TCREUR_Public/130830.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 30, 2013, Vol. 14, No. 172



DAYLI: Insolvency Payment Start For Employees


VALERI 90: Files for Bankruptcy Following Financial Woes


CONERGY AG: Kawa Capital Buys Global Sales Units
REUTAX AG: U.S. Judge Grants Creditor Protection


IRISH BANK RESOLUTION: Files Chapter 15 in Delaware
JOE O'DONOVAN: Firms in Receivership Over EUR500MM Debt
* IRELAND: Number of Insolvent Firms Drops 40% in August


VENUS-1 FINANCE: Fitch Lowers Rating on Class D Notes to 'CC'


S&B MINERALS: S&P Assigns B+ Corp. Credit Rating; Outlook Stable


DUCHESS IV: Moody's Upgrades Rating on Class D Notes to 'Ba1'
SAKTHI SUGARS: Dutch Subsidiaries File for Liquidation


NATIONAL RESERVE: Moody's Cuts Long-Term Deposit Ratings to 'B3'
WEST SIBERIAN: S&P Affirms 'B+/B' Counterparty Credit Ratings


NOSTRA EMPRESAS 1: Fitch Keeps BB+ Note Ratings on Watch Negative


BANK FINANCE: Moody's Keeps Caa1 Deposit Ratings; Outlook Stable
ITC: Declared Bankrupt by Volin Court

U N I T E D   K I N G D O M

BUSINESS MORTGAGE: Moody's Cuts Ratings on 2 Note Classes to 'Ca'
CAVERN WALKS: Owners Go Into Administration
CO-OPERATIVE BANK: Posts GBP709MM Pre-Tax Loss in 1st Half 2013


* Fitch Says Neg. Outlooks Highest for Developed European Banks
* Moody's Says Rising Yields Weigh Down Global Recovery
* BOOK REVIEW: Land Use Policy in the United States



DAYLI: Insolvency Payment Start For Employees
Austrian Times reports that payments have started to be made to
the 3,500 employees affected by the insolvency of supermarket
chain Dayli and building firm Alpine.

The report says the salaries are being paid by the Insolvency
Contingency Fund.  This was also confirmed by Social Affairs
Minister Rudolf Hundstorfer from the SPO, the Austrian Times

The first step is paying the salaries to the former employees
still owed money, the report notes.

At Dayli this is EUR5.8 million and at Alpine around EUR19
million, the report discloses.

On top of this there are still severance payments, compensation
and holiday pay to be paid to former employees.

In total the Insolvency Contingency Fund faces paying out
EUR108 million for the due to the insolvencies of Dayli and
Alpine, the Austrian Times adds.

Dayli is an Austrian drugstore chain.  Dayli declared insolvency
in July, one year after its former parent company Schlecker in
Germany closed down.

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


VALERI 90: Files for Bankruptcy Following Financial Woes
FOCUS News Agency reports that Valeri 90 filed for bankruptcy on
Aug. 23 because of "continuous and irreversible" financial

According to Focus News, the company owes a combined BGN101,000
in debts to UniCredit Bulbank and Postbank.  It piled up losses
of BGN130,000, discontinued tax and social security installments
and payments to partners and suppliers, Focus News discloses.

Testimonies posted on the company's Facebook profile suggest
Valeri 90 has cancelled 11 trips to different destinations over
financial difficulties, Focus News notes.

The bankruptcy resulted in 30 Bulgarian tourists having to pay
twice for their hotel rooms in the UK and that left many others
in Bulgaria without the holidays they have already paid for,
Focus News says, citing Sega Daily.

Valeri 90 is a Bulgarian traveling agency.


CONERGY AG: Kawa Capital Buys Global Sales Units
Edgar Meza at reports that U.S. financial
investor Kawa Capital Management has purchased the global
subsidiaries of insolvent German solar group Conergy AG
subsidiaries, including its sales units in the U.S., Canada,
Singapore and Thailand.

Kawa, which agreed to buy the divisions in July, will purchase
the group's assets in a two-step process, acquiring first the
four international divisions effective immediately, pv- relates.

According to the report, the Miami Beach-based Kawa announced in
July its intention to buy the German group's assets. Conergy's
mounting system and module manufacturing units are not part of
the Kawa deal, the report notes. relates that Conergy said Kawa was working
towards closing the second step acquisitions of its remaining
foreign subsidiaries as well as its administrative, management
and infrastructure units by October at the latest, "subject to
conclusion of the relevant agreements."

For the time being, Conergy's remaining divisions will continue
to operate in their current structure, the company said, reports

The two-step approach was necessary, according to Conergy, "due
to the increased financing requirements of these subsidiaries
caused by the continuously strong order book for the construction
of large-scale power plants," adds.

Conergy AG is a Hamburg-based solar panel manufacturer.

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

REUTAX AG: U.S. Judge Grants Creditor Protection
Law360 reported that a Delaware bankruptcy judge issued a
temporary restraining order on Aug. 23 to protect the U.S. assets
of Reutax AG, a Germany-based information technology firm whose
founder is facing criminal charges in that country for allegedly
siphoning funds to purchase a Beverly Hills mansion and other

                             Reutax AG

Reutax began German bankruptcy proceedings in March and founder
Soheyl Ghaemian, who resigned soon after, was arrested in Germany
in June on charges of fraud, embