the two-
notch downgrade of Bankia's long-term debt and deposit ratings to
B1 from Ba2.

Although Moody's recognizes the improved risk profile of BFA
underpinned by the transfer to SAREB of the bulk of the bank's
real estate exposure and the positive impact on its liquidity
from the recapitalization exercise, Moody's has maintained the
existing three-notch difference with the rating of Bankia to
reflect the uncertainties associated to the impact of the
currently open arbitration process affecting BFA's hybrid
instruments on the bank's credit fundamentals.

What Could Move The Rating Up/Down

An upgrade of the banks' standalone rating is currently unlikely,
given the negative outlook. An improvement of their standalone
ratings could be driven by (1) the work out of their asset-
quality challenges; (2) a sustainable recovery in their
profitability indicators; (3) sustainable access to market
funding and capital; and (4) a successful execution of the
restructuring plans.

Downward pressure would be exerted on the banks' standalone
credit strength if (1) operating conditions worsen beyond Moody's
current expectations, i.e., a broader economic recession beyond
Moody's current GDP decline forecasts of -1.4% for 2013; (2) the
banks' liquidity position deteriorates significantly; and/or (3)
their franchise weakens.

The principal methodology used in these ratings was Global Banks
published in May 2013.


TDA IBERCAJA 2: S&P Lowers Rating on Class D Notes to 'B+'
----------------------------------------------------------
Standard & Poor's Ratings Services lowered its credit ratings on
TDA Ibercaja 2 Fondo de Titulizacion de Activos' class A, B, C,
and D notes.  At the same time, S&P has removed from CreditWatch
negative its ratings on the class A and B notes.

The rating actions follows S&P's review of this transaction,
including a cash flow analysis without giving benefit to the
swap, in accordance with S&P's current counterparty criteria, and
taking into account Spain's current economic conditions.

"This transaction has experienced increasing delinquencies.  As
of April 2013, arrears excluding defaults (defined in this
transaction as loans in arrears for more than 18 months)
represented 2.52% of the pool's outstanding balance, compared
with 1.67% and 1.98% in April 2011 and April 2012, respectively.
Cumulative defaults now represent 0.23% of the pool's initial
balance.  In S&P's view, this deterioration is due to Spain's
poor macroeconomic performance, such as the unemployment rate
rising to 27.2% in April 2013, which S&P has considered in its
credit analysis by projecting further delinquencies.

Banco Santander S.A. (BBB/Negative/A-2) is the swap provider for
TDA Ibercaja 2.  Following S&P's Oct. 15, 2012 downgrade of Banco
Santander, it took remedy actions in accordance with the
transaction documents.  The documented remedies are not in line
with S&P's current counterparty criteria.  As a result, on
Feb. 15, 2013, S&P placed on CreditWatch negative its ratings on
the class A and B notes, which are already capped at one notch
above its long-term issuer credit rating (ICR) on the swap
counterparty.

The transaction documents have not been amended to incorporate
S&P's current counterparty criteria.  Banco Santander has not
been replaced or guaranteed by a higher-rated entity.

In accordance with S&P's current counterparty criteria and using
the latest available portfolio and structural features
information, S&P has conducted a credit, cash flow, and
structural analysis -- with and without giving benefit to the
swap agreement.

"The increase in delinquencies and the year-on-year decrease in
Spanish house prices are increasing our assumptions of the
portfolio's probability of default and the losses suffered from
those defaulted assets.  With regard to the transaction's
structural features, the increase in available credit enhancement
has been limited for the junior classes.  Since closing in
October 2005, the available credit enhancement has increased by
3.99% for the class A notes and by just 1.83%, 1.12%, and 0.67%
for the class B, C, and D notes, respectively.  This is due to
the notes having been paid sequentially until January 2012 and a
decreasing prepayment rate," S&P said.

"In our cash flow analysis, without giving benefit to the swap
agreement and while applying margin compression with our cash
flow stresses, the transaction suffers from negative carry.  The
results show that all classes of notes are unable to achieve a
rating above our long-term ICR on the swap provider plus one
notch.  We have therefore lowered to 'BBB+ (sf)' from 'AA- (sf)'
and removed from CreditWatch negative our rating on the class A
notes," S&P added.

"The maximum ratings that the class B, C, and D notes can achieve
while giving benefit to the swap agreement are 'BB+ (sf)', 'BB
(sf)' and 'B+ (sf)', respectively.  We have therefore lowered to
'BB+ (sf)' from 'A (sf)' and removed from CreditWatch negative
our rating on the class B notes, lowered to 'BB (sf)' from 'BBB
(sf)' our rating on the class C notes, and lowered to 'B+ (sf)'
from 'BB (sf)' our rating on the class D notes," S&P noted.

TDA Ibercaja 2 is a residential mortgage-backed securities (RMBS)
transaction issued by Ibercaja Banco S.A.  It securitizes a
portfolio of first-ranking mortgage loans granted to individuals
in Spain, mainly to buy a residential property.

          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
            To                From

TDA Ibercaja 2 Fondo de Titulizacion de Activos
EUR904.5 Million Mortgage-Backed Floating-Rate Notes

Ratings Lowered And Removed From CreditWatch Negative

A           BBB+ (sf)         AA- (sf)/Watch Neg
B           BB+ (sf)          A (sf)/Watch Neg

Ratings Lowered

C           BB (sf)           BBB (sf)
D           B+ (sf)           BB (sf)


* SPAIN: Sareb to Select Investor Shortlist for Property Sale
-------------------------------------------------------------
Miles Johnson and Ed Hammond at The Financial Times report that
Sareb, the Spanish state-organized "bad bank", will this week
select a shortlist of international investors for a landmark
property sale that it hopes will pave the way for at least five
other transactions this year.

According to the FT, people close to the deal said Sareb, which
was established late last year to take EUR90 billion of real
estate assets and soured loans off the books of Spain's bailed
out banks, will by Friday narrow down a list of 10 offers for a
package of properties codenamed "Project Bull".

The sale of a portfolio, composed of between 700-1,000 mostly
costal residential property in the regions of Andalucia and
Valencia, is being viewed by real estate investors as a watershed
moment in Spain's effort to purge the legacy of its decade-long
property bubble, the FT says.

Among the investors that have lodged bids include Lone Star and
Apollo, with Sareb, which has sold 550 of its near 50,000
properties in the first three months of this year, hoping to
accelerate sales in at least five more similar deals by the end
of 2013, the FT discloses.

A notable aspect of the transaction, on which KPMG is advising
Sareb, is that it will be the first time a special low-tax
vehicle, known in its Spanish initials as a FAB, is provided to
international investors buying assets from the bad bank,
according to the FT.

