TCREUR_Public/130821.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 21, 2013, Vol. 14, No. 165



ATU AUTO-TEILE: S&P Keeps 'CCC-' Rating on CreditWatch Negative


FAGE INTERNATIONAL: Moody's Revises Outlook on 'B3' CFR to Stable
* GREECE: Privatization Agency Chairman Dismissed


ONE51: NAMA Takes Control of John Hegarty's 3% Stake


ITALCEMENTI SPA: Poor Performance Spurs Moody's to Cut CFR to Ba3


CONVATEC FINANCE: Moody's Rates New $900MM Senior Notes 'Caa1'


PBG SA: In Debt Payment Negotiations with Creditors
POLIMEX-MOSTOSTAL: In Talks with Creditors on Payment Schedules
* POLAND: Construction Sector Bankruptcies Hit Record High


AK BARS: Fitch Affirms 'B' FC Issuer Default Rating
ALROSA OJSC: Fitch Affirms 'B' Short-term Issuer Default Rating
RASPADSKAYA: Low Coal Prices Prompt Moody's to Lower CFR to B2
RASPADSKAYA: Moody's Lowers National Scale Rating

U N I T E D   K I N G D O M

AEI: To Meet Creditors on Aug. 29; Seeks Changes to CVA Terms
ARQIVA BROADCAST: Moody's Retain Ratings over New Energy Deal
HEARTS OF MIDLOTHIAN: FoH Unveils Structure of Takeover Offer
HUELIN-RENOUF: Ceases Trading; About 20 Jobs at Risk
SMOOTH FINANCIAL: In Administration, Clients Transferred

TAYLOR WIMPEY: Moody's Lifts CFR & Senior Notes Rating to Ba2



ATU AUTO-TEILE: S&P Keeps 'CCC-' Rating on CreditWatch Negative
Standard & Poor's Ratings Services said it was keeping its 'CCC-'
long-term corporate credit rating on Germany-based auto parts
retailer and workshop operator A.T.U Auto-Teile Unger Handels
GmbH & Co. KG (ATU) on CreditWatch with negative implications.
S&P placed the rating on CreditWatch negative on May 23, 2013,
because of the continued weakening of the group's liquidity and
rising concerns over its ability to successfully refinance its
debt falling due in 2014.

S&P is also keeping its 'CCC-' issue rating on ATU's
EUR450 million senior secured notes due May 2014 on CreditWatch
negative.  The recovery rating on these notes is unchanged at
'4', indicating S&P's expectation of average recovery in the 30%-
50% range in the event of a payment default.

The CreditWatch placement reflected the group's continued
weakening liquidity caused by its poor operating performance
throughout its financial year 2013-2014 ending June 30, 2013 and
its high refinancing risks.  At the end of June ATU reported a
low cash balance of EUR15 million, and it has also fully drawn
the EUR45 million revolving credit facility (RCF) that comes due
in March 2014.  S&P believes that liquidity headroom is very
tight considering the cash requirements for working capital to
fund the purchasing of necessary stocks in preparation for the
October-December 2013 winter season, an installment of EUR10
million for the buyback of a warehouse in Werl, and high interest
of about EUR65 million per year.

S&P understands that ATU is in talks with potential equity and
debt investors to ensure a sustainable long-term capital
structure, but the outcome of negotiations is uncertain.  Given
the weak operating performance of fiscal 2013/2014, when the
group's reported adjusted EBITDA declined to EUR61.9 million
(compared with a financial maintenance covenant of EUR60 million)
from EUR103.4 million a year earlier, S&P considers a financial
restructuring, for instance by making a distressed exchange offer
to its subordinated bond holders, as increasingly likely.

The rating on ATU, which is a subsidiary of A.T.U Auto-Teile-
Unger Holding GmbH (ATU Holding), reflects S&P's view of the
group's "highly leveraged" financial risk profile and "weak"
business risk profile.  S&P's assessment relies on accounts from
Auto-Teile-Unger Investment GmbH & Co. KG, an intermediate
holding company between ATU and ATU Holding, because ATU doesn't
publish financial accounts.

S&P believes that ATU's high debt-to-EBITDA ratio severely limits
its financial flexibility.  S&P also considers that seasonal cash
flow generation is a key risk for the group, given its dependence
on winter road conditions and cold temperatures for seasonal
sales in the fourth and first quarters of the financial year.
ATU's operations in the highly competitive German automotive
aftermarket also constrain its profitability.

The CreditWatch reflects an at least one-in-two likelihood that
S&P could downgrade ATU to 'CC' or below at its next review.  It
also reflects the near-term risk that we could downgrade ATU
should it announce a financial restructuring.

S&P aims to resolve the CreditWatch within the next 90 days, once
it has greater visibility on the group's refinancing plans and
near-term liquidity planning.

S&P could affirm the ratings and assign a stable outlook if ATU
was able to undertake a timely and sustainable refinancing of its
upcoming debt maturities and improve its debt maturity profile.
Until then, an affirmation or a stable outlook is highly


FAGE INTERNATIONAL: Moody's Revises Outlook on 'B3' CFR to Stable
Moody's Investors Service has changed to stable from negative the
outlook on the B3 corporate family rating (CFR), B3-PD
probability of default rating (PDR) and B3 senior unsecured bond
rating (loss given default assessment of LGD4 53% from LGD4 54%)
of FAGE International S.A. (Fage). At the same time, Moody's has
affirmed these ratings. The $400 million of senior unsecured
notes, maturing in February 2020, are co-issued by Fage and FAGE
USA Dairy Industry, Inc. (Fage USA), a subsidiary of Fage.

Ratings Rationale:

"The stable outlook on Fage's ratings was prompted by the
company's sustained sales volume growth in markets outside Greece
over the last 18 months to June 30, 2013, mitigating the more
challenged performance in its Greek market," says Andreas Rands,
a Moody's Vice President -- Senior Analyst and lead analyst for
Fage. "The action also reflects our view that Fage's Greek
operations will become less of a drag on group sales and EBITDA
over the next 12-18 months and that the group's deleveraging
trend will continue."

During fiscal 2012 (to December 31), Fage's sales in the US
increased at high double-digit rates (approximately 27%),
continuing the strong volume growth trend (up 32.2% in fiscal
2012) over the past four financial years. This increase was
driven by the health food trend in the US and the fact that
yoghurt is a cheap source of protein. For the same reasons,
Fage's sales volumes in its Italian and UK operations also
increased significantly in 2012 (+29.2% and +7.1%, respectively).
This geographic diversification helps mitigate the more
challenged performance of Fage's Greek operations, which
represented around 31% of sales in fiscal 2012, with sales
volumes having declined by 25.4% during the year. The company's
Moody's-adjusted EBIT margin improved to 11.5% in 2012 from 8.4%
in the previous year as a result of (1) the aforementioned sales
growth; (2) a 3.2 percentage-point improvement in Fage's adjusted
gross margin to 46.6% from 43.4%, due to the foreign exchange
(FX) impact of a stronger US dollar (Fage's reporting currency)
vs. euro (which accounts for around 60% of the increase in gross
profit), as well as a 8.1% reduction in the price of US milk used
for the US yoghurt facility; and (3) a flat overhead cost base in
2012, enabling the company to reap scale economy benefits.

