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        T R O U B L E D   C O M P A N Y   R E P O R T E R

                           E U R O P E

            Wednesday, July 24, 2013, Vol. 14, No. 145

                            Headlines



B E L G I U M

REMEDENT INC: Reports US$982K Net Loss in Fiscal 2013


F R A N C E

CLARIS LIMITED: Partial Redemption No Impact on Moody's Ratings


G E R M A N Y

CONERGY AG: Resumes Production at One Panel Factories
DEUTSCHE BANK: Accelerates Plan to Reduce Balance Sheet Size
MINIMAX VIKING: Moody's Assigns 'B2' CFR; Outlook Stable
MINIMAX VIKING: S&P Assigns Preliminary 'B' CCR; Outlook Stable


I R E L A N D

ARAVON SCHOOL: Financial Difficulties Prompt Liquidation
EVENT ELEPHANT: Files Examinership Petition; Aug. 9 Hearing Set
TREASURY HOLDINGS: NAMA to Get EUR100-Mil. From Settlement Deals


I T A L Y

GAMENET SPA: Moody's Assigns 'B1' CFR; Outlook Stable
ISLAND REFINANCING: Fitch Lowers Rating on Class D Notes to 'CCC'


N O R W A Y

AKER SOLUTIONS: Fitch Lowers LT Issuer Default Rating to 'BB'
NORSKE SKOGINDUSTRIER: Moody's Cuts CFR to Caa2; Outlook Negative


P O L A N D

* Fitch: New Debt Regulations Will Challenge Polish Subnationals


R U S S I A

LSR GROUP: Fitch Affirms 'B' Long-Term Foreign Currency IDR
PROMSVYAZBANK: S&P Assigns 'BB/B' Counterparty Credit Ratings


S P A I N

BANKINTER SA: S&P Revises Outlook to Stable & Affirms 'BB' Rating
CECABANK SA: Moody's Lowers Deposit Ratings to 'Ba3'


U N I T E D   K I N G D O M

BRIGHTHOUSE GROUP: Moody's Rates GBP200MM Sr. Notes Issue 'B2'
CO-OPERATIVE BANK: Chief Executive Reassures Members Over Future
HIBU PLC: Shareholders Mull Legal Action Over Restructuring Deal
PARAGON SECURED: S&P Affirms 'B' Rating on Class C Notes
TRANSOL WORLDWIDE: Placed in Liquidation

TRAVELEX HOLDINGS: S&P Assigns Prelim. 'B' Corp. Credit Rating

* UK: Court to Rule on Pension Scheme Insolvency Ranking Today


                            *********


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B E L G I U M
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REMEDENT INC: Reports US$982K Net Loss in Fiscal 2013
-----------------------------------------------------
Grant Thornton bedrijfsrevisoren CVBA, in Brussels, Belgium, in
their audit report on Remedent, Inc.'s consolidated financial
statements as of and for the year ended March 31, 2013, raised
substantial doubt about the Company's ability to continue as a
going concern.

The independent auditors explained that the Company incurred a
net loss of US$981,936 during the year ended March 31, 2013, and
as of that date, the Company's current liabilities exceeded its
current assets by US$1,337,846.  The Company also experienced
cash outflows from operations during the year ending March 31,
2013, totaling US$946,316 and had cash on hand at March 31, 2013,
of US$64,504.   Also, the reimbursement schedule for a long term
debt commitment has not been complied with.

The Company reported a net loss of US$981,936 on US$2.9 million
of sales for the year ended March 31, 2013, compared with net
income of US$1.3 million on US$9.7 million of sales for the year
ended March 31, 2012.

Net sales decreased by approximately 69.7% to US$2,937,276 in the
year ended March 31, 2013, as compared to US$9,687,292 in the
year ended March 31, 2012.  According to the regulatory filing,
the decrease in sales is primarily due to the deconsolidation of
the Company's OTC division at the quarter ending September 2011
and also because of the deconsolidation of its Asian Division at
the end of January 2012, resulting in decreased revenue.
Additionally, included during the fiscal year ending March 31,
2012, were non-recurring royalty fees in reference to the DenMat
Distribution agreement and the non-recurring fee in connection
with the First Fit Distribution agreement.

The Company's balance sheet at March 31, 2013, showed US$6.5
million in total assets, US$5.0 million in total liabilities, and
stockholders' equity of US$1.5 million.

A copy of the Form 10-K is available at http://is.gd/ikQ6CX

Remedent, Inc., is a manufacturer and distributor of cosmetic
dentistry products, including a full line of professional dental
tooth whitening products which are distributed in Europe, Asia
and the United States.  The Company manufactures many of its
products in its facility in Ghent, Belgium as well as outsourced
manufacturing in its facility in Beijing, China and Ghent.  The
Company distributes its products using both its own internal
sales force and through the use of third party distributors.



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F R A N C E
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CLARIS LIMITED: Partial Redemption No Impact on Moody's Ratings
---------------------------------------------------------------
Moody's Investors Service has determined that the partial
repurchase by Claris Limited of the series 88 notes in accordance
with the terms of the Partial Redemption Deed between, inter
alias, the Issuer and Societe Generale dated as of June 28, 2013,
will not in and of itself and at this time cause the current
Moody's rating of the remaining Notes to be reduced or withdrawn.
Moody's believes that the partial redemption does not have an
adverse effect on the credit quality of the securities such that
the Moody's rating is impacted. Moody's does not express an
opinion as to whether the amendment could have other, non-credit-
related effects.

The Partial Redemption Deed may be summarized as follows: A
certain nominal amount of collateral of the tranche has been used
to pay the termination costs of the swaps (credit default swap
and interest rate swap) and redeem the notes. The credit risk for
the remaining noteholders remains constant despite the reduction
of the notional of the tranche.

The Notes related to the Partial Redemption Deed are:

- Claris Limited Series 88/2007 Tranche 1 EUR 16,000,000
   Millesime 2007 2 Synthetic CDO of ABS Floating Rate Notes due
   2037. The amount of the partial redemption is EUR 5,000,000
   which will leave this tranche with an outstanding amount of
EUR
   11,000,000 post redemption.

The principal methodology used was "Moody's Approach to Rating SF
CDOs" published in May 2012.

Other methodologies and factors that may have been considered in
the process of rating these issuances can also be found in the
Ratings Methodologies subdirectory.

Moody's will continue monitoring the rating. Any change in the
rating will be publicly disseminated by Moody's through
appropriate media.

On August 26, 2011, Moody's took these rating actions for
Claris Limited Series 88 & 89 (Millesime 2007-2 Portfolio):

  EUR21M Series 88/2007-1 Notes, Downgraded to Caa3 (sf);
  previously on Mar 25, 2011 B3 (sf) Placed Under Review for
  Possible Downgrade

  EUR38M Series 89/2007-1 Notes, Downgraded to B1 (sf);
previously
  on Mar 25, 2011 Baa1 (sf) Placed Under Review for Possible
  Downgrade

Issuer: Societe Generale - Credit Default Swap (Millesime 2007-2
portfolio)

  EUR5M Credit default swap ref EXO-1224830 Notes, Downgraded to
  Caa3 (sf); previously on Mar 25, 2011 B3 (sf) Placed Under
  Review for Possible Downgrade



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G E R M A N Y
=============


CONERGY AG: Resumes Production at One Panel Factories
-----------------------------------------------------
Deutsche Welle reports that Conergy AG said it will resume
production at one of its panel factories after a US private
equity fund agreed to invest in the firm.

Production of solar panels at its factory in Frankfurt, Germany,
would be resumed on Monday, Conergy announced in a statement
Friday.

In addition, deliveries of solar panels and equipment would also
re-start on that day, said the Hamburg-based company, which is
currently under insolvency administration after filing for
protection from its creditors two weeks ago.

Calling the resumption of production a positive signal to
employees and customers, Conergy Chief Executive Sven K. Starke
said the brief manufacturing stop was necessary to sort out the
firm's business relations.

Conergy AG is a Hamburg-based solar panel manufacturer.

The Company filed for insolvency on July 5 and stopped its module
production in Frankfurt an der Oder near the Polish border after
a delay in payments from a large project and the failure of
executives to bridge the financial gap, Bloomberg New reported.
Conergy said in a separate statement that manufacturing at its
insolvent Conergy SolarModule GmbH & Co. KG will resume on
Systems GmbH in Rangsdorf near Berlin continue, Bloomberg noted.
Conergy's sales last year dropped 37% to EUR473.5 million while
the net loss widened to EUR99 million, Bloomberg disclosed.


DEUTSCHE BANK: Accelerates Plan to Reduce Balance Sheet Size
------------------------------------------------------------
Laura Stevens at The Wall Street Journal reports that Deutsche
Bank AG is accelerating plans to reduce the size of its balance
sheet amid persistent concerns among regulators and investors on
both sides of the Atlantic that the bank is carrying too much
risk.

According to the Journal, people familiar with the matter said
that Deutsche Bank plans to increase its so-called leverage
ratio, which measures the capital base against total assets, to
3% by 2015, by shedding assets and retaining earnings.

The bank is required to meet the target by 2018, the Journal
discloses.  Most analysts put Deutsche Bank's current leverage
ratio at around 2%, one of the lowest among major banks, the
Journal notes.  A lower leverage ratio would generally indicate
the bank has too many assets and not enough capital in case
something goes wrong, the Journal states.

According to the Journal, it isn't clear what impact the
accelerated timetable will have on earnings, but analysts warned
that the bank's bottom line probably would take a hit.

Deutsche Bank, with assets totaling EUR2.03 trillion, is one of
Europe's largest banks - and by many analyst calculations, one of
the most heavily leveraged, the Journal says.

The bank's balance sheet now approaches the size of Germany's
EUR2.7 trillion economy, posing what critics say is a serious
risk to the global financial system, the Journal notes.

Deutsche Bank executives have repeatedly dismissed those
concerns, insisting that the bank is adept at managing risk and
that its capital position is more than adequate, the Journal
relates.

In recent months, the bank has faced increasing pressure from
regulators regarding its capital reserves, the Journal recounts.

Analysts estimate the bank could face a capital shortfall of
several billion dollars when the new rules are in place in 2015,
the Journal says.

Deutsche Bank has long faced doubts from some investors and
analysts that it has enough capital to absorb potential future
losses and to meet increasingly stringent regulatory
requirements, the Journal notes.