The FAB structure, which is taxed at only 1%, is likely to
involve Sareb retaining a stake in the vehicle used for "Project
Bull", allowing it co-investing with any private equity fund that
buys the assets, the FT says.

The low tax rate provided by the Spanish government to encourage
foreign investors to buy Sareb assets is also likely to be viewed
as controversial in Spain, where many of the properties held by
the state-run asset manager were repossessed by rescued banks
from citizens in financial distress, the FT discloses.

The portfolio, the size of which has been reduced since the start
of the process, is expected to be valued at between EUR80
million-EUR100 million, depending on how the cash flows from the
assets, capital structure of the FAB, and the amount of equity
retained by Sareb, the FT says.  If valued at EUR100 million this
would represent a 50% reduction on the registered value of the
assets before they were transferred into Sareb, the FT states.

Sareb's strategy is to sell assets as soon as possible, in an
attempt to provide a pricing floor for other investors and help
restart a broader recovery in the housing market, the FT
discloses.


* Moody's Lowers Ratings on Covered Bonds from 5 Spanish Programs
-----------------------------------------------------------------
Moody's Investors Service has downgraded the ratings on the
covered bonds issued under five Spanish covered bond programs.
These rating actions follow Moody's decision to downgrade the
senior unsecured ratings of the issuers that support those
covered bonds.

Specifically, Moody's has:

(1) downgraded to Ba1 from Baa1 (on review, direction uncertain)
    the ratings of the mortgage covered bonds and public-sector
    covered bonds issued by Bankia, S.A. (deposits B1 negative,
    standalone bank financial strength rating (BFSR) E+/ baseline
    credit assessment b3 negative);

(2) downgraded to Ba2 from Ba1 (on review for downgrade) the
    ratings of the mortgage covered bonds and public-sector
    covered bonds issued by Catalunya Banc, S.A. (B3 negative,
    BFSR E/BCA caa2 stable); and

(3) downgraded to Ba2 from Ba1 (on review for downgrade) the
    ratings of the mortgage covered bonds issued by NCG Banco,
    S.A. (B3 negative, BFSR E/BCA caa2 stable).

Ratings Rationale:

These rating actions are prompted by Moody's decision to
downgrade the senior unsecured ratings of Bankia, Catalunya Banc
and NCG Banco. The TPIs Moody's assigns to the issuers' covered
bond programs remain "Improbable".

Key Rating Assumptions/Factors

Moody's determines covered bond ratings using a two-step process:
an expected loss analysis and a TPI framework analysis.

EXPECTED LOSS: Moody's uses its Covered Bond Model (COBOL) to
determine a rating based on the expected loss on the bond. COBOL
determines expected loss as (1) a function of the issuer's
probability of default (measured by the issuer's rating); and (2)
the stressed losses on the cover pool assets following issuer
default.

For the covered bond programs, cover pool losses are an estimate
of the losses Moody's currently models if the relevant issuer
defaults. Moody's splits cover pool between market risk and
collateral risk. Market risk measures losses stemming from
refinancing risk and risks related to interest-rate and currency
mismatches (these losses may also include certain legal risks).
Collateral risk measures losses resulting directly from the cover
pool assets' credit quality. Moody's derives collateral risk from
the collateral score.

For each cover pool, the numbers show that Moody's is not relying
on "uncommitted" over-collateralization (OC) in its expected loss
analysis.

(1) Bankia's Mortgage Covered Bonds

The cover pool losses are 37%, with market risk of 22.6% and
collateral risk of 14.4%. The collateral score for this program
is currently 21.6%. The OC in this cover pool is 74.2%, of which
Bankia provides 25% on a "committed" basis. The minimum OC level
that is consistent with the Ba1 rating target is 4%.

(2) Bankia's Public-Sector Covered Bonds

The cover pool losses are 50%, with market risk of 33.6% and
collateral risk of 16.4%. The collateral score for this program
is currently 32.7%. The OC in this cover pool is 78.1%, of which
Bankia provides 42.9% on a "committed" basis. The minimum OC
level that is consistent with the Ba1 rating target is 10%.

(3) Catalunya Banc's Mortgage Covered Bonds

The cover pool losses are 35.2%, with market risk of 21.9% and
collateral risk of 13.4%. The collateral score for this program
is currently 20%. The over-collateralization (OC) in this cover
pool is 86.3%, of which Catalunya Banc provides 25% on a
"committed" basis. The minimum OC level that is consistent with
the Ba2 rating target is 5.5%.

(4) Catalunya Banc's Public-Sector Covered Bonds

The cover pool losses are 44.8%, with market risk of 22.1% and
collateral risk of 22.7%. The collateral score for this program
is currently 45.3%. The OC in this cover pool is 180.1%, of which
Catalunya Banc provides 42.9% on a "committed" basis. The minimum
OC level that is consistent with the Ba2 rating target is 20.5%.

(5) NCG Banco's Mortgage Covered Bonds

The cover pool losses are 35.3%, with market risk of 21.7% and
collateral risk of 13.7%. The collateral score for this program
is currently 20.4%. The OC in this cover pool is 100.6%, of which
NCG Banco provides 25% on a "committed" basis. The minimum OC
level that is consistent with the Ba2 rating target is 6%.

TPI FRAMEWORK: Moody's assigns a "timely payment indicator"
(TPI), which indicates the likelihood that the issuer will make
timely payments to covered bondholders if the issuer defaults.
The TPI framework limits the covered bond rating to a certain
number of notches above the issuer's rating.

The TPIs assigned to these programs are "Improbable".

Sensitivity Analysis

The issuer's credit strength is the main determinant of a covered
bond rating's robustness. The TPI Leeway measures the number of
notches by which Moody's might downgrade the issuer's rating
before the rating agency downgrades the covered bonds because of
TPI framework constraints.

Based on the current TPI of "Improbable", the TPI Leeway for both
Bankia's programs is one notch. This implies that Moody's might
downgrade the covered bonds because of a TPI cap, if it
downgrades the issuer rating below B2, all other variables being
equal.

Based on the current TPI of "Improbable", the TPI Leeway for both
Catalunya Banc's programs is limited. This implies that any
downgrade of the issuer ratings may lead to a downgrade of the
covered bonds.

Based on the current TPI of "Improbable", the TPI Leeway for NCG
Banco's program is limited. This implies that any downgrade of
the issuer ratings may lead to a downgrade of the covered bonds.

A multiple-notch downgrade of the covered bonds might occur in
certain limited circumstances, such as (1) a sovereign downgrade
negatively affecting both the issuer's senior unsecured rating
and the TPI; (2) a multiple-notch downgrade of the issuer; or (3)
a material reduction of the value of the cover pool.

The principal methodology used in these ratings was "Moody's
Approach to Rating Covered Bonds" published in July 2012.



