TCREUR_Public/130807.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

                           E U R O P E

           Wednesday, August 7, 2013, Vol. 14, No. 155

                            Headlines



G E R M A N Y

SOLARWORLD AG: Creditors Back Restructuring Plan


G R E E C E

DRYSHIPS INC: Q2 Results Conference Call Scheduled for August 8


H U N G A R Y

* HUNGARY: Moody's Outlook for Banking Sector Remains Negative


I R E L A N D

ALLIED IRISH: Reports EUR758 Million Net Loss in H1 2013


I T A L Y

BANCO POPOLARE: Bond Amendments No Impact on Moody's Ratings
SALINI SPA: Fitch Rates EUR400MM Senior Unsecured Bond 'BB'
TELECOM ITALIA: Fitch Cuts Subordinated Hybrid Rating to 'BB'


N E T H E R L A N D S

NXP BV: S&P Raises Corp. Credit Rating to 'BB-'; Outlook Positive
PALLAS CDO II: S&P Cuts Ratings on Three Note Classes to 'CCC+'


P O L A N D

CENTRAL EUROPEAN: Dobrzyniecki to File Shareholder Suit
POLIMEX-MOTOSTAL: Share Sale Deadline Extended to August 31


R U S S I A

RUSSIAN PRIMSOTSBANK: Fitch Hikes LT Issuer Default Rating to B+


S W E D E N

NORTHLAND RESOURCES: Implements Final Steps of Bond Restructuring
SAS AB: S&P Raises Corp. Credit Rating to 'B-'; Outlook Stable


U N I T E D   K I N G D O M

BENEFICIARIES LIMITED: Gets Order to Pay GBP200K Compensation
EQUINOX ECLIPSE 2006-1: Fitch Cuts Rating on Class D Notes to 'D'
GREENSOLUTIONS LTD: In Liquidation; Faces Clyde Gateway Suit
HEARTS OF MIDLOTHIAN: Has Been Issued New Registration Embargo
HUGHES CHILLED: Director Faces 10-Year Disqualification

INVENSYS PLC: Moody's Puts 'Ba1' CFR Under Review for Upgrade
MID STAFFORDSHIRE NHS: GP Calls for Lewisham Hospital's Survival
NORTHERN ROCK: UKAR Pays GBP1.9BB to Taxpayers in 1st Half Year
RAILCARE: Union Calls for Government Intervention by Vince Cable
SALUBRIOUS PLACE: Goes Into Receivership


X X X X X X X X

* Firms May Rearrange Leases to Avoid Balance-Sheet Inclusion


                            *********


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


SOLARWORLD AG: Creditors Back Restructuring Plan
------------------------------------------------
Stefan Nicola at Bloomberg News reports that Solarworld AG
creditors have backed proposals to try to save Germany's biggest
solar-panel maker.

According to Bloomberg, Solarworld said in a statement that a
total of 99.96% of noteholders present in a meeting in Bonn on
Monday representing 35.78% of Solarworld's EUR150 million
(US$198.9 million) of bonds due July 2016 backed the
restructuring plan.  A group representing at least 25% of the
notes was required, Bloomberg notes.

Solarworld reported net debt of EUR806.4 million in the first
quarter, up from EUR757.6 million the year before, Bloomberg
says, citing a company filing.  The company has a EUR250 million
revolving credit facility maturing in 2016, according to data
compiled by Bloomberg.

As reported by the Troubled Company Reporter-Europe on Aug. 6,
2013, Bloomberg News related that Solarworld said in June, Qatar
Solar S.P.C. is seeking 29% of the company through a purchase of
new equities after current share capital is cut by a ratio of
150:1.  The company said bondholders would receive proceeds from
the Qatari deal and a separate purchase of shares by the CEO,
Bloomberg noted.

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



===========
G R E E C E
===========


DRYSHIPS INC: Q2 Results Conference Call Scheduled for August 8
---------------------------------------------------------------
DryShips Inc. on Aug. 1 disclosed that it will release its
results for the second quarter 2013 after the market closes in
New York on Wednesday, August 7, 2013.

DryShips' management team will host a conference call the
following day on Thursday, August 8, 2013, at 9:00 a.m. EDT to
discuss the Company's financial results.

Conference Call details: Participants should dial into the call
10 minutes before the scheduled time using the following numbers:
1(866) 819-7111 (from the US), 0(800) 953-0329 (from the UK) or
+(44) (0) 1452 542 301 (from outside the US).  Please quote
"DryShips."

A replay of the conference call will be available until Thursday,
August 15, 2013.  The United States replay number is 1(866) 247-
4222; from the UK 0(800) 953-1533; the standard international
replay number is (+44) (0) 1452 550 000 and the access code
required for the replay is: 2133051#.

Slides and audio webcast: There will also be a simultaneous live
webcast over the Internet, through the DryShips Inc. website
(www.dryships.com).  Participants to the live webcast should
register on the website approximately 10 minutes prior to the
start of the webcast.

                        About DryShips Inc.

Headquartered in Athens, Greece, DryShips Inc. (NASDAQ: DRYS) is
an owner of drybulk carriers and tankers that operate worldwide.
Through its majority owned subsidiary, Ocean Rig UDW Inc.,
DryShips owns and operates 10 offshore ultra deepwater drilling
units, comprising of 2 ultra deepwater semisubmersible drilling
rigs and 8 ultra deepwater drillships, 3 of which remain to be
delivered to Ocean Rig during 2013 and 1 is scheduled for
delivery during 2015.  DryShips owns a fleet of 46 drybulk
carriers (including newbuildings), comprising of 12 Capesize, 28
Panamax, 2 Supramax and 4 Very Large Ore Carriers (VLOC) with a
combined deadweight tonnage of about 5.1 million tons, and 10
tankers, comprising 4 Suezmax and 6 Aframax, with a combined
deadweight tonnage of over 1.3 million tons.

The Company reported a net loss of US$288.6 million on
US$1.210 billion of revenues in 2012, compared with a net loss of
US$47.3 million on US$1.078 billion of revenues in 2011.

The Company's balance sheet at Dec. 31, 2012, showed
US$8.878 billion in total assets, US$5.010 billion in total
liabilities, and shareholders' equity of US$3.868 billion.

                       Going Concern Doubt

Ernst & Young (Hellas), in Athens, Greece, expressed substantial
doubt about DryShips Inc.'s ability to continue as a going
concern, citing the Company's working capital deficit of
US$670 million at Dec. 31, 2012, and in addition, the non-
compliance by the shipping segment with certain covenants of its
loan agreements with banks.

As of Dec. 31, 2012, the shipping segment was not in compliance
with certain loan-to-value ratios contained in certain of its
loan agreements.  In addition, as of Dec. 31, 2012, the shipping
segment was in breach of certain financial covenants, mainly the
interest coverage ratio, contained in the Company's loan
agreements relating to US$769,098,000 of the Company's debt.  As
a result of this non-compliance and of the cross default
provisions contained in all bank loan agreements of the shipping
segment and in accordance with guidance related to the
classification of obligations that are callable by the creditor,
the Company has classified all of its shipping segment's bank
loans in breach amounting to US$941,339,000 as current at
Dec. 31, 2012.



=============
H U N G A R Y
=============


* HUNGARY: Moody's Outlook for Banking Sector Remains Negative
--------------------------------------------------------------
The outlook for the Hungarian banking system remains negative,
says Moody's Investors Service in a new report entitled "Banking
System Outlook: Hungary".