Deutsche Bank Aktiengesellschaft -- http://www.deutsche-bank.com/
-- is a stock corporation organized under the laws of the Federal
Republic of Germany headquartered in Frankfurt am Main.  The
Company is a global provider of a full range of corporate and
investment banking, private clients and asset management products
and services.


MINIMAX VIKING: Moody's Assigns 'B2' CFR; Outlook Stable
--------------------------------------------------------
Moody's Investors Service assigned a B2 Corporate Family Rating
and a B2-PD Probability of Default Rating to Minimax Viking GmbH.
Concurrently, Moody's assigned a provisional (P)B1 Rating (LGD3,
41%) to the group's first lien term loan facility and to the
revolving credit facility and a provisional (P)Caa1 Rating (LGD5,
89%) to the second lien term loan facility. The outlook on the
ratings is stable. This is the first time that Moody's has rated
Minimax Viking GmbH ("Minimax" and collectively with its
subsidiaries "Minimax group" or "the group") .

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

The following ratings have been assigned:

Assignments:

Issuer: Minimax Viking GmbH

  Corporate Family Rating, Assigned B2

  Probability of Default Rating, Assigned B2-PD

Issuer: MX Mercury Beteiligungen GmbH

  EUR255M Senior Secured Bank Credit Facility, Assigned (P)B1

  EUR40M Senior Secured Bank Credit Facility, Assigned (P)B1

  EUR255M Senior Secured Bank Credit Facility, Assigned a range
of
  LGD3, 41 %

  EUR40M Senior Secured Bank Credit Facility, Assigned a range of
  LGD3, 41 %

Issuer: Minimax GmbH & Co. KG

  EUR45M Senior Secured Bank Credit Facility, Assigned (P)B1

  EUR45M Senior Secured Bank Credit Facility, Assigned a range of
  LGD3, 41 %

Issuer: MX Holdings US, Inc.

  EUR300M Senior Secured Bank Credit Facility, Assigned (P)B1

  EUR60M Senior Secured Bank Credit Facility, Assigned (P)Caa1

  EUR300M Senior Secured Bank Credit Facility, Assigned a range
of
  LGD3, 41 %

  EUR60M Senior Secured Bank Credit Facility, Assigned a range of
  LGD5, 89 %

Ratings Rationale:

The B2 Corporate Family Rating balances (i) the company's
resilience against economic cycles driven by a high share of
recurring revenues, (ii) a strong market position in core markets
reflecting its one-stop shopping approach and (iii) high barriers
to entry predominantly driven by regulations related to fire
protection equipment with (i) high leverage as evidenced by a
debt/EBITDA ratio proforma for the transaction of 6.5-7.0x as
expected per full year 2013, (ii) relatively low profitability
despite the regulatory nature of its markets and a high share of
recurring services business, (iii) limited regional
diversification with 51% of turnover generated in Europe, and
Germany accounting for a major part of this, and 35% in the US,
and (iv) a shareholder oriented financial policy, as evidenced by
the repayment of a major part of Minimax' shareholder loan.

Minimax has proven a solid track record of financial performance
over the last decade and especially strong resilience during the
last severe economic downturn in 2009. In 2009 sales decreased by
only 5.2% and EBITDA margin (as adjusted by Minimax) slightly
declined to 10.0% from 10.4% in the previous year. EBITDA margin
has been moving in a narrow range of 10-11% since 2007. The
company has also shown a strong generation of operating free cash
flow (as reported by Minimax), which is after investments but
before debt service (interest & repayment), reflecting its low
capex need (around 1.5% of sales) and moderate net working
capital ratio (advance payments received amounted to around 4-5%
of order book and sales). However, Moody's notes that the
majority of operating free cash flow has been used for debt
service payments in the past due to the highly levered capital
structure.

Moody's assesses the business profile of Minimax group to be
relatively strong. This view is supported by the group's strong
regional market positions in its key markets Germany (the group's
home market, accounting for 37% of revenues) and the U.S. (c. 35%
of revenues). Its market positions are protected by high barriers
to entry resulting from various regulations and quality standards
and a large number of required approvals. However, the group's
regional footprint is concentrated on a few core regions and
stringent regulations also make it costly and time consuming for
all players to expand into new markets.

Minimax group's customers predominantly are industrial and
commercial clients. The group is developing and installing
tailor-made fire protection systems that comply with
international safety standards. Minimax group's key competitive
advantage is to be able to cover the full value chain with
proprietary products and solutions spanning from R&D, sourcing &
manufacturing, product sales & distribution, system installation
and post-installation follow-up services. Moody's believes, that
the engagement in the whole value chain provides access to more
customers and the possibility of cross-selling its products and
services.

Minimax is currently setting up a new capital structure through
the establishment of new term loan facilities and repayment of
all existing bank loans and a major part of its shareholder
loans. The remaining portion of EUR144 million will be converted
into equity. The new senior term facilities include a total of
EUR600 million first lien term loans due after seven years and
EUR60 million second lien term loan (available in U.S. dollars)
due after seven and a half years. The EUR600 million first lien
term loan will be split into two equal tranches: one denominated
in Euro and the other in USD. The transaction will result in an
extended maturity profile and significantly lower debt service
for the company on the back of lower interest rates. On a pro-
forma basis 2012 leverage is calculated at a quite high level of
7.2x Debt / EBITDA on a Moody's adjusted basis, which positions
the company weakly in the B2 rating category with limited room
for underperformance or other measures which would extend the
expected trajectory of improving leverage going forward.
Therefore, the B2 CFR assigned assumes that Minimax will be able
to improve this metric to below 6x by 2014 at the latest,
reflecting a combination of steady debt reduction and EBITDA
improvement supported by the non-incurrence of restructuring
costs that were accounted for in 2011 and 2012, and the lower
cost base as an effect of previous restructuring measures.

The first lien facilities will be secured by first priority
pledges of the security package (encompassing share pledges as
well as all main tangible and intangible assets of the borrowers
and guarantors together representing at least 80% of the group's
revenues, EBITDA and assets). The second lien term loan will be
secured by subordinated pledges of the same security package for
the first lien securities.

Structural considerations -- Moody's has assigned a Corporate
Family Rating (CFR) of B2 and a probability of default rating
(PDR) of B2-PD to Minimax. Given the up-stream guarantees from
material subsidiaries as well as the priority claims on the
security package, Moody's assigns a provisional (P)B1 rating
(LGD3, 41%) to the first lien term loan facility and to the EUR40
million revolving credit facility which get first ranking in
Moody's LGD assessment in line with trade claims (EUR77 million
as of year-end 2012). Subsequently, the second lien term loan
facility is rated (P)Caa1 (LGD5, 89%) reflecting its contractual
second rank, followed by the unsecured EUR65 million pension
deficit and EUR25 million lease rejection claims due within one
year.

Overall, Moody's views Minimax' liquidity profile to be good post
the refinancing. The company expects a EUR66 million cash
position after the closing of the refinancing. Other cash sources
for the next 12 months ending June 2014 comprise FFO of around
EUR55 million as well as the new EUR40 million revolving credit
facility maturing in 6 years, which is expected to remain undrawn
during this period. The senior term facilities will be subjected
to conditional language. Expected cash uses totaling roughly
EUR100 million for the 12-month period ending June 2014 mainly
relate to working cash required to run the business (assumed at
3% of annual revenues), moderate working capital consumption and
capex, modest cashout for acquisitions as well as mandatory debt
repayment incurred by semi-annual amortization of its first lien
term loan. In addition to the cash credit facilities, Minimax
will set up a guarantee facility of EUR145 million due in 6
years, which compares to a total of EUR168 million guarantee
facilities pre re-financing. As per year-end 2012 the company had
guarantees in the amount of EUR129 million outstanding,
management expects a moderate but steady increase in guarantee
needs so that full utilization of the facility is reached by
2022.

The outlook on the ratings is stable balancing the stability of
the business model with the risk resulting from the initially
high leverage. It assumes that Minimax is able to generate a
stable EBITDA margin of above 12% as adjusted by Moody's (per
2012: 11.9%), to continue to generate positive free cash flows
and to gradually reduce leverage to below 6.0x at the latest by
the end of 2014. An upgrade of the CFR would be considered should
the company manage to sustainably bring EBITDA-margin (as
adjusted by Moody's) above 15%, to increase the generation of
cash flow reflected in RCF / Net debt exceeding 12% and FCF /
Debt exceeding 5% and to reduce leverage sustainably below 5x
debt / EBITDA. A rating downgrade would be considered should the
EBITDA Margin of the group fall below 11% or if the company is
not able to lower leverage below 6x debt/EBITDA. Likewise, a
deterioration of its liquidity profile or Cash Flow generation
weakening below 8% RCF / Net debt or 2% FCF / Debt could result
in a downgrade.

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

Headquartered in Bad Oldesloe, Germany, Minimax Viking GmbH
collectively with its subsidiaries is operating internationally
in the fire protection and detection markets. The group serves
its industrial and commercial clients by developing,
manufacturing and installing tailor-made solutions that comply
with international safety standards and offers follow-up services
post system installation. During 2012, Minimax group, of which
the majority of its shares is owned by funds advised by IK
Investment Partners, generated revenues of EUR1.1 billion with
its 6,531 employees.


MINIMAX VIKING: S&P Assigns Preliminary 'B' CCR; Outlook Stable
---------------------------------------------------------------
Standard & Poor's Ratings Services assigned its preliminary 'B'
long-term corporate credit rating to Germany-based fire
protection technology equipment provider Minimax Viking GmbH.
The outlook is stable.

"At the same time, we assigned our preliminary 'B' issue rating
to the proposed EUR600 million first-lien term loan facility (of
which an equivalent of EUR300 million is issued in U.S. dollars).
The recovery rating on this facility is '3', indicating our
expectation of meaningful (50%-70%) recovery prospects for
lenders in the event of a payment default.  We also assigned our
preliminary 'CCC+' issue rating to the proposed EUR60 million
second-lien term loan facility (to be issued in U.S. dollars).
The recovery rating on this facility is '6', indicating
negligible recovery prospects (0%-10%) for lenders in the event
of payment default," S&P said.

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

The preliminary ratings on Minimax reflects S&P's view of the
company's "fair" business risk profile and "highly leveraged"
financial risk profile.