=============
U K R A I N E
=============


SOLWAY INVESTMENT: Fitch Publishes 'B' Issuer Default Rating
------------------------------------------------------------
Fitch Ratings has published Solway Investment Group Limited's
(Solway) Long-term foreign currency Issuer Default Rating (IDR)
of 'B' with a Stable Outlook and Short-term foreign currency IDR
of 'B'.

Solway is a privately owned company with metals & mining
production facilities in Ukraine, Macedonia, Russia, Indonesia
and Guatemala. The company produces ferronickel, copper, lead and
zinc concentrates. The company also has a number of investments
in various non-mining businesses.

Key Rating Drivers

Small Scale, Acceptable Diversification
From an operational perspective, with US$557 million of revenue
and US$119 million of Fitch-adjusted EBITDA in 2012, Solway is a
comparatively small mining company. However, the company has an
acceptable diversification by products producing ferronickel (67%
of revenue in 2012), copper and copper concentrate (14%), lead
concentrate (11%) and zinc concentrate (5%). The company started
to produce gold in 2013. Product diversification allows Solway to
reduce the volatility of its margins through the business cycle.
The company operates in countries with 'high' and 'medium' risk
relative to mining operations -- Ukraine, Macedonia, Guatemala,
Indonesia and Russia.

Progress in Development of Nickel Project in Guatemala
Guatemalan Nickel is Solway's main investment project. The first
stage of the project with a US$350 million budget assumes output
of 12 thousand tonnes of nickel per year, which will increase the
company's nickel production capacity by 60%. According to the
company, implementation of the project will be without cost
overruns or substantial time delays. Commissioning of the
smelting mill in Guatemala is expected in Q313. However, Fitch
notes that the company does not have a track record of
development of projects of such scale, which could bear an
additional risk.

Relatively Strong Credit Metrics vs. 'B' Rated Mining Companies
At end-2012 the company had funds from operations (FFO) adjusted
leverage of 1.0x. Fitch expects leverage to increase to 1.6x by
end-2013 due to intensive capex, with an expected capex to
revenue ratio of 46% in 2013. However, Fitch expects the company
to deleverage to 0.6x by end-2014. Fitch does not expect, or
include in its rating case forecast, significant additional
investments in Solway's Indonesian Nickel project, which is
currently on hold.

Material Related Party Transactions, Information Transparency
Below Average

Transactions with related entities represent a material portion
of Solway's revenue. Fitch considers the company's relatively low
level of information transparency a rating constraint.

Rating Sensitivities

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

- Increase of scale and improvement of operational
   Diversification

- FFO adjusted gross leverage sustainably below 2.0x

- Improvement of individual corporate governance profile

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

- FFO adjusted gross leverage sustainably above 3.0x
- Sustainably negative free cash flow
- Setbacks in project development leading to material worsening
   of the company's operational performance


* Fitch Revises Outlook on 10 Ukrainian Corporates to Negative
--------------------------------------------------------------
Fitch Ratings has revised 10 Ukrainian companies' Outlooks to
Negative from Stable, following the agency's rating action on
Ukraine's sovereign ratings. The agency affirmed Ukraine's Long-
term foreign and local currency Issuer Default Ratings (IDRs) at
'B' and Short-term foreign currency IDR at 'B'. Ukraine's Country
Ceiling was affirmed at 'B'.

The rating actions on the foreign currency ratings reflect the
effective constraint by the sovereign rating, while local
currency ratings reflect the worsened economic outlook for
Ukraine, including the expectation of weaker GDP growth and the
risks of a deteriorating business environment that may affect
corporates with operations in the country.

The rating actions are:

Lemtrans LLC

Long-term foreign currency IDR: affirmed at 'B'; Outlook revised
to Negative from Stable

Long-term local currency IDR: affirmed at 'B'; Outlook revised
to Negative from Stable

Senior unsecured foreign currency rating: affirmed at 'B';
Recovery Rating of 'RR4'

DTEK Holdings B.V.

Long-term foreign currency IDR: affirmed at 'B'; Outlook revised
to Negative from Stable. The rating remains constrained by
Ukraine's Country Ceiling of 'B'

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

Long-term local currency IDR: affirmed at 'B+'; Outlook revised
to Negative from Stable

Senior unsecured foreign currency rating: affirmed at 'B';
Recovery Rating of 'RR4'

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

National Long-term rating: affirmed at 'AA+(ukr)'; Outlook
Stable

National senior unsecured rating: affirmed at 'AA+(ukr)'

DTEK Finance BV's senior unsecured notes and DTEK Finance plc's
senior unsecured guaranteed notes are affirmed at 'B'. Recovery
Rating of 'RR4'

Fintest Trading Co. Limited

Long-term foreign currency IDR: affirmed at 'B'; Outlook revised
to Negative from Stable

Long-term local currency IDR: affirmed at 'B'; Outlook revised
to Negative from Stable

National Long-term rating: affirmed at 'AA(ukr)'; Outlook Stable

Metinvest B.V.

Long-term foreign currency IDR: affirmed at 'B'; Outlook revised
to Negative from Stable. The rating remains constrained by
Ukraine's Country Ceiling of 'B'

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

Long-term local currency IDR: affirmed at 'B+'; Outlook revised
to Negative from Stable

Senior unsecured foreign currency rating: affirmed at 'B';
Recovery Rating of 'RR4'

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

National Long-term rating: affirmed at 'AA+(ukr)' ; Outlook
Stable

National Short-term rating: affirmed at 'F1+(ukr)'

Ferrexpo Plc

Long-term foreign currency IDR: affirmed at 'B'; Outlook revised
to Negative from Stable.  The rating remains constrained by
Ukraine's Country Ceiling of 'B'

Short-term foreign currency IDR was affirmed at 'B'.

In addition, the foreign currency senior unsecured rating and
Ferrexpo Finance plc's guaranteed notes (GNs) issue senior
unsecured rating are affirmed at 'B' with a Recovery Rating (RR)
of 'RR4'

Avangardco Investmente Plc

Long-term foreign currency IDR: affirmed at 'B'; Outlook revised
to Negative from Stable. The rating is constrained by Ukraine's
Country Ceiling of 'B'

Long-term local currency IDR: affirmed at 'B+'; Outlook revised
to Negative from Stable

Senior unsecured foreign currency rating: affirmed at 'B';
Recovery Rating of 'RR4'

National Long-term rating: affirmed at 'AA+(ukr)'; Outlook
  Stable

Ukrlandfarming PLC

Long-term foreign currency IDR: affirmed at 'B'; Outlook revised
to Negative from Stable. The rating is constrained by Ukraine's
Country Ceiling of 'B'

Long-term local currency IDR: affirmed at 'B+'; Outlook revised
to Negative from Stable

Senior unsecured foreign currency rating: affirmed at 'B';
Recovery Rating of 'RR4'

National Long-term rating: affirmed at 'AA+(ukr)'; Outlook
Stable

MHP S.A.