For fiscal 2013, Moody's expects that Fage's consolidated sales
growth will continue in the low-single digits, with continued
sales volume growth in the US, Italy and the UK, mitigating
significant volume declines in Greece. However, Moody's also
expects that Fage's gross margins will remain under pressure from
continued high US and European milk prices, which was the case in
first half 2013, as a result of tight supply and strong global
demand. Whilst reported profit from operations in 1H13 is down
44.6% relative to the prior year comparable, this
underperformance is relatively balanced between (1) higher milk
prices, which Moody's anticipates to moderate in line with lower
grain prices (and therefore lower animal feed costs, a key cost
in milk production), and (2) the phasing of 2013 advertising
costs. In this regard, Moody's does not expect similar declines
in reported profit from operations during the next two quarters.
As a result, Moody's expects that fiscal 2013 EBITDA will be
around 2012 levels and that adjusted debt/EBITDA will also remain
around 4.2x (adjusting for the 2015 bond pre-funding as at
December 31, 2012).

Beyond fiscal 2013, Moody's expects a bottoming-out of the
significant sales volume declines Fage has experienced in Greece
over the past two financial years, given that (i) 2012 sales
volumes are around 40% lower than 2010 levels; and (ii) the
company's plan to remove lower quality Greek retailers from its
customer base is now complete. As such, over time, Moody's
expects Fage's Greek operations to become less of a drag on
consolidated results. Nevertheless, the rating agency cautions
that volume trends were significantly negative during 2012 and
first half 2013.

The Greek sovereign's growth outlook remains susceptible to
considerable downside risks over this period given (1) its social
and political fragility, which increases risks related to policy
and implementation missteps; and (2) the continued uncertainty in
the wider euro area. Moody's projects that Greece's GDP growth
will remain negative in both 2013 and 2014, but that the pace of
decline will slow in 2014 (to -3.6% from -5.3% in 2013).

Fage's B3 CFR primarily reflects (1) its small size relative to
Moody's rated universe of packaged goods issuers (with $550
million in sales for the year ended December 2012); (2) its
exposure to the Greek economy, with the company's Greek sales
volumes declining by 25.4% during 2012; (3) its principal focus
on yoghurt production (Moody's estimates that yoghurt sales
represent more than 80% of 2012 group sales, with sales outside
Greece being primarily yoghurt); and (4) that further US capacity
expansion will weaken the company's cash flow metrics over the
next 12 months. More positively, the rating reflects (1) Fage's
strong growth in its core US market, as well as in the rest of
Europe, which is currently offsetting the revenue decline in
Greece; (2) Moody's expectation that the volume decline in Greece
will slow over the next 12-18 months, such that the Greek
operations will become less of a drag on Fage's results; and (3)
the strengthening of key adjusted credit metrics, particularly
interest coverage (EBIT/interest expense, at 2.0x as of fiscal
2012) and leverage (debt/EBITDA, at around 4.2x, adjusting for
the 2015 bond pre-funding), as well as profitability (EBIT
margin, at 11.5%), mainly driven by the company's US expansion.

Rationale For Stable Outlook

The stable rating outlook reflects Moody's expectation that Fage
will continue to use its cash flow to deleverage and improve its
credit metrics. The outlook further reflects Moody's expectation
that Fage's US operations will continue to offset the negative
performance trends in Greece and that the company will maintain
an adequate liquidity profile, which the rating agency will
closely monitor.

What Could Change The Rating Up/Down

Positive pressure on the ratings would require (1) continued
growth in Fage's markets outside of Greece, which would offset
margin pressure in the company's domestic operations and allow it
to maintain adjusted EBIT margins comfortably above 10%; (2)
positive free cash flow generation; (3) adjusted debt/EBITDA
trending below 4.0x on a sustainable basis; and (4) a material
reduction in the risk of (a) further deterioration in Fage's
results in Greece; and (b) Greece's exit from the euro area. The
company's liquidity position is also a key rating driver.

Conversely, downward pressure on Fage's ratings could develop in
the event of a weakening in its competitive position in Greece or
slower growth in markets outside Greece, such that the company
exhibits (1) low-single-digit EBIT margins, for example due to
higher milk or advertising costs; (2) negative free cash flow
generation; (3) a debt/EBITDA ratio approaching 5.0x on a
sustainable basis; and/or (4) tighter liquidity. Although
Greece's exit from the euro area is not Moody's central scenario,
should it occur additional negative pressure would be exerted on
Fage's ratings to the extent that its Greek operations and debt-
servicing capacity were impaired.

Principal Methodology

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

FAGE International S.A. manufactures and markets dairy products
in North America, Greece, the UK, Italy and Germany. While the
business was founded in Greece in 1926, it has significantly
diversified its revenues into other geographies (notably the US)
over the past 10 years. In Greece, Fage is the market leader for
branded yoghurts and in the US, the company is the fourth-largest
branded yoghurt company, by sales value. The Filippou family,
which founded the company, still retains full control. Fage
reported US$550 million in revenues for the year ended December

* GREECE: Privatization Agency Chairman Dismissed
BBC News reports that Stelios Stavridis, the chairman of Greece's
privatization agency, has been dismissed.

According to BBC, Finance Minister Yannis Stournaras called for
Mr. Stavridis to resign following a report that he had travelled
on a plane belonging to a businessman who bought gambling firm
Opap from the state.

Mr. Stavridis had only been in the job for four months but had
faced criticism for the slow pace of privatizations, BBC

Athens recently finalized the sale of a controlling stake in
Opap, BBC relates.  According to BBC, a group of Greek and
eastern European investors paid EUR650 million (US$866 million;
GBP554 million) for the state's 33% stake in the company.  Those
investors include Greek shipowner Dimitris Melissanidis, whose
private jet Mr. Stavridis is said to have flown on, BBC notes.

Mr. Stavridis had successfully transformed the Athens Water Board
before being appointed boss of the Hellenic Republic Asset
Development Fund (HRADF), BBC recounts.

According to BBC, the financial target for the sale of state
assets this year has been set at EUR2.6 billion, but it is
estimated that the final figure will be EUR1 billion short.