"The ratings on Minimax are constrained by the Group's high
leverage and our view that its credit metrics will likely remain
in line with a "highly leveraged" financial risk profile under
our criteria over the coming years, including debt to EBITDA of
more than 6.5x and funds from operations (FFO) to debt of about
10%. The business risk assessment is mainly restricted by the
Group's limited business diversification and the limited scope of
its operations.  However, we believe that these risks are
mitigated by the Group's strong positions within fire protection
markets in Germany and its solid position in the U.S. market
following its acquisition of Viking Group, Inc. in 2009," S&P
added.

"We view positively the Group's good operating resilience, which
is to a large degree due to regulatory requirements that drive
demand for fire protection systems and recurring service
requirements for the installed base.  This has allowed Minimax to
show a solid operating performance over the past years, including
in the economic downturn in 2009, when its Standard & Poor's-
adjusted EBITDA margin stayed firmly between 9% and 10% although
its organic revenue declined by about 11%," S&P noted.

S&P believes that, following the refinancing, Minimax will
continue to generate positive free operating cash flow, despite a
moderate increase in cash-paying interest.

After the refinancing, S&P believes the Group's FFO to debt will
likely be about 10% in 2013 and 2014.  S&P anticipates that its
debt to EBITDA will be about 7x as of year-end 2013, progressing
toward 6.5x in 2014.

The stable outlook reflects S&P's opinion that Minimax should
continue to generate free operating cash flows over the coming
years on the assumption that it continues its solid operating
performance and controls expansionary investments in capital
expenditure and working capital.



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ARAVON SCHOOL: Financial Difficulties Prompt Liquidation
--------------------------------------------------------
Louise Hogan at Independent.ie reports that Aravon School, once
bailed out by singer Chris de Burgh, has run into financial
difficulties with a liquidator appointed.

A liquidator has been appointed to the private school, following
a creditor's meeting in recent days, Independent.ie discloses.

A drop-off in enrolments resulted in the school's turnover
falling from EUR1.28 million in 2010 to EUR1.1 million last year,
Independent.ie says, citing the latest accounts filed for the
school.

The school has around 80 pupils enrolled, varying in age from
three to 12.  It receives no state funding and is run as an
independent and co-educational school, Independent.ie notes.  It
is situated on a 15-acre site in picturesque Rathmichael, south
Dublin.


EVENT ELEPHANT: Files Examinership Petition; Aug. 9 Hearing Set
---------------------------------------------------------------
TheJournal.ie reports that several charities fear that funds
raised are to be lost after Event Elephant petitioned for
examinership.

Insolvency firm Hughes Blake has confirmed it has been appointed
as an interim examiner to the company ahead of an initial hearing
on Aug. 9, TheJournal.ie relates.

According to TheJournal.ie, an examiner will determine the assets
and liabilities of a company and decide on payments to creditors.

In recent weeks, a number of charities have complained that
payment owed to them by Event Elephant have not been made,
TheJournal.ie discloses.

In examinership cases where charities are involved, there is a
provision where charities can be placed in a separate class of
creditor, TheJournal.ie states.  This could lead to them being
given a larger dividend than others owed money but much depends
the specific case, TheJournal.ie notes.

Speaking to TheJournal.ie, interim examiner Joe Walsh of Hughes
Blake said that it is too soon to discuss whether this could
happen in the case of Event Elephant.  He did confirm however
that letters have been sent out to creditors to informing them of
the petition for examinership, according to TheJournal.ie.

Event Elephant is an Event planning company.  The company was
launched in 2008 and part of their business has been to process
ticket payments for events put on by volunteer organizations.
Event Elephant take a fee for the service but it cuts down on
administration for the volunteer organization.


TREASURY HOLDINGS: NAMA to Get EUR100-Mil. From Settlement Deals
----------------------------------------------------------------
Ciaran Hancock at The Irish Times reports that the National Asset
Management Agency is set to receive up to EUR100 million as a
result of agreements relating to bust Irish property developer
Treasury Holdings and its former owners Johnny Ronan and Richard
Barrett.

These include settlement agreements for two transactions relating
to assets sold by Treasury to entities related to either
Mr. Ronan or Mr. Barrett before the company was wound up in
October 2012, the Irish Times discloses.  NAMA and the
liquidators of Treasury had disputed these transactions, the
Irish Times notes.

It is understood that KBC Bank Ireland, another major creditor of
Treasury, will also receive millions of euro as part of the
settlements, the Irish Times states.

The windfall for NAMA follows the sale by Messrs. Ronan and
Barrett of their interests in a Singapore-listed property company
called Forterra Trust, the Irish Times says.  This entity is
involved in developments in China and was formerly known as
Treasury China Trust, a company once associated with Treasury,
the Irish Times discloses.

Messrs. Ronan and Barrett have agreed to sell their 26.9%
shareholding in Forterra to Hong Kong-based investment group Nan
Fung, the Irish Times relates.

The businessmen, along with fellow former Treasury executive Rory
Williams, received an aggregate EUR122.3 million for their
shares, the Irish Times discloses.  Of this, Mr. Ronan is set to
receive EUR42 million for his shareholding, the Irish Times says.
Most of these funds are expected to flow to NAMA as Mr. Ronan is
a debtor of the agency, the Irish Times says.

Mr. Ronan also received EUR14 million for a put-and-call option
relating to 3% of Forterra's shares, the Irish Times discloses.
Again, most is expected to go to NAMA, the Irish Times states.

Separately, Mr. Barrett has reached agreement with the liquidator
of Treasury to value two former assets at EUR13.3 million rather
than the EUR2.2 million he paid in August 2012, the Irish Times
relates.

These entities act as the property manager and the trustee
manager of Forterra and earn substantial sums annually, the Irish
Times notes.  Mr. Barrett acquired them via a company called
Oriental Management Services (OMS) just before KBC went to the
High Court seeking a winding-up order against Treasury last year,
the Irish Times recounts.  These sales were disputed by NAMA and
KBC, the Irish Times says.

The arrangements are subject to High Court approval, the Irish
Times states.

                      About Treasury Holdings

Treasury Holdings is an Irish property developer.  The company
owns the Westin Hotel in Dublin and the Irish headquarters of
accounting firm PricewaterhouseCoopers.

On October 9, 2012, Mr. Justice Brian McGovern appointed Paul
McCann and Michael McAteer of Grant Thornton as joint liquidators
of Treasury Holdings and 16 related companies at the High Court,
Dublin, following a petition from KBC Bank.



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GAMENET SPA: Moody's Assigns 'B1' CFR; Outlook Stable
-----------------------------------------------------
Moody's Investors Service has assigned a B1 corporate family
rating and a Ba3-PD probability of default rating to Gamenet SpA,
one of the largest Italian gaming companies and the second
largest State's concessionaire of machine games in the country.
Concurrently, Moody's has also assigned a provisional (P)B1 (LGD4
- 65%) senior secured rating to the group's proposed issuance of
EUR200 million of senior secured notes due 2018. The outlook on
all ratings is stable. This is the first time Moody's has
assigned ratings to Gamenet.

Moody's issues provisional ratings in advance of the final sale
of securities and these only reflect Moody's opinions regarding
the transaction. Upon closing of the refinancing and a conclusive
review of the final documentation, Moody's will endeavor to
assign definitive ratings to Gamenet. A definitive rating may
differ from a provisional rating.

Ratings Rationale:

Assignment of B1 CFR

"The B1 rating we have assigned to Gamenet reflects Moody's view
that a conservative financial policy and the barriers to entry
offered by the group's existing concession to operate gaming
machines in Italy compensate for its limited business
diversification," says Paolo Leschiutta, a Moody's Senior Credit
Officer - Vice President and lead analyst for Gamenet. "The
rating, which is strongly positioned in the category, recognizes
the group's sound market position, as the second-largest player
in the entertainment machine market in Italy, as well as its
lower operating risks compared with other operators in the gaming
industry."

Moody's views Gamenet's business diversification as limited as
the group is mainly present in the entertainment machines segment
in Italy. However, this limited diversification is mitigated by
the group's strong market position. Gamenet is the second-largest
concessionaire of VLT (Video Lottery) and AWP (Amusement With
Price) machines in Italy, for which it holds 7,805 and
approximately 50,000 licenses, respectively. Both licenses expire
in 2022, offering a degree of revenues visibility. The group is
also planning to expand its betting and online games activity,
which, however, still represented a small portion of its revenues
at the end of 2012 (around 1.6%). In addition, Moody's notes
that, compared with other gaming activities, the entertainment
machine sector carries lower operating risks as the payout is
fixed by the regulator, while the betting activity is expected to
remain a small portion of the business.

Gamenet's geographic concentration in Italy exposes the group to
the currently challenging market conditions in the country, which
is exerting pressure on people's disposable income, and to a
single regulatory environment in which future changes to
regulations could affect the group's ability to generate
profitable returns.

In Moody's view, the aforementioned weaknesses are partially
compensated by the group's modest financial leverage. Moody's
expects Gamenet's debt/EBITDA, pro forma for the proposed
refinancing and including Moody's standard adjustments, to be
below 3.0x, with the potential for a reduction over time in light
of the group's expected free cash flow (FCF) generation. The
group is planning to issue EUR200 million of senior secured
notes, the proceeds of which Moody's expects to be used to repay
existing debt and for general corporate purposes. In addition,
Moody's views the group's liquidity profile as adequate and
supportive of the B1 rating. The rating agency notes that the
group does not have a committed bank facility although derives
some comfort from the company's commitment to maintain at least
EUR20 million of cash on balance sheet at all time.

Assignment Of (P)B1 Rating To Senior Secured Notes

The rating of the notes, in line with the CFR, reflects the fact
that the new notes will constitute the majority of the group's
capital structure. The notes will be issued by Gamenet SpA, the
operating holding company of the group. Gamenet SpA owns all of
the key assets of the group and generates approximately 100% of
its consolidated EBITDA. The notes will be also secured by the
shares on Gamenet SpA; however, Moody's tends to assign a low
value to the security provided by shares, given the low value of
this in case of distress.

Ba3-PD PDR

Given the absence of bank debt, Moody's has assigned, in line
with its standard approach, a corporate family recovery rate
assumption of 35% (against the standard 50%). This has resulted
in a PDR of Ba3-PD, one notch above the CFR. This also reflects
the currently strong position of the CFR.