Long-term foreign currency IDR: affirmed at 'B'; Outlook revised
to Negative from Stable. This rating remains constrained by
Ukraine's Country Ceiling of 'B'

Long-term local currency IDR: affirmed at 'B+'; Outlook revised
to Negative from Stable

Senior unsecured foreign currency rating: affirmed at 'B';
Recovery Rating of 'RR4'

OJSC Myronivsky Hliboproduct (MHP S.A.'s 99.9% owned subsidiary)

Long-term foreign currency IDR: affirmed at 'B'; Outlook revised
to Negative from Stable. This rating remains constrained by
Ukraine's Country Ceiling of 'B'

Long-term local currency IDR: affirmed at 'B+'; Outlook revised
to Negative from Stable

National Long-term rating: affirmed at 'AA+(ukr)'; Outlook
Stable

Kernel Holding SA

Long-term foreign currency IDR: affirmed at 'B'; Outlook revised
to Negative from Stable. This rating remains constrained by
Ukraine's Country Ceiling of 'B'

Long-term local currency IDR: affirmed at 'B+'; Outlook revised
to Negative from Stable

National Long-term rating: affirmed at 'AA+(ukr)'; Outlook
Stable

Mriya Agro Holding PLC

Long-term foreign currency IDR: affirmed at 'B'; Outlook revised
to Negative from Stable

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

Long-term local currency IDR: affirmed at 'B'; Outlook revised
to Negative from Stable

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

Senior unsecured foreign currency rating: affirmed at 'B';
Recovery Rating of 'RR4'

National Long-term rating: affirmed at 'A-(ukr)'; Outlook Stable



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


CELLULAR SYSTEMS: In Administration, Deloitte Handles Details
-------------------------------------------------------------
Bill Ray at The Register reports that Cellular Systems has gone
into administration with Deloitte handling the details.

The company built O2's 4G network in London and which was
apparently a cornerstone of Cornerstone -- the Vodafone/O2 shared
-- infrastructure project.

The Cheshire company still lists Vodafone, O2 and (combined
effort) Cornerstone as customers, according to The Register.  The
report relates that Deloitte tells El Reg that its "main
customer" walked at the end of last year, and it understands that
refers to the Cornerstone project.

The report says that 48 of Cellular Systems' 53 staff has been
laid off and there probably isn't much left.

The report notes that only good news, for those staff, is that
networks are deploying a lot more infrastructure over the next
year or two, so hopefully the departing people won't have too
much trouble finding fresh employment.


CO-OPERATIVE BANK: Parent to Launch Probe on GBP1.5B Capital Hole
-----------------------------------------------------------------
Sharlene Goff at The Financial Times reports that The
Co-operative Group is poised to launch an independent inquiry
into what went wrong at its banking arm after the discovery of a
GBP1.5 billion capital hole threw the mutual into crisis.

According to the FT, people familiar with the plan said that the
group is close to appointing a senior figure from business or
legal circles to lead the review, which is expected to publish
its findings next spring.

The inquiry is an attempt by the Co-op's new chief executive,
Euan Sutherland, to investigate the mistakes that blew a hole in
the once-conservative lender's balance sheet, the FT says.

Mr. Sutherland, who took over as chief executive of the Co-op in
May, acted quickly to shore up the mutual's banking arm with a
debt restructuring intended to plug the GBP1.5 billion capital
hole triggered by mounting losses on Britannia property loans.
He has also ushered in a new chairman and finance director and
installed Niall Booker, a former HSBC executive, as chief
executive of the Co-op's banking arm, the FT recounts.

Mr. Sutherland now wants a rigorous examination of the Co-op's
culture and governance and of the decisions made by the former
management team in its attempts to transform the lending arm into
a prominent banking competitor, the FT discloses.

The inquiry, the FT says, will focus on the Co-op's ill-timed
acquisition of Britannia building society, the 2009 deal
orchestrated by former executives David Anderson and Neville
Richardson, which saddled the mutual with billions of pounds of
bad debts.  It will also examine whether the forthright former
chief executive, Peter Marks, was right to pursue the acquisition
of 630 branches from Lloyds Banking Group, the FT notes.  The
Co-op was forced to abandon prolonged talks with Lloyds this year
after it emerged its banking arm was facing the capital
shortfall, the FT relates.

According to the FT, the Co-op is considering a small number of
potential candidates to lead the review and is expected to
finalize the appointment in the coming days.  The FT notes that
people familiar with its plans said it has spoken to a several
senior business figures with experience in legal and regulatory
matters.

Co-op Bank -- part of the mutually owned food-to-funerals
conglomerate Co-operative Group -- traces its history back to
1872.  The bank gained prominence for specializing in ethical
investment.  It refuses to lend to companies that test their
products on animals, and its headquarters in Manchester is
powered by rapeseed oil grown on Co-operative Group farms.

Founded in 1863, the Co-op Group has more than six million
members, employs more than 100,000 people and has turnover of
more than GBP13 billion.

                           *     *     *

As reported by the Troubled Company Reporter-Europe on May 13,
2013, Moody's Investors Service downgraded the deposit and senior
debt ratings of Co-operative Bank plc to Ba3/Not Prime from
A3/Prime 2, following its lowering of the bank's baseline credit
assessment (BCA) to b1 from baa1.  The equivalent standalone bank
financial strength rating (BFSR) is now E+ from C- previously.


COVENTRY CITY F.C.: Sale Completed; Set to Exit Administration
--------------------------------------------------------------
InsolvencyNews reports that the sale of insolvent Coventry City
Football Club to Otium Entertainment Group was confirmed on
June 27.

The report relates that although the sale has been finalised, the
club will remain in administration until a CVA is issued and
agreed by all involved parties.

"I can confirm that the asset sale by Coventry City FC Limited to
Otium Entertainment Group has been completed," the report quotes
Paul Appleton, joint administrator, as saying.

"I stress that that I have only been able to sell such right and
title to these as Limited possesses because CCFC Holdings Ltd
asserts beneficial ownership over them."

As reported in the Troubled Company Reporter-Europe on March 26,
2013, Coventry Observer said Coventry City Football Club have
confirmed they have put their non-operating subsidiary of the
club into administration.

The announcement comes on the eve of a High Court hearing in
London as the company that runs the club's stadium, ACL, attempts
to force the League One club into administration over the GBP1
million they are owed, according to Coventry Observer.  The
report relates that the Sky Blues could still face a ten-point
deduction which would all but end any hopes of making the play-
offs.


D&G RESIDENTIAL: Kudos Buys Firm Out Of Administration
------------------------------------------------------
Edp24 the business reports that D&G Residential was sold to Kudos
Residential on Friday for an undisclosed figure -- 24 hours after
being placed into administration.