ONE51: NAMA Takes Control of John Hegarty's 3% Stake
The Irish Times, citing The Sunday Independent, reports that the
National Asset Management Agency has conditionally taken control
of John Hegarty's 3% stake in One51.

NAMA took control of the stake on foot of a EUR15.5 million
judgment against the businessman and four other parties, the
Irish Times relates.

According to the Irish Times, Hegarty's shares in One51 are said
to be worth EUR1.5 million, having fallen in value by about 90%
since the property and financial crash.

Meanwhile, Sankaty Advisors, the debt-investment unit of Bain
Capital, is reported to have bought debt of about EUR17 million
in One51, the Irish Times discloses.  The debt was put on the
market by Lloyds bank in recent weeks with a discount of 8%, the
Irish Times notes.

One51, whose investment portfolio includes Irish Pride bakeries
and a 50% interest in Greenore Port, owes a syndicate of six
banks about EUR100 million, the Irish Times says.

One51 is an Irish investment company.


ITALCEMENTI SPA: Poor Performance Spurs Moody's to Cut CFR to Ba3
Moody's Investors Service downgraded the Corporate Family and
Probability of Default ratings of Italcementi S.p.A. to Ba3 and
Ba3-PD respectively. Concurrently Moody's has downgraded the
Corporate Family and Probability of Default ratings of Ciments
Francais SA to Ba2 and Ba2-PD respectively. Moody's has also
downgraded the Senior Unsecured ratings of Italcementi S.p.A.,
Italcementi Finance S.A. and Ciments Francais SA to (P)Ba3, Ba3
and Ba2 respectively. The outlook on all ratings is stable.

Ratings Rationale:

The downgrade to Ba3 reflects the fact that Italcementi's credit
metrics have been below Moody's expectations for the current
rating for the last twelve months. Per June 2013 Debt/EBITDA
stood at 5.4x (5.2x at fiscal year-end 2012) and RCF/Net debt
remained broadly stable at 11.9% (11.3% at fiscal year-end 2012).
This compares to Moody's expectations for the current rating of
Debt/EBITDA to be maintained below 4.5x and RCF/Net debt
sustainably above 15%. Furthermore Moody's does not expect
Italcementi to be able to restore credit metrics in line with
Moody's requirement over the next 12 months at least.

Moody's remains also concerned by Italcementi's strong earnings
concentration with 83% of FY2012 recurring EBITDA being generated
in France/Belgium, Egypt and Morocco. In this respect it notes
that Moody's sovereign team has downgraded the Egyptian's
government bond rating to Caa1, with a negative outlook in March
2013 reflecting (i) the continued unsettled political conditions,
(ii) the sustained deterioration in Egypt's external payments
position and government finances, and (iii) the lack of
predictability in economic and fiscal policies and outcomes. The
outlook on the Egyptian banking sector is also negative, which
might put cash balances which Italcementi holds in Egypt somewhat
at risk. The Egyptian market accounted for 18% of group EBITDA in
2012. To the credit of Italcementi, the group has so far been
able to manage the difficult market environment relatively well
in H1 2013 with a broadly flat EBITDA year-on-year.

On a more positive note Italcementi's H1 2013 results were
slightly stronger than what Moody's had anticipated especially in
light of the challenging operating environment. Italcementi was
even able to post a 3.7% increase in recurring EBITDA in Q2 2013
(120bps uplift in recurring EBITDA margin) despite declining
volumes. This is evidence that Italcementi's cost cutting
measures are starting to bear fruit. Moody's also positively
notes that the group's credit metrics have stabilized in H1 2013
supported by continued focus on cash flow generation. Moody's
expects Italcementi's operating performance to be at least at the
same level as in H2 2012. This should translate into credit
metrics in line or slightly stronger than at fiscal year-end
2012, hence the stable outlook assigned to the ratings.

Finally Moody's notes that Italcementi has been able to restore
stronger headroom under its financial covenants through improved
free cash flow generation notwithstanding that this has been
achieved to a large extent by securitizing an increasing amount
of receivables (receivables securitized have increased by EUR71
million to EUR240 million since year-end 2012). Free cash flow
generation was also supported by Italcementi's reduced capex
spending and the decrease in dividend.

The liquidity profile of Italcementi is adequate. Italcementi had
EUR549 million of cash on balance sheet and EUR1,982 million
availability under undrawn committed long term lines of credit.
As of June 30, 2013 EUR345 million of cash located in Egypt,
Morocco, Thailand and India were not immediately available to
Ciments Francais SA and its parent company Italcementi SpA. Under
Moody's base case Italcementi is expected to generate an FFO
slightly in excess of EUR430 million over the next 12 months.
This should be sufficient to fund short term needs of cash mainly
consisting of working cash, modest WC requirements, capex, debt
repayments and dividends. Moody's notes that Italcementi has
financial covenants in all its lending facilities with leverage
covenant levels of 3.75x. The covenant can be increased to 4.0x
for a limited period of time and only once during the life of the
facility. Italcementi has a well spread maturity profile with
manageable maturities over the next five years and a liquidity
headroom of 2.25 years.

Italcementi has also a good track record of extending the
maturities of its bank facilities.

What Could Change The Rating Down/Up

A deterioration in the group's credit profile with Debt / EBITDA
moving towards 6.0x and RCF/Net debt sustainable below 10% could
lead to negative pressure on the current rating. In addition,
weakening covenant headroom which would put Italcementi's access
to liquidity at risk would be a negative rating driver.

Italcementi could achieve a higher rating if the company were
able to improve RCF/net debt towards 15% and Debt/EBITDA towards

Principal Methodology

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

The Italcementi group, headquartered in Bergamo, Italy, is one of
the top five cement producers globally, with an installed cement
capacity in excess of 70 million tons and sales of approximately
EUR4.5 billion per December 2012. The group's cement and clinker
business, which accounts for more than two-thirds of total sales
is supplemented by aggregates, ready-mix concrete businesses.
Including its Italian market, Italcementi (ITC), via its 83.2%-
owned subsidiary Ciments Francais (CF), is active in 22
countries, with an emphasis on the Mediterranean basin. The
company is majority-owned by Italian investment holding


CONVATEC FINANCE: Moody's Rates New $900MM Senior Notes 'Caa1'
Moody's Investors Service has assigned a definitive Caa1 rating
(with a loss given default (LGD) assessment of LGD6, 91%) to the
US$900 million HoldCo senior notes issued by ConvaTec Finance
International S.A. ConvaTec Healthcare A S.a r.l.'s corporate
family and probability of default ratings (B2, B2-PD, outlook
negative) as well as instrument rating on secured senior bank
facilities Ba3 (LGD2, 23% from LGD2, 24%) and senior unsecured
notes at B3 (LGD5, 70% from LGD5, 71%) remain unchanged.