Rationale For Stable Outlook

The stable rating outlook reflects Moody's expectation that
Gamenet will weather the difficult macroeconomic environment and
the current pressure on consumer spending in Italy. The outlook
also assumes that the group will pursue a prudent expansion
policy, generating positive FCF such that it is able to achieve a
degree of reduction in financial leverage over time.

What Could Change The Rating Up/Down

Upward rating pressure is limited by the current depressed
consumer spending and sentiment in Italy. An improvement in the
economic environment together with a track record of stable
performance, positive FCF generation, and the company's
demonstrated ability to maintain stable credit metrics, could
result in a rating upgrade.

Conversely, downward rating pressure could develop (1) in the
event of changes in the regulatory environment that adversely
affect Gamenet's profitability; or (2) following lower-than-
expected cash flow generation that leads to negative FCF over a
prolonged period. Consideration for a downgrade would be given in
case the group's financial leverage increase materially above 4x
on an ongoing basis.

Principal Methodology

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

Gamenet SpA is one of the largest gaming companies in Italy,
being the second largest State's concessionaire of machine games
in the country. During 2012, the group generated EUR650.4 million
of revenues and EUR79.2 million of EBITDA, entirely in Italy.


ISLAND REFINANCING: Fitch Lowers Rating on Class D Notes to 'CCC'
-----------------------------------------------------------------
Fitch Ratings has downgraded Island Refinancing S.r.l.'s class D
notes and affirmed all other classes of the floating rate non-
performing loan (NPL) notes, due July 2025, as follows:

EUR20.8m Class A (IT0004293558): affirmed at 'AA+sf'; Outlook
Negative

EUR62.0m Class B (IT0004293574): affirmed at 'BBBsf'; Outlook
Negative

EUR60.0m Class C (IT0004293582): affirmed at 'Bsf'; Outlook
Negative

EUR32.0m Class D (IT0004293590): downgraded to 'CCCsf' from
'Bsf'; Recovery Estimate 50%

Key Rating Drivers

The downgrade reflects the sustained underperformance in
collections compared with both the original business plan and
Fitch's base case. In the past two collection periods, only
EUR21 million was reported as net cash flows by the special
servicer (Prelios Credit Servicing S.p.a., CSS2), the lowest 12-
month result since transaction closing. This underperformance is
reflected in the deferral of interest on the class B through D
notes, a deficit that is set to grow from its current EUR28
million over subsequent interest payment dates (IPDs).

As of the last IPD (January 25, 2013), cumulative net collections
stood at 52% of the business plan set by the servicer at closing.
In nominal terms, the EUR7 million of net cash flows recorded in
H113 compares unfavorably with the agency's base case
projections. In contrast, amounts recovered on closed positions
have consistently exceeded the servicer's expectations, as
evidenced by an overall profitability ratio of 104%.

Fitch notes that approximately EUR75 million has been deposited
in various tribunals' accounts, awaiting approval by the same
courts for distribution. Although these funds should be
distributed (having made provisions for legal and workout costs),
extreme delays are not uncommon in Italy, especially in southern
and some central regions. While the agency does not incorporate a
swift disbursal of these funds in its analysis, the long time
until bond maturity in which to collect such funds is supportive
of the credit quality of the class A and B notes, which are still
considered investment grade.

Island Refinancing is a refinancing of Island Finance (ICR4)
S.p.A. (ICR4) and Island Finance 2 (ICR7) S.r.l. ICR4 and ICR7
were securitisations of NPLs originated in Italy by Banco di
Sicilia S.p.A. (BdS, part of the UniCredit banking group,
BBB+/Negative/F2). The portfolio consisted of secured and
unsecured loans numbering 7,824 business plan credit lines to
3,395 borrowers for a total unresolved gross book value (GBV) of
EUR1,902 million.

Rating Sensitivities

Further deterioration and delay in collections may lead to a
downgrade of the class B notes. As highlighted at Fitch's last
review, this may also result in a technical default of the class
C notes. This is because class C deferred interest becomes due
and payable upon redemption of the class B notes, and if this
lump sum is not covered by semi-annual collections together with
the available liquidity facility (which amortises in line with
the notes), an issuer event of default could be called.



===========
N O R W A Y
===========


AKER SOLUTIONS: Fitch Lowers LT Issuer Default Rating to 'BB'
-------------------------------------------------------------
Fitch Ratings has downgraded Aker Solution ASA's Long-term Issuer
Default Rating (IDR) to 'BB' from 'BB+'. The Outlook is Stable.

The downgrade reflects Fitch's view that operational difficulties
related to increased project costs and delays that are negatively
affecting the company's financial performance are likely to
persist beyond Q213. We think that this jeopardizes the company's
ability to deliver its NOK60.5 billion order backlog even after
the cancellation and order book removal of the Cat B contract
with Statoil. Additionally, Fitch calculates that the company is
experiencing increased costs and project delays in other business
areas beyond oil field services that are increasing order intake
risks for the remainder of 2013.

Fitch believes there is an increased risk that the company's weak
operating cash flow performance and significant increase in net
debt in 2013 will be difficult to reverse despite the company's
planned divestment of the oilfield services and marine assets
business. Consequently, key leverage and coverage credit metrics
are likely to remain at levels more in line with a mid 'BB'
rating.

KEY RATING DRIVERS

Challenging Operating Performance
Aker's Q1 profit warning came as a surprise following what looked
like a strong recovery in 2012. Fitch considers that operational
issues are relatively widespread within the company, as costs and
delays appear to affect several divisions within the company
rather than being limited to just one or two. The renewed
volatility in Aker's earnings is concerning to Fitch as we
previously anticipated more stable performance following the de-
merger of the company's engineering, procurement and construction
business.

Difficult Medium-Term Sector Outlook
Fitch believes that the company's ambitious target revenue and
margin growth through to 2016 may be more difficult to achieve
against the backdrop of potentially vulnerable market conditions.
As outlined in its Q1 conference call, the company continues to
target top-line revenue growth of 9% to 15% per annum despite
evidence that the decision-making processes within the oil and
gas industry are sliding and contract awards are being postponed
in certain segments and certain regions.

Financial Profile Potentially Stretched
Aker's rating reflects the company's increased business and
financial risks. The company's financial profile is likely to
come under additional pressure in 2013, and there is little
headroom for additional leverage at the current rating level.
Fitch anticipates leverage and coverage ratios could deteriorate
if the company's cash flow performance does not improve in 2013
and the company maintains a still relatively large capex program.

Strong Order Book
Aker's order book is at a record level of around NOK60.5 billion
even after the cancellation of the Cat B contract with Statoil.
Fitch is slightly concerned about the company's ability to
deliver such a large book given the current operating
difficulties within certain divisions of the company, but is
encouraged by the large amount of contracted revenue. This is one
of the factors supporting the Stable Outlook on the rating.

Leading Market Positions
The ratings reflect Aker's leading position in niche segments of
the oilfield services sector, its strong technological expertise
and experience of large, complex projects in harsh environments
globally. The ratings are constrained by the earnings volatility
of the oil and gas industry, and a reliance on cyclical spending
plans.

RATING SENSITIVITIES

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

-- More stable operating performance and a track record of cost
   containment and timely project delivery.

-- Maintaining a fixed charge coverage greater than 2.5x or FFO
   net leverage below 3.5x on a sustained basis, in addition to
   FCF remaining positive on a sustained basis.

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

A deterioration in fixed charge coverage to below 2x, or FFO net
leverage above 4x on a sustained basis. A reduction in opex and
capex by oil and gas companies, deterioration in the financial
profile as a result of debt-financed acquisitions or higher
dividends, lower than expected free cash flow (FCF), and large
project overruns and/or delays that further negatively affect
operating cash flow, could also put downward pressure on the
ratings.

LIQUIDITY AND DEBT STRUCTURE

Adequate Liquidity
Aker's liquidity is adequate for its rating level. In Q113,
borrowings due within one year were NOK1.1 billion, against cash
and cash equivalents of NOK2.2 billion. Undrawn committed long-
term bank revolving credit facilities amounted to NOK3.5 billion.

Debt Structure
The company's debt maturity profile is only slightly onerous,
with about NOK1 billion and NOK4 billion due to be repaid or
refinanced in 2013 and 2014, respectively. Fitch believes that
Aker's access to external financing remains strong, and the
company should not face any difficulties extending its debt
maturity profile in the local Norwegian capital markets.

FULL LIST OF RATING ACTIONS

Aker Solutions ASA
Long-term IDR: downgraded to 'BB' from 'BB+'; Outlook Stable
Senior unsecured debt: downgraded to 'BB' from 'BB+'


NORSKE SKOGINDUSTRIER: Moody's Cuts CFR to Caa2; Outlook Negative
-----------------------------------------------------------------
Moody's Investors Service has downgraded the Corporate Family
Rating of Norske Skogindustrier ASA to Caa2, the Probability of
Default rating to Caa2-PD and the rating of the company's Senior
Unsecured Notes to Caa3 (LGD 4, 64%). The outlook on all ratings
is negative.

Rating Rationale:

The rating downgrade reflects Norske Skog's weak liquidity
profile as well as the deterioration in industry conditions and
in Norske Skog's profitability and credit metrics.

Norske Skog is facing various refinancing requirements over the
next few years. Moody's estimates that the company's liquidity
sources are not currently sufficient to cover approximately
NOK900 million Senior Unsecured Notes maturing in 2014. Norske
Skog announced in its Q2 2013 results release that its EUR70
million revolving credit facility will be cancelled by end of
September, ahead of the original maturity date in May 2014.
Following the cancellation, Norske Skog will not have any
backstop liquidity arrangements, with remaining cash sources
pertaining to NOK1.58 billion of cash on balance sheet as of June
2013 and operating cash generation which Moody's estimates in the
region of NOK200-400 million for the next twelve months. While
these sources are still likely in Moody's view to cover projected
cash uses, pertaining to capex, operational cash needs and
repayment of the drawn RCF (ca. NOK550 million equivalent) over
the next few months, they are not sufficient to address scheduled
debt maturities in 2014. While Moody's understands that Norske
Skog is actively trying to secure additional cash sources,
including further asset disposals and asset based lending
options, these measures inevitably have associated market
execution risks as to value and timing. Given these risk factors,
the negative outlook reflects potential for further negative
rating actions should Norske Skog fail to secure new funding
sufficient to cover 2014 maturities.