Directors placed the firm into administration after Her Majesty
Revenue and Customs issued a petition for unpaid VAT and PAYE
bills totaling about GBP100,000, according to Edp24 the business.

The report relates that its sale to Kudos, which has offices in
Brundall, Poringland, and Great Yarmouth will see Kudos take over
to contracts to market nearly 100 properties in and around
Norwich including those sold subject to contract.

However, the report relays that the deal could not save the jobs
of the 11 D&G staff while its offices in Dereham Road, Reepham
Road, Hellesdon, and Thorpe Avenue, Thorpe St Andrew, look set to
close.

The report discloses that Jamie Playford, from East Anglian
business rescue firm Parker Andrews, which brokered the sale
using an online data room, said it represented the best deal for
creditors.


DWELL: Co-Founder Rescues Business
----------------------------------
Graeme Evans at Press Association reports that Aamir Ahmad, the
co-founder of Dwell, kept the ailing business alive on Wednesday
by agreeing a deal to rescue a number of stores and the jobs of
150 staff.

Mr. Ahmad, who founded Dwell with family and friends in 2003 but
left last year following its sale to a private equity firm,
stepped in after the business went into administration last
month, resulting in the closure of 23 stores, Press Association
relates.

According to Press Association, securing the jobs of around half
of Dwell's 300-strong  workforce, the deal with administrator
Duff & Phelps will result in the reopening of three outlets in
London on Saturday -- at Tottenham Court Road and the two
Westfield sites -- as well  as at the Lakeside centre in Essex
and Barton Square, Manchester.

Talks with other landlords are under way with the hope that
additional stores and jobs can be saved, Press Association notes.

Mr. Ahmad, who is returning to the business as chief executive,
has promised to try and help customers who have outstanding
orders, Press Association discloses.

The upmarket retailer, previously majority owned by private
equity firm Key Capital Partners, went into administration after
it struggled amid sluggish consumer confidence and a weak housing
market, Press Association recounts.

Dwell is a furniture retailer.


HEARTS: Sanctions For Going Into Administration
-----------------------------------------------
Stv sport reports that Heart of Midlothian Football Club's
administrator Bryan Jackson will appear before the Scottish FA
for the second time this year.

Hearts face possible sanctions from the Scottish FA for going
into administration after the governing body opened disciplinary
proceedings against the club, according to Stv sport.

The report notes that the Edinburgh side appointed BDO as
administrators on June 19 and, as a result, will be called to
appear in front of a judicial panel on Thursday, July 18.

The report relates that Hearts have until Monday, July 8 to
respond to the notice of complaint.

The report says that if found guilty the club faces a number of
possible punishments from the Scottish FA, ranging from a warning
and fine to having its membership of the governing body suspended
or revoked.

The report notes that Hearts are the third club to go into
administration since new disciplinary measures were brought into
effect at the start of the 2011/12 season.


* UK: Insurance Insolvencies Double in May 2013
-----------------------------------------------
Andrew Pearce at Insurance Age reports that insurance failures
doubled during May 2013, compared to the same month a year ago,
according to the latest UK business insolvency figures from
Experian.

Experian revealed that some eight firms collapsed during the
period, markedly up on just four falling insolvent in May 2012,
Insurance Age relates.

The report found that 0.07% of the insurance business population
failed, an increase on the 0.03% surveyed for May 2012, Insurance
Age discloses.

Overall, of the UK's five biggest industries, hotel/leisure and
building/construction were the most improved with insolvency
rates falling from 0.16% and 0.18% in May 2012 to 0.11% and 0.14%
respectively, Insurance Age relates.

And the overall business insolvency rate for the UK remained at
0.08% for the fourth month running.


* UK: More in Administration Despite Early Signs Of Recovery
------------------------------------------------------------
Michael Bird at City A.M. reports that insolvency specialists FRP
Advisory said March and April saw a 20 per cent increase in
businesses going into administration across England and Wales.

The number of administrations rose to 378 - 56 more than in
January and February, according to City A.M.  The report relates
that FRP Advisory attributed much of the jump to poor sales over
Christmas.

The report notes that some groups may have struggled into 2013,
but payments for the second quarter's rent are falling short.

Individual voluntary arrangements, settlements made to avoid
bankruptcy, have also risen 15 per cent on the year, the report
relates.

The report discloses that Glyn Mummery, partner at FRP Advisory,
saw an upside to some firms going under.  "Zombie companies seem
to be realising that they are in fact dead", adding, "when an
economy or market picks up, stressed businesses often then fail
as there is insufficient working capital to meet demand."


* UK: Fitch Says Reform Positive for Utilities in Long Term
-----------------------------------------------------------
Planned reform of the UK's electricity market will help
strengthen the credit profile of utility companies in the long
term by reducing exposure to price risk and providing an
incentive to reactivate plants or build new capacity, Fitch
Ratings says. But the proposals do nothing to mitigate the short-
term risk of market and supply disruptions as power plants are
closed or mothballed. Also, detail on the timing of re-entry of
capacity and terms and conditions of "contracts for difference"
remains to be elaborated.

The government's proposed capacity auctions will provide steady
payments to utilities in return for a commitment to provide
electricity in periods of high demand or stress on the network.
Because gas plants are crucial to security of supply, the
proposal will help remedy unfavorable market conditions and
encourage companies to build plant and keep capacity available,
but not before it comes into force in 2018.

Utilities that continue investing in renewable technology, such
as SSE and Iberdrola subsidiary Scottish Power, will also benefit
from contracts for difference. These ensure generators receive a
set strike price by topping up market prices when they are low
and requiring them to pay back the difference when market prices
are high. "We believe the proposed strike prices will provide
some market protection and may alleviate price risk, albeit at
slightly less attractive prices than previous incentives under
the Renewables Obligation," Fitch says.

Neither proposal provides a solid, short-term solution to
security of supply as the proposed capacity measures will run
from winter 2018, by which time market conditions may have
altered. The risk of disruption continues to increase, peaking in
2015-2016 as coal plants are closed due to EU legislation on
emissions and gas plants are mothballed due to unfavorable
economics. The proposed reforms provide clarity for renewable
technologies, but nothing until 2018 on maintaining core capacity
reserves to support them.

Electricity regulator Ofgem has said the UK will have an
electricity reserve margin of under 4% in 2015-2016, decreasing
to 2% in high-demand scenarios and assuming that plants are
actually closed as expected. The regulator has proposed
addressing pre-2018 capacity concerns by paying consumers to cut
consumption in periods of high demand and making payments to
capacity that would otherwise be closed or mothballed,
particularly gas plants.