The outlook, which has been negative since June 2009, reflects
Moody's expectations of continued downside risks for Hungarian
banks from the weak operating environment, which will result in
pressures on asset quality and capitalization. The banks also
continue to be heavily exposed to wholesale and foreign-currency
(FX) funding, as well as parental support constraints in a system
that is predominantly foreign-owned.

Moody's expects Hungarian banks to continue deleveraging their
balance sheets over the outlook period, as the challenging
operating environment results in subdued supply and demand for
credit. Moody's forecasts real GDP growth of just 0.2% in 2013
(2012: -1.7%) owing to weak demand for Hungarian exports and the
poor investment climate. In addition, the heavy tax burden will
continue to suppress banks' profitability. "Deleveraging and the
weak operating environment will limit Hungarian banks' revenue-
generating capacity, and we expect system net interest margins to
be compressed by declining interest rates and rising problem
loans," says Simone Zampa, a Moody's Vice President-Senior Credit
Officer, and author of the report.

Moody's notes that weak asset quality and pressure on
capitalization will remain major credit challenges for the
Hungarian banking system over the next 12-18 month outlook
period. The rating agency also expects continued -- albeit slower
-- growth in the problem loans ratio, which stood at 20% at the
end of Q1 2013. The deterioration in asset quality will be driven
by the weak economy, high unemployment and the sizeable amount of
FX loans in the system, which renders the banks' loan books
vulnerable to external currency market dynamics. "Against the
background, the system-wide aggregate Tier 1 capital ratio stood
at 13.5% at year-end 2012, but falls to 10.1% for rated banks
under Moody's central scenario," adds Mr. Zampa.

Despite continued deleveraging, Hungarian banks' wholesale
funding reliance remains high, at about 40% of total funding at
year-end 2012. Moody's notes that the banks' funding and
liquidity profiles are also highly confidence-sensitive, given
the banks' large FX funding needs. In addition, many foreign-
owned banks rely on short-term FX funding facilities from their
parent banks to fund their FX portfolios, thus exposing them to
significant rollover risk in the current challenging funding
environment.

The Hungarian banking system is largely foreign-owned (90% of
total capital as of end of Q1 2013), mainly by Western European
parents, whose willingness and capacity to provide additional
liquidity and capital support to local banks may be constrained
by challenges in their domestic markets and by the adverse
business climate in Hungary.



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


ALLIED IRISH: Reports EUR758 Million Net Loss in H1 2013
--------------------------------------------------------
Allied Irish Banks incurred a net loss of EUR758 million on
EUR595 million of net interest income for half-year June 2013, as
compared with a net loss of EUR1.05 billion on EUR568 million of
net interest income for half year June 2012.

As of June 30, 2013, AIB had EUR120.60 billion in total assets,
EUR110 billion in total liabilities and EUR10.59 billion in total
shareholders' equity.

AIB's Chief Executive, David Duffy, described the interim results
as encouraging adding that he expects the positive performance to
continue.

"We are mid-way through a three year plan to return to
sustainable profitability.  While we have met our key strategic
objectives to date, we acknowledge the continuing challenges that
lie ahead.

"The bank's results for the first half of 2013 demonstrate that
our strategy for stabilisation and recovery is delivering
results. We are seeing a steady improvement in our operating
performance and a return to pre-provision operating profit.  I
expect that overall progress made in the first half of 2013 will
continue through this year.

"Although the economic environment remains challenging we have
observed early positive trends in the SME, corporate and mortgage
sectors.  AIB approved over EUR3 billion in lending in the Irish
market in the first half of 2013 and we are well positioned to
actively support growth in the economy," he said.

A copy of the Report is available for free at:

                         http://is.gd/VNiMOn

                      About Allied Irish Banks

Allied Irish Banks, p.l.c. -- http://www.aibgroup.com/-- is a
major commercial bank based in Ireland.  It has an extensive
branch network across the country, a head office in Dublin and a
capital markets operation based in the International Financial
Services Centre in Dublin.  AIB also has retail and corporate
businesses in the UK, offices in Europe and a subsidiary company
in the Isle of Man and Jersey (Channel Islands).

Since the onset of the global and Irish financial crisis, AIB's
relationship with the Irish Government has changed significantly.

As at Dec. 31, 2010, the Government, through the National Pension
Reserve Fund Commission ("NPRFC"), held 49.9% of the ordinary
shares of the Company (the share of the voting rights at
shareholders' general meetings), 10,489,899,564 convertible non-
voting ("CNV") shares and 3.5 billion 2009 Preference Shares.  On
April 8, 2011, the NPRFC converted the total outstanding amount
of CNV shares into 10,489,899,564 ordinary shares of AIB, thereby
increasing its holding to 92.8% of the ordinary share capital.

In addition to its shareholders' interests, the Government's
relationship with AIB is reflected through formal and informal
oversight by the Minister and the Department of Finance and the
Central Bank of Ireland, representation on the Board of Directors
(three non-executive directors are Government nominees),
participation in NAMA, and otherwise.

The Company reported a loss of EUR2.29 billion in 2011, a loss of
EUR10.16 billion in 2010, and a loss of EUR2.33 billion in 2009.



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


BANCO POPOLARE: Bond Amendments No Impact on Moody's Ratings
------------------------------------------------------------
Moody's Investors Service said that the lowering of various
rating triggers will not, in and of itself and at this time,
result in a downgrade or withdrawal of the current Baa2 ratings
of the covered bonds issued by Banco Popolare Societa Cooperativa
(deposits Ba3 negative outlook, standalone bank financial
strength rating E+ / baseline credit assessment BCA b3 negative
outlook).

Moody's opinion addresses only the credit impact of the
amendments, and Moody's is not expressing any opinion as to
whether the amendments have, or could have other, non-credit-
related effects that may have a detrimental impact on the
interests of noteholders and/or counterparties.

The amendments consist of:

(1) Lowering to the loss of Ba3 from the loss of Baa3 the
    subordinated loan late-repayment provision trigger:

    If Moody's downgrades the issuer's rating below Ba3, the
    issuer will repay the subordinated loans six months after the
    longest maturing covered bonds.

(2) Lowering to the loss of Ba3 from the loss of Baa3 the back-up
    servicer (BUS) appointment trigger:

    If Moody's downgrades the issuer's long-term rating below
Ba3,
    the guarantor must appoint a BUS within 30 days.

(3) Lowering to the loss of Ba3 from the loss of Baa3 the trigger
    for delivery of solvency certificates with subsequent
    transfers:

    Typically the guarantor requires a solvency certificate from
    the issuer to ensure that the insolvency administrator cannot
    claw-back the asset transferred.

(4) Lowering to the loss of Ba3 from the loss of Prime-1 the
    trigger for the postponement of the release of the guarantee
    granted by the Guarantor:

    The guarantee will be in place until all covered bonds are
    fully redeemed. However, if Moody's downgrades the issuer's
    rating below Ba3, this guarantee may continue to exist beyond
    the redemption time if certain conditions are met.

(5) Lowering to the loss of Prime-3/Ba3 from the loss of Prime-
    1/A1 the pre-maturity test trigger for hard-bullet covered
    bonds maturing within 6 and 12 months, respectively:

    However, Moody's notes that there are no hard-bullet covered
    bonds outstanding and the issuer has stated the intention of
    continuing to issue soft-bullet bonds.

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


SALINI SPA: Fitch Rates EUR400MM Senior Unsecured Bond 'BB'
-----------------------------------------------------------
Fitch Ratings has assigned Salini S.p.a.'s (BB/Stable) EUR400
million 2018 senior unsecured bond a final 'BB' rating.

Key Rating Drivers

The senior unsecured bond rating is in line with Salini's Issuer
Default Rating (IDR), based on the assumption that the merger
between Salini and Impregilo will be completed, as Fitch
considers the possibility that the merger will not go ahead as
very unlikely. However, if the merger is stopped for any reason,
the bond rating would likely be notched down from the IDR,
reflecting its structural subordination to the senior unsecured
debt of Impregilo. After the merger, the bond would still be
structurally subordinated to the operating companies' (including
Todini) debt, none of which is the bond's guarantor. However,
Fitch deems this structural subordination not to be material.

Rating Sensitivities

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

-- Liquidity remaining comfortably above 1.25x on a sustained
   basis.

-- FFO net leverage to improve to 1.0x or below on a sustained
   basis.

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

-- Liquidity score below 1.1-1.2x on a sustained basis.

-- FFO net leverage above 2.0x.

-- Evidence of poor performance on major contracts with a
material
   impact on profitability.


TELECOM ITALIA: Fitch Cuts Subordinated Hybrid Rating to 'BB'
-------------------------------------------------------------
Fitch Ratings has downgraded Telecom Italia SpA's (TI) Long-term
Issuer Default Rating (IDR) to 'BBB-' from 'BBB'. The Outlook on
the Long-term IDR is Negative.

The downgrade reflects the worsening operating conditions in TI's
domestic business due to regulatory pressure, a continued mobile
price war and a weak economic environment. The erosion of TI's
cash flow generation looks to continue into 2014. If the domestic
business can be stabilized, and leverage brought under control,
Fitch fundamentally views TI as an investment grade credit.

Key Drivers

- Domestic business deteriorating
TI's H113 results and full year domestic guidance were weaker
than Fitch expected. TI's revenue and EBITDA trends in 2013 are
likely to be worse than that reported in 2012. The mobile price
war in Italy is showing no signs of abating and the effects of a
weak Italian economy could to persist into 2014.

- Erosion of financial flexibility
Increasing pressures in the domestic business, TI's main
generator of cash flow, means visibility is worsening. Management
has shown in the past it has been able to deal with regulatory
and competitive pressures to prevent TI's credit metrics
deteriorating. The Negative Outlook reflects Fitch's concerns
that TI's financial cushion to deal with future adverse shocks to
the business has been reduced.

- High leverage to persist
TI ended H113 with leverage of 2.9x - as measured by unadjusted
net debt to EBITDA, excluding Telecom Argentina - which is an
increase from 2.7x at the end of 2012. With continued declines in
EBITDA, Fitch expects leverage will increase in 2013, and
probably in 2014.

- Protecting Cash Flow Generation
The challenge facing TI is to maintain its domestic market
position in an increasingly price competitive market while
protecting free cash flow generation and reducing leverage. With
regulatory and competitive developments, improving efficiency in
operations and capital expenditure may not be enough to preserve
profitability. However, continued investment in long-term
evolution mobile network upgrades and fibre deployment should
allow TI to increasingly differentiate its service offering based
on network quality, albeit at a cost.

- Limited Contribution from Brazil
Brazil currently provides just under 10% of the group's EBITDA
less capex (excluding Telecom Argentina). Revenue growth in 2013
and 2014 is likely to be hampered by a slowing economy and higher
than expected mobile termination rate cuts. A weakened Brazilian
real further reduces TIM Brasil's contribution to group EBITDA.

Rating Sensitivities

Negative:

-- Leverage as measured by unadjusted net debt to EBITDA
   (excluding Telecom Argentina) sustainably above 3.5x
   could result in TI's Long-term IDR being downgraded.

-- Continued weakness in the domestic business with expectations
   of further high-single digit EBITDA declines in 2014 would
   lead to a downgrade.

Positive:

-- A sustained improvement in the company's domestic business's
   operating and improvement in the company's financial
   flexibility would be required before the Outlook on Telecom
   Italia's IDR could be revised to Stable.

Liquidity and Debt Structure

TI's liquidity remains healthy. TI had EUR6.1 billion of cash and
cash equivalents on its balance sheet at the end of June 2013 as
well as EUR6.7 billion of undrawn committed facilities (which
includes EUR4 billion available until May 2017 and EUR3 billion
available until March 2018). Together, this liquidity should
allow TI to cover debt maturing until 2015.

The rating actions are as follows:

Telecom Italia SpA

Long-term IDR: downgraded to 'BBB-' from 'BBB', Outlook Negative
Senior unsecured rating: downgraded to 'BBB-' from 'BBB'
Subordinated hybrid rating: downgraded to 'BB' from 'BB+'

Telecom Italia Capital and Telecom Italia Finance SA

Senior unsecured rating: downgraded to 'BBB-' from 'BBB'



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


NXP BV: S&P Raises Corp. Credit Rating to 'BB-'; Outlook Positive
-----------------------------------------------------------------
Standard & Poor's Ratings Services said it raised its long-term
corporate credit rating on Dutch semiconductor manufacturer NXP
B.V. to 'BB-' from 'B+'.  The outlook is positive.

At the same time, S&P raised all issue ratings by one notch in
line with the one-notch rise in the corporate credit rating.  The
recovery ratings remain unchanged.

The upgrade reflects S&P's expectation that NXP's credit metrics
will likely strengthen further in 2013 and 2014 as a result of
continued solid revenue growth, improving operating margins, and
significant free cash flow generation.  S&P has revised its
assessment of the group's financial risk profile to "significant"
from "aggressive," as S&P's criteria define the term.  Under
S&P's base-case scenario, it expects the group's Standard &
Poor's-adjusted gross-debt-to-EBITDA ratio to decline below 3.0x
by year-end 2013, from 3.4x as of June 30, 2013, and further
towards 2x by year-end 2014 if the group continues to apply its
discretionary cash flow (DCF) generation primarily for debt
reduction.  In the 12 months to June 30, 2013, NXP reduced its
gross consolidated financial debt by $438 million to $3,381
million.

"In our revised base-case assessment, we expect NXP's revenues to
increase by about 10% in 2013--previously we assumed low-single-
digit growth--and in the mid-single digits in 2014, primarily due
to continued strong demand in its High Performance Mixed Signal
(HPMS) segment and despite still unstable economic conditions,
particularly in Europe.  In the first six months of 2013, HPMS
revenues increased by 19% year-on-year.  This will more than
offset lower revenues in the Manufacturing Operations segment and
currently soft demand prospects in the Standard Products segment,
in our opinion.  In addition, we expect NXP's reported EBITDA
margin before share-based compensation expense to improve to
about 26% in 2013 and more than 27% in 2014, from 23% in 2012,
helped by higher revenues and good cost control.  We also
estimate that NXP will generate positive DCF of about $550
million in 2013, compared with $402 million in 2012," S&P said.

"We expect that higher EBITDA and lower cash interest will more
than offset significant working capital requirements, which
totaled $182 million in the first half of 2013.  We expect a
further substantial increase in DCF in 2014, primarily due to
higher EBITDA and lower working capital requirements.
Furthermore, we assume continued dividend leakage from NXP's 61%-
owned, but fully consolidated, subsidiary Systems on Silicon
Manufacturing Co. Pte. Ltd. (SSMC; not rated) to its joint-
venture partner Taiwan Semiconductor Manufacturing Co. Ltd.
(TSMC).  In 2013, SSMC paid a minority dividend of $46 million.
We have not factored in any parent company dividend, in line with
NXP's track record," S&P added.

The positive outlook reflects the potential for an upgrade in
2014 if the group further reduces its gross indebtedness through
DCF generation to reach and maintain a Standard & Poor's-adjusted
gross-debt-to-EBITDA ratio of about 2.5x through the cycle.  S&P
also believes the group will continue to post further solid
revenue growth in the next 12 months, primarily as a result of
company-specific design wins, and to gradually improve its
operating margins.  At the same time, S&P expects the group to
further increase its DCF generation in 2014, from about
US$550 million in 2013.

S&P might revise the outlook to stable if the group did not
further reduce its gross indebtedness from current levels through
DCF generation, for example as a result of significant
acquisitions or higher shareholder distributions.


PALLAS CDO II: S&P Cuts Ratings on Three Note Classes to 'CCC+'
---------------------------------------------------------------
Standard & Poor's Ratings Services lowered all of its credit
ratings in Pallas CDO II B.V.

The rating actions follow S&P's assessment of the transaction's
performance since its previous review on April 30, 2012.

S&P has applied its relevant criteria and considered recent
transaction developments using data from the May 31, 2013 trustee
report and from S&P's ratings database in its cash flow analysis.

                          CREDIT ANALYSIS

Since S&P's previous review, it has observed a negative ratings
migration in the performing portfolio.  The assets rated in the
'CCC' category (assets rated 'CCC+', 'CCC', or 'CCC-') have
increased to 8% from 3%.

This has since increased the scenario default rates for all
classes of notes, as shown by S&P's CDO Evaluator (Version 6.0.1)
model.

The transaction's post-reinvestment period began in January 2012.
The class A-1-a and A-1-d notes have amortized by about
EUR42 million over the past 12 months.  This has increased the
available credit enhancement for all classes of notes.

                         CASH FLOW ANALYSIS

Following S&P's credit analysis, it subjected the transaction's
capital structure to a cash flow analysis to determine the break-
even default rate for each rated class of notes at each rating
level.

"In our analysis, we used the portfolio balance that we
considered to be performing, the reported weighted-average spread
(which has decreased to 1.02% from 1.38%), and the weighted-
average recovery rates, in accordance with our 2009 corporate
cash flow collateralized debt obligation (CDO) criteria and our
CDO of structured finance assets criteria.  We incorporated
various cash flow stress scenarios using our standard default
patterns in conjunction with different interest rate and currency
stress scenarios.  Our cash flow analysis shows that all of the
classes of notes pass at lower rating levels," S&P said.

                     SUPPLEMENTAL STRESS TESTS

Nevertheless, the application of S&P's largest obligor default
test constrained at 'CCC+ (sf)' its ratings on the class D-1-a
and D-1-b notes, even though they passes S&P's cash flow analysis
at the 'B- (sf)' rating level.  S&P's largest obligor default
test is a supplemental stress test that it introduced in its 2009
corporate cash flow CDO criteria.

S&P has lowered its ratings on the class A-1-a, A-1-d, A-2, B, C,
D-1-a, D-1-b notes, and the class P, Q, and R combination notes
because, following its credit and cash flow analysis, S&P
considers the available credit enhancement for these notes to be
commensurate with lower ratings.

Pallas CDO II is a cash flow CDO transaction of primarily
European asset-backed securities (ABS).  M&G Investment
Management Ltd. manages the transaction, which closed in October
2006.

            STANDARD & POOR'S 17G-7 DISCLOSURE REPORT

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

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

            http://standardandpoorsdisclosure-17g7.com

RATINGS LIST

Class        Rating           Rating
             To               From

Ratings Lowered

PALLAS CDO II B.V.
EUR498.6 Million Senior Secured Fixed- And Floating-Rate Notes

A-1-a        A- (sf)          A (sf)
A-1-d        A- (sf)          A (sf)
A-2          BBB- (sf)        BBB+ (sf)
B            BB+ (sf)         BBB (sf)
C            BB (sf)          BBB- (sf)
D-1-a        CCC+ (sf)        BB (sf)
D-1-b        CCC+ (sf)        BB (sf)
P Combo      BB (sf)          BBB- (sf)
Q Combo      CCC+ (sf)        B+ (sf)
R Combo      BB (sf)          BBB- (sf)



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


CENTRAL EUROPEAN: Dobrzyniecki to File Shareholder Suit
-------------------------------------------------------
According to Bloomberg News' Piotr Skolimowski, Parkiet
newspaper, citing Andrzej Dobrzyniecki, managing partner at
Dobrzyniecki & Partners Law Office LLP, reported on Monday that
the firm expects to file a lawsuit on behalf of Polish
shareholders of Central European Distribution Corp. by the end of
this month.

Central European Distribution Corp. filed for U.S. bankruptcy
protection on April 8 with a pre-approved restructuring plan
aimed at cutting about US$665.2 million in liabilities, Bloomberg
recounts.

                           About CEDC

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

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

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

The Bankruptcy Court approved the Disclosure Statement and
confirmed the Second Amended and Restated Joint Prepackaged Plan
of Reorganization.  CEDC's Plan, which won approval from the
U.S. Bankruptcy Court for the District of Delaware on May 13,
2013, was declared effective on June 5.


POLIMEX-MOTOSTAL: Share Sale Deadline Extended to August 31
-----------------------------------------------------------
David McQuaid at Bloomberg News reports that Polimex-Mostostal's
creditors agreed to extend the deadline to raise PLN250 million
in share sales and modify several existing contracts to Aug. 31

The company had received a one-month extension from end-June to
end-July, Bloomberg recounts.

As reported by the Troubled Company Reporter-Europe on July 2,
2013, Bloomberg News related that Polimex failed to pay interest
on its debt by the June 28 deadline.  The company signed in
December a deal with creditors allowing it to restructure
outstanding debt and raise new capital, Bloomberg disclosed.

Polimex-Mostostal is a Polish engineering and construction
company that has been on the market since 1945.  The Company is
distinguished by a wide range of services provided on general
contractorship basis for the chemical as well as refinery and
petrochemical industries, power engineering, environmental
protection, industrial and general construction.  The Company
also operates in the field of road and railway construction as
well as municipal infrastructure.  Polimex-Mostostal is a large
manufacturer and exporter of steel products, including platform
gratings, in Poland.



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


RUSSIAN PRIMSOTSBANK: Fitch Hikes LT Issuer Default Rating to B+
----------------------------------------------------------------
Fitch Ratings has upgraded Russian Primsotsbank's Long-term
Issuer Default Rating (IDR) to 'B+' from 'B'. The Outlook is
Stable.

KEY RATING DRIVERS - IDRS, NATIONAL RATING, VIABILITY RATING

The upgrade of Primsotsbank's Long-Term IDR, National Rating and
Viability Rating (VR) reflect the bank's extended track record of
solid performance, its reasonable asset quality and underwriting
standards, limited related party business and comfortable
liquidity. Offsetting these factors are the bank's limited
franchise, moderate capitalization, recent rapid growth and
contingent risks from sister bank, Levoberezhny (LB).

Performance remained solid in 2012, with IFRS pre-impairment
operating profit and net income equal to 4.7% and 2.2% of average
assets, respectively. H113 statutory accounts suggest similar
pre-impairment performance (although statutory provisions have
been catching up with those under IFRS, somewhat pressuring
bottom line profitability in the Russian accounts). Revenues are
supported by solid margins and strong commission/trading income
earned on money transfers and client foreign currency operations,
which benefit from the bank's location in the Russian Far East
and customers' foreign trade business.

Primsotsbank's asset quality is reasonable, with non-performing
loans (NPLs, over than 90 days overdue) accounting for 4% of
gross loans at end-Q113, and renegotiated loans another 6%.
Reserves fully covered NPLs, and management expects about half of
the restructured loans to be repaid during H213. The corporate
book, which comprised 60% of total loans at end-Q113, appears to
be of decent quality, based on Fitch's review of the largest 25
exposures, which comprised about half the corporate portfolio.
Reported related party lending was equal to 10% of Fitch core
capital (FCC) at end-Q113 (15% at end-2012), although Fitch
estimates this could have been moderately higher.

The performance of the bank's retail lending is satisfactory.
NPLs in the unsecured consumer book, which comprised 27% of gross
loans at end-Q113, were a moderate 7%. Pay-roll clients comprise
about 40% of these exposures, mitigating overall risks, while
high rates create a significant margin of safety. Mortgage
lending, 10% of gross loans, is predominantly a commission
business, with the bank usually selling loans soon after
origination.

The bank's liquidity is supported by deposit collection through
its regional branch network, and by negligible wholesale funding.
A slowdown of loan growth in H113 (due to capital constraints)
has also boosted liquidity, with liquid assets (cash, net short-
term interbank and securities eligible for refinance with CBR)
covering a significant 35% of customer funding at end-H113.
Liquidity risks are also mitigated by moderate deposit
concentrations, with the top 20 depositors accounting for 10.5%
of customer accounts at end-Q113.

Primsotsbank's capitalization weakened in 2012 as a result of
rapid growth, and the FCC ratio fell to 10.1% from 12.0% at end-
2011. The regulatory capital ratio stood 11.2% at end-H113, but
as Fitch understands this could be supported in H213 by a
subordinated loan (equal to about 14% of end-H113 regulatory
capital). Fitch views the moderate capital levels as a rating
weakness, although this is offset by solid internal capital
generation and the bank's demonstrated ability (during the 2008-
2009 crisis) to rapidly deleverage its balance sheet.

Fitch views sister bank LB as a somewhat weaker credit than
Primsotsbank due to its higher proportion of unsecured lending
and even faster growth. However, LB's recent performance, asset
quality and liquidity have been satisfactory, albeit offset, as
at Primsotsbank, by rather tight capitalization. LB is of a
similar size to Primsotsbank and based in Novosibirsk in Siberia.

RATING SENSITIVITIES - IDRS, NATIONAL RATING, VR

Potential for a further upgrade of Primsotsbank's ratings is
limited, given its moderate franchise and capitalization. A
significant weakening of asset quality or capitalization, or a
marked deterioration in LB's credit profile, could result in a
downgrade of Primsotsbank.

KEY RATING DRIVERS AND SENSITIVITIES - SUPPORT RATING, SUPPORT
RATING FLOOR
Primsotsbank's '5' Support Rating and 'No Floor' Support Rating
Floor reflect the limited probability of government support,
given the bank's limited franchise. The Support Rating could be
upgraded in case of acquisition by a stronger shareholder.

The rating actions are:

Primsotsbank:

Long-Term IDR upgraded to 'B+' from 'B'; Outlook Stable
Short-Term IDR affirmed at 'B'
National Long-Term Rating upgraded to 'A-(rus)' from 'BBB(rus)';
  Outlook Stable
Viability Rating upgraded to 'b+' from 'b'
Support Rating affirmed at '5'
Support Rating Floor affirmed at 'No Floor'



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


NORTHLAND RESOURCES: Implements Final Steps of Bond Restructuring
-----------------------------------------------------------------
Northland Resources S.A. and Northland Resources AB announced the
implementation of the final steps of restructuring of the bond
loans previously issued by Northland Resources AB.

As previously announced, Northland's Extraordinary General
Meeting on July 31, 2013 approved all resolutions.  The Board
therefore resolved to go through with the contemplated
restructuring of the bond loans previously issued by Northland
Resources AB with ISIN NO0010636137 and ISIN NO0010636194.  The
Second Lien Bonds are amended into the Second Lien Convertible
Bonds on the terms set out in the Second Amendment and
Restatement Bond Agreement dated 7 June 2013, between, amongst
others, NRSA as issuer of the Second Lien Convertible Bonds and
Norsk Tillitsmann ASA as bond trustee on behalf of the holders of
the Second Lien Convertible Bonds.  A copy of the Second Lien
Convertible Bond Agreement is available on Stamdata at
http://www.stamdata.no

Having obtained the requisite approvals, Northland is taking all
steps necessary to implement the final stages of the
restructuring, including making the necessary registrations in
the Norwegian Central Securities Depository
(Verdipapirsentralen).

Holders of Second Lien Convertible Bonds are reminded that, as
per the terms and conditions of the Second Lien Convertible
Bonds, those bonds can only be converted on an Interest Payment
Date (as defined in the Second Lien Convertible Bond Agreement),
the next Interest Payment Date being 15 January 2014; no action
may be taken by any Second Lien Convertible Bondholder to convert
their bonds before that time.

                        About Northland

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

As reported by the Troubled Company Reporter on July 15, 2013,
Peter Pernlof, Acting CEO and COO of Northland Resources S.A.,
disclosed that the Lulea District Court approved on July 12 the
reorganization plan for the Company's Swedish subsidiaries.
As previously disclosed, the Lulea District Court held
composition proceedings on July 12 in connection with the
reorganization of companies Northland Resources AB (publ),
Northland Sweden AB and Northland Logistics AB.  During the
proceedings the companies' creditors approved the terms of the
proposed composition.  The District Court held in accordance with
this and approved the reorganization plan and composition.
Norwegian subsidiary Northland Logistics AS is not going through
formal reorganization, but has previously agreed with all of its
creditors on a payment plan identical to that of the other
subsidiaries.

                         *     *     *

As reported by the Troubled Company Reporter-Europe on April 1,
2013, Moody's Investors Service affirmed the Caa3 corporate
family rating and bond rating of Northland Resources AB.
Concurrently, Moody's has applied the 'limited default' ('/LD')
indicator to the company's Ca-PD probability of default rating
(PDR), to reflect the recently missed interest payment on its
outstanding notes, which the rating agency considers a default
according to its definition of default.  As a result, Moody's PDR
for Northland has been affirmed at Ca-PD/LD.  In addition, the
outlook on all ratings remains negative.


SAS AB: S&P Raises Corp. Credit Rating to 'B-'; Outlook Stable
--------------------------------------------------------------
Standard & Poor's Ratings Services said that it raised to 'B-'
from 'CCC+' its long-term corporate credit rating on Sweden-based
airline group SAS AB.  The outlook is stable.