The rating action also reflects very weak profitability and cash
generation in H1 2013 on the back of severe industry conditions,
characterized by a significant decline in demand with market
volumes in Europe down about 6% compared to last year and pricing
pressure. As a result, the company's reported EBITDA dropped by
about 50% to NOK388 million in the first six months compared to
H1 last year. Some of the drop however also relates to capacity
closures and asset sales implemented over 2012. While the company
pointed towards improving profitability over H2 2013 on the back
of implemented price increases, Moody's cautions that these will
unlikely be sufficient to recover the drop in profitability
experienced in the first half. Also, given the unabated decline
in demand, absent additional capacity closures, Moody's believes
that price increases may only be short-lived.

Given Norske Skog's liquidity pressures and the negative outlook
on the ratings, Moody's considers that there is currently limited
potential for any upward ratings pressure. However, if a solution
is found to address the near-term liquidity requirements, the
outlook could be stabilized, while further positive pressure
might develop over time should Norske Skog be able to improve its
profitability to sustainable levels that allows it to generate
meaningful positive free cash flow.

The rating could be downgraded further should Norske Skog be
unable to implement a successful refinancing over the next
months.

Downgrades:

Issuer: Norske Skogindustrier ASA

Probability of Default Rating, Downgraded to Caa2-PD from Caa1-PD

Corporate Family Rating, Downgraded to Caa2 from Caa1

Senior Unsecured Regular Bond/Debenture Oct 15, 2015, Downgraded
to Caa3 from Caa2

Outlook Actions:

Issuer: Norske Skogindustrier ASA

Outlook, Changed To Negative From Stable

Adjustments, Issuer: Norske Skogindustrier ASA

Senior Unsecured Regular Bond/Debenture Oct 15, 2015, Upgraded to
a range of LGD4, 64 % from a range of LGD4, 65 %

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

Norske Skogindustrier ASA, with headquarters in Oslo, Norway, is
among the world's leading newsprint producers with production in
Europe, South-America, Asia and Australasia. The company also
produces magazine paper in Europe. In the last twelve months
ending June 2013, Norske Skog recorded sales of around NOK14.3
billion (approximately EUR1.8 billion).



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


* Fitch: New Debt Regulations Will Challenge Polish Subnationals
----------------------------------------------------------------
Fitch Ratings says in a new report that new debt regulations will
present challenges for Polish subnationals in 2013-2014. In
particular, Fitch highlights that the new debt limit suppresses
Polish local and regional governments' (LRGs) investment but
encourages them to improve operating results.

To comply with the new debt limit, binding from 2014, Polish LRGs
have begun to more broadly exploit their revenue-raising
flexibility, by increasing local tax rates and fees, including
public transport fares, parking and rental fees. Simultaneously,
they are counteracting the continued pressure on operating
expenditure growth, by launching efficiency rationalization
measures.

Fitch expects these trends to continue in 2013-2014 with LRGs
further improving their operating performance as in 2012 when the
aggregate LRGs' operating balance rose to about PLN15 billion
(9.7% of current revenue) from PLN14 billion in 2011 (9.3%).

The new debt limit has driven LRGs to reduce their current
investment activity, limiting their budgetary deficits and thus
the demand for debt. In 2012 capital spending declined by 16% to
PLN35.6 billion and accounted for 19.7% of total spending (23.3%
in 2011). Following a much lower budgetary deficit, the sector's
debt growth slowed to only 3.3% in 2012 from an average of 30%
annually in 2009-2011. Fitch expects the LRGs' capex to further
decline in 2013-2014, coupled with the current EU budget program
coming to an end.

Improved operating performance, coupled with a projected decline
in debt financing needs, should improve the LRGs'
creditworthiness and their ratings. However, some LRGs may face
problems in complying with the new debt limit and thus adopting
their budgets. This could lead to major turbulence in their
finances and even threaten the fulfillment of their core public
responsibilities.



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


LSR GROUP: Fitch Affirms 'B' Long-Term Foreign Currency IDR
-----------------------------------------------------------
Fitch Ratings has affirmed OJSC LSR Group's (LSR) Long-term
foreign currency Issuer Default Rating (IDR) at 'B' with a Stable
Outlook and the senior unsecured rating of the outstanding bond
issues at 'B'.

The affirmations reflect LSR's leadership in the building
materials, construction and development market of St. Petersburg
and Leningrad region. The ratings are supported by LSR's
integration into building materials, which provides better input
cost control and exposure to the more stable infrastructure
segment. The ratings also reflect LSR's still high geographical
concentration in North-Western Russia, industry cyclicality and
capital intensity, as well as higher than average systemic risks
associated with Russian business and jurisdictional environment.

KEY RATING DRIVERS
Top-Five Developer in Russia
LSR Group retains its position as one of the top-five real estate
developers in Russia with ca. 1% volume share in highly
fragmented Russian residential construction market. The company
is the leading elite real estate and is one of the leading mass
market real estate players in St. Petersburg. LSR is also the
leading building materials producer in North-Western Russia.

Limited Geographical Diversification
Over 80% of LSR's revenues historically come from St. Petersburg
and the surrounding Leningrad region (North-Western Russia),
where the company's business originated. LSR targets regional
diversification via increasing its presence in Moscow region and
Urals, increasing the revenue share increase from 20% in 2012.

Robust Land Bank
Over the past few years, LSR has kept a steadily high land bank
of around 8 million sq. m., which is mostly concentrated in
North-Western Russia (over 70% of total). The land bank is
sufficient given it is 26x higher than real estate completions
and 19x higher than new real estate sales in 2012.

Integrated Business Model
LSR is vertically integrated into building materials and
aggregates, which contributed 31% of its revenue and 35% of its
EBITDA in 2012. Vertical integration supports the ratings via the
issuer's better input cost control and its exposure to the less
volatile infrastructure construction segment, which in turn is
supported by the government.

Margins Supported by Cement and Bricks
LSR launched the new 1.86mtpa cement plant in 2011 and new 120
million units brick plant in 2012. The ongoing ramp up of both
plants will result in improving margins for the building
materials segment from 2013 onwards, which will positively affect
group-wide performance.

Focus on Deleveraging
Following the recently launched US$800 million new cement and
brick plants LSR has no projects of comparable size over the next
couple of years. Consequently, Fitch expects material capex
moderation in 2013-2014 leading to neutral free cash flow (FCF)
generation and FFO adjusted leverage falling below 3.0x, given no
major market shocks.

Bondholders Structurally Subordinated
Secured bank debt accounted for RUB25 billion of RUB39 billion
total debt at end-2012, making unsecured bondholders (RUB14
billion) structurally subordinated to bank debt. However, the
degree of subordination is acceptable as nearly two-thirds of
bank debt is the financing of new launched cement and brick
plants, with only the projects' assets and shares as material
pledge and the repayment coming from the projects' cash flows.

Russian Realty Market Deceleration
Following the 2010-2012 Russian real estate market recovery
supported by double-digit mortgage market growth, Fitch expects
market growth to continue decelerating, driven by 1pp average
mortgage interest rate growth in H212-H113 and higher base
effect. At the same time, the medium-term prospects remain
supported by mortgage market penetration potential, the
government's intention of reducing interest rates alongside with
inflation, and poor living conditions.

Rating Sensitivities

Future developments that could lead to positive rating action
include:

-- Sustainable improvement in the financial metrics leading
   to EBIT margin above 15%;

-- FFO adjusted gross leverage below 3.0x;

-- Positive FCF generation;

Future developments that could lead to negative rating action
include:

-- Market deterioration leading to EBIT margin below 10% and/or
   worsened liquidity position;

-- Leveraging with FFO adjusted gross leverage sustainably above
   4.0x.


PROMSVYAZBANK: S&P Assigns 'BB/B' Counterparty Credit Ratings
-------------------------------------------------------------
Standard & Poor's Ratings Services said it assigned its 'BB/B'
long- and short-term counterparty credit ratings and and its
'ruAA' Russia national scale rating to Russian non-state bank
Open Joint Stock Company Promsvyazbank (PSB).  The outlook is
stable.

"We base our ratings on PSB on our 'bb' anchor for a commercial
bank operating only in Russia, the bank's "adequate" business
position, "moderate" capital and earnings, "moderate" risk
position, "average" funding, and "adequate" liquidity.  The
stand-alone credit profile (SACP) is 'bb-'.  The ratings
incorporate one notch of uplift above the bank's SACP, to reflect
the bank's moderate strategic importance in Russia," S&P said.

"Our assessment of PSB's business position as adequate balances
the bank's well-established competitive standing and well-
diversified business mix in a Russian context against its limited
competitive power compared with larger state-owned banks.  PSB is
one of Russia's top 10 largest banks and had total assets of
about Russian ruble (RUB)680 billion as of March 31, 2013, (about
US$23 billion).  It provides financial services to corporate,
retail, and small and midsize enterprise (SME) clients, although
it has a strong corporate focus.  Historically, factoring and
trade finance have been the bank's key areas of specialization.
PSB's track-record of profitability, even during the 2008-2009
crisis when it bank posted a much more moderate loss than peers,
shows the stability of its business model.  Russian businessmen,
brothers Alexei and Dmitry Ananyev who established the bank,
together own 88.25% of the entity.  We consider that the owners
take a consistent and rational approach to business development,
which implies a high level of risk awareness," S&P noted.

S&P considers PSBs capital and earnings to be moderate.  Lower
capital adequacy than peers remains one of the bank's major
rating constraints.  This is partly offset by its good earnings
generation capacity, with return on assets likely exceeding 1% in
2013 compared with 1.3% in 2012, which S&P considers to be
enough to build up capital.

"We assess PSB's risk position as "moderate."  The bank's gross
nonperforming loans (NPLs; more than 90 days overdue) stood at
about 3.9% of total loans as of March 31, 2013, which compares
well with the industry.  We understand, however, that asset
quality metrics are affected by the bank's policy of writing off
or selling some of its problematic assets on a regular basis.  We
note that the bank's ambitious loan growth plans that imply a
growing share of loans to riskier segments such as SME and retail
business, are likely to lead to an increase in non-performing
assets.  At the same time, we expect the NPL ratio to remain
within 5% of total loans in the next 12-24 months, with the
assets sold or written off remaining within 1.5%.  We consider
the quality of borrowers to be only average and risk
concentrations to be moderately high, with the 20 largest
borrowers contributing about 22% of total loans and about 175% of
adjusted total equity (ATE) as of Dec. 31, 2012," S&P added.