These additional payments, or an improvement in spark spreads to
around GBP10/MWh, as detailed by Centrica in its strategic
update, could mean gas plant can be reactivated or built. This
would be credit positive for companies with mothballed plants,
such as SSE and Centrica. Alternatively, gas plant could remain
mothballed should overall electricity demand reduce further than
expected, through higher interconnector inflows from Europe, and
if demand side consumption cuts are higher than expected.


* UK: Moody's Says Regulatory Changes to Water Sector Credit Neg.
-----------------------------------------------------------------
Moody's Investors Service has said that it continues to view the
Water Bill published by the UK government as credit negative for
the existing vertically integrated monopoly water companies in
England and, potentially, Wales.

The Bill, introduced in the House of Commons on June 27, 2013,
shows that the government's plans for changes to the water sector
remain largely on track. In particular, Moody's views as credit
negative for these companies one of the main elements of the
Bill, namely proposed reforms to support competition in the
retail and upstream segments.

The rating agency notes, however, that the impact of increased
competition may be limited over the medium term and that the
regulator's discretion in implementing a number of the proposed
changes has been reduced since a draft of the Bill was published
in July 2012.

According to the government, the Bill will deliver policy in four
areas: (1) growth -- a water sector that supports a growing
economy; (2) resilience -- helping to ensure that water is
available to supply households and businesses without damaging
the environment; (3) choice -- offering choice and flexibility to
customers; and (4) flood insurance -- to help manage the
financial risk of flooding.

The Bill provides for retail competition in water and wastewater
services for non-household (NHH) customers and the creation of a
cross-border market in Great Britain. Retail competition in
England and Wales is expected to begin in 2017 -- a competitive
market already exists in Scotland -- following changes proposed
by Ofwat to implement disaggregated price limits for existing
companies in respect of retail and wholesale activities from the
start of AMP6.

Moody's notes that competition in Wales will be subject to
decisions by the Welsh Assembly, with the Welsh minister
responsible for water, Alun Davies, recently saying that he will
not allow Welsh Water (A3 stable) to face competition.

The impact of retail competition will be a function of the way in
which Ofwat sets price limits for the wholesale and retail
activities as part of PR14, and subsequently, and the number of
customers switching supplier. However, analysis by Moody's shows
that the impact on most companies is likely to be modest over the
medium term. Whilst some of the existing vertically integrated
companies suggested that they may welcome the ability to exit the
retail market following the introduction of competition, the Bill
does not provide for this option.

Increased wholesale competition is proposed, with changes to be
made to the existing Water Supply Licensing (WSL) regime to allow
new entrants to supply water services to NHH customers. New
entrants will also be able to provide wastewater services to such
NHH customers. The existing 'costs principle', which governs the
charges levied by incumbent operators for use of their resources
and assets, is being abolished with new charging codes and rules
to be set by Ofwat. Meaningful upstream competition would likely
be credit negative for incumbent operators but Moody's does not
expect this to crystallize over the medium term.

In response to concerns around the potential stranding of water
company assets, the Bill modestly reduces the scope for upstream
competition by removing the proposed network infrastructure
authorization. This would have enabled new entrants to own and
operate their own infrastructure (mains, pipes, storage and
treatment), connected to an incumbent water company's network and
used to supply water in order to bypass parts of that network. A
similar "last mile" retail infrastructure authorization is also
no longer proposed. The scope for new entrants in upstream
infrastructure services is thus reduced, reinforcing the
principle of incumbent operators retaining ownership and
responsibility for the core network. Government will also work
closely with Ofwat to improve the existing regime of inset
appointments to meet the requirements of a growing population.

A February 2013 report by the House of Commons Environment, Food
and Rural Affairs (EFRA) Committee highlighted that the July 2012
draft Bill provided only a broad framework and left too much
detail to be decided by Ofwat. The Bill now limits the
regulator's discretion by (1) allowing the Secretary of State or
the Welsh Ministers to veto changes to company licenses that the
regulator may propose as a result of the Bill; (2) requiring
government to produce guidance for Ofwat with respect to setting
rules and codes for inter alia bulk supply; and (3) allowing
government to direct Ofwat not to issue new rules or codes, or to
amend them as directed. Companies may also appeal proposed code
changes through the newly formed Competition and Markets
Authority (which succeeds the Competition Commission).

The Bill sets a new primary duty for Ofwat, to secure the long-
term resilience of water supply and sewerage systems, although it
is unclear how this may interact with the regulator's existing
duties, which include 'contributing to the achievement of
sustainable development', or affect PR14. A further duty is also
proposed, to ensure that companies do not show undue preference
or discrimination in their dealings with other operators.

Subject to its progress through Parliament, the Bill could be
passed into law during the current session, which runs until
April 2014.



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


* EMEA Auto ABS Loan Performance Remains Stable in April
--------------------------------------------------------
The overall performance of auto loan and lease asset-backed
securities (ABS) market in Europe, the Middle East and Africa
(EMEA) remained stable in April 2013, according to the latest
indices published by Moody's Investors Service.

EMEA auto loan and lease ABS cumulative defaults decreased to
1.5% in April 2013 from 1.8% in April 2012. This result was
mostly attributed to markets that performed well, such as Germany
where defaults remained stable at 0.7% and France where defaults
decrease to 0.59% from 2.6% in April 2012.

The weakest markets remain Spain and Portugal where defaults
remain the highest but only represent a small portion of the
index (Portugal 1% and Spain 5%). For Portugal, the cumulative
defaults increased to 7.6% in April 2013 from 7.0% and were the
highest of the EMEA market. The Spanish cumulative defaults
decreased to 3.8% from 3.9% over the same period but remain
higher than the average.

The 60+ day delinquencies also decreased to 0.7% in April 2013
from 0.8% a year before, a level which continued to improve
mostly due to the good performance of the German auto ABS market.
This market, which is the biggest in Europe, saw 60+ day
delinquencies remain stable and low at 0.5%.

Moody's outlook for German auto ABS collateral is stable. The
rating agency expects that the unemployment rate in Germany will
remain stable at 5.5% while GDP will increase 0.4%. Moody's
previously announced its forecast in "Country Statistics:
Government of Germany", June 3, 2013. Moody's forecasts that
Portugal, Spain and Italy will remain in economic recession in
2013 ("Update to Global Macro Outlook 2013-14: Loss of Momentum",
13 May 2013). The rating agency expects that Spanish GDP will
decrease 1.4% in 2013 and the unemployment rate will rise to
27.4% (Country Statistics: Government of Spain, June 3, 2013).

In the quarter to April 2013, Moody's rated three new auto ABS
transactions, all located in Germany. The outstanding pool
balance of rated transaction was EUR28.3 billion in April 2013.