"The upgrade reflects our view that SAS has reduced its near-term
liquidity risk following the implementation of its refinancing
and restructuring plan.  In particular, SAS has made significant
progress toward the sale of Norwegian regional airline Wideroe
for Swedish krona (SEK) 2 billion.  We understand that the sale
has received clearance from the Norwegian completion authority,
which is an important step toward closing by the anticipated
September deadline.  In addition, we believe that SAS'
implementation of its restructuring program is moving key
performance indicators in the right direction.  We understand
that second-quarter 2013 operating expenses were down by about 9%
(before leasing costs) year-on-year and that underlying unit
costs were down 3.6%.  As a result, we now see less risk of a
near-term default," S&P said.

"However, we believe that SAS' main challenge in future will be
the continued improvement of its cost competitiveness relative to
low-cost carriers in its core markets.  In addition, despite our
understanding that headroom under SAS' new financial covenants is
adequate as of the end of April 2013, we believe that it could
tighten toward year-end if SAS does not complete its disposal and
cost-cutting program as planned.  It would put pressure on SAS'
liquidity if the group were to breach any of its financial
covenants.  If this were to occur, we believe that the group
would find it harder to fund its financial and operational needs
in the seasonally weak first quarter of the calendar year," S&P
added.

"Our base-case credit scenario--including the impact of the
restructuring plan--anticipates continued growth in passenger
numbers for 2013, mostly due to SAS' successful expansion into
the European leisure market.  We anticipate flat to marginally
positive revenues in 2013, based on growth in revenue passenger
kilometers (RPK; the number of kilometers passengers have
traveled) of about 2%, partially offset by a decline in RPK yield
(average ticket price per kilometer traveled) of about 1%.  The
lower RPK yield would, in our view, be caused by an increase in
capacity of 4%-5%, leading to pressure on ticket prices, as well
as SAS' focus on leisure travelers.  Based on the above, in our
base-case scenario we calculate the load factor (a measurement of
capacity utilization) at 73%.  We assume that SAS will continue
to reduce its nonfuel costs by as much as 6%," S&P noted.

"We believe that SAS needs to achieve the cost reductions that
the restructuring plan anticipates to become more competitive
over the medium-to-long term.  Ongoing cost reduction will be
essential to the group's long-term survival in the challenging
and highly competitive airline sector.  As a result, we see
significant downside risk to our current base case should SAS
fail to implement the restructuring plan in full.  Furthermore,
we consider that adverse developments in fuel prices or currency
movements, aggravated by economic uncertainty, could
significantly weaken our current base case," S&P added.

The stable outlook reflects S&P's view of SAS' improved liquidity
and its opinion that increased efficiency linked to the cost-
reduction program should allow SAS to improve its operating
performance and maintain credit ratios S&P considers commensurate
with the ratings.  Nevertheless, the industry environment remains
challenging, with high fuel prices and growing low-cost
competition contributing to SAS' credit risk.

S&P could take a positive rating action if it considers SAS' cost
structure more competitive after it has completed its disposal
program and fully implemented the restructuring plan.  This would
depend on SAS' liquidity position improving sustainably, with
S&P's forecast anticipating sufficient headroom under its
covenants.

S&P could consider taking a negative rating action if it believes
that SAS' operating performance will fall materially short of
S&P's base-case forecast.  S&P could also take a negative rating
action if the disposals and restructuring plan do not complete as
SAS has planned, and as a result S&P anticipates that the group
will breach its covenants and lose access to its RCF.



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


BENEFICIARIES LIMITED: Gets Order to Pay GBP200K Compensation
-------------------------------------------------------------
Daily Record and Sunday Mail reports that Beneficiaries Limited,
a Scots heir-hunting firm who defrauded relatives of a dead
woman,  have been told to pay them compensation of more than
GBP200,000.

Beneficiaries Limited were also fined GBP25,000 for targeting
three siblings when their 93-year-old aunt, who they didn't know
existed, died without leaving a will for her GBP237,342 estate,
according to Daily Record and Sunday Mail.

The report relates that Judge Richard Parkes ordered the firm,
who were based in Edinburgh, to pay up - even though they have
gone into administration.

Beneficiaries Limited, who charged the family inflated expenses
and took massive cuts of their inheritance payouts, denied seven
counts of fraud by false representation and three counts of
misleading consumers by omission, the report discloses.

However, the report notes that a jury returned guilty verdicts on
all counts.

Parties involved were told to agree to give the firm a 40 per
cent share of any payout and to pay all expenses incurred - or
get nothing, the report notes.  The expenses included charging
the siblings GBP200 per hour for meeting them, the report says.

The report discloses that once the agreement was signed,
Beneficiaries Limited sub-contracted work to other firms, which
were also run by Pilley in a "highly artificial and very cynical
way."

The report notes that the company should have paid out
GBP213,096,98 to the siblings and two of their cousins in Canada
-but they haven't received a penny, Reading Crown Court heard.


EQUINOX ECLIPSE 2006-1: Fitch Cuts Rating on Class D Notes to 'D'
-----------------------------------------------------------------
Fitch Ratings has downgraded Equinox (Eclipse 2006-1) plc's
class D commercial mortgage-backed notes as follows:

  GBP10.7m class D (XS0259280591) downgraded to 'Dsf' from 'Csf';
  Recovery Estimate 0%

Key Rating Drivers

The downgrade of the class D notes reflects the GBP10.2 million
allocation of loss to the class D notes on the July 2013 interest
payment date (IPD). This follows the sale of the two remaining
properties securing the Macallan Potfolio loan.

Net recoveries from the remaining two properties were GBP0.75
million, resulting in a GBP17.9 million loan level loss,
equivalent to 44% of the original securitized balance of GBP40.6
million. This GBP17.9 million loss was allocated reverse
sequentially to the notes, resulting in a full write-down of the
class E notes, and a partial write-down of the class D notes.

Rating Sensitivities

The GBP10.2 million loss allocation to the class D notes
represented 49% of its outstanding balance. Fitch believes that
the eventual resolution of a number of other loans within the
portfolio will eventually lead this tranche to being fully
written-down to zero.

Fitch will continue to monitor the performance of the
transaction.


GREENSOLUTIONS LTD: In Liquidation; Faces Clyde Gateway Suit
------------------------------------------------------------
David Leask at Evening Times reports that Greensolutions
(Glasgow) Limited, which was accused of "leaving behind"
thousands of tonnes of contaminated dirt close to Commonwealth
Games venues, has gone into liquidation.

The company was wound up at the High Court in Belfast on Aug. 1
after the Evening Times revealed it was being sued by city
regeneration agency Clyde Gateway, Evening Times relates.

The company has always denied it was responsible for four spoil
heaps towering over its former site at Poplin Street, next to key
Games gateway Dalmarnock Railway Station, Evening Times notes.

Greensolutions has been in dispute with Clyde Gateway over rent
and the future of the dumped soil for months, Evening Times
discloses.  It is now not clear who, if anyone, will be in a
position to remove them in time for next year's showcase, Evening
Times states.

Greensolutions (Glasgow) Limited is a spoil heap row firm.


HEARTS OF MIDLOTHIAN: Has Been Issued New Registration Embargo
--------------------------------------------------------------
Gavin McCafferty at The Independent reports that Hearts of
Midlothian Football Club has been issued with a new registration
embargo for going into administration.

A Scottish Football Association judicial panel has imposed a ban
on the club signing new players aged 21 and over until February 1
next year, the Independent discloses.

The club cannot sign any player at the moment because of an
automatic registration embargo which kicked in when they went
into administration on June 19 under what were then Scottish
Premier League rules, The Independent notes.

Hearts, whose true debt was revealed as almost GBP29 million,
have escaped a monetary punishment, the Independent relates.  But
their extended transfer ban will be a blow to manager Gary Locke,
who only has two outfield players aged over 21, the Independent
states.

According to the Independent, Hearts were also hit with an
automatic 15-point penalty in June and Mr. Locke will be unable
to immediately bring in experienced players if the club exits
administration before the end of the January transfer window.

Hearts of Midlothian Football Club, more commonly known as
Hearts, is a Scottish professional football club based in Gorgie,
in the west of Edinburgh.


HUGHES CHILLED: Director Faces 10-Year Disqualification
-------------------------------------------------------
Margaret Canning at Belfast Telegraph reports that Kieran Patrick
Hughes, boss of Hughes Chilled & Frozen Distribution, has been
"frozen out" of the boardroom for trying to move assets out of
the reach of administrators and other corporate misdemeanors.

Mr. Hughes was disqualified as a director for 10 years by the
Department of Enterprise, Trade and Investment -- five years off
the lengthiest sanction of 15 years away from directorships,
Belfast Telegraph discloses.

Hughes Chilled & Frozen Distribution went into administration on
February 17, 2010, owing GBP2.5 million after being in business
for 15 years, Belfast Telegraph recounts.

Mr. Hughes, who is 55, gave a disqualification undertaking to the
department, and admitted unfit conduct including keeping back
around GBP1 million which was owned to the Crown, which included
GBP700,000 in unpaid Vat accumulated over two tax years,
GBP114,000 in PAYE and GBP196,000 in unpaid national insurance
contributions, according to  Belfast Telegraph.  Mr. Hughes also
created at least five false accounting records in order to
convince the administrator that the transfer to an associated
company and a preferred transferee and taken place before the
company went into administration, Belfast Telegraph relates.

However, the assets were transferred around the time that
administrators KPMG were called in, meaning that the assets were
moved in an attempt to keep them in the associated company beyond
the reach of the administrators, Belfast Telegraph notes.

He also kept the company trading despite knowing that it was
insolvent, a process which left creditors worse off, Belfast
Telegraph states.

He allowed his company to abuse its receivables finance
agreement, an arrangement which enables it to use money owned by
customers as collateral in a financing agreement, Belfast
Telegraph discloses.

According to Belfast Telegraph, Mr. Hughes also admitted keeping
inaccurate books and records.

Hughes Chilled & Frozen Distribution stored and distributed
frozen and chilled foods around Europe from its headquarters at
Annesborough Industrial Estate in Lurgan and Carn in Portadown.


INVENSYS PLC: Moody's Puts 'Ba1' CFR Under Review for Upgrade
-------------------------------------------------------------
Moody's Investors Service placed Invensys plc.'s Ba1 CFR and Ba1-
PD ratings under review for upgrade. The action follows an
announcement that Invensys's board of directors had accepted an
offer for Invensys to be acquired by Schneider Electric SA (A3
stable).

Ratings Rationale:

"We have placed Invensys's ratings on review for upgrade because
we expect that, as a result of the company's acquisition by
Schneider, Invensys will be fully integrated into Schneider at
some point in the future, which will lead to the rating being
either withdrawn or equalized, more likely the former," says
Roberto Pozzi, a Moody's Vice President - Senior Analyst and lead
analyst for Schneider.

The proposed transaction will value Invensys at approximately
GBP3.3 billion, including acquired cash of GBP581 million as per
end June 2013. A majority shareholder vote by Invensys's
shareholders as well as anti-trust regulatory consent will be
required, with the parties targeting closing the deal at the end
of 2013.

As of March 31, 2013, Invensys had no significant borrowings
outstanding. However, the group, including Invensys Rail, had
defined benefit obligations of GBP6.1 billion covered by plan
assets with a value of GBP5.6 billion, which are largely invested
in fixed-income instruments. Following the disposal of the rail
business, Invensys has made a GBP400 million contribution to its
UK pension scheme, thus significantly reducing the reported net
pension liability, and made an additional GBP225 million
contribution to a reservoir trust for use as a reserve for future
potential funding requirements. The pension agreement results in
cash savings of more than GBP40 million per annum, thus more than
halving the company's top-up cash payments, and enhancing the
group's free cash flow generation in the medium term.

The review will focus on the outcome of the proposed transactions
and any developments regarding the nature of credit support
Schneider may provide to Invensys, if any, as well as the degree
of integration of Invensys within Schneider. Moody's could align
Invensys's rating with Schneider's A3 rating following the
closing of the transaction.

Principal Methodology

The principal methodology used in this rating was the Global
Manufacturing Industry published in December 2010.

Headquartered in London, England, Invensys plc is a UK-listed
technology company providing software, systems and control
equipment to a variety of industries including chemicals,
pharmaceuticals, oil & gas, and power & utilities. The group's
revenue for the year ending March 31, 2013 was approximately
GBP1.8 billion. On May 2, 2013, Invensys completed the disposal
of its Invensys Rail business to Siemens for GBP1.7 billion in
cash to refocus on industrial software, systems and controls.

Schneider SA produces electrical products and systems addressing
a wide range of industrial, commercial and consumer markets, with
operations in more than 100 countries. Schneider is organized
into five business segments: Power (36% of 2012 revenues and 52%
of operating earnings before intragroup eliminations),
Infrastructure (22% and 16%, respectively), Industry (19% and
23%), Information Technology (15% and 20%) and Buildings (7% and
3%). The company's revenue for fiscal 2012 (to December 31) was
EUR23.9 billion and its market capitalization was approximately
EUR33 billion on July 31, 2013. Schneider is headquartered in
Rueil Malmaison, France.


MID STAFFORDSHIRE NHS: GP Calls for Lewisham Hospital's Survival
-----------------------------------------------------------------
BBC News reports that Dr. Louise Irvine, a GP who campaigned to
keep services at a London hospital, has urged people to fight for
Stafford Hospital.

Administrators have recommended that Mid Staffordshire NHS Trust,
trust which runs Stafford Hospital should be dissolved and some
services moved elsewhere, BBC relates.

According to BBC, Dr. Irvine, who chairs the Save Lewisham
Hospital campaign, said Stafford Hospital was "much needed".

On July 31, Health Secretary Jeremy Hunt's decision to reduce
services at Lewisham Hospital was quashed, BBC discloses.

The Mid Staffordshire NHS Trust went into administration on April
16 after a report concluded it was not "clinically or financially
sustainable", BBC recounts.

Under the Trust's proposals, Stafford Hospital will be part of
the University Hospital of North Staffordshire (UHNS) in Stoke-
on-Trent while Cannock Hospital will become part of the Royal
Wolverhampton Trust, BBC notes.

Other major proposals include Stafford Hospital losing its
maternity unit but keeping its A&E department, which opens for 14
hours each day, BBC says.

Seriously ill children would no longer be admitted to Stafford,
and would instead go to the University Hospital of North
Staffordshire, according to BBC.

Downgrading Stafford's critical care unit and losing some
emergency surgery is also proposed, BBC states.

If approved, the proposals will be implemented in 2018, BBC
notes.

Dr. Irvine, as cited by BBC, said: "Mid Staffs has improved a lot
over the years, it's a much needed hospital and this is an issue
because of underfunding . . . [You] need to fund a much needed
vital local health service."

She urged campaigners to continue to gain the support of GPs and
local councils and to have a campaign in "every corner of
society."

