TCREUR_Public/130816.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

                           E U R O P E

            Friday, August 16, 2013, Vol. 14, No. 162



CREDINS BANK: Moody's Affirms B1 Deposit Rating; Outlook Negative


ALPINE BAU: Ex-Managers Face Probe Over Alleged Bankruptcy Fraud


RAIFFEISENBANK: Moody's Downgrades Deposit Ratings to 'Ba2'
* BULGARIA: High Turkish Fees May Spur Road Carrier Bankruptcies


PICARD GROUPE: Fitch Rates EUR480MM Senior Secured Notes 'BB'


AZZURRI: High Court Appoints Examiner After Cash Flow Woes
MOSSWAY LTD: Issues Disqualification Order Against Two Directors
ULSTER BANK: Has No Plans to Write Off Homeowners' Debt


KOMPETENZ JOINT: Fitch Affirms 'B' IFS Rating; Outlook Stable


CADOGAN SQUARE V: Moody's Rates EUR25MM Class E Sr. Notes 'Ba2'
COPERNICUS EURO: Fitch Cuts Rating on Class D Notes to 'D'
NORTH WESTERLY: S&P Lowers Ratings on Three Note Classes to CCC-
RENOIR CDO: S&P Lowers Ratings on Two Note Classes to 'CCC'


RUSSIAN AGRICULTURAL: Fitch Cuts Viability Rating to 'b-'

U N I T E D   K I N G D O M

COMET: OpCapita Recoups GBP54 Million Following Collapse
GOLDTHORN MORTGAGE: Permission Cancelled Following Liquidation
GRAMPIAN CONSTRUCTION: Creditors May Not Recover Money Owed
HEARTS OF MIDLOTHIAN: Foundation of Hearts Named Preferred Bidder
HOISTQUIP: Drop-Off in Jobs Led to Administration

LEADING RESTAURANTS: Lameys Appointed as Group's Liquidators
THOMSON DIRECTORIES: In Administration, to Make Jobs Redundant
* Fitch: Costs of RBS Bad Bank Split Would Likely Exceed Benefits


* BOOK REVIEW: Rand Araskog's The ITT Wars



CREDINS BANK: Moody's Affirms B1 Deposit Rating; Outlook Negative
Moody's Investors Service has affirmed all of Credins Bank
Sh.a.'s ratings and changed the outlook on the bank's B1 local-
currency deposit rating to negative from stable. All other
ratings carry a stable outlook.

The affirmation reflects Credins's sizeable loss absorption
capacity as demonstrated by its improving capitalization and
provisioning coverage, and solid historic pre-provision
profitability. Nevertheless, the negative outlook reflects
Moody's expectation that the bank's pre-provision profitability
will likely come under pressure from margin compression and
subdued new loan growth, in the context of Albania's economic
slowdown and rising levels of non-performing loans.

Ratings Rationale:

Affirmation Driven By Sizeable Loss Absorption Capacity

The rating affirmation reflects Credins's improving
capitalization and provisioning coverage that leads to a sizeable
loss absorption capacity. Over the past two years, Credins has
been building up its capital buffers, with the total capital
ratio improving to 14.2% as of year-end 2012 (year-end 2010:
13.4%), and the provisioning coverage ratio -- measured as IFRS
loan-loss reserves as a proportion of problem loans -- improving
to 67% at year-end 2012 (year-end 2010: 48%).

In addition, Credins's historically solid pre-provision
profitability (PPI as a percentage of average risk-weighted
assets of 5.1% for 2012) has allowed the bank to absorb the
higher provisioning costs (which have risen to 4.4% of average
gross loans for 2012). The higher provisioning costs reflect the
bank's provisioning policy and Albania's economic slowdown, which
has weakened the bank's asset quality.

Change In Outlook Reflects Expectations For Weakening Pre-
Provision Profitability And Continuation Of Large Credit Losses

While the bank has been able to successfully absorb the higher
provisioning costs to date, the change in outlook to negative,
from stable, reflects Moody's expectation that going forward
Credins's pre-provision profitability will increasingly come
under pressure due to reduced net interest margins and limited
loan growth. Accordingly, Moody's considers that there is a risk
that these factors could lead to a decline in pre-provision
profitability to a level that would be inadequate to offset
continued high credit losses.

Weakening Pre-Provision Profitability

Moody's expects Credins's profitability to be affected by lower
net interest income following cuts to Bank of Albania's key
interest rate to a record low 3.75% that will compress margins,
while there is a risk that interest rates may fall further.

In addition, Moody's expects that lower business volumes will
further pressure Credins's pre-provision profitability. In
particular, loan book growth will likely decelerate due to
limited new loan demand from creditworthy enterprises and
individuals. The bank's loan book growth slowed down to 10%
during 2012, following a compound annual growth rate of 40%
during the period between 2007 and 2011, and Moody's expects loan
growth to fall further in 2013.

Continuation of High Credit Losses

Moody's expects that the depressed economic environment will
continue to negatively affect Credins's asset quality, which,
together with the seasoning of the bank's portfolio will lead to
further high provisioning needs. The rating agency forecasts that
Albania's real GDP growth at 1.7% and 2.6% in 2013 and 2014,
respectively, will remain well below the levels recorded prior to
the 2008-09 global financial crisis. As a consequence, Moody's
expects that high credit costs may erode the bank's weaker pre-
provision income.

What Would Move The Ratings Up/Down

Downward pressure on Credins's B1 local-currency deposit rating
could develop if the bank experiences a further weakening in
asset quality that pressures the bank's capital levels and
weakens its solvency.

As expressed by the negative outlook, there is currently very
limited upside potential for Credins's ratings. However, the
outlook could be changed back to stable if the bank restores its
recurring profitability or if asset quality pressures abate.

List Of Affected Ratings

- Long-term local-currency deposit rating of B1, affirmed with a
negative outlook

- Long-term foreign-currency deposit rating of B2, affirmed. The
foreign-currency deposit rating carries a stable outlook as it is
capped at B2 by Albania's foreign-currency deposit ceiling.

- Short-term local and foreign-currency deposit ratings of Not
Prime, affirmed

- Standalone bank financial strength rating (BFSR) of E+
(equivalent to a baseline credit assessment of b2), affirmed with
a stable outlook

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


ALPINE BAU: Ex-Managers Face Probe Over Alleged Bankruptcy Fraud
Alexander Weber at Bloomberg News reports that prosecutors said
former managers of Alpine Bau GmbH, the builder that in June
filed for Austria's biggest postwar insolvency, are being
investigated on allegations of false accounting and bankruptcy

Erich Mayer, a spokesman for the white-collar crime department at
Vienna's prosecutors office, yesterday Aug. 14 said that
authorities are probing five executives from several Alpine
units.  Mr. Mayer, as cited by Bloomberg, said that the
investigation follows a complaint by lawyer Eric Breiteneder, who
represents holders of Alpine bonds.

Alpine Bau, owned by Spain's Fomento de Construcciones y
Contratas SA, filed for insolvency on June 19 with liabilities of
EUR2.56 billion (US$3.4 billion), Bloomberg News recounts.
According to Bloomberg News, lawyers are looking at ways to
reduce the damage done to the holders of bonds issued by Alpine
Holding GmbH, Alpine Bau's parent that also filed for insolvency.
The notes with a combined face value of EUR290 million euros were
issued as late as in May 2012, Bloomberg News discloses.

"My goal is to recover the lost funds as quickly and efficiently
as possible," Bloomberg quotes Mr. Breiteneder as saying.  He
said that the information obtained by prosecutors may help with a
separate action seeking compensation from the banks that sold the
bonds to private investors, Bloomberg relates.

According to Bloomberg, Mr. Mayer said that if proven guilty, the
people investigated face as long as 10 years in jail.  He
declined to identify the individuals being probed, Bloomberg

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


RAIFFEISENBANK: Moody's Downgrades Deposit Ratings to 'Ba2'
Moody's Investors Service has downgraded Raiffeisenbank
(Bulgaria)'s long-term local and foreign-currency deposit ratings
to Ba2 from Ba1, and the standalone bank financial strength
rating (BFSR) to E+, mapping to a baseline credit assessment of
b1, from D-/ba3. The outlook on the long-term deposit ratings was
changed to negative from stable. The short-term deposit ratings
of Not-Prime remained unaffected.

Moody's says that the rating action is primarily driven by (1)
Raiffeisenbank's weakening asset quality, owing to legacy
exposures to the construction and real estate sector, which
continue to perform poorly, and its growing delinquencies in the
broader loan portfolio within the context of Bulgaria's
challenging operating environment; and (2) subsequent pressure on
the bank's profitability -- stemming from the non-performing
status of a part of the real estate portfolio and of the other
problematic exposures -- which in turn weaken the bank's interest
income and raise provisioning needs. Offsetting factors are the
bank's comfortable capital and liquidity buffers.