Moody's definitive rating assignments on the Holdco senior notes
are in line with the provisional ratings assigned as outlined in
Moody's press release dated August 5, 2013. The final terms of
the notes are in line with the drafts reviewed for the
provisional rating assignment.

The proceeds of the $900 million HoldCo note issuance will be
used to fund a dividend to shareholders via part redemption of
outstanding preferred equity certificates (PEC).

Affected ratings:

Issuer: ConvaTec Finance International S.A.

US$900 million, HoldCo senior notes, Assigned Caa1

Ratings Rationale:

ConvaTec's B2 CFR reflects the company's strong current and
forecast levels of trading, expected attractive levels of free
cash flow generation and good liquidity position. Moody's further
expects that, in line with management guidance, the company will
no longer incur material restructuring costs and that acquisition
activity, if any, will be limited to small bolt-on transactions.

However, the rating remains constrained by ConvaTec's high
leverage, estimated at around 6.2x at the end of March 2013,
increasing to 8.0x pro forma for the issuance of $900 million of
HoldCo notes. Moody's expects the company's leverage metrics to
improve materially by end of 2013, supported by improved current
trading, a lack of material restructuring costs and the
application of free cash flows to debt reduction. Such
improvements would result in leverage decreasing below 7.0x, even
when including the new HoldCo notes. However, Moody's remains
cautious about the sustainability of current trading levels and
the company's ability to further expand its already high EBITDA
margins (above 30% as per March 2013).

The HoldCo notes have been issued by an entity which is above the
top company (Convatec Healthcare B S.a.r.l., CvT B) of the
restricted group. Therefore debt and leverage within the
restricted group will remain unaffected. However, through the
recently softened restricted payment test, which allows for the
payment of dividends out of the restricted group to Convatec
Healthcare A S.a.r.l. (CvT A) if the (reported) net leverage of
the restricted group is below 5.5x, Moody's believes that
payments are easily possible, except in a scenario of
significantly weakening operating performance. Consequently, PIK
payments have become a third-party cash obligation for CvT B,
rather than an option for shareholders to pay. With the CFR
remaining unchanged at B2, and given the increased loss cushion
resulting from the issuance of the structurally subordinated
HoldCo notes, the rating for the existing senior unsecured notes
is at B3 and the HoldCo notes are assigned a Caa1 rating.

What Could Change The Rating Up/Down

For Moody's to consider a rating upgrade to B1, ConvaTec would
need to (1) deliver sustained deleveraging towards 5.5x
debt/EBITDA; (2) achieve FCF/debt that is trending towards 5%;
and (3) maintain an EBITDA margin in the high twenties in
percentage terms.

Moody's could consider rating downgrade to B3 if ConvaTec
leverage remains sustainably above 7.0x. Aggressive debt-funded
acquisition activity, a weakening of the company's liquidity
profile and/or sizeable restructuring costs could also be
triggers for downgrade.

Principal Methodology

The principal methodology used in this rating was the Global
Medical Products & Device Industry published in October 2012.
Other methodologies used include Loss Given Default for
Speculative-Grade Non-Financial Companies in the U.S., Canada and
EMEA published in June 2009.

ConvaTec Healthcare A S.a.r.l. ("ConvaTec" or "the company") is a
leading developer, manufacturer and marketer of innovative
products for ostomy management, advanced chronic and acute wound
care, continence care, sterile single-use medical devices for
hospitals, and infusion sets used in diabetes treatment infusion
devices. The company, which holds market leadership positions in
a number of its businesses, operates in over 100 countries,
manufactures in 12 manufacturing sites and generated US$1.652
billion of revenues and EBITDA of US$494 million (Moody's
adjusted, trailing 12 months as per end of March 31, 2013)
through its total workforce of approximately 8,000 employees


PBG SA: In Debt Payment Negotiations with Creditors
Beata Socha at Warsaw Business Journal reports that PBG SA is
currently undergoing involuntary reorganization and is
negotiating the payment of its liabilities.

The supervisory board was scheduled to approve payment schedules
and drafts of the agreements with the company's creditors on
Aug. 19, WBJ relates.

Prime Minister Donald Tusk's assurances in early June that the
group's subsidiary, Rafako, would be involved in the construction
of a planned extension of the Opole power plant brought a short-
lived rebound to PBG's share price, pushing it up to nearly
PLN7 in mid-June, WBJ recounts.  However, the shares soon resumed
their slide, and had dropped by over 50%, to PLN3.07 by Aug. 16,
WBJ notes.

PBG SA is Poland's third largest builder.  PBG secured court
bankruptcy protection for debt restructuring proceedings in June
2012, after signing a stand-down agreement with its banking
creditors in May.

POLIMEX-MOSTOSTAL: In Talks with Creditors on Payment Schedules
Beata Socha at Warsaw Business Journal reports that
Polimex-Mostostal points out that it is negotiating payment
schedules with its creditors.

On August 8, Polimex-Mostostal sold one of its assets, anti-
corrosives firm Ocynkownia Debica, for PLN18.31 million, WBJ

Polimex-Mostostal is one of the biggest players in Poland's
construction market, WBJ notes.  It recorded PLN523.6 million in
revenues in the first quarter of 2013 and suffered a PLN23.5
million net loss, WBJ discloses.

According to WBJ, the company's share price has been on a steady
decline for years, and has already lost 70% this year alone, from
PLN0.62 to PLN0.17 on Aug. 16.

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.

* POLAND: Construction Sector Bankruptcies Hit Record High
Beata Socha at Warsaw Business Journal, citing debt management
company Euler Hermes Collections, reports that as many as 33
Polish construction companies went bankrupt in July, which
accounts for a third of all the bankruptcies declared that month.

"The number is the highest since October of last year, which is
alarming, because back then the annual construction cycle was
coming to an end, and last month was the cycle's peak," WBJ
quotes Euler Hermes as saying in a statement.

The high number of bankruptcies in the construction market has
made investors uneasy about which companies will follow over the
edge, particularly since even some of the biggest companies in
the market are currently struggling to stay afloat, WBJ


AK BARS: Fitch Affirms 'B' FC Issuer Default Rating
Fitch Ratings has affirmed Ak Bars Bank's (ABB) Long-term Issuer
Default Rating (IDR) at 'BB-' with a Stable Outlook. The
affirmation follows the upgrade of the Republic of Tatarstan (RT)
to 'BBB' from 'BBB-' on Aug. 1, 2013.


ABB Long-Term IDRs, senior debt, National and Support Ratings
reflect Fitch's view of the moderate probability of support from
RT (BBB/Stable). This is based on (i) ABB's considerable market
shares in the region, (ii) its large deposit base, (iii) RT's
ultimate control over the bank, (iv) the close association
between the local authorities and the bank and (v) significant
non-equity funding made available to ABB by the local government
and government-related entities.