* Exposure of US Money Market Funds to Euro Areas Rise in Q2 2013
-----------------------------------------------------------------
US-domiciled money market funds (MMFs) have increased their total
exposure to European financial institutions to $189.8 billion
(28% of their assets) from US$168.6 billion (25% of their assets)
in the first two months of Q2 2013, said Moody's Investors
Service.

Most of this increase is due to higher exposures to UK banks,
which rose by 47% to US$30.5 billion from US$20.4 billion in the
same time period. Within euro- and sterling-denominated MMFs,
exposure to European financial institutions remained stable at
EUR28 billion (40% of their assets) and GBP58 billion (49% of
their assets), respectively. However, there have been significant
country shifts.

Moody's analysis is based on the portfolios of all Moody's-rated
MMFs in the first two months of Q2 2013. For the USD funds, the
data covers 41 US Prime MMFs and 29 European and offshore USD-
denominated MMFs. For both the euro-denominated MMFs and
sterling-denominated MMFs, the data covers 22 funds domiciled in
Europe for each (44 total).

The credit profiles of U.S. prime, Euro-denominated and Sterling
prime money market funds (MMFs) continued to experience a modest
deterioration during the second quarter of 2013, whereas
portfolios' duration and diversification improved.

--- US-dollar Prime MMFs: Exposure to European securities --
particularly to UK banks- significantly increases; Modest credit
deterioration; Overnight liquidity remains high

In the first two months of Q2 2013, both US Prime MMFs and
offshore USD MMFs have shown increased exposures to European
financial institutions, increasing by 11% to US$189.8 billion
(28% of their assets) and 9% to US$91.7 billion (57% of their
assets), respectively. For offshore USD-denominated MMFs, most of
this increase is due to their exposures to Swedish banks that
went to US$22.2 billion from US$19.6 billion, and to UK banks
that went to US$11 billion from US$8.8 billion.

There was modest credit deterioration in the same time period, as
5.9% of investments in US-domiciled funds and 3.9% of offshore-
domiciled funds moved from Aaa- and Aa-rated securities to A-
rated securities. Approximately 18% of investments in all
Moody's-rated MMFs were rated Aaa, down from 23% in March in US-
domiciled funds and 20% in offshore-domiciled funds.

Overnight liquidity remains high, at around 32% in US-domiciled
fund assets and 36% in offshore-domiciled funds on average.

The funds' sensitivity to market risk increased modestly in Q2
2013 due to the increased exposure to slightly longer-dated
securities combined with the modest deterioration in funds'
credit profiles. Moody's stressed net asset value decreased to
0.9918 on average from 0.9923 at the beginning of the quarter for
US-domiciled funds and to 0.9914 on average from 0.9926 at the
beginning of the quarter for offshore-domiciled funds .

Combined assets under management (AUM) in both US-domiciled and
offshore-domiciled funds increased 1.4% to USD916 billion from
USD903 billion during this period.

--- Euro-denominated MMFs: Exposures to French financial
institutions down 20%; AUM drop by 7%; Obligor diversification at
its highest level in 12 months

Prime euro-denominated MMFs experienced a stabilization in their
credit, liquidity and market risk profiles, while they reduced
their maturity profile and decreased their portfolio
concentration.

While funds' aggregate exposure to European financial
institutions remained stable at EUR28 billion, there have been
significant shifts in country allocation. In the first two months
of Q2 2013, investments in French financial institutions
decreased significantly by 20% to EUR8.5 billion from EUR10.6
billion. However, exposure to Swedish banks increased by 16% to
EUR6.6 billion from EUR5.7 billion, and investments in German
financial institutions also increased by 24% to EUR2.9billion
from EUR2.3 billion.

The low interest-rate environment and low yields across the
sector prompted a further AUM decrease by 7% in euro MMFs to
EUR69.9 billion.

Overall, the credit profiles of euro-denominated MMFs stabilized,
with "barbell" strategy allocations, reflected by the 25%
decrease in exposure to Aa1-rated securities, which was driven by
reduced investments in repurchase agreements, and an increase in
investments rated Aaa (+14%), Aa3 (+10%) and A1 (+22%).

Given the flatness of the short end of the yield curve, prime
funds have decreased their weighted-average maturity (WAM) by 1.6
days to 42 days on average. While overnight liquidity remained
largely unchanged at 30% of AUM, exposure to relatively long-
dated securities with maturities above three months decreased by
10%.

The neutral changes in the credit profiles largely contributed to
the stabilization of the funds' sensitivity to market risk at
0.9917 on average, from 0.9921 at the beginning of the Q2 2013.

Funds' diversification improved significantly, as their top three
obligor concentration ratio hit the lowest level within the last
12 months at 19.1% of their AUM. Many banks are returning to the
short term markets after paying back part of their 3-year
facility of the long term refinancing operation during Q1 2013.

--- Sterling-denominated MMFs: Increased exposures to the UK and
Swedish banks; Reduced investments in German securities;
Overnight liquidity up 2%

Prime sterling-denominated MMFs experienced a stabilization in
their risk profiles, with a modest credit deterioration of their
portfolio, but a shorter duration and higher diversification.
Funds' investment in Aaa- and Aa-rated securities decreased by
4%, increasing exposures to A-rated instruments.

While exposure to European financial institutions remained stable
at GBP58 billion (49% of their assets), there have been
significant country shifts in the first two months of Q2 2013.
Exposures to UK and Swedish financial institutions continued to
increase by 11% and 19%, to reach GBP15.2 billion and GBP10.5
billion, respectively, while reducing exposures to German
financial institutions by 31% down to GBP4.4 billion.

Sterling prime MMFs reduced their WAM by 1.5 days, by increasing
their overnight liquidity to 30.5% of their AUM, from 28.7% on
average.

The increased exposures to A-rated securities led to a modest
deterioration in the funds' sensitivity to market risk. Stressed
net asset value decreased to 0.9918 on average from 0.9921 at the
beginning of the quarter.

Portfolios have become less concentrated and exposure to the
largest three obligors decreased to 18.4% of AUM from 20% on
average.

Combined AUM increased by 3.2% to GBP118.5 billion during the
quarter, despite the low yields across the sector.


* Moody's Sees Possible Default of a Fourth of European LBOs
------------------------------------------------------------
While the overall refinancing burden of unrated European LBOs has
materially decreased over the past 12 months, up to a quarter of
these companies could still default, says Moody's Investors
Service in a Special Comment entitled "Unrated European LBOs:
Refinancing Burden Eases but Default Risk Remains High for
Weakest Companies."

The overall debt burden of unrated European LBOs has fallen since
Moody's last study in May 2012 to EUR122 billion, down from
EUR171 billion, with the unrated universe having shrunk from 368
to 288 companies. This refinancing activity, combined with
significant "amend-and-extend" (A&E) activity, has flattened the
previous 2014-15 refinancing peak. Approximately 44% of debt now
matures after 2015, double the 22% in the 2012 study.