PSB's funding is average and its liquidity adequate, in S&P's
opinion.  The bank's loan to deposit ratio was at 114% as of
March 31, 2013, and S&P do not expect it to grow above 120%
within the next 12-24 months.  The bank is mostly funded by
current accounts and deposits from customers, the largest
portions of which are corporate clients (42% of customer accounts
and deposits), retail (42%, 20% of which is high net-worth
individuals).  The bank maintains an adequate liquidity cushion
with cash and money market instruments comprising about 18% of
total assets as of March 31, 2013, amply covering debt repayments
in the next 12 months.

S&P considers PSB to have moderate systemic importance within the
Russian banking sector, given its strong market presence and
well-developed branch network across the country.  The long-term
rating therefore incorporates one notch of uplift for the
moderate likelihood of extraordinary government support.

The outlook on PSB reflects S&P's expectation that the bank will
successfully manage the risks associated with its planned
business expansion, and that its asset quality and capitalization
ratios will not worsen significantly.

S&P might consider a negative rating action if it sees a decline
in capitalization, with the projected RAC ratio going down to
less than 5%.  This could happen if the share of non-performing
loans is higher than S&P currently expects, leading to a sharp
increase in credit costs and decline in the bottom-line financial
results.

The possibility of a positive rating action is currently remote.
An upgrade would necessitate a substantial change in capital
management, with PSB operating with much higher capital buffers
than it has had for past few years.  S&P do not expect such a
change in the next 12 to 24 months.



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


BANKINTER SA: S&P Revises Outlook to Stable & Affirms 'BB' Rating
-----------------------------------------------------------------
Standard & Poor's Ratings Services changed its outlook on the
mortgage covered bonds issued by Spain-based Bankinter S.A.
(BB/Stable/B) to stable from negative.

In June 2013, the asset-liability mismatch risk for Bankinter's
mortgage covered bond program fell below 15%, a level that S&P
considers "low" according to its criteria, following the early
redemption of notes.  This increased the maximum potential uplift
above the issuer credit rating to six notches.  S&P's credit and
cash flow analysis determined that the available credit
enhancement was commensurate with all six notches of uplift.

S&P has revised its outlook on Spanish bank Bankinter S.A. to
stable from negative and affirmed its 'BB/B' long-and short-term
counterparty credit ratings.

Bankinter's mortgage covered bonds currently benefits from the
maximum potential uplift above S&P's rating on the issuer.

The stable outlook reflects that on the issuer.  This means that,
all else being equal, any rating action on the issuer would
automatically lead to a corresponding rating change on the
covered bonds.


CECABANK SA: Moody's Lowers Deposit Ratings to 'Ba3'
----------------------------------------------------
Moody's Investors Service has downgraded the deposit ratings of
Cecabank SA by two notches to Ba3 from Ba1, following the
lowering of the bank's baseline credit assessment (BCA) to b1
from ba2, which is equivalent to a standalone bank financial
strength rating (BFSR) of E+, down from D. All of the bank's
ratings carry a negative outlook and the short-term ratings
remain Not Prime.

This rating action concludes the review for downgrade which
Moody's initiated on May 17, 2012 and extended on October 24,
2012 for Cecabank's predecessor CECA.

Ratings Rationale:

Lowering of the Standalone Credit Assessment

The downgrade of Cecabank's standalone BFSR and the lowering of
the BCA reflect the pressures stemming from its business model as
provider of services to Spanish financial institutions, mainly
former savings banks which represent around 75% of the total
revenues earned by Cecabank as service provider. Cecabank's
traditional business model has been the rendering of services to
small- or medium-size savings banks lacking size to execute these
transactions themselves and which formed a captive customer base
representing a large part of the Spanish banking system. This
business model has been hit by the ongoing consolidation and
restructuring process of the savings banks segment.

As a consequence of the changes in the structure of the Spanish
savings banks segment, former savings banks have gained critical
size through mergers with an increased capacity to cover the
services provided by Cecabank or maintain their own service
infrastructure; or they are being acquired by stronger Spanish
peers (e.g. large commercial banks) with their own service
infrastructure. In addition, the weakening credit profile of
former savings banks -- whose ratings have been severely
downgraded throughout the banking crisis -- puts additional
pressure on the revenues earned from this segment and also
increases Cecabank's counterparty risk from the credit exposures
that the bank has to the segment. As an additional constraining
factor of Cecabank's recurrent revenue generation capacity,
Moody's notes the declining level of economic activity in Spain,
which points to an overall reduced demand for financial services
from the system.

Moody's acknowledges the strategic reorientation undertaken
recently by Cecabank to adapt to the challenges, whereby the bank
aims to occupy a leading position in Spain in the provision of
independent custody, settlement and deposit of funds and
securities services, in order to offset the decline in revenues
from the provision of other type of services. While Moody's
acknowledges recent signs of success of this strategy, the rating
agency believes that such success is unlikely to enable Cecabank
to maintain the same strong franchise value and capacity to
generate recurrent earnings compared with levels recorded prior
to the break-up of the Spanish savings banks segment.

In addition to these challenges, Moody's notes that a significant
portion of Cecabank's revenues are generated from the activity of
the bank's treasury desk. Moody's acknowledges the good
performance of this revenue line in recent years and the fact
that most of these activities are performed with Spanish public
debt rather than with esoteric assets. However, the rating agency
notes (1) the exposure to earnings volatility of this revenue
line because it relies on the performance of financial markets;
and (2) the opacity of the risk taken inherent to these types of
activities. Moody's acknowledges that the potential risk arising
from the realization of sizeable losses from these types of
activities is a constraining factor for Cecabank's standalone
rating.

Downgrade of the Deposit Ratings

The two-notch downgrade of Cecabank's deposit ratings reflects
the two-notch lowering of the bank's BCA.

Moody's has reduced its assessment of probability of systemic
support from 'high' to 'moderate', driven by the rating agency's
consideration that the bank's profile as a key service provider
for the Spanish banking system has diminished. The new assessment
of systemic support still results in a one-notch uplift from the
b1 BCA, the same uplift conferred before the downgrade.

Rationale for the Negative Outlook

The negative outlook on Cecabank's deposit ratings reflects
Moody's view that the bank's ratings are more exposed to negative
rating pressure than to potentially positive developments.
Cecabank will remain exposed to an adverse operating environment,
driven by the still ongoing restructuring of the savings banks
segment, as well as the challenges on the business of the bank's
customers arising from the poor economic conditions in Spain. The
adverse operating environment exerts further downward pressure on
Cecabank's revenues and profitability and therefore on its
ratings.

What Could Move The Rating Up/Down

There is currently no upward pressure on Cecabank, given the
current negative outlook.

Negative pressure on Cecabank's long-term deposit rating could
result from a further downgrade of the Spanish government's
ratings (Baa3 negative), as well as from a downgrade of the
bank's standalone BFSR.

The standalone BFSR could be downgraded due to any of the
following factors: (1) a failure by Cecabank to maintain its
footprint in the Spanish financial system as a consequence of the
ongoing restructuring of the savings banks segment; (2) increased
market-risk appetite against the background of a less
conservative investment policy; and/or (3) a further
deterioration of savings banks' credit quality. In addition to
these bank-specific factors, Moody's also notes that a worsening
of economic conditions in Spain beyond Moody's current
expectations (i.e., a broader economic recession beyond the
rating agency's current GDP forecast of a 1.4% contraction for
2013 and a GDP growth forecast between 0% and 1% for 2014) could
prompt a reduction in Cecabank's business volume following
diminishing demand by Spanish banks for financial services.

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

Headquartered in Madrid, Spain, Cecabank had total, audited
assets of EUR15 billion as of year-end 2012.



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


BRIGHTHOUSE GROUP: Moody's Rates GBP200MM Sr. Notes Issue 'B2'
--------------------------------------------------------------
Moody's Investors Service has assigned a definitive B2 instrument
rating with a loss given default of LGD4 (54%) to the GBP220
million of senior secured notes due 2018 issued by BrightHouse
Group plc. (UK) following the successful execution of the group's
refinancing and review of the final credit documentation.
BrightHouse's B2 corporate family rating (CFR), B2-PD probability
of default rating (PDR) and the stable outlook on all ratings
remain unchanged.

Ratings Rationale:

The definitive B2 senior secured instrument rating is in line
with the provisional (P)B2 rating assigned on April 30, 2013. The
rating is at the same level as the CFR, reflecting the limited
amount of debt ranking ahead of the notes in the capital
structure. The guarantors for the notes and the RCF are the same.
However, based on the terms of an inter-creditor agreement, while
the liens securing the notes will rank equally with the liens
that secure the RCF, in the event of enforcement of the
collateral, holders of the notes will receive proceeds only after
the lenders under the RCF have been repaid in full.

BrightHouse's B2 CFR balances Moody's assessment of the company's
scale and fairly high leverage, as well as the potential
regulatory and credit risks in the industry, with the company's
solid track record of growth and deleveraging in recent years,
with reported EBITDA rising to GBP49.4 million in FY2013 from
GBP29.4 million in FY2009.

In Moody's view, the key constraints to BrightHouse's B2 rating
include its small scale and high leverage of approximately 5.8x
on a pro forma basis for the transaction and based on FYE2013
earnings, as well as the risks related to potential regulatory
changes, to which the broader industry is also exposed. The
Office of Fair Trading currently regulates the consumer credit
market, and while recent reviews have not had any apparent impact
on BrightHouse's earnings, any significant reform to the
provision of credit, or to the terms that apply, could impact
future growth. Moody's also notes the credit risk associated with
the loan book's quality given the long-term nature of contracts
and the company's reliance on these contracts for future
revenues. In BrightHouse's case, approximately 64% of its FY2013
hire-purchase revenues had been pre-sold as of the beginning of
the year. While this should in principle result in stable
earnings, it relies on careful control of the credit quality of
the loan portfolio. The company reported a bad debt charge of
approximately 8% of revenues over the past two years.

The B2 rating also reflects the company's strong track record of
growth and deleveraging in recent years, reflecting both its
organic growth as well as new store openings. BrightHouse
reported 8.3% like-for-like revenue growth in FY2013 (to March),
and 7.4% in FY 2012, which is strong compared with rated retail
peers, especially in non-food. The company operates 284 stores
across the UK, compared with 147 in 2007, with 27 new stores
having opened in FY2013 alone. BrightHouse's client base consists
largely of low-income earners (approximately 60% are below the UK
median income), many of whom are recipients of state benefits.
Moody's believes that BrightHouse's fairly unique product
offering, notably product rentals over three years with the right
to purchase at the end of the contract, differentiates it from
most mainstream retailers, while it supplements this offering
with optional service and damage liability cover. Moody's
nevertheless assesses BrightHouse in the context of the broader
retail market, which can represent viable competition insofar as
customers can obtain credit financing from other sources, or
indeed opt to purchase with no credit.

Moody's deems the company's liquidity to be adequate. As at
March 31, 2013, the company retained approximately GBP11 million
in cash, of which GBP1.7 million was classified as restricted due
to solvency requirements reflecting the insurance business and
cash held in segregated accounts as a result of voluntary
prepayments by customers. The liquidity assessment further
assumes that the company will retain access to a Revolving Credit
Facility (RCF) of GBP25 million, which was undrawn at closing.
The RCF retains financial covenants for net debt-to-EBITDA,
falling from 6.8x as of June 2013 to 4.1x as of March 2016. As
the notes (and the longer-dated shareholder loans) represent the
company's only debt liabilities, the company did not report any
short-term debt following the transaction. The rating agency also
expects that the company will retain strong covenant headroom
under the RCF at all times. Given the seasonality in cash flows -
- with the third quarter seeing a working capital outflow due to
higher demand -- Moody's expects that the peak drawing on the RCF
will be in that quarter. On this basis, if the RCF were to become
inaccessible, Moody's would view the company's liquidity as weak,
or potentially inadequate, and this could have rating
implications.

The GBP220 million in senior secured notes due 2018 were used to
repay existing debt of approximately GBP75 million, certain
transaction costs and the repayment of GBP128.8 million of the
existing shareholder loan of GBP153.9 million, of which GBP25.1
million remains outstanding. On this basis, following this
transaction and based on FYE2013 results, the company's pro forma
gross adjusted leverage is estimated at approximately 5.8x.
Moody's has not added back the depreciation of rental assets in
calculating EBITDA, in line with management's calculation of
EBITDA.

Outlook

Following the transaction, the company is weakly positioned
within the rating category, but Moody's believes that the
company's track record of deleveraging will enable it to become
more strongly-positioned in the rating category over time. For
the rating to be more firmly positioned, gross adjusted leverage
would need to trend towards 5x. The B2 CFR reflects Moody's view
that based on past performance, this could be achieved in the
next 12-18 months.

What Could Change The Rating Up/Down

In light of the current rating positioning, upward pressure is
unlikely in the current year. However, the rating could be
positively impacted if leverage were to fall comfortably below
4.5x with strong liquidity. Conversely, there could be downward
pressure if leverage were to rise above 6x on a continued basis,
or if liquidity conditions deteriorated. On this basis, there
remains limited flexibility within the current rating category.

Principal Methodology

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

BrightHouse Group plc., based in Watford, is a leader in the UK
in the rent-to-own market for new and refurbished household
products. In FY2013 (to March), the company reported revenues and
an operating profit of GBP297 million and GBP35.5 million,
respectively.


CO-OPERATIVE BANK: Chief Executive Reassures Members Over Future
----------------------------------------------------------------
The Scotsman reports that Euan Sutherland, chief executive of the
Co-operative Group, has written to 1.9 million of its members to
reassure them over the mutual's future and defend a painful
rescue of its banking arm.

Acknowledging investor fury over the "bail-in" of the
Co-operative Bank -- in which bondholders must help plug a GBP1.5
billion hole in its finances -- Mr. Sutherland, as cited by the
Scotsman, said the plan will avoid further damaging asset sales
and is a better option than a taxpayer bailout.

Recently-appointed Mr. Sutherland e-mailed members at the weekend
after a turbulent three months which has seen the collapse of its
deal to buy 632 branches from Lloyds Banking Group, warnings from
ratings agency Moody's over its health and a capital shortfall,
the Scotsman relates.

According to the Scotsman, the former B&Q boss said that, while
the group is struggling through difficult times, it remains
"fundamentally strong" and is now well-placed to tackle future
challenges.

Mr. Sutherland, who took over in May, said while some investors
suggested the group should carry the full burden of the rescue,
it also has responsibilities to its members, the Scotsman notes.

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.


HIBU PLC: Shareholders Mull Legal Action Over Restructuring Deal
----------------------------------------------------------------
Roland Gribben at The Telegraph reports that shareholders in Hibu
plc, the former Yellow Pages business, are considering mounting
legal action against the board if they are frozen out of a
restructuring deal due to be announced later this week.

Around 300 shareholders, who claim to account for an estimated
20% of the group equity, have joined forces to salvage something
from a debt for equity package that will leave creditors in
control and investors with nothing, the Telegraph discloses.
They have seen the share price plunge from more than 600p to less
than 0.3p as the one time directory company entered a series of
disastrous deals and struggled against online competitors, the
Telegraph relates.

"We have a committed group of individuals and professionals who
will not simply give up on this investment.  We will be looking
at the restructuring extremely closely to ensure our best
interests have been served.  If it turns out that this is not the
case, we will look at taking legal action," the Telegraph quotes
a spokesman for the action group as saying.

Shareholders are subscribing to a legal fund to support their
case, but analysts say they face an uphill task in trying to
influence changes in the survival package, the Telegraph notes.

According to the Telegraph, the shareholders claim that directors
had not acted in the best interest of investors over the past two
years and "in our opinion many statements made have been
misleading".

Many shareholders had acted on the back of comments made by the
board, the Telegraph relates.  Despite paying down more than 50%
of its debt burden in the past four years, directors decided to
put the company into voluntary default on its loan agreements,
the Telegraph discloses.  "This was done despite there being
sufficient free cash flow to service this obligation," the
shareholders, as cited by the Telegraph, said.

The deal to be announced tomorrow, accompanied by the release of
full-year results, is expected halve group debt to under GBP1
billion with creditors including Ares, Soros Fund Management and
Deutsche Bank moving into the driving seat, the Telegraph
discloses.

The deal will also create uncertainty for Hibu's 13,000
employees, the Telegraph states.

Hibu Plc is a British Yellow Pages publisher.

                          *     *     *

As reported by the Troubled Company Reporter-Europe on March 5,
2013, Standard & Poor's Ratings Services said that it lowered to
'D' (default) from 'CC' its long-term corporate credit rating on
U.K.-based international publisher of classified directories hibu
PLC.  The downgrade follows hibu's nonpayment of interest on its
2009 credit facility on the due date of Feb. 28, 2013.


PARAGON SECURED: S&P Affirms 'B' Rating on Class C Notes
--------------------------------------------------------
Standard & Poor's Ratings Services affirmed all of its credit
ratings in Paragon Personal and Auto Finance (No. 3) PLC and
Paragon Secured Finance (No. 1) PLC.

The rating actions follows S&P's performance review, where it
conducted its credit and cash flow analysis using the servicer's
most recent information, and the application of its relevant
criteria.

           Paragon Personal And Auto Finance (No. 3) PLC

Since S&P's previous review of the transaction on July 4, 2012,
total delinquencies have increased by 25 basis points (bps) to
13.98% of the pool's current balance.  During this period, severe
delinquencies (of 90 days or more) have increased to 8.71% from
7.92%.  Delinquencies for 30 to 90 days have decreased to 5.27%
from 5.81%, partially offsetting the increase in severe arrears.

The transaction's available credit enhancement has increased
considerably since S&P's last review due to the amortization
rate, combined with a nonamortizing reserve fund, which has
increased to 28.35% of the pool's current balance, from 22.39%.
The class A notes' subordination has doubled since closing, the
reserve fund is fully funded, there is no asset/liability
mismatch, and the April 2010 interest payment date has passed.
As a result, the transaction's documented conditions have all
been satisfied and the transaction is now amortizing on a pro
rata basis.  S&P also notes that the transaction is generating
robust excess spread of about 3.86% in the last year.

S&P based its analysis on the pool of mortgage loans, which
comprise more than 97% of the total pool.  The remaining 3%
comprises unsecured personal loans, auto loans, and retail credit
loans.  S&P has scaled up the mortgage loans balance by
increasing the mortgage loan balance to match the outstanding
note balance. This assumption is more conservative than if S&P
was to have applied its asset-backed securities (ABS) criteria to
the aforementioned remaining 3% ABS portion of the transaction.
Due to the nature of the ABS assets, S&P expects the percentage
of mortgage loans to continue to increase.

The transaction's swap documentation is not in line with S&P's
current counterparty criteria.  Due to the transaction's
dependence on the currency swap, S&P's current counterparty
criteria caps its ratings in the transaction at one notch above
our long-term 'AA-' issuer credit rating (ICR) on HSBC Bank PLC
as the swap counterparty.

Additionally, S&P considers the transaction to be exposed to
commingling risk through the collection account provider,
National Westminster Bank PLC (NatWest).  S&P has therefore
applied a credit loss to those classes of notes that it rates
above its long-term 'A' ICR on NatWest; in this case, the class
A, B, and C notes.

S&P has also applied a commingling liquidity stress to those
classes of notes that it rates equal to, or below its ICR on
NatWest, i.e., the class D notes.  S&P's current counterparty
criteria therefore caps at 'A' its ratings on these notes.

In S&P's cash flow analysis, using the weighted-average
foreclosure frequency (WAFF) and weighted-average loss severity
(WALS) figures below, all of the notes passes S&P's cash flow
stresses at the currently assigned rating levels.  They did not
pass S&P's cash flow stresses at higher rating levels.  Following
S&P's cash flow analysis, it has affirmed its ratings on the
class A1, A2, B1, B2, C1, C2, D1, and D2 notes.