However, ABB's ratings remain constrained by (i) RT's indirect
and somewhat non-transparent control over ABB; (ii) some concerns
over RT's financial flexibility and ability to provide timely
capital support in all circumstances; and (iii) significant
corporate governance concerns, as the bank is still heavily
exposed to entities which Fitch believes to be connected to the
local administration. Accordingly, ABB's ratings have been
affirmed, notwithstanding the upgrade of RT.


The affirmation of ABB's VR reflects its high-risk corporate
lending, significant exposure to investment property and other
non-core assets, which materially exceeds the bank's loss-
absorption capacity; and poor pre-impairment profitability. The
VR also reflects ABB's reasonably performing retail loan book,
stable deposit funding and reasonable liquidity.

For details see "Fitch Affirms Ak Bars Bank at 'BB-'; Revises
Outlook to Stable" dated June 3, 2013 on


Downward pressure on ABB's IDRs, senior debt, National and
Support Ratings could arise if there was any major weakening in
the relationship between RT and the bank, for example, as a
result of changes in any key senior regional officials or
pressure from the federal authorities for RT to divest its stake
in the bank (although neither of these are currently expected by

Upside potential for ABB's support-driven ratings may emerge if
(i) its shareholding structure is streamlined, resulting in a
majority stake being held by the RT or an RT-controlled entity;
and/or (ii) ABB's related party business decreases and corporate
governance improves, thereby reducing the risk of support for the
bank being less politically acceptable or too costly.


Downward pressure on ABB's VR could stem from a further marked
deterioration in its performance and asset quality, should these
erode the bank's capital, or renewed high-risk lending. An
upgrade of the VR would require further progress with work outs
of the bank's problem assets and maintenance of at least
moderately positive pre-impairment profitability.


ABB's subordinated debt is rated two notches lower than its Long-
term IDR, of which one notch reflects incremental non-performance
risk (higher probability of default on subordinated debt than on
senior obligations) and one notch reflects potential loss
severity (lower recoveries in case of default). Any changes to
the bank's Long-term IDR would likely impact the rating of the
subordinated debt.

The rating actions are:

  Long-term foreign currency IDR: affirmed at 'BB-'; Outlook

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

  National Long-term rating: affirmed at 'A+(rus)'; Outlook

  Viability Rating: affirmed at 'b-'

  Support Rating: affirmed at '3'

  Senior unsecured debt: affirmed at 'BB-'

  Senior unsecured debt National rating: affirmed at 'A+(rus)'

AK BARS Luxembourg S.A

  Senior unsecured debt: affirmed at 'BB-'

  Subordinated debt: affirmed at 'B'

ALROSA OJSC: Fitch Affirms 'B' Short-term Issuer Default Rating
This announcement corrects the version published on July 24,
2013, which incorrectly stated the rating action on ALROSA's
Short-term IDR.

Fitch Ratings has placed OJSC ALROSA's (ALROSA) 'BB-' Long-term
Issuer Default Rating (IDR) and senior unsecured ratings on
Rating Watch Positive (RWP). The company's Short-term IDR has
been affirmed at 'B'.

The rating actions follow the company's expected sale of its 100%
interest in CJSC Geotransgaz and LLC Urengoy Gas Company. If the
transaction closes as expected, Fitch would expect to upgrade
ALROSA by one notch.

Key Rating Drivers

Sale of Natural Gas Assets
Fitch expects the company to direct proceeds from the transaction
for short-term borrowings' repayment, which will result in
decrease of FFO adjusted gross leverage to 2.1x by end-2013 (2.4x
at end-2012) and will also contribute to an improvement in the
company's liquidity position. Sale of the non-core assets will
allow ALROSA to focus on the development of its core diamond
mining operations in the Republic of Sakha (Yakutia) (BBB-

Significant Scale
ALROSA is the world's largest rough diamond producer by volume
with a strong reserve base. The company has more than 950m carats
of proved reserves, indicating an average mine life of more than
30 years.

State Support
Fitch assesses ALROSA's link with its controlling shareholder,
the Russian Federation (BBB/Stable), as medium, which provides a
one-notch uplift to the company's standalone rating of 'B+'.
State support during 2008-2009 included the purchase of diamonds
via the Russian State Depository for Precious Metals and Stones,
plus financing provided via state-owned Bank VTB (JSC)

The expected sale of a 14% stake which is planned in H213 will
likely be neutral to the company's ratings, as the Russian
Federation with the Republic of Sakha (Yakutia) will remain
jointly controlling shareholders of the company.

Increasing Cash Costs
Like other mining companies in Russia, ALROSA faces mining cost
inflation at a rate higher than general inflation. An expected
increase in the proportion of underground mining will also
negatively affect the average cash mining costs.

Rating Constraints
ALROSA's lack of product diversification and its exposure to the
price cycles of the diamond market act as rating constraints. In
addition, the company is exposed to higher-than-average
political, business and regulatory risks of operating in Russia.


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

  -- Sale of 100% interest in CJSC Geotransgaz and LLC Urengoy
     Company and subsequent repayment of short-term borrowings.

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

  -- Inability to roll over maturing debt and attract new
     financing to meet debt obligations

  -- Reduction of support from the Russian Federation.

  -- FFO adjusted gross leverage above 3.0x on a sustained basis
     (2.4x at end-2012).

  -- EBITDAR margin below 20%.

RASPADSKAYA: Low Coal Prices Prompt Moody's to Lower CFR to B2
Moody's Investors Service has downgraded Raspadskaya OAO's
corporate family rating and probability of default rating to B2
and B2-PD from B1 and B1-PD, respectively, reflecting Moody's
expectation of prolonged softness in coal prices, which will
continue to negatively affect the company's financial metrics
over the next 12-18 months.

Concurrently, Moody's has downgraded the ratings on the senior
unsecured debt issued by Raspadskaya Securities Ltd., a limited
liability company incorporated in Ireland, and its PDR to B2
(with a loss-given-default (LGD) assessment of LGD4, 50%) and B2-
PD from B1 and B1-PD, respectively. In addition, the outlook has
been changed to negative from stable.

"The downgrade of Raspadskaya's rating was prompted by continued
deterioration in the metallurgical coal sector, which is likely
to remain oversupplied for at least several quarters as a result
of weak demand from the end-user steel industry," says Denis
Perevezentsev, a Moody's Vice President and lead analyst for
Raspadskaya. "Production issues at the company's Raspadskaya mine
following the temporary suspension of operations in May 2013 puts
additional pressure on the company's unit cash costs, which
overall will lead to a deterioration in financial performance and
leverage during 2013."

Ratings Rationale:

The downgrade reflects Moody's view that demand in the
metallurgical coal industry will remain weak in the near term
following substantive deterioration in recent months. Benchmark
pricing for low-volatility hard coking has fallen dramatically,
to US$145/tonne for third quarter deliveries, from US$172/tonne
for second quarter deliveries. This should translate into a
domestic price for Russian producers of around US$80/tonne on a
"Free carrier", or FCA (i.e., excluding transportation costs)
basis, or even lower for export deliveries. Given such weak
prices, the gap is narrowing between these and Raspadskaya's cash
costs of around US$62/tonne in 2012, shrinking the company's
operating margins and operating cash flows. While some
international producers have announced production cuts, the net
impact on the global market is modest and the anticipated
supply/demand balance is unlikely to support meaningful near-term
price improvement.

Moody's expects that these factors, coupled with operational
issues at the Raspadskaya mine, will cause the company's
financial results and leverage to deteriorate over the next 12-18
months. At the same time, Raspadskaya's liquidity position is
fairly comfortable, given that its bilateral loan of US$150
million matures on December 2015, which will allow the company to
weather the current market environment.

Raspadskaya's B2 CFR reflects (1) low coking coal prices, with a
low probability of substantial recovery over the next 12 months;
(2) recurring operational issues at the company's main production
mine following the temporary suspension of operations in May
2013; (3) the company's fairly small size and narrow operating
footprint; (4) Raspadskaya's lack of product, geographical or
operational diversification; (5) its high leverage and modest
cash flow metrics; (6) the company's heavy dependence on the
steel sector, which is fairly volatile; (7) Raspadskaya's
customer concentration, including significant sales to the
companies affiliated with its shareholders (Evraz plc.
(unrated)/Evraz Group S.A. (Ba3 stable)); and (8) ownership
concentration, which could lead to a shareholder-friendly
financial policy (high dividends or share buybacks).

However, these negative factors are partially offset by
Raspadskaya's (1) extensive high-quality and fairly low-cost
semi-hard and hard coking coal reserves, with an average cash
cost of around US$62/tonne in 2012, which compares favorably with
the cash costs of many international coal producers and Russian
vertically integrated steel producers; (2) strategic importance
of the company to its controlling shareholder (Evraz plc.); and
(3) fairly comfortable liquidity profile, with no debt repayments
until December 2015, and only interest and coupon of around US$40
million per year to be paid until then. In addition, the company
has a fairly large liquidity cushion (cash and short-term
deposits) of around US$120 million as at December 31, 2012.

Rationale For Negative Outlook

The negative outlook on the rating reflects Moody's view that
although market conditions are unlikely to worsen meaningfully,
Raspadskaya's financial metrics will deteriorate over the next
12-18 months. This is because the gap between the coking coal
prices on an FCA basis and the company's cash costs have been
narrowing, which increases the company's price sensitivity.

What Could Change The Rating Down/Up

Negative rating pressure will develop if (1) Raspadskaya's
financial metrics continue to deteriorate as a result of
unfavorable market dynamics; (2) the company's refinancing risk
increases; or (3) operational issues at the Raspadskaya mine
escalate in such a way that leads to a significant deterioration
in unit cash costs and operating profits.

Given the negative outlook on the rating, an upgrade is unlikely
over the next 12-18 months. Moody's will stabilize the rating if
coking coal prices on domestic and export deliveries improve
sustainably to above Raspadskaya's cash costs and the company
manages to successfully resolve operational issues at its main
production mine.

Principal Methodology

The principal methodology used in these ratings was the Global
Mining Industry Methodology, published in May 2009. Other
methodologies used include Loss Given Default for Speculative-
Grade Non-Financial Companies in the US, Canada and EMEA,
published in June 2009.

Raspadskaya is one of Russia's largest coking coal producers,
with a coal production volume of 7 million tonnes in 2012 (2011:
6.3 million tonnes) and sales of 5.0 million tonnes of coal
concentrate and raw coal (2011: 4.7 million tonnes).

The company's production assets consist of three underground
mines, one open-pit mine, a coal preparation plant, as well as a
coal transportation network and a number of integrated
infrastructure companies. All these assets are located in the
Kuzbass Basin (Kemerovo region, Russia). The company is
controlled by Evraz plc. In 2012, Raspadskaya reported revenues
of US$542 million (2011: US$726 million) and EBITDA of US$141
million (2011: US$321 million).

RASPADSKAYA: Moody's Lowers National Scale Rating
Moody's Interfax Rating Agency has downgraded Raspadskaya, OAO's
national scale rating (NSR) to from Moody's
Interfax is majority-owned by Moody's Investors Service (MIS).

Ratings Rationale:

Moody's Interfax's downgrade of Raspadskaya's NSR follows MIS's
downgrade of the company's corporate family rating to B2 and the
change of outlook to negative.

Raspadskaya is one of Russia's largest coking coal producers,
with a coal production volume of 7 million tonnes in 2012 (2011:
6.3 million tonnes) and sales of 5.0 million tonnes of coal
concentrate and raw coal (2011: 4.7 million tonnes).

The company's production assets consist of three underground
mines, one open-pit mine, a coal preparation plant, as well as a
coal transportation network and a number of integrated
infrastructure companies. All these assets are located in the
Kuzbass Basin (Kemerovo region, Russia). The company is
controlled by Evraz plc. (unrated). In 2012, Raspadskaya reported
revenues of US$542 million (2011: US$726 million) and EBITDA of
$141 million (2011: US$321 million).

Principal Methodology

The principal methodology used in this rating was the Global
Mining Industry Methodology, published in May 2009.

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

About Moody's And Moody's Interfax

Moody's Interfax Rating Agency specializes in credit risk
analysis in Russia. MIRA is a joint-venture between Moody's
Investors Service, a leading provider of credit ratings, research
and analysis covering debt instruments and securities in the
global capital markets, and the Interfax Information Services
Group. Moody's Investors Service is a subsidiary of Moody's
Corporation (NYSE: MCO).

U N I T E D   K I N G D O M

AEI: To Meet Creditors on Aug. 29; Seeks Changes to CVA Terms
Journal Live reports that the future of AEI, struggling to pay
off its debts, could depend on talks with creditors, scheduled
for the end of the month.

In 2011, AEI Cables could have faced administration and has since
been kept afloat through a Company Voluntary Arrangement (CVA),
Journal Live recounts.

However, tough trading conditions mean the 84-year-old firm is
now asking for creditors to approve changes to the rate at which
it pays back what it owes, Journal Live notes.

According to Journal Live, if the vote goes against the company
at a meeting scheduled for Aug. 29, it will have to meet with the
original arrangements -- or ultimately face liquidation.