Ratings Rationale:

Legacy Real Estate Exposures And Persistently Challenging
Operating Environment Pressure Asset Quality:

The main driver for this action is Raiffeisenbank's weakening
asset quality owing to legacy construction and real estate
exposures, which continue to perform poorly and the bank's
increasing delinquencies in the broader loan portfolio, which are
affected by Bulgaria's persistently challenging economic
conditions. Moody's notes that although the pace of growth in
problematic exposures has eased in recent quarters,
Raiffeisenbank's impaired loans to gross loans ratio grew to a
high 17.4% as at December 2012, up from 15.1% in 2011 and 9% in

The rating agency notes that Raiffeisenbank remains exposed to a
few large customers in the construction and real-estate sector,
which continue to perform poorly and limit the bank's ability to
reduce the stock of non-performing loans (NPLs) in its books. The
performance of the construction and real estate sector, which
accounted for approximately 14% of the bank's gross loans in
December 2012, continues to be under pressure as real-estate
prices remain depressed and foreign direct investment (FDI)
remains well below pre-crisis levels.

In addition to the real estate, Moody's notes that the weak
operating environment has affected also the performance of the
bank's broader loan portfolio. In Q1 2013, Bulgaria's real GDP
grew by a modest 0.8% (according to the National Statistics
Institute (NSI)), while the unemployment rates increased to
around 13.8% (approximately double the levels recorded in Q1
2009). Although Moody's expects that Bulgaria's economic
performance will improve slightly in the coming years, the rating
agency expects that growth rates will remain well below pre-2008
levels of around 6% GDP growth per year.

Asset Quality Deterioration Pressures Profitability:

Moody's notes that the high stock of NPLs in the construction and
real estate sectors and the upward trend in delinquencies in
Raiffeisenbank's broader loan portfolio are generating pressure
on the bank's profitability levels, as these delinquencies
constrain interest income and raise the bank's provisioning
needs. In 2012, interest income declined by 15% on a year-on-year
basis, while provisioning expenses absorbed 97% of the bank's
pre-provisioning income, with the bank reporting a net income of
BGN3.2 million (EUR1.6 million) compared with BGN50.4 million in
2011 (EUR25.7 million), according to the bank's 2012 consolidated
financial statements.

The rating agency also notes that Raiffeisenbank recorded a
contraction in lending in 2012, which also constrained its
ability to generate earnings. Moody's expects that elevated
provisioning charges and subdued credit expansion will continue
to dampen the bank's profitability going forward.

Sound Capital And Liquidity Provide Some Cushion:

Despite the aforementioned negative drivers, Moody's also
recognizes that the bank's standalone profile continues to be
supported by sound capitalization and liquidity buffers. As at
end-2012, the bank reported a Tier 1 ratio of 16.6%, according to
the bank's 2012 consolidated financial statements, which provides
a cushion to absorb losses. Moody's also notes that the bank
benefits from a solid deposit base in Bulgaria, which underpins
its comfortable liquidity levels, with liquid assets to total
asset estimated at around 23% as at end-2012.

Parental Support Uplift Underpin Deposit Ratings:

Raiffeisenbank's Ba2 deposit rating continues to incorporate two
notches of uplift based on Moody's view of the high likelihood of
parental support from Raiffeisen Bank International AG (A2,
negative, D+/ba1, stable). Raiffeisenbank continues to be well
integrated within the Raiffeisen Bank International group, which
provides the bank with operational, supervisory and funding
support. These considerations, together with Moody's view of
RBI's commitment to the Bulgarian market, underpin the rating
agency's assumptions of high parental support for the bank, which
result in a two-notch rating uplift from the bank's standalone

Rationale For The Outlook:

The outlook on Raiffeisenbank's long-term deposit ratings is
negative owing to the negative pressure of Bulgaria's
persistently challenging operating environment on the bank's
asset quality and profitability.

What Could Move The Ratings Down/Up

Downward pressure might develop on Raiffeisenbank's ratings if
the operating environment weakens further and affects the bank's
asset quality, profitability and capital levels, beyond current
expectations. In addition, a reduced commitment and/or ability of
the parent bank to support its Bulgarian subsidiary could exert
downwards pressure on Raiffeisenbank's ratings. Over the near
term, upward pressure on the bank's ratings is limited, as
reflected by the negative outlook on the deposit ratings.
However, the outlook could be changed to stable following
stabilization in asset quality trends and improvement in the
bank's profitability metrics.

The principal methodology used in this rating was Consolidated
Global Bank Rating Methodology published in May 2013.

Headquartered in Sofia, Bulgaria, Raiffeisenbank reported total
consolidated assets of BGN6.2 billion (EUR3.2 billion), as of
end-December 2012, according to the bank's audited 2012
consolidated financial statements.

* BULGARIA: High Turkish Fees May Spur Road Carrier Bankruptcies
FOCUS News Agency reports that Iliyan Filipov, member of the
management board of the Bulgarian Association of Road Transport
Unions (BASAT), said "Higher fees imposed on foreign road
carriers by Turkey will lead to the bankruptcy of many transport
companies in Bulgaria."

"If the fees imposed on Bulgarian road carriers on the territory
of Turkey are increased and Bulgaria does not take any reciprocal
measures, more 10,000 Bulgarian families will be left without
incomes," FOCUS News quotes Mr. Filipov as saying.

According to FOCUS News, Mr. Filipov said that a course to
Istanbul, for instance, will get around EUR130 to EUR140 more
expensive, and a single course will cost around EUR 500 only in
one direction.

"The problem is that the increase of the transit fees blocs the
entire market of the Bulgarian road carriers to countries, which
are reached by transiting Turkey, such as Georgia, Armenia,
Azerbaijan, Iran, Iran, Turkmenistan, Syria . . . The fees paid
to cross Turkey to reach these countries will increase to
EUR900 -- EUR1,000 in one direction, while in both direction --
around BGN2,000," Mr. Filipov, as cited by FOCUS News, said.

He commented that there had not been such fees until now, while
the Bulgarian road carriers used to pay a EUR43 fee on the
territory of Turkey and on the way back, FOCUS News relates.

"Relations between Bulgaria and Turkey will get very tense,"
Mr. Filipov remarked and added that the issue should be even
referred to the competent European institutions, FOCUS News


PICARD GROUPE: Fitch Rates EUR480MM Senior Secured Notes 'BB'
Fitch Ratings has assigned Picard Groupe S.A.S.'s EUR480 million
4.25% senior secured floating rate notes (FRNs) due 2019 and
EUR30 million revolving credit facility (RCF) final ratings of
'BB'/'RR2'. Following the refinancing of the senior secured bank
debt at Picard Groupe S.A.S. Fitch has withdrawn its 'BB'/'RR2'
instrument rating.

The final ratings follow a review of final documentation which
materially conforms to information received at the time the
agency assigned the expected ratings together with the
affirmation of Picard's Long-term Issuer Default Rating. Picard
Bondco S.A.'s IDR and the secured notes' ratings are not impacted
by the refinancing.

Key Rating Drivers

New Debt Structure

The new FRNs mature after the existing EUR300 million senior
notes (structurally and contractually subordinated to the FRNs)
and the PIK notes issued by Picard PIKco S.A. Such feature
creates subordination of the FRNs in time. However this is a
long-term risk, with a strong possibility that the current
capital structure will not be in place when the existing senior
notes mature. Fitch is also confident that should the senior
notes have to be repaid before the FRNs, Picard's cash generation
capabilities should enable a satisfactory refinancing of the
senior notes.

Resilient Business Model

Picard's 'B+' rating reflects the group's historical resilience
in a competitive market and depressed economic environment. In
financial year ending March 2013 (FY13) the group's sales grew by
3.9% and Picard generated 1% like-for-like sales growth in its
core French market (+1.8% in the first nine months i.e. before
the industry-wide horsemeat scandal in February 2013). Fitch
forecasts a 2% like-for-like sales decline in France in FY14,
followed by a slow recovery into low single digits.

Still Limited Diversification

Fitch factors into Picard's rating its yet-to-be-proven ability
to diversify its activities, both outside France and through
various sales channels. Italy continues to underperform heavily.
New operations in Sweden and in Belgium look promising, yet at a
very early stage. The sector-wide horsemeat scandal could have a
negative impact on a brand that still needs to establish itself
abroad. Fitch does not factor any EBITDA contribution from
foreign operations over the next four years. Home Delivery (i.e.
on-line sales and phone sales) revenues are stagnating. FY13
sales for this segment are at the same level as FY10 and still
represent less than 2% of total revenues. It remains too early to
see the impact of the new website launched in April 2013.

Growing Operating Margin Pressure

FY13 EBITDA margin fell to 14.0% from 14.4% in FY12, despite a
30bps increase in gross margin. Communication costs related to
the horsemeat incident played a small role with a 10bps negative
impact. The margin deterioration mainly reflects management's
strategic decision to increase marketing expenses in France to
support slowing traffic development, and a fixed cost base
growing faster than revenues due to both network expansion and
lower like-for-like sales growth. Fitch believes higher marketing
and food control costs as a percentage of sales together with
network expansion will lower the EBITDA margin, with
stabilization expected around 13%.

Rating Sensitivities:

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

-- Positive like-for-like sales growth and EBITDA margin
    sustainably above 14.5%

-- Funds from operations (FFO) adjusted gross leverage
    sustainably below 5.0x

-- FFO fixed charge cover sustainably above 2.5x

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

-- FFO adjusted gross leverage sustainably above 6.0x

-- FFO fixed charge cover below 1.5x

-- Negative like-for-like sales growth beyond Fitch's

-- Significant EBITDA margin deterioration

-- Any refinancing of the PIK notes through a debt instrument
    with terms and conditions any less favorable to the FRNs and
    senior notes holders than the existing ones.

Liquidity and Debt Structure

Adequate Liquidity: Despite only limited potential for EBITDA
expansion over the next few years, the group's ability to
generate positive free cash flow (FCF) remains supported by
natural funding from negative trade working capital - typical for
food retailers - and relatively low capital expenditure
requirements. Available liquidity is further enhanced by a EUR30m
revolving credit facility. The debt repayment schedule is
manageable following the issuance of the FRNs due 2019.

The rating actions are:

Picard Groupe S.A.S.

-- Senior Secured Bank Debt: withdrawn;

-- EUR480 million 4.25% Senior Secured Notes due 2019: assigned

-- EUR30 million Revolving Credit Facility due 2018 assigned


AZZURRI: High Court Appoints Examiner After Cash Flow Woes
Gianni Cafolla at reports that the High
Court has appointed an examiner to Azzurri.

The application for a full examiner to be appointed comes after
the appointment of an interim examiner in the month of July, relates.

According to, in an independent accountant
report, it was noted that Azzurri had a reasonable prospect for
survival.  The company, says, had suffered
tight and tough cash-flow pressure, despite a recorded turnover
of EUR4.6 million last year.

The company had employed 35 people, recently making 2 redundant, discloses.

During the interim examinership, it was reported in the court
that 20 potential investors had expressed interest in picking up
where Azzurri had faulted.  The company were looking into a
complete corporate restructure during the year 2011,  recounts.  However, due to problems and
delays the company was facing this was pushed back. This in turn
begun making an impact on financial, operational and customer
service sectors, notes.

These problems resulted in loss of sales and negative cash-flow, discloses.  On top of this, Azzurri also
accumulated a bank debt with Bank of Ireland in the sum of EUR1.1
million, notes.  With these issues working
against the company, it finally became insolvent in mid-2013, the
petition stated, according to  The full
time whistle may have blown for Azzurri, but we may still see a
turnaround in extra time yet, states.

Azzurri is the Waterford-based manufacturer of sportswear.

MOSSWAY LTD: Issues Disqualification Order Against Two Directors
William Fry at reports that the High Court
has made an order disqualifying two directors of Mossway Limited
(In Liquidation) for a period of 12 months.

On June 3, 2011, the Revenue Commissioners presented a petition
to wind up the company on the basis that it was unable to pay its
debts as they fell due, relates.  The Court
made the order sought and appointed an Official Liquidator, discloses.

Due to the manner in which the directors had conducted the
company's business together with their failure to co-operate with
the liquidation process, the Official Liquidator sought to have
the directors restricted or disqualified,

According to, the Official Liquidator
referred to the following as evidencing a lack of commercial
probity by both directors:

   * Non-payment of revenue debt (while this is not of itself an
     automatic ground for disqualification, it is a factor to be
     taken into consideration by the Court in determining whether
     or not a director may be deemed to be "unfit")

   * Failing to keep adequate books and records and to deliver up
     books and records making it extremely difficult for the
     Official Liquidator to ascertain the underlying reasons for
     the company's insolvency

   * Use of company funds for director's personal expenditure

   * Engagement by the directors of a self-administered wind down
     whereby payments were made in disregard of statutory
     obligations and obligations to the Revenue Commissioners

   * The transfer of assets, employees and customers out of the
     company after it ceased to trade, to another company of
     which one of the company's directors was a director together
     with his wife

The Court was satisfied from the evidence provided that the
conduct of both directors was of such a serious nature as to deem
them both unfit to be concerned in the management of the company, notes.  The Order against one of the
directors was postponed for two weeks to afford him time to
resign as a director of the other company to which the company's
assets and employees had been transferred, according to

Mossway Limited provided haulage services with a warehousing and
distribution facility.

ULSTER BANK: Has No Plans to Write Off Homeowners' Debt
Louise Mcbride at reports that Ulster Bank boss
Jim Brown has said that the lender does not want to write off the
debt of homeowners struggling to repay their mortgage -- a stance
likely to dash the hopes of distressed mortgage holders hoping to
get some of their debt written off under the State's new personal
insolvency deals.

"We don't have a policy for writing off debt," Brown told the
Sunday Independent earlier this month, relats. relates that rather than write off debt, claimed
Mr. Brown, Ulster Bank instead tries to come to arrangements with
struggling homeowners to make their mortgages more affordable --
and allow them to stay in their own home.  One such arrangement
is the split mortgage, where part of a mortgage is parked.

However, the State's new insolvency mechanism, the Insolvency
Service of Ireland (ISI), which allows distressed borrowers to
strike debt deals with their banks, could run into trouble if
banks refuse to write off debt, according to says the ISI's debt deals are expected to include
debt write-offs, particularly for homeowners in negative equity.
The ISI has said that it hopes to be in a position to accept
applications for the new debt deals later this month.

"Banks are inherently wary of the ISI although they accept that
it is now a reality," according to a report published by Stubbs
Gazette in conjunction with Red C earlier this year, the report
relays. "They are pushing to settle informally with debtors and
so presumably obtain a better deal and avoid practitioner fees."


As reported by the Troubled Company Reporter-Europe on June 11,
2013, The Irish Times, citing The London Times, related that
Ulster Bank accounted for one in four pounds of losses at state-
owned Royal Bank of Scotland.  Ireland was given a "back-door
bailout" worth around GBP10 billion (EUR11.5 billion) by Britain
in "an arrangement that was never explicitly approved by
parliament", the Irish Times said, citing a report on June 10.
According to the Irish Times, The London Times claimed Ulster
Bank accounted for about a quarter of losses since 2008 at the
state-owned Royal Bank of Scotland, which is 81% owned by British
taxpayers after a GBP45 billion state bailout five years ago.
Quarterly reports after the Irish property market collapsed in
2010 show losses at Ulster Bank amounted to GBP10 billion,
exceeding those in the rest of the RBS group combined, the Irish
Times disclosed.  The money pumped into Ulster Bank is more than
three times the GBP3.25 billion direct loan offered by the
British government to Ireland in 2010, which was approved by
parliament after a heated debate and vote, the Irish Times noted.

                       About Ulster Bank

Ulster Bank Group -- is a wholly
owned subsidiary of the enlarged RBS group.  First Active, a
leading mortgage provider, was acquired by Ulster Bank Group in
January 2004 in a EUR887 million transaction.  Serving personal
and small business customers, Ulster Bank Retail Markets provides
Branch Banking and Direct Banking throughout the Republic of
Ireland and Northern Ireland.  Ulster Bank Corporate Markets
caters for the banking needs of business and corporate customers,
treasury and money market activities, asset financing, wealth
management, ebanking and international services, with a continued
focus on providing customer choice and value.


KOMPETENZ JOINT: Fitch Affirms 'B' IFS Rating; Outlook Stable
Fitch Ratings has affirmed Kompetenz Joint Stock Company
(Kazakhstan)'s (Kompetenz) Insurer Financial Strength (IFS)
rating at 'B' and National IFS rating at 'BB(kaz)'. The Outlooks
are Stable.

Key Rating Drivers

The ratings are underpinned by Kompetenz's robust capitalization
and its disciplined underwriting. These strengths are
counterbalanced by strategic challenges facing the company and,
as a result, its declining volumes of new business and
profitability in 2012 and 5M13.

Fitch believes Kompetenz faces strategic challenges in the
Kazakhstani market after it was acquired by current chairwoman
Zhanar Kalieva from Allianz SE (IFS: AA-/Stable) in Q411. These
challenges are reflected in a 31% gross written premium decline
in 2012 and a 22% fall in the net written premium in 5M13. Fitch
understands that the fall in premium volumes also reflects the
company's conservative approach to underwriting.

Both Fitch's calculated capital adequacy ratio and the regulatory
solvency margin (156% of required capital at end-5M13) indicate
that Kompetenz is well-capitalized for its current rating.
Capitalization is to some extent flattered by low net volumes of
business but in any case exceeds the expectations for the rating
by a good margin.