Mid Staffordshire NHS Foundation Trust is a NHS foundation trust
which manages two hospitals: Stafford Hospital, which is an acute
hospital with approximately 350 inpatient beds; and Cannock Chase
Hospital, which has approximately 115 inpatient beds.


NORTHERN ROCK: UKAR Pays GBP1.9BB to Taxpayers in 1st Half Year
---------------------------------------------------------------
Press Association reports that the bad bank behind failed lenders
Northern Rock and Bradford & Bingley paid another GBP1.9 billion
to taxpayers in the first half of the year and saw a sharp fall
in non-performing loans.

UK Asset Resolution (UKAR), the state-owned firm responsible for
winding down the mortgage books of the collapsed banks, said
Government repayments surged more than 70% from GBP788 million a
year earlier, Press Association relates.

UKAR has now repaid a total GBP6.6 billion to the Government, but
still owes another GBP42.1 billion, Press Association discloses.
It repaid GBP1.3 billion in the first half, with fees, interest
and taxes of around GBP500 million taking the half-year total to
GBP1.9 billion, according to Press Association.  It expects to
fully repay the state within the next 10 years, Press Association
notes.

The company was formed in October 2010 to manage the loan books
of B&B and Northern Rock after the former building societies
failed during the financial crisis, Press Association recounts.

It is winding down a GBP66.1 billion total loan book and has
584,000 customers, of whom around a third are on interest-only
mortgages, Press Association discloses.

Last month, UKAR raised GBP400 million after selling a portfolio
of Northern Rock's personal loans to OneSavings Bank -- the group
behind mutual Kent Reliance -- and debt recovery business Marlin
Financial, Press Association recounts.

OneSavings Bank, which is backed by US private equity group JC
Flowers, bought Northern Rock Asset Management's loans that are
not in default, adding 70,000 new customers, Press Association
discloses.

Operating some 70 branches across the UK, Northern Rock offers
residential mortgages and savings accounts, including variable
cash and fixed-rate Individual Savings Accounts (or ISAs, which
are tax-exempt savings accounts offered in the UK), as well as
bonds and traditional savings accounts.  The bank also offers
financial planning and mortgage-related insurance and life
assurance products through third-party providers.


RAILCARE: Union Calls for Government Intervention by Vince Cable
----------------------------------------------------------------
Scott Kirk at MKWeb reports that rail union RMT called for urgent
intervention by Business Secretary Vince Cable to save 500
skilled engineering jobs in Glasgow and Milton Keynes after it
was confirmed that rail fleet repairs and refurbishment company
Railcare has been placed in administration.

RMT understands that the Government has been approached by the
company for assistance in getting Railcare through a short-term
cash flow crisis but that they were turned down, according to
MKWeb.  The report relates that the union is pointing out that
for want of what is estimated to be not much more than a million
pounds in cash flow, the Government have turned their backs,
while at the same time wasting an estimated GBP100 million on the
aborted franchising timetable - a shambles which looks like it is
the main cause of the crisis at Railcare.

The report notes that unions had been made aware earlier this
week that Railcare was in trouble after it failed to pay staff
wages and after a planned takeover by a German company collapsed.
Crisis talks this morning with another potential buyer are
thought to have collapsed forcing the company into administration
with BDO appointed as the administrators, the report says.

MKWeb notes that RMT understands that although Railcare has a
full order book and plenty of work in the pipeline from the train
operators via the rail fleet leasing companies they ran into a
cash-flow problem which has forced the move into administration
threatening the jobs at the former British Rail plants at
Springburn near Glasgow and Wolverton near Milton Keynes.

The report says that RMT also understands that the key delays
with moving the order book forwards have been caused by the
franchising chaos in the wake of the West Coast fiasco which has
held back fleet refurbishment plans while costing the taxpayer
GBP100 million.

"RMT is calling on Vince Cable and the Government to step in to
secure the future of these 500 key rail fleet engineering jobs
following the collapse of Railcare . . . .  The Government cannot
sit on their hands and watch this situation play out for the want
of what we believe is not much more than a million pounds of cash
flow finance. . . . Reports that Railcare have already been
turned down for assistance make a mockery of the Government's
business strategy and their stated objective of protecting
skilled jobs. . . . This crisis has left 500 staff unpaid and
without any security and the root cause appears to be the
franchising shambles in the wake of the West Coast fiasco. . . .
Vince Cable and the Government have a moral and economic duty to
intervene urgently to save these jobs and protect the scheduled
work and RMT will meet with him at any time to assist in moving
this on. . . . All of us now need to work together to secure
these jobs and the important work that the company is involved
in," the report quoted RMT General Secretary Bob Crow as saying.


SALUBRIOUS PLACE: Goes Into Receivership
----------------------------------------
Wales Online reports that a major leisure and entertainment
development in Swansea has been put into receivership.

Salubrious Place has tenants including TGI Fridays, a 116 bedroom
Premier Inn Hotel, Vue Cinema and car park operator NCP.

Peter Welborn and Elaine Tooke of international property
consultancy Knight Frank have been appointed joint LPA (Law of
Property Act) receiver, according to Wales Online.

The report relates that the scheme from Brunswick Mansford was
put into receivership by the Nationwide, which has financed its
development.

The report discloses that the Knight Frank receivers will manage
the development and deal directly with tenants.

"Salubrious Place is very much a going concern and remains fully
viable.  We will be able to deliver the injection of investment,
energy and asset management expertise that it now needs to
thrive. . . . We will be investing heavily and will work closely
with the tenants to cement Salubrious Place's position as the
number one leisure destination in Swansea," the report quoted Ms.
Tooke as saying.



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


* Firms May Rearrange Leases to Avoid Balance-Sheet Inclusion
-------------------------------------------------------------
Fitch Ratings says new international accounting rules will give a
better indication of the economic substance of leases, but could
give companies an incentive to change the way lease deals are
structured so they remain off balance sheet.

The new standards will require that all leases with terms of over
12 months are brought on-balance sheet. This will aid analysis as
we view longer-term leases as debt-like obligations and routinely
adjust debt metrics to enable comparison of different financing
models. However it is vital that information about cash rentals
and the nature of leased assets remains available to ensure
adjustments can be made if necessary. If companies did manage to
keep any leases of longer-term assets off the balance sheet,
robust disclosure will be essential so that analysts can still
adjust key metrics.

There are several ways that companies might try to structure
arrangements to keep leases off the balance sheet. These include
switching to a lease with a term of less than 12 months. The
rules attempt to limit the appeal of this exemption by including
renewal options within the 12 month period. Short-term leases
might be a disadvantage because they create uncertainty over the
future availability of the asset, but this could be less of a
deterrent where contractual commitment for a longer period is not
essential.

Companies may also try to replace leases with contracts that give
them access to a desired service without giving them rights over
a specific asset. Since leases are defined as providing an
identified asset that the lessee controls, these service
contracts could remain off-balance sheet. This might be achieved
by something as simple as giving the lessor the right to
substitute an asset at will for a similar one, which may have
little operations impact for either party.

Fitch has published a Special Report titled "New Global Proposals
to Reshape Lease Accounting" which explains how we assess leases
in our analysis and how we will approach the changes proposed by
the International Accounting Standards Board and the US Financial
Accounting Standards Board. An effective date for the new
standards has not yet been proposed, however, we would not expect
them to become effective prior to 2017.


                            *********

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

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

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

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


                            *********


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

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

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

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

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

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


                 * * * End of Transmission * * *