"The easing of the refinancing burden reflects the ability of
many highly leveraged, usually medium sized, companies, to
benefit from recent extraordinary market appetite for high-yield
bonds to refinance their loans," says Sebastien Cieniewski, an
Assistant Vice President - Analyst in Moody's Corporate Finance
Group and author of the report. "An additional factor has been
the significant amend-and-extend activity reflecting the need for
collateralized loan obligation (CLO) lenders to remain invested
before their amortization phases."

However, Moody's notes that the maturities of a problematic stub
of smaller and weaker companies remain largely unaddressed and as
a result, up to a quarter of the companies sampled in the study
(representing a smaller portion of debt) could default.

"Despite the weak European macro environment, the strong
refinancing activity, mainly undertaken by the relatively larger
and more credit-worthy unrated companies, has kept the default
rate subdued. However, we expect to see the default rate for
smaller and weaker unrated companies increase materially over the
next couple of years," adds Mr. Cieniewski.

Funding dynamics will remain important factors in this context.
These include ongoing access to the high-yield market at
reasonable terms, the pressures around bank deleveraging, and
developments regarding the pace of new CLO formation as existing
CLOs will have mostly entered their amortization period by the
end of 2013. The return of capital markets turbulence and
increased investor risk aversion at this juncture may prove
decisive.


* Moody's Outlook on Global Airline Sector Remains Stable
---------------------------------------------------------
Moody's outlook for the global airline industry remains stable,
the rating agency says in a new report. While the slow US
economic recovery and continued weakness in Europe will continue
to weigh on the sector over the next 12 to 18 months, lower fuel
costs should offset soft demand and higher non-fuel operating
expenses.

"We expect the global airline industry's operating profits to
grow modestly this year and next," says Vice President -- Senior
Credit Officer Jonathan Root in "Capacity Discipline, Lower Fuel
Costs to Buoy Operating Profits Despite Slowing Demand." "But we
do not anticipate a meaningful expansion in profit margins in
this time frame due to economic headwinds and capacity
additions."

Capacity discipline, careful management of non-fuel costs and
ancillary fees will remain the primary tools for carriers as they
seek to achieve their targeted returns, Root says. Moody's
expects industry adjusted operating profit margins of between 4%
and 7% in 2013 and 2014, and yield growth to be in the range of -
1% to 3% in 2013 and to be flat to 3% in 2014.

US airlines are likely to enjoy better-than-average profitability
over the outlook horizon. Delta, JetBlue, Southwest, United
Airlines, US Airways and American Airlines will be helped by
their conservative capacity management and improved ability to
raise fares when fuel prices rise and tack on additional fees for
checked bags, meals and other items.

In Europe, slow economic recovery will continue to impede the
efforts of low-cost carriers such as Ryan Air and EasyJet to
improve their profit margins. Despite challenging conditions at
home, however, larger carriers such as Deutsche Lufthansa and
International Airlines Group's British Airways should see their
operating profits grow this year.

Elsewhere, both Qantas and Air New Zealand will see their
earnings expand as demand remains steady.

Growth in emerging markets will drive an overall increase in
revenue passenger kilometers, Root says. "In the Middle East, we
expect strong growth in available seat kilometers to lead to
gains in passenger traffic, thanks to increasing trade between
the Middle East and emerging economies in Africa and Asia."

Robust traffic increases are also expected in Asia and Latin
America. Led by strong growth in China and long-haul markets,
Asian carriers are projected to post a 6.3% gain in revenue
passenger kilometers in 2013. And passenger demand among Latin
American carriers is expected to jump 9.8% during the same
period, thanks to brisk trade with Asia and North America.


* BOOK REVIEW: Land Use Policy in the United States
---------------------------------------------------
Author: Howard W. Ottoson
Publisher: Beard Books
Paperback: US$34.95
Review by Gail Owens Hoelscher
Order your personal copy today and one for a colleague at
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In 1962, marking the 100th anniversary of the signing of the
Homestead Act by President Lincoln, 20 nationally recognized
economists, historians, a political scientist, and a geographer
presented papers at the Homestead Centennial Symposium at the
University of Nebraska.  Their task was to appraise the course
that United States land policy had taken since independence.  The
resulting papers are presented in this book, grouped into five
major areas: historical background; social factors influencing
U.S. land policy; past, present and future demands for lands in
the U.S.; control of land resources; and implications for future
land policy.

This book begins with a summary of the Homestead Act, its
antecedents, the arguments of its supporters and detractors, and
its intent versus implementation.  The Act offered a quarter
section (160 acres) of public land in the West to citizens and
intended citizens for a US$14 filing fee and an agreement to live
on the land for five years.  The program ended in 1935.
Advocates claimed that frontier lad had no value to the
government until it was developed and began generating tax
revenue.  Opponents feared the Act would lower land valued in the
East and pushed for government sale of the land.  In practice,
states, territories, railroads and investors were able to set
aside more land than was eventually handed over to the
homesteaders.

One paper deals with land policy before 1862. From the start,
the U.S. required that "all grants of land by the federal
government should embody a description of the land not merely in
quality, but in place as defined by relation to an actual
survey."  This policy avoided countless boundary disputes so
vexing to other countries.

Perhaps most interesting are the social history chapters:
Czechoslovakians pushing wheelbarrows across Nebraska,
"Daughters and Sons of the Revolution.(living) next
to.Mennonites," and "an illiterate.neighborly with a Greek and a
Hebrew scholar from a colony of Russian Jews."  Mail-order
brides, "defectors from civilization," the importance of the
Mason jar, the Jeffersonian dream of a nation of agrarian
freeholders, and Santayana's observation that the typical
American skitters between visionary idealism and crass
materialism, all make for fascinating reading.

The land-use policy problems discussed certainly haven't been
solved today.  And, although land use conflicts in the U.S.
haven't always been resolved equitably, "the big step forward
taken by the United States during the last one hundred and fifty
years in the age-long struggle of man towards the ideals of
mutuality and equity has been the working out of a system
wherein the sovereign superior who prescribes the working-rules
for land use and decision making have become, himself, a
collective of the citizenry."

A chapter is devoted to the arguments between the family farm ad
the "sentiment against concentration of wealth in the hands of a
few."  The discussion of the Land Grant college system and its
contribution to international development closes with a quote
from Chester Bowles:

"Can we, now the richest people on earth, become creative
participants in the unprecedented revolutionary changes of our
era, changes that the most privileged people will oppose tooth
and nail, but which for the bulk of mankind offer the hopeful
prospect of a little more food, a little more opportunity, a
doctor for their sick child, and sense of personal dignity?"


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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.


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

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

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

This material is copyrighted and any commercial use, resale or
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202-241-8200.


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