Kompetenz experienced a deterioration in loss and expense ratios
in 2012 and 5M13, which contributed to a net loss for 5M13. Its
combined ratio worsened to 133% in 2012 (2011: 78%) and further
to 169% for 5M13 (5M12: 124%). The loss ratio deteriorated due to
an inflow of reported claims on a single contract for obligatory
employee accident insurance and a decline in premium volumes,
while falling premium volumes put significant pressure on its
expense ratio. Meanwhile, Fitch views positively Kompetenz's
tight control of its commission ratio.

The insurance portfolio is largely composed of commercial
accounts including some concentration of business. One contract
accounted for 47% of gross premium written in the 5M13. This
concentration risk is partly offset by good credit quality of the
reinsurers to which Kompetenz cedes a material proportion of
premium under facultative arrangements.

Kompetenz has a reasonably prudent investment policy, with
significant exposure to local sovereign and bank debt and only
small exposure to equities. The quality of the investments is
better than those of local peers.

Kompetenz's current shareholder has begun negotiations with a
potential new investor in the insurer's capital. Although such a
deal could lead to benefits for Kompetenz, there is currently no
further information available about the negotiations or the
potential structure of any transaction. The company's rating
therefore continues to be based on its current standalone
financial profile, without taking into account any potential
change of ownership or new investment.

Rating Sensitivities

The ratings could be upgraded if Kompetenz demonstrates
improvements in its business franchise while reporting a stable
financial performance (i.e. combined ratio below 100%) and
capitalization (solvency margin reasonably above 100%).

Triggers for a downgrade include:

-- A further decline of Kompetenz's franchise.

-- A material deterioration of Kompetenz's risk-adjusted capital
    or a sustained reduction in its statutory solvency margin to
    below 100%.

-- Negative net income over a sustained period of time.


CADOGAN SQUARE V: Moody's Rates EUR25MM Class E Sr. Notes 'Ba2'
Moody's Investors Service has assigned the following definitive
ratings to notes issued by Cadogan Square CLO V B.V.:

Issuer: Cadogan Square CLO V B.V.

EUR1,500,000 Class X Senior Secured Floating Rate Notes due 2025,
Definitive Rating Assigned Aaa (sf)

EUR142,500,000 Class A1 Senior Secured Floating Rate Notes due
2025, Definitive Rating Assigned Aaa (sf)

GBP25,500,000 Class A2 Senior Secured Floating Rate Notes due
2025, Definitive Rating Assigned Aaa (sf)

EUR10,000,000 Class B1 Senior Secured Floating Rate Notes due
2025, Definitive Rating Assigned Aa2 (sf)

EUR30,000,000 Class B2 Senior Secured Fixed Rate Notes due 2025,
Definitive Rating Assigned Aa2 (sf)

EUR17,250,000 Class C Senior Secured Deferrable Floating Rate
Notes due 2025, Definitive Rating Assigned A2 (sf)

EUR15,500,000 Class D Senior Secured Deferrable Floating Rate
Notes due 2025, Definitive Rating Assigned Baa2 (sf)

EUR24,750,000 Class E Senior Secured Deferrable Floating Rate
Notes due 2025, Definitive Rating Assigned Ba2 (sf)

Moody's had issued provisional ratings on July 19, 2013 for this

Ratings Rationale:

Moody's definitive ratings of the rated notes address the
expected loss posed to noteholders by the legal final maturity of
the notes in August 2025. The definitive ratings reflect the
risks due to defaults on the underlying portfolio of loans, the
transaction's legal structure, and the characteristics of the
underlying assets.

Cadogan Square CLO V B.V. is a managed cash flow CLO with a
target portfolio made up of EUR 300,000,000 par value of mainly
European corporate leveraged loans. At least 85% of the portfolio
must consist of senior secured loans, floating rate notes or
senior secured bonds, and up to 15% of the portfolio may consist
of second-lien loans, unsecured loans, mezzanine obligations and
high yield bonds. The portfolio may also consist of up to 15% of
fixed rate obligations and between 5% and 15% of assets
denominated in GBP. The portfolio is expected to be 75% ramped up
as of the closing date and to be comprised predominantly of
corporate loans to obligors domiciled in Western Europe. The
remainder of the portfolio will be acquired during the six month
ramp-up period in compliance with the portfolio guidelines.

Credit Suisse Asset Management Limited ("CSAM") will actively
manage the collateral pool of the CLO. It will direct the
selection, acquisition and disposition of collateral on behalf of
the Issuer and may engage in trading activity, including
discretionary trading, during the transaction's four-year
reinvestment period. Thereafter, collateral purchases are
permitted using principal proceeds from unscheduled principal
payments and proceeds from sales of credit risk obligations, and
are subject to certain restrictions.

The transaction incorporates interest and par coverage tests
which, if triggered, divert interest and principal proceeds to
pay down the notes in order of seniority.

Moody's modeled the transaction using its European Cash Flow
Model, a cash flow model based on the Binomial Expansion
Technique, as described in Section 2.3 of the "Moody's Global
Approach to Rating Collateralized Loan Obligations" rating
methodology published in May 2013. The cash flow model evaluates
all default scenarios that are then weighted considering the
probabilities of the binomial distribution assumed for the
portfolio default rate. In each default scenario, the
corresponding loss for each class of notes is calculated given
the incoming cash flows from the assets and the outgoing payments
to third parties and noteholders. Therefore, the expected loss or
EL for each tranche is the sum product of (i) the probability of
occurrence of each default scenario and (ii) the loss derived
from the cash flow model in each default scenario for each
tranche. As such, Moody's encompasses the assessment of stressed

Moody's used the following base-case modeling assumptions:

Par amount: EUR300,000,000

Diversity Score: 41

Weighted Average Rating Factor (WARF): 2755

Weighted Average Spread (WAS): 3.90%

Weighted Average Coupon (WAC): 6.50%

Weighted Average Recovery Rate (WARR): 40.5%

Weighted Average Life (WAL): 8 years

Moody's also addressed the potential impact of further credit
deterioration in peripheral European countries. The underlying
portfolio is comprised of loans to obligors domiciled in several
countries with different local currency country ceilings. Given
that some of these countries currently have a local currency
country ceiling below Aaa, the portfolio was assessed based on
its maximum exposure to such countries. As part of the base case,
Moody's has addressed the transaction's limit on the percentage
of total obligors domiciled in countries with a foreign
government bond rating below A3. Given the portfolio constraints
and the current government bond ratings in Europe, such exposure
may not exceed 10% of the total portfolio being domiciled in
Croatia, Italy, Iceland, Ireland, Portugal and Spain with the
rest of the portfolio domiciled in countries which currently have
a local currency country ceiling of Aaa. For the Class X, Class
A1 and Class A2 notes, Moody's modeled a portfolio par amount
corresponding to 90% of the target par amount.

The rated notes' performance is subject to uncertainty. The
notes' performance is sensitive to the performance of the
underlying portfolio, which in turn depends on economic and
credit conditions that may change. CSAM's investment decisions
and management of the transaction will also affect the notes'

Together with the set of modeling assumptions, Moody's conducted
an additional sensitivity analysis, which was an important
component in determining the provisional rating assigned to the
rated notes. This sensitivity analysis includes increased default
probability relative to the base case.

Summary of the impact of an increase in default probability
(expressed in terms of WARF level) on each of the rated notes
(shown in terms of the number of notch difference versus the
current model output, whereby a negative difference corresponds
to higher expected losses), holding all other factors equal:

Percentage Change in WARF: WARF + 15% (to 3168 from 2755)

Ratings Impact in Rating Notches: Class A1/A2 Notes: 0

Ratings Impact in Rating Notches: Class D Notes: -2

Percentage Change in WARF: WARF + 30% (to 3580 from 2755)

Ratings Impact in Rating Notches: Class A1/A2 Notes: -1

Ratings Impact in Rating Notches: Class D Notes: -3

The V Score for this transaction is Medium/High. Moody's assigned
this V Score in a manner similar to the Medium/High V score
assigned for the global cash flow CLO sector, as described in the
special report titled, "V Scores and Parameter Sensitivities in
the Global Cash Flow CLO Sector."

The score for the "Transaction Complexity," a sub-category of the
V Score, is Medium/High, higher than that of the benchmark CLO,
which is Medium. The raised score of Medium/High reflects the
fact that the transaction is potentially expose to FX risk due to
the natural hedging mechanism as oppose to the entry into FX
swaps. Also the score "Alignment of Interests", another sub-
category of the V Score, is Low/Medium, lower than that of the
benchmark CLO, which is Medium. The lowered score of Low/Medium
reflects the implementation of the risk retention rules for this
transaction. Overall, none of these, cause this transaction's
overall composite V Score of Medium/High to differ from that of
the CLO sector benchmark.

Moody's V Scores provide a relative assessment of the quality of
available credit information and the potential variability around
the various inputs to a rating determination. The V Score ranks
transactions by the potential for significant rating changes
owing to uncertainty around the assumptions due to data quality,
historical performance, the level of disclosure, transaction
complexity, the modeling and the transaction governance that
underlie the ratings. V Scores apply to the entire transaction,
rather than individual tranches.

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

COPERNICUS EURO: Fitch Cuts Rating on Class D Notes to 'D'
Fitch Ratings has downgraded Copernicus Euro CDO I B.V. as

-- EUR8.3m class D downgraded to 'Dsf' from 'Csf', Recovery
   Estimate of 0% is removed and rating is withdrawn

Key Rating Drivers

On the August 12, 2013 payment date, the transaction reached its
legal final maturity and failed to redeem the class D note
principal and pay in full the notes' current or deferred
interest. As a result, the class D note defaulted as per the
terms and conditions of the notes and the rating is subsequently
withdrawn. There is the possibility of additional cashflows from
equity securities retained by the transaction, but these are not
addressed by our rating.

Rating Sensitivities

The transaction has reached its legal final maturity. No
sensitivity analysis was conducted.

Copernicus Euro CDO I B.V. is a cash securitization of mainly
European high-yield bonds and leveraged loans. At closing, the
total note issuance of EUR350 million was used to invest in a
target portfolio of EUR337.7 million.

NORTH WESTERLY: S&P Lowers Ratings on Three Note Classes to CCC-
Standard & Poor's Ratings Services lowered its credit ratings on
North Westerly CLO I B.V.'s class I-A, I-B, II, III-A, III-B, and
III-C notes.  At the same time, S&P has affirmed its 'CCC- (sf)'
ratings on the class IV-A and IV-B notes.

The rating actions follow S&P's assessment of the transaction's
performance, and the application of its relevant criteria.

For S&P's review of the transaction's performance, it used data
from the payment date report (dated May 28, 2013), in addition to
S&P's cash flow analysis.  S&P has taken into account recent
developments in the transaction, and has applied its current
counterparty criteria, as well as S&P's 2009 corporate cash flow
collateralized debt obligation (CDO) criteria.

From S&P's analysis, it has observed a decline in the proportion
of assets that S&P considers to be rated in the 'CCC' category
('CCC+', 'CCC', and 'CCC-') in notional terms, which is mainly
due to the pool's amortization.  S&P has also observed that the
defaulted assets (rated 'CC', 'C', 'SD' [selective default],
and 'D') in the pool have increased to EUR10.5 million
(approximately 11% of the outstanding balance) from zero as of
previous review on Aug. 16, 2012.  Considering these defaulted
assets at a recovery rate that S&P considers to be appropriate
(the lower of Standard & Poor's recovery rate and the market
value of such assets) and the performing pool balance, results in
a lower aggregate collateral balance than at S&P's previous
review (excluding the deleveraging of the notes).  This had led
to lower available credit enhancement for all classes of notes
junior to the class I notes (classes I-A and I-B taken together
as they pay pro rata).

All of the assets in the pool pay a floating rate of interest,
but the class I-A, III-A, IV-A, and IV-B notes pay a fixed rate
of interest. To mitigate this mismatch risk, the issuer entered
into an interest rate hedge that matures in 2016.  The pool also
contains non-euro-denominated assets (approximately 9.6% of the
outstanding pool), which are also hedged.  More than 15% of the
assets in the pool mature after the transaction's June 2016 legal
final maturity.  S&P has considered this in its cash flow
analysis by applying a haircut (deduction) to such assets above
5% of the pool, in accordance with S&P's 2004 cash flow CDO

The negative rating migration in the pool, compared with S&P's
previous review, has also led to increasing scenario default
rates (SDRs) at each rating level.

The issuer has applied scheduled principal proceeds toward
principal payments on the class I notes since the end of the
reinvestment period (i.e., from 2008).  The class I and II par
value tests continue to comply with their documented minimum
requirement triggers, as was the case at S&P's previous review.
However, the class III par value test, which was passing as of
S&P's previous review is now failing.  The class IV par value
test continues to fail, but by higher margin than at S&P's
previous review:  The documented trigger is 104.00% and the
result has deteriorated to 91.90% from 102.06%.  Based on the
current par value test calculations, this class of notes may not
be paid full par value.

S&P has subjected the capital structure to a cash flow analysis
in order to determine the break-even default rate (BDR).  In
S&P's analysis, it has used the reported portfolio balance that
it considers to be performing, the principal cash balance, the
current weighted-average spread, and the weighted-average
recovery rates that S&P considered to be appropriate.  S&P has
incorporated various cash flow stress scenarios using various
default patterns, levels, and timings for each liability rating
category, in conjunction with different interest rate stress

In S&P's 2009 corporate cash flow CDO criteria, it introduced
supplemental stress tests (including the largest obligor default
test for all of the rated notes and largest industry test for the
classes of notes rated above 'A+').  As the transaction is
amortizing and has fewer than 35 obligors, S&P do not need to
apply these tests under certain conditions.  Based on the notes'
seniority (which under S&P's criteria determines whether it
applies these tests), pool concentration, and maturity profile,
S&P has concluded that the supplemental tests are applicable to
all classes of notes in this transaction.

Due to higher defaults observed in the pool, higher average
exposure to the loans (due to amortization), and negative rating
migration, the supplemental tests now pass at lower ratings.

S&P's ratings on the class I-A, I-B, and II notes are constrained
by the results of its supplemental tests.  The cash flows for
these classes of notes pass at higher ratings than the outcome of
the supplemental tests.

S&P's cash flow analysis and supplemental test results have the
same outcome for the class III-A, III-B, and III-C notes.  Under
both the scenarios, the rating outcome for each of these classes
of notes is 'CCC- (sf)'.

Taking into account the above observations, S&P has lowered its
ratings on the class I-A, I-B, II, III-A, III-B, and III-C notes.

For the class IV-A and IV-B notes, the maximum ratings under the
supplemental tests continues to be 'CCC- (sf)'.  From S&P's cash
flow analysis, it has concluded that the BDRs are lower than the
required SDRs for these classes of notes.  S&P has therefore
affirmed its 'CCC- (sf)' ratings on the class IV-A and IV-B

S&P has analyzed the derivative counterparty documents (that do
not comply with S&P's current counterparty criteria, but which do
comply with its previous counterparty criteria) and concluded
that the derivative exposure is currently sufficiently limited,
so as not to affect the assigned ratings.

North Westerly CLO I is a cash flow collateralized loan
obligation (CLO) transaction backed by senior loans and mezzanine


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:



Class              Rating
            To                From

North Westerly CLO I B.V.
EUR363 Million, $5.27 Million Senior Deferrable Interest
and Subordinated Notes

Ratings Lowered

I-A         AA+ (sf)          AAA (sf)
I-B         AA+ (sf)          AAA (sf)
II          B+ (sf)           BBB+ (sf)
III-A       CCC- (sf)         B+ (sf)
III-B       CCC- (sf)         B+ (sf)
III-C       CCC- (sf)         B+ (sf)

Ratings Affirmed

IV-A        CCC- (sf)
IV-B        CCC- (sf)

RENOIR CDO: S&P Lowers Ratings on Two Note Classes to 'CCC'
Standard & Poor's Ratings Services lowered its credit ratings on
Renoir CDO B.V.'s class A, C, D1, and D2 notes.  At the same
time, S&P affirmed its ratings on the class B notes.

Renoir CDO is a cash arbitrage collateralized debt obligation
(CDO) of a portfolio of mainly mortgage-backed securities.

The rating actions follows S&P's assessment of the transaction's
performance.  S&P used data from the June 2013 payment date
report, took into account recent transaction developments, and
performed its credit and cash flow analysis.  S&P applied its
2013 counterparty criteria, its cash flow criteria, and its CDO
of ABS criteria.

From S&P's analysis, it has observed a deterioration in the
credit quality of the pool.  As the deal continues to amortize,
the proportion of lower-rated assets in the pool has increased.
Although the notional value of assets rated 'CCC+', 'CCC', or
'CCC-' has decreased compared with S&P's previous review, these
assets now account for more than 11% of the pool, higher than in
S&P's previous review.  Both the proportion and notional value of
defaulted assets (rated 'CC', 'C', 'SD' [selective default], or
'D') in the collateral pool have increased since S&P's last
review of the transaction.  Scheduled principal proceeds are now
used to pay down the notes in accordance with the note payment
sequence. S&P still considers the collateral pool to be
reasonably diversified compared with other rated amortizing CDOs
backed by mortgage securities.

None of the ratings on the underlying assets in the pool are on
CreditWatch negative, so S&P has not applied any related
additional stresses on the pool.  Because of the deleveraging of
the class A notes, the class A/B overcollateralization par value
test remains above the trigger level of 107% (and has even
increased since S&P's last review).  However, the class C and D
par value tests are still below the trigger levels set under the
transaction documentation (106% for the class C test and 102.5%
for the class D test).  Both tests are now below 100%.  The class
D1 and D2 notes, which pay pro rata, continue to defer interest.
Based on the coverage test calculation, these notes are unlikely
to be paid at full par value on the legal maturity.

"We subjected the capital structure to our cash flow analysis,
based on the updated methodology and assumptions in our cash flow
criteria and our CDO of ABS criteria, to determine the break-even
default rate (BDR).  We used the reported portfolio balance that
we considered to be performing, the principal cash balance, the
current weighted-average spread, and the weighted-average
recovery rates that we considered to be appropriate.  We
incorporated various cash flow stress scenarios using various
default patterns, levels, and timings for each liability rating
category, in conjunction with different interest rate stress
scenarios," S&P said.

At the same time, S&P conducted its credit analysis, based on its
updated assumptions, to determine the scenario default rate (SDR)
at each rating level, which S&P then compared with its respective

Taking into account S&P's credit and cash flow analyses, and
despite the deterioration in the transaction's performance, it
considers that the credit enhancement available to the class B
notes remains commensurate with its current ratings.  S&P has
therefore affirmed its ratings on these notes.

The SDRs have increased because of lower-rated assets in the
pool. Additionally, the available credit enhancement on the class
A, C, D1, and D2 notes has become lower because of an increase in
defaults and a lower weighted-average spread earned on the
collateral pool.  The credit enhancement is no longer
commensurate with the notes' rating levels as of S&P's previous
review, and it has therefore lowered its ratings on these classes
of notes.

S&P has analyzed the derivative counterparties' exposure to the
transaction, and concluded that the exposure is currently
sufficiently limited that it does not affect the assigned


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:



Renoir CDO B.V.
EUR280 Million Fixed- And Floating-Rate Notes

Class                 To                 From

Ratings Lowered
A                     BBB- (sf)          BBB (sf)
C                     B+ (sf)            BB (sf)
D1                    CCC (sf)           B- (sf)
D2                    CCC (sf)           B- (sf)

Ratings Affirmed
B                     BBB- (sf)


RUSSIAN AGRICULTURAL: Fitch Cuts Viability Rating to 'b-'
Fitch Ratings has downgraded Russian Agricultural Bank's (RusAg)
Long-term Issuer Default Ratings (IDRs) to 'BBB-' from 'BBB' and
its Viability Rating (VR) to 'b-' from 'b', and removed them from
Rating Watch Negative (RWN). The Outlooks on the bank's Long-term
IDRs are Stable. The rating actions reflect the only limited
capital support made available to the bank following its
significant asset quality deterioration. RSHB Capital S.A.'s debt
issues have been downgraded in line with RusAg.


The downgrade of the VR reflects RusAg's weak asset quality and
limited loss absorption capacity. The rating also considers the
bank's moderate pre-impairment profitability, weak bottom-line
performance and tightly managed liquidity. However, the rating is
supported by the stability to date of the bank's funding base and
market access, which provides significant flexibility in
recognizing and managing asset quality problems.

Non-performing loans (NPLs; loans overdue by 90 days or more,
including those transferred to the watch category) increased to
17% of the loan book at end-2012 (the last date at which the bank
has disclosed portfolio asset quality metrics) from 12% at end-
2011. Restructured loans classified in the watch category
comprised a further 8% of the portfolio, meaning that recognized
problem exposures in total comprised 25% of the book.

Reserve coverage of NPLs was a moderate 49%, and of total
recognized problem exposures (NPLs and restructured loans) 34%.
Unreserved problem exposures were equal to Fitch Core Capital
(FCC). At the same time, the long-term recovery schedule for
these loans envisaged by the bank (with only limited recoveries
expected during the next three years) suggests that further
impairment losses are likely, in Fitch's view.

In addition, there remains significant uncertainty about the
overall extent of potential asset quality problems at RusAg due

-- The unseasoned nature of the loan book, which has grown
    rapidly in recent years and still contains a large proportion
    of long-term exposures (almost half of gross loans had
    remaining maturities of over three years at end-2012)

-- Interest rate subsidies and non-amortization of loan
    principal, enjoyed by a substantial proportion of non-retail
    borrowers, which make it difficult to draw conclusions about
    ultimate loan repayment prospects in the currently non-
    overdue part of the book

-- Rapid growth of the retail portfolio, which comprised 18% of
    loans at end-H113, having expanded by 36% during 2012 and 11%
    in H113; reported NPLs in this book are moderate to date
   (3.1% at end-2012), but average loan tenors are about three
    years, and impairment in this portfolio will probably rise
    further, in Fitch's view

-- A lack of clarity on the total volume of restructured loans,
    including among loans which are not currently classified in
    the watch category.

The FCC/weighted risks ratio stood at 12.4% at end-2012,
following a RUB40 billion equity injection at year-end, but Fitch
views capitalization as weak in light of the large amount of
unreserved problem exposures, potential further impairment in the
performing book, continued significant loan growth, weak internal
capital generation and the absence of any announced plans for
further equity injections. The regulatory capital ratio of 13.4%
at end-H113 is supported by debt funding made available to a
subsidiary SPV (consolidated in the IFRS accounts) which buys
NPLs from RusAg's balance sheet.

Pre-impairment profit, net of interest income accrued but not
received in cash, was just RUB11 billion in 2012 (equivalent to
1% of the loan book), constrained by declining margins and a high
cost base. Net income has been close to zero for the past four
years as pre-provision results have been almost fully channeled
into loan reserves. Based on H113 statutory results, Fitch does
not expect a material improvement in profitability for 2013.

RusAg's high loans/deposits ratio (210% at end-2012) and slowly
amortizing loan book make its liquidity position to a significant
degree dependent on continued wholesale market access. Facilities
maturing (including put options) to end-H114 comprised
approximately RUB140 billion at end-H113, equal to 9% of
liabilities, or almost 70% of liquid assets. Deposit
concentrations could also make the liquidity position somewhat
variable over time, in Fitch's view.


A further marked deterioration in asset quality could result in a
downgrade of the VR. A strengthening of capitalization, combined
with a reduction in asset quality risks, could lead to an

KEY RATING DRIVERS - IDRs, National Rating, Senior Debt Ratings,
Support Rating, Support Rating Floor

The downgrade of the bank's support-driven ratings, including its
Long-term IDRs and senior debt rating to 'BBB-' from 'BBB',
reflects the only moderate capital support made available to the
bank relative to the scale of its asset quality problems, and the
absence at present of any announced plans to inject new equity in
the future. In light of the only limited support provided, Fitch
believes it is no longer appropriate to rate RusAg at the same
level as the Russian sovereign ('BBB'/Stable).

The downgrade also reflects Fitch's current view that any change
in RusAg's status is unlikely to result in a material
strengthening of the support framework for the bank. Fitch
understands that the Russian government is considering a proposal
from RusAg to change its status to that of a state corporation,
potentially similar to Vnesheconombank ('BBB'/Stable). However,
any such change seems unlikely to be accompanied by legal
obligations to provide support to RusAg, or funding guarantees or
other forms of enhancement for the bank's creditors.

At the same time, RusAg's ratings continue to reflect Fitch's
view of the high probability of support for the bank from the
Russian authorities, in case of need. This view is based on the
bank's full government ownership (and exclusion from the
privatisation program), its policy role and the moderate size of
RusAg's balance sheet relative to the sovereign's available
financial resources.

RATING SENSITIVITIES - IDRs, National Rating, Senior Debt
Ratings, Support Rating, Support Rating Floor

RusAg's ratings could be upgraded or downgraded in case of a
similar rating action on the Russian sovereign.

The ratings could also be upgraded if, contrary to Fitch's
current expectations, a change in the bank's status is
accompanied by a material strengthening of the support framework
for the bank, or if future support made available to the bank
enables it to operate with consistently stronger capitalization
over an extended period of time.

The ratings could be further downgraded if capital or liquidity
support is not forthcoming when urgently required, or if the
bank's policy role is considerably weakened. However, Fitch views
these scenarios as unlikely.


The rating of RusAg's subordinated debt continues to be notched
off the bank's Long-term IDRs, reflecting Fitch's methodology for
rating 'old style' subordinated debt in Russia. Accordingly, an
upgrade or downgrade of the subordinated debt rating would follow
similar actions on the bank's Long-term IDRs.

The rating actions are:

Russian Agricultural Bank:

  Long-term foreign and local currency IDRs: downgraded to 'BBB-'
  from 'BBB', Outlook Stable; off RWN

  Short-term IDR: affirmed at 'F3', off RWN

  National Long Term Rating: downgraded to 'AA+(rus)' from
  'AAA(rus)' , Outlook Stable; off RWN

  Viability Rating: downgraded to 'b-' from 'b'; off RWN

  Support Rating: affirmed at '2'; off RWN

  Support Rating Floor: revised to 'BBB-' from 'BBB'; off RWN

  Senior unsecured debt: downgraded to 'BBB-' from 'BBB'; off RWN

  Senior unsecured debt: downgraded to 'AA+(rus)' from
  'AAA(rus)', off RWN

RSHB Capital S.A.:

  Senior unsecured debt: downgraded to 'BBB-' from 'BBB'; off RWN

  Senior unsecured debt: downgraded to 'AA+(rus)' from
  'AAA(rus)', off RWN

  Subordinated debt: downgraded to 'BB+' from 'BBB-'; off RWN

U N I T E D   K I N G D O M

COMET: OpCapita Recoups GBP54 Million Following Collapse
Graham Ruddick and Steve Hawkes at The Telegraph report that
Henry Jackson's OpCapita and its backers have already recouped at
least GBP54 million from the ruins of Comet, despite suppliers
and the taxman facing millions of pounds of losses.