It was originally estimated this would equate to GBP3.5 million
and the company agreed to pay a minimum of GBP360,000 in
voluntary contributions per year, on the understanding the
agreement would only be completed when all unsecured non-
preferential creditors had received a minimum dividend of 30p in
the pound, Journal Live relates.

To date, GBP665,770 has been paid, but AEI, which is three months
in arrears and reported a loss in the year ending March 31, of
GBP2.4 million, predicts it will a negative cashflow balance of
over GBP9.2 million by June 2014, Journal Live discloses.

The company is therefore proposing that it changes its monthly
contributions from GBP30,000 to GBP10,000, and that both the 65%
of profit requirement and the 30p dividend requirement be
removed, Journal Live states.

It also suggests the CVA could be brought to an end before the
predicted 35 months, should the company be able to introduce new
working capital to do so by an earlier date, Journal Live notes.

The total still to be paid is GBP440,000, according to Journal

AEI a North East cable maker.

ARQIVA BROADCAST: Moody's Retain Ratings over New Energy Deal
On August 14, 2013, the Department for Energy and Climate Change
(DECC) awarded the Arqiva group of companies, headed by Arqiva
Broadcast Parent Limited (CFR: B1 stable), preferred bidder
status to provide smart metering communications for the North
region. This is subject to finalization of contracts, with
contracts to be confirmed by September 2013.

Moody's believes that this award will provide growth
opportunities for the group, which will bolster its future cash
flow generation capability, with the overall contract value being
around GBP625 million for the North region. Nevertheless, the net
impact on the group's consolidated credit profile will depend on
the investment requirements and how these will be funded, albeit
recognizing that the costs will ultimately be borne by the end-
consumer. The rating agency also notes that any part of the smart
metering activities may be undertaken by group companies that
remain outside of the ring-fenced financing structure and may
therefore be outside of the scope of Moody's ratings, which
address the consolidated credit quality of the ring-fenced group
up to and including Arqiva Broadcast Parent Limited. Moody's will
review the implications for Arqiva's credit quality as more
details of the contract and the investment program become known.
However, at this stage, Moody's does not expect any rating

Arqiva is participating in a joint bidding consortium comprising
British Telecommunications Plc. (Baa2 positive), BAE Systems Plc.
(Baa2 stable) in cooperation with Detica (unrated), and Sensus
(unrated). The technology of the smart meters will be provided by
Sensus, and Arqiva will be primarily responsible for the data
transmission, which is closely linked to its core business.

Smart meters are due to be rolled out to homes and businesses
across the UK between 2015 and 2020, with the costs of roll-out
being passed on to consumers in their bills. DECC estimates that
smart metering will bring a net benefit of GBP6.7 billion to the
UK Economy. The roll-out has been divided into three regions
across the UK, (1) the North region covering the north of England
and Scotland; (2) the Central region, including the Midlands,
East Anglia and Wales; and (3) the South region, covering the
south of England. Telefonica UK (part of Telefonica S.A., Baa2
negative) has been awarded the license for the other two areas,
amounting to a contract value of around GBP1.5 billion. All smart
metering contracts will be for a 15-year period.

Arqiva owns and operates a portfolio of communications
infrastructure assets and provides television and radio
transmission services, tower sites rental to mobile network
operators, media services and radio communications in the UK and
satellite services in the UK, Continental Europe and the US.
Moody's currently has a B3 rating on the GBP600 million notes
issued by Arqiva Broadcast Finance Plc. The notes rank junior to
around GBP2.3 billion of senior debt (unrated) raised in a ring-
fenced financing structure around the operating companies in the
Arqiva group.

HEARTS OF MIDLOTHIAN: FoH Unveils Structure of Takeover Offer
STV reports that a group of Edinburgh business people will
provide the immediate finance for the Foundation of Hearts' bid
for the administration-hit club, The Hearts of Midlothian
Football Club, before being paid back over a number of years by
supporters' contributions.

The fans' group, which was named as the preferred bidder for
Hearts by administrators last Thursday, revealed the structure of
its offer at Tynecastle, STV relates.

The proposal involves two companies -- Bidco and Fanco --
entering into a binding contract that would ultimately deliver
fan ownership of the Scottish Premiership club, STV discloses.
Bidco, set up by the Foundation and funded by the wealthy
individuals behind it, will pay for the Company Voluntary
Arrangement (CVA), STV says.  The ownership of the club will then
be transferred over time to the fans through Fanco, which is paid
for by monthly supporter contributions, STV notes.

The Foundation stressed that the Edinburgh business people are
Hearts supporters who stand to make no personal gain from the
deal, STV relates.

According to STV, Foundation of Hearts chairman Ian Murray, a
Labour MP, said: "This is a very flexible arrangement at the
moment, because we don't have a CVA agreed yet.  There are some
imponderables with UBIG.

"But the agreement will ensure that Bidco can only sell the club
back to Fanco.

"There are many other ways of [buying the club] but they are not
as generous as this one.

"This is a very stable arrangement with which we can take the
club forward and deliver fan ownership."

Supporters will have an immediate influence in the running of the
club should the deal go through with the ownership transition
predicted to take between three and five years, depending on the
number of fans contributing, STV discloses.

The private individuals are not being named while the bid remains
in the balance -- the administrator of Lithuanian-based Ukio
Bankas needs to approve an offer, STV notes.

It is understood the Foundation's bid is around GBP3 million to
go towards a CVA, but the bank has security over Tynecastle and
could spark a sale of the stadium separately from the club if not
unsatisfied with that amount, STV says.

Trevor Birch, joint administrator of Hearts, said they had
reached the next stage in the process of getting the club out of
administration, STV relates.

However the BDO partner warned there was still work to be done to
achieve an acceptable bid, STV notes.

A recent report by BDO revealed the club's total debt was GBP28.5
million, STV discloses.

Ukio Bankas is due GBP15 million and another Lithuanian firm,
UBIG, which owns half of the club's shares, is owed in the region
of GBP8 million, STV states.

According to STV, more than 6700 fans have pledged money to the
club via direct debits worth between GBP10 and GBP500 per month.
The Foundation of Hearts will begin to draw money from those
direct debits on Sept. 2, STV says.

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

HUELIN-RENOUF: Ceases Trading; About 20 Jobs at Risk
This Is Guernsey reports that Huelin-Renouf ceased trading on
Monday night, putting about 20 Bailiwick jobs at risk.

According to This Is Guernsey, Jersey States had been planning to
step in and temporarily run the Channel Islands service until a
buyer or investor was found, but on Tuesday morning it was
announced that the company was going into liquidation.

It is unclear what could happen to the Guernsey jobs and link,
even if Jersey saves the troubled business, This Is Guernsey

Huelin-Renouf is a ferry freight company.

SMOOTH FINANCIAL: In Administration, Clients Transferred
Manchester Evening News reports that debt management firm Smooth
Financial has collapsed into administration and its clients have
been transferred to another firm.

Sale-based Smooth Financial, which had around 80 staff, has
appointed joint administrators A B Coleman and R M Withinshaw, of
Royce Peeling Green, in Manchester, according to Manchester
Evening News.

The report relates that a statement on Smooth's website said
clients have been transferred to Surrey-based Money Expert Group.

"We are currently formulating our proposals which will be sent to
all creditors in due course and, if appropriate, details of
creditors meeting.  We have appointed the Money Expert Group to
take over responsibility for managing your debt management plan,"
the statement made by the joint administrators added, the report

The report relates that the business is part of Smooth Group,
which also included a creative and media division and a payment
protection insurance and mortgage mis-selling claims operation.

The group is owned by Mark Broadstock.

TAYLOR WIMPEY: Moody's Lifts CFR & Senior Notes Rating to Ba2
Moody's Investors Service upgraded Taylor Wimpey plc.'s corporate
family rating to Ba2 from Ba3 and its probability of default
rating to Ba2-PD from Ba3-PD. Concurrently, Moody's has upgraded
the instrument rating on the company's GBP250 million of 10.375%
senior unsecured notes due 2015 to Ba2 from Ba3, with a loss
given default assessment of LGD4, 50% (unchanged). The outlook on
all ratings is stable.

Ratings Rationale:

"The upgrade of Taylor Wimpey's ratings to Ba2 was prompted by
the company's strong operating performance, with growth in sales
and profitability, and the sustained improvement in its financial
strength metrics," says Lynn Valkenaar, a Moody's Vice President
- Senior Analyst and lead analyst for Taylor Wimpey.

Taylor Wimpey has experienced sustained sales growth; first half
2013 UK volumes increased year-on year, with 5,191 homes sold
compared with 5,083 homes sold in the first half of 2012. Sales
revenues have risen by 11.8% for the last 12 months to June 30,
2013, similar to the 11.7% increment in revenues achieved in
2012. Furthermore, Taylor Wimpey's committed future sales are
increasing: the company's order book has increased by 35% in
value to GBP1.3 billion as at July 27, 2013 compared with GBP960
million at July 1, 2012. At that date, the strong order book
represented 66% of the previous year's sales.

Moody's notes that the company's profitability for the last 12
months to June 30, 2013, as measured by its gross margin and EBIT
margin (as adjusted by Moody's), rose to 18.6% and 12.1%,
respectively (2012: 17.8%, 11.0%). The upswing in profit margins
is the result of actions taken by Taylor Wimpey to change its
product mix, reduce operating costs, use better locations,
maintain margins and allow sales volumes to increase with demand.

Taylor Wimpey's sales growth and improved profitability have led
to better interest coverage, as measured by adjusted
EBIT/interest expense, which has risen to 5.3x for the last 12
months to June 30, 2013 from 4.6x in 2012 and 2.2x in 2011. In
addition, at June 30, 2013 the company maintained debt at the
same level as at year-end 2012, by virtue of continuing to
generate positive free cash flow in spite of increasing working
capital requirements as inventory builds to support increased
volumes. Leverage, as measured by adjusted debt/total
capitalization, improved to 19.4% at June 30, 2013 from 20.8% at
year-end 2012. (Note all financial ratios are calculated using
data that has been adjusted by Moody's.)

Taylor Wimpey's Ba2 corporate family rating (CFR) incorporates
the company's exposure to economic cyclicality because
homebuilding revenues and profitability are correlated to
economic growth. Moody's revised GDP growth forecast for the UK,
published May 13, 2013, indicates almost no growth in 2013, with
GDP forecast in a range of 0.0%-1.0% and gradual, modest growth
for 2014 in a range of 1.0%-2.0%.

More positively, the CFR reflects the company's solid competitive
position and scale, as measured by number of houses sold, total
revenues and tangible net worth. Its operations benefit strongly
from economies of scale; it is one of the top three homebuilders
in the UK (based on completions) with national coverage,
operating from 24 regional offices, and the second-largest in
terms of revenues. The rating is further underpinned by the
company having produced positive free cash flow in all but one of
the years from 2006 through 2012.

Moody's believes that Taylor Wimpey retains a strong liquidity
profile, backed by mid-year cash and cash equivalents of
GBP181million, and an undrawn revolving credit facility (RCF) of
GBP550 million maturing in 2018 that was recently refinanced.
Prior to that date the company has no maturing debt; although
Moody's liquidity analysis factors in the company's intention to
prepay GBP149.4 million of its unsecured 10.375% notes due 2015,
which should lower its interest costs going forward. Moody's
expects that the company may rely sporadically on its RCF to
cover seasonal shifts in working capital as the business expands
and engages in land acquisitions. However, the company has
adequate sources of funds to meet cash outflows over the next 12-
18 months. In addition, Moody's expects covenant headroom under
the new RCF to remain strong, as was the case under the previous
RCF expiring in 2014.

Rationale For Stable Outlook

The stable outlook on the ratings reflects Moody's expectation
that Taylor Wimpey's revenues and profitability will continue at
least at current levels in light of a strong order book (66% of
2012 sales), the UK economy showings signs of recovery and the
homebuilding industry showing signs of growth. In addition, the
outlook reflects Moody's expectation that the company will
maintain its gross margins and positive cash flow generation,
thereby enhancing its ability to finance growth from internal
sources. The current ratings and outlook also assume that Taylor
Wimpey will maintain an adequate liquidity profile, including
ample covenant headroom at all times, but do not factor in any
transformational acquisitions.

What Could Change The Ratings Up/Down

Positive pressure could be exerted on the ratings if Taylor
Wimpey's revenues increase and profitability continues to
ameliorate on the back of supportive industry conditions. In
addition, positive rating pressure would be dependent on an
improvement in the company's credit metrics (as adjusted by
Moody's), with, inter alia, adjusted debt/total capitalization
remaining sustainably around 30% and interest coverage
(EBIT/interest expense + capitalized interest) remaining
sustainably around 6.0x.

Conversely, although not currently expected in view of the
action, negative pressure could be exerted on the ratings if the
company (1) experiences operating underperformance or negative
free cash flow generation for an extended period of time such
that adjusted debt/total capitalization trends above 40% or
interest coverage falls below 4.0x; or (2) is unable to maintain
an adequate liquidity risk profile.

Principal Methodology

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

Taylor Wimpey plc., headquartered in High Wycombe,
Buckinghamshire, England, is a UK-focused homebuilder that also
has operations in Spain. Based on figures reported by the
company, the last-12-months consolidated revenues and net income
were GBP2.1 billion and GBP236 million, respectively, at June 30,


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,
contact Peter Chapman at 215-945-7000 or Nina Novak at

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