Rating       WAFF            WALS
level        (%)             (%)
AAA          49.21           95.81
AA           40.48           93.74
A            33.99           88.68
BBB          27.22           85.30
BB           18.78           82.50
B            15.43           79.56

Paragon Personal and Auto Finance (No. 3) securitizes a pool of
second-ranking mortgages, auto loans, unsecured personal loans,
and unsecured retail credit loans.  Paragon Personal Finance
Ltd., Colonial Finance Ltd. (UK), and Paragon Car Finance Ltd.
originated the collateral.

                Paragon Secured Finance (No. 1) PLC

Since S&P's previous review of the transaction on June 7, 2012,
severe delinquencies have increased by 1.08%, to 10.93% from
9.85%.  Overall delinquencies remain slightly above the level of
those that S&P has observed in transactions with a similarly
large proportion of second-lien loans, but low compared with
S&P's nonconforming U.K. residential mortgage-backed securities
(RMBS) index.  The transaction writes-off delinquencies over 360
days, reducing the level of severe arrears.

The transaction's available credit enhancement has increased
because it has been deleveraging and because the reserve fund has
increased to GBP15.9 million from GBP13.5 million.  The
transaction is currently amortizing sequentially, as not all of
the documented pro rata triggers have been satisfied.  S&P has
considered this in its cash flow analysis.  The reserve fund
remains fully funded and the transaction has robust excess spread
of about 6.08% in the last year.

Additionally, S&P considers the transaction to be exposed to
commingling risk through the collection account provider,
NatWest. S&P has therefore applied a credit loss to those classes
of notes that it rates above its long-term 'A' ICR on NatWest; in
this case, the class A notes only.  S&P has also applied a
liquidity stress to those classes of notes that it rates equal
to, or below the ICR on NatWest; in this case, the class B and C
notes.

Based on S&P's credit analysis, in which it considered the
transaction's credit quality, the available credit enhancement,
excess spread in the transaction, and the prevailing
macroeconomic conditions, S&P has affirmed its ratings on the
class A, B, and C notes.

Rating       WAFF            WALS
level        (%)             (%)
AAA          55.61           99.24
AA           46.60           97.72
A            39.61           94.19
BBB          31.91           91.76
BB           22.18           89.87
B            18.42           87.93

Paragon Secured Finance (No. 1) securitizes a pool of second-
ranking British residential mortgages.  Paragon Personal Finance
Ltd. originated the collateral.

                         CREDIT STABILITY

S&P's credit stability analysis indicates that the maximum
projected deterioration that it would expect at each rating level
over one- and three-year periods, under moderate stress
conditions is in line with its credit stability criteria.

          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 Reports
included in this credit rating report are available at:

            http://standardandpoorsdisclosure-17g7.com

RATINGS LIST

Ratings Affirmed

Class        Rating

Paragon Personal and Auto Finance (No. 3) PLC
EUR358 Million, GBP204.5 Million Mortgage-Backed
Floating-Rate Notes

A1           AA (sf)
A2           AA (sf)
B1           AA (sf)
B2           AA (sf)
C1           AA- (sf)
C2           AA- (sf)
D1           BBB (sf)
D2           BBB (sf)

Paragon Secured Finance (No. 1) PLC
GBP300 Million Mortgage-Backed Floating-Rate Notes

A            AA+ (sf)
B            BBB- (sf)
C            B (sf)


TRANSOL WORLDWIDE: Placed in Liquidation
----------------------------------------
Ashleigh Wight at MotorTransport reports that former Pall-Ex and
Fortec member Transol Worldwide Logistics has been placed in
liquidation after it appointed administrators earlier this year,
owing GBP739,810.

The Coventry-based operator, which had O-licences to run 20
vehicles and seven trailers across two sites in Coventry, was
placed in liquidation on July 9, 2013, by administrators
Brett Barton and Tony Mitchell, both of Cranfield Business
Recovery.

The haulier left Pall-Ex back in August 2012, just four months
after it joined, the report notes.


TRAVELEX HOLDINGS: S&P Assigns Prelim. 'B' Corp. Credit Rating
--------------------------------------------------------------
Standard & Poor's Ratings Services said it assigned its
preliminary 'B' long-term corporate credit rating to U.K.-based
foreign exchange services provider Travelex Holdings Ltd.  The
outlook is stable.

"At the same time, we assigned our preliminary 'B' long-term
issue rating to Travelex' proposed five-year GBP350 million of
senior secured notes, in line with the corporate credit rating.
The preliminary recovery rating on the notes is '4', indicating
our expectation of average (30%-50%) recovery in the event of a
payment default.  We also assigned our preliminary 'BB-' long-
term issue rating to the proposed undrawn GBP90 million super
senior revolving credit facility (RCF).  The preliminary recovery
rating on the RCF is '1', indicating our expectation of very high
(90%-100%) recovery," S&P said.

The rating on Travelex reflects S&P's view of the company's
"fair" business risk profile and its "highly leveraged" financial
risk profile.

Travelex operates more than 1,300 stores in airports, tourist
spots and malls, among other locations.  It provides foreign
currency services to financial institutions, supermarkets, travel
agencies, and central banks.

"Our assessment of Travelex' business risk profile as fair
reflects the company's exposure to the cyclical travel industry,
ongoing trends reducing the share of cash as a payment method,
moderate profitability, and potential margin pressure on the
renewal of concessions.  Additionally, we factor in concentration
risks relating to Heathrow airport's 8% contribution to total
revenues (in fiscal 2012) and to wholesale customers, in
particular from Nigeria.  Risks from currency swings, although
limited owing to the company's active hedging practices, also
affect the business risk profile," S&P added.

"These weaknesses are partly offset by the company's position as
the largest nonbank provider of travel money worldwide, favorable
long-term trends for air travel volumes, good product and
regional diversification, and a strong franchise.  Moreover,
Travelex is operating in a complex regulated environment, which
could have a pronounced negative impact on group operations.
Notwithstanding, we think that such a risk is limited and partly
mitigated by the company's solid track record and by the high
barriers to entry generated by regulation requirements," S&P
noted.

The main factor constraining Travelex' financial risk profile is
its high debt.  Under S&P's base-case scenario, it expects
Standard & Poor's adjusted debt to EBITDA of close to 18x as of
December 2013.  According to S&P's criteria, it considers the
shareholder loans and preference shares as debt-like.  Excluding
these instruments, we forecast adjusted debt to exceed EBITDA by
close to 8x in 2013, which would be firmly within S&P's highly
leveraged category for financial risk.  S&P thinks that revenue
growth of close to 10% in 2014 and improving EBITDA margin will
facilitate a reduction in these ratios to about 16x and just
under 7x, respectively.  S&P also anticipates adjusted EBITDA
cash interest cover averaging about 2.0x over 2013 and 2014.
Partly mitigating the high leverage are Travelex' strong cash
balance and modestly positive free operating cash flow (FOCF).

The stable outlook reflects S&P's expectation that Travelex will
continue to derive positive organic revenue growth of close to
10% and reported EBITDA margins of at least 10%, based on mid-
single-digit growth in international traveler volumes, opening of
new stores and ATMs, and the successful implementation of
business reorganization and IT platform projects.  Adjusted
EBITDA cash interest cover of about 2.0x, positive free operating
cash flow (FOCF), and adequate liquidity also support the stable
outlook.

S&P could lower the ratings on Travelex if unexpected operating
setbacks cause earnings growth to slow to the extent that FOCF
generation turns negative as this may lead S&P to regard the
capital structure as unsustainable.  S&P could also lower the
ratings if adjusted EBITDA cash interest cover falls to below
2.0x for an extended period.

Given the group's highly leveraged capital structure, S&P
considers a near-term positive rating movement to be unlikely.  A
positive rating action would depend on Travelex' sustainable
deleveraging to less than 6x (on an adjusted basis including
shareholder loans and preference shares) and adjusted EBITDA cash
interest cover of above 2.5x.


* UK: Court to Rule on Pension Scheme Insolvency Ranking Today
--------------------------------------------------------------
Out-Law.com reports that the UK's highest court will today,
July 24, rule on whether an insolvent company's pension schemes
can take priority over other company debts, according to its
website.

Both the High Court and Court of Appeal have previously said that
if the Pensions Regulator issues a claim against a company over a
pension scheme which is in deficit after the company enters
formal insolvency, that action would rank above the claims of
other creditors, including certain claims by banks, Out-Law.com
notes.

"This decision is eagerly anticipated by the stakeholder groups
whom it will directly affect: scheme employers and associated
companies, banks, scheme trustees and investors.  It has highly-
significant implications" said restructuring expert Alastair
Lomax of Pinsent Masons, the law firm behind Out-Law.com.

"The insolvency profession will no doubt be hoping that their
Lordships will be keen to avoid the law of unintended
consequences by finding that moral hazard claims made by the
Pensions Regulator both before and after formal insolvency rank
as provable, unsecured claims in the target company's insolvency.
To do otherwise would afford a greater priority to such claims
against non-employers than is afforded to the scheme's claim in
its employer's insolvency," Out-Law.com quotes Mr. Lomax as
saying.

However, such a verdict would not mean that insolvency
practitioners "could all relax", Mr. Lomax, as cited by
Out-Law.com, said. "The threat of such claims could still produce
a real headache for administrators and liquidators who are faced
with the thorny question of how they should be valued, with a
knock-on effect for other creditors," Mr. Lomax said.

Since 2004, Out-Law.com relates, the Pensions Regulator has had
wide powers to seek financial contributions or support to meet a
pension scheme deficit from companies connected to or associated
with the pension scheme employer through financial support
directions (FSDs) and contribution notices. These powers prevent
the 'moral hazard' that solvent companies in the same corporate
group could leave the scheme without adequate funds knowing that
the Pension Protection Fund (PPF), which guarantees the pensions
of members of DB pension schemes in the event of employer
insolvency, would cover the deficit, says Out-Law.com.

According to Out-Law.com, today's Supreme Court ruling relates to
a claim made by the Pensions Regulator on behalf of former
employees of Nortel Networks and Lehman Brothers' European
division who had been members of defined benefit (DB) pension
schemes.  Out-Law.com says when the companies went into
administration Nortel's scheme was approximately GBP2.1 billion
in deficit, while Lehmans' was approximately GBP148 million in
deficit. When the companies went into administration the
regulator began the process of issuing an FSD against companies
within the two groups that did not participate in the pension
schemes, Out-Law.com relays.


                            *********

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

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

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

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


                            *********


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

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

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

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

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

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


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