According to the Telegraph, documents relating to the collapse of
Comet show that Hailey Acquisitions Limited (HAL), the vehicle
OpCapita and its investors used to buy the electrical retailer,
has so far been paid GBP54 million from the sale of Comet's stock
and equipment.

HAL is the main secured creditor to Comet and entitled to GBP140
million after snapping up the retailer's debt from former parent
company Kesa, and funding Comet through loans secured against its
assets, the Telegraph discloses.

Comet collapsed into administration last November with the loss
of almost 7,000 jobs, the Telegraph recounts.  According to the
Telegraph, Vince Cable's Department for Business, Innovation and
Skills is conducting a review into the retailer's failure, which
resulted in the closure of all of its stores in the UK, over
concerns about "malpractice".

According to an update on the administration process filed at
Companies House by administrators Deloitte, HAL could be in line
for further payments from the ruins of Comet, the Telegraph

An extra GBP29 million of cash is yet to be distributed from the
administration, while HAL also controls Comet's profitable
warranty business Triptych, and is in talks to buy up to GBP27
million of Comet's taxable losses -- which it could potentially
use to offset other tax payments, the Telegraph discloses.

One estimate based on internal Comet figures suggests that HAL
has already collected almost GBP77 million from the retailer, the
Telegraph states.  This includes monitoring fees and interest
paid by Comet while it was still trading, as well as the payouts
from the administration, according to the Telegraph.

Despite the payments to HAL, Deloitte has warned that unsecured
creditors, who are owed GBP232 million, will get less than 1p in
the pound, the Telegraph notes.  The creditors include suppliers,
landlords and HMRC, with the failure of Comet likely to
eventually cost GBP50 million in redundancy fees and unpaid tax,
the Telegraph discloses.

Deloitte has so far been paid GBP10 million in fees, while
insolvency adviser GA Europe has earned GBP7 million, the
Telegraph notes.

The GBP140 million of debts that HAL is listed as having by
administrators is understood to include a GBP30 million asset-
backed loan from PNC that was bought by HAL and lent to Comet, as
well as GBP110 million of existing debt that was acquired when
Kesa sold the retailer, the Telegraph discloses.

According to the Telegraph, Deloitte said that it instructed its
independent legal adviser Mayer Brown to review the security held
by HAL over Comet's assets and found it to be "valid".

Headquartered in Rickmansworth, Comet is an electrical retailer.

Neville Kahn, Nick Edwards and Chris Farrington of Deloitte were
appointed Joint Administrators to Comet on Nov. 2, 2012.
Deloitte said like many other retailers, Comet has been hit hard
by the uncertain economic environment, slow consumer spending and
lack of consumer confidence.  Despite significant investment in
the business and the efforts of the experienced management team,
Comet has struggled to compete with online retailers which have
far lower overhead costs and can offer cheaper products, Deloitte

GOLDTHORN MORTGAGE: Permission Cancelled Following Liquidation
(Matet) reports that the Financial Conduct Authority
(FCA) has cancelled the permissions of insurance and mortgage
broker Goldthorn Mortgage & Insurance Services following the
liquidation of the company.

According to the report, the regulator said it was not satisfied
that Birmingham-based Goldthorn, which was put into compulsory
liquidation by HM Revenue & Customs in February, had the
appropriate resources to carry out its regulated business. relates that the FCA said it had asked
Goldthorn's liquidator to apply to cancel Goldthorn's Part 4A
permission, but it declined to do so.

"The authority has therefore concluded," the FCA said, "that
Goldthorn has failed to maintain appropriate resources and is
failing to satisfy the threshold conditions in relation to the
regulated activities for which Goldthorn has had a permission."

Goldthorn did not try to appeal the FCA's decision notice within
the given timeframe of 28 days, the report notes.

GRAMPIAN CONSTRUCTION: Creditors May Not Recover Money Owed
Ross Davidson at The Press and Journal reports that creditors
owed money by a collapsed north-east building contractor have
been warned not to expect a penny of their money back.

Grampian Construction went out of business in January, leading to
more than 30 staff being laid off, the Press and Journal relates.

The firm, set up in 1997 and whose sole director was
Kenny Riddoch, also used 47 subcontractors, but went into
administration with GBP6 million of debts, the Press and Journal

Grampian Construction is a Huntley-based building contractor.

HEARTS OF MIDLOTHIAN: Foundation of Hearts Named Preferred Bidder
BBC Sport reports that fans' group the Foundation of Hearts have
been named preferred bidder for the Hearts of Midlothian Football

Hearts Midlothian entered administration in June and BDO, who has
taken over the running of the club, revealed last month that club
debts amount to GBP28.4 million, BBC Sport recounts.

Two other parties submitted formal offers for the club, BBC Sport

Hearts manager Gary Locke welcomed the news and urged fans to
support the foundation's bid, BBC Sport relates.

According to BBC Sport, any deal to exit administration via a
company voluntary arrangement (CVA) must be agreed with the major
creditors of the club.

Objections have been lodged in a Lithuanian court over the
proposed liquidation of Hearts' parent company, UBIG, BBC Sport
notes.  UBIG, a Lithuanian investment company, own 50% of Hearts
shares and until the court makes a decision on the future of the
company, no sale of Hearts can be completed, BBC Sport states.

A decision from the courts on UBIG could be made before the end
of September, BBC Sport says.

Lithuanian bank Ukio Bankas, itself in administration, is Hearts'
other main creditor, BBC Sport notes.

"We all still have a lot of work to do to demonstrate to the
major creditors that the bid can offer them the best possible
outcome.  Let's not get carried away -- now is the time for
everyone to get behind FOH to make this bid work," BBC Sport
quotes Mr. Jackson as saying.

"This is a positive development but does not guarantee that a CVA
will be successful.  That will require a considerable combined
effort from FOH and BDO to ensure that all interested parties are

"At the moment, we cannot put a timescale on the process as a
number of negotiations with various parties still need to take
place and we are waiting for the appointment of administrators to
UBIG to be ratified.

"However, we can ensure that collectively we make as much
progress as possible on our side so we are able to finalize the
matter quickly once the opportunity presents itself."

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

HOISTQUIP: Drop-Off in Jobs Led to Administration
Shropshire Star reports that Shrewsbury-based Hoistquip was taken
over in a management buyout in 2011 and the company had been
looking to start global projects.

However, Shropshire Star relates that a drop-off in jobs has now
led to the company collapsing into administration.

Joint administrators Nicholas Lee and Dilip Dattani of RSM Tenon
have moved into the Ennerdale Road-based business, which designs,
manufactures and installs cranes and lifting equipment, according
to Shropshire Star.

"A reduction in the level of work generated by the company had
led to the business ceasing to trade and the company being placed
into administration, and unfortunately the remaining 11 staff
being made redundant. . . . The administrators are actively
seeking offers for the business and assets of the company," the
report quoted Mr. Lee as saying.

Hoistquip was launched in 1976 and continued as a family-run firm
until it was bought by a remotely run holding company in 1999.

The report notes that the most recently available accounts, for
period to the end of August last year, showed that while
Hoistquip had assets of GBP734,913, the company owed GBP1.139
million to creditors, leaving it with a shortfall in assets of
more than GBP400,000.

It listed its level of cash at the bank and in hand at just
GBP209, with the bulk of its assets being in the form of debtors,
the report relays.

In the last year, the report discloses that the company has twice
been threatened with dissolution by Companies House.  The report
notes that this is a process which usually begins when a company
fails to meet certain paperwork requirements.

This was halted when the company entered administration, the
report says.

Hoistquip has ceased trading since entering administration, while
a buyer is sought for the assets of the firm, the report adds.

LEADING RESTAURANTS: Lameys Appointed as Group's Liquidators
InsiderMedia reports that insolvency specialist Lameys has been
appointed to help place Leading Restaurants of the World Ltd into

The Leading Restaurants of the World Ltd traded from Sutton
Harbour and was owned by well-known restaurateur Edmond Davari,
the report says.

"I have fought for the last two years; I have done everything I
can do to keep the businesses going for the sake of my staff,"
the report quotes Mr. Davari as saying.

"I have entered into many financial agreements, re-mortgaged my
house, and tried to keep the businesses going for the last two
years but it's come to a point now where I have been left with no
choice but to let it go."

According to InsiderMedia, Mr. Davari said the closures meant the
last 30 years' work had gone "out of the door".

Lameys partner Michelle Weir said The Leading Restaurants of the
World had suffered because of increased competition, the report

Leading Restaurants of the World Ltd is a Plymouth restaurant
group which owns Asia Chic, Rocco y Lola and Zucca.

THOMSON DIRECTORIES: In Administration, to Make Jobs Redundant
The Drum reports that Thomson Directories placed into
administration Thomson Directories, the UK subsidiary of Italian
publisher of telephone directories and street maps, Seat Pagine
Gialle (SPG), is understood to have entered administration.

The Drum has learned that the local business directory has
informed staff of administration process which took place, with a
consultation process over redundancies thought to be already

Staff are also said to have also been informed that there are
three potential buyers for the business, although their identity
is unknown at this time, according to The Drum.

At the end of June, SPG filed with the Court of Turin a proposal
for a "composition with creditors" which is similar to a
Creditors Voluntary Agreement, The Drum relates.

A meeting of creditors is also scheduled for next January, while
in July, following a general shareholder's meeting for SPG, it
was revealed that the company's overall losses had reached
EUR432,885,844, the report notes.

* Fitch: Costs of RBS Bad Bank Split Would Likely Exceed Benefits
RBS's solid half-year earnings, based on an increasingly robust
balance sheet, are likely to reduce the benefit of implementing a
"bad bank" split, as currently being considered by the UK
government, Fitch Ratings says. "A bad bank split is unlikely as
we believe the costs, obstacles and uncertainties involved in
transferring some assets to a state-run bad bank would exceed the
benefits, in particular to the UK government as majority
shareholder in the bank and potential acquirer of assets from the
bank," Fitch says.

"In light of this and given the large unknown elements of what
could be transferred and under what mechanisms even were some
sort of split to occur, we have not taken any related rating
action on RBS.

"From a bondholder's perspective, there are a number of reasons
why any split is likely to be neutral for the bank's Viability
Rating, although this cannot be assured without full knowledge of
what is being considered. At its simplest, it is difficult to
imagine a restructuring being sanctioned that would increase risk
for bondholders without also reducing value for shareholders,
most obviously the UK government, one of whose very objectives is
to create shareholder value for reprivatization.

"RBS has just proved, in its recent set of results and following
the UK Prudential Regulatory Authority's recent adjusted capital
requirement test, that it can continue to operate viably under
its current plans. As such, we expect any restructuring would
take place outside any existing statutory framework, presumably
involving the sale by RBS of certain assets at no less than fair
value in order to avoid a breach of EU state aid rules.

"Indeed, the UK has pledged not to inject any more money into the
bank. Any restructuring scheme that fell foul of EU state aid
requirements would, under the revised rules effective 1 August
2013, require junior debt burden sharing and, presumably
therefore, dilution of the government as shareholder in favor of
junior bondholders.

"For any such restructuring to go ahead, the UK government would
likely need the approval of some of the minority shareholders in
RBS, who would probably want to see a compelling valuation
benefit to support a strategy that consumed significant
management time. Uplift for shareholders could be difficult to
achieve with the costs, legal complexities and valuation
adjustments that accompany a good bank/bad bank scheme.

"Another consideration is that the public sector debt will likely
increase by the size of the assets selected to go into a state-
owned bad bank. Public sector banking groups, such as RBS, are
excluded from the primary measure of net public debt used by the
government and the Office for Budget Responsibility. However,
like the existing state run UK Asset Resolution, the bad bank
will most likely be included on the exchequer's balance sheet,
and thus be included in the public debt. The government may have
limited appetite to see an increase in the debt level, so this
would likely be a constraint for the size of a potential bad bank
asset pool.

"The assets that could be considered for transfer into public
ownership would likely be in Ulster Bank, UK commercial real
estate and some legacy portfolios. They would also likely be
loans accounted for at above fair value, so any asset transfer at
fair value would likely crystallize losses. The gap between the
fair value of RBS's loans and the carrying value at which they
were held in the accounts has fallen, but remains substantial at
GBP17 billion at end-H113. A large portion of the deficit is
likely to relate to Irish and property loans, even though some
will stem from low-risk assets written at uneconomic rates, such
as housing association loans.

If a split were to happen, it might be negative for reported
capital ratios. But we believe the impact would likely be
moderate, considering the constraints on the potential size of
the asset pool and some capital relief from the removal of
impaired assets. There has also been media speculation that the
government could recycle any compensation it received from RBS's
exit of the dividend access share -- a scheme put in place as
part of RBS's bailout to make it impractical to pay dividends to
ordinary shareholders -- as a further equity investment. Even if
capital ratios deteriorated moderately, asset quality would
improve and tail risks would diminish after the asset transfers.

"We believe the most likely outcome is for the group to continue
to follow its planned capital actions -- to deleverage further,
partially float its US Citizens operations, and reduce and
reshape its markets business. One of the greatest risks facing
the RBS group is the litigation and conduct costs relating to
legacy business. This risk remains unquantifiable but potentially
significant and would be difficult to remove with a bad bank

A new chief executive with retail banking pedigree could lead to
a strategy more focused on the UK and further reshaping of the
markets operations, which would reduce risk-weighted assets,
volatility in income and tail risk. But Ulster Bank will remain a
drag on capital, as it is not expected to become fully profitable
until the medium term.


* BOOK REVIEW: Rand Araskog's The ITT Wars
Author: Rand Araskog
Publisher: Beard Books
Soft cover: 236 pages
List Price: $34.95
Review by Gail Owens Hoelscher
Buy a copy for yourself and one for a colleague on-line at:

This book was originally published in 1989 when the author was
Chairman and Chief Executive Officer of ITT Corporation, a $25
billion conglomerate with more than 100,000 employees and
operations spanning the globe with an amazing array of
businesses: insurance, hotels, and industrial, automotive, and
forest products. ITT owned Sheraton Hotels, Caesars Gaming, one
half of Madison Square Garden and its cable network, and the New
York Knickerbockers basketball and the New York Rangers hockey
teams. The corporation had rebounded from its troubles of the
previous two decades.

Araskog was made CEO in 1978 to make sense of years of wild
acquisition and growth. Under Harold Geneen, successor to ITT's
founder and champion of "growth as business strategy," ITT's
sales had grown from $930 million in 1961 to $8 billion in 1970
and $22 billion in 1979. It had made more than 250 acquisitions
and had 2,000 working units. (It once acquired some 20
companies in one month).

ITT's troubles began in 1966, when it tried to acquire ABC.
National sentiment against conglomerates had become endemic; the
merger became its target and was eventually abandoned. Next
came a variety of allegations, some true, some false, all well
publicized: funding of Salvador Allende's opponents in Chile's
1970 presidential elections; influence peddling in the Nixon
White House; underwriting the 1972 Republican National
Convention. ITT's poor handling of several antitrust cases was
also making headlines.

Then came recession in 1973. ITT's stock plummeted from 60 in
early 1973 to 12 in late 1974. Geneen found himself under fire
and, in Araskog's words, the "succession wars" among top ITT
officers began. Geneen was forced out in 1977, and Araskog,
head of ITT's Aerospace, Electronics, Components, and Energy
Group, with more than $1 billion in sales, won the CEO prize a
year later.

Araskog inherited a debt-ridden corporation. He instituted a
plan of coherent divesting and reorganization of the company
into more manageable segments, but was cut short by one of the
first hostile bids by outside financial interests of the 1980s,
by businessmen Jay Pritzker and Philip Anschutz. This book is
the insider's story of that bid.

The ITT Wars reads like a "Who's Who" of U.S. corporations in
the 1970s and 1980s. Araskog knew everyone. His writing
reflects his direct, passionate, and focused management style.
He speaks of wars, attacks, enemies within, personal loyalty,
betrayal, and love for his company and colleagues. In the
book's closing sentences, Araskog says, "We fought when the odds
were against us. We won, and ITT remains one of the most
exciting companies of the twentieth century. We hope to keep
the wagon train moving into the twenty-first century and not
have to think about making a circle again. Once is enough."
Araskog wrote a preface and postlogue for the Beard Books
edition, and provides us with ten years of perspective as well
as insights into what came next. In 1994, he orchestrated the
breakup of ITT into five publicly traded companies. Wagon
circling began again in early 1997 when Hilton Hotels made a
hostile takeover offer for ITT Corporation. Araskog eventually
settled for a second-best victory, negotiating a friendly merger
with The Starwood Corporation, in which ITT shareholders became
majority owners of Starwood and Westin Hotels, with the
management of Starwood assuming management of the merged entity.
Today Mr. Araskog continues to serve on the boards of the four
corporations created from ITT, as well as on the boards of Shell
Oil Company and Dow Jones, Inc. He heads up his own investment
company with headquarters on Worth Avenue, in Palm Beach,


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

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

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

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


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

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

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

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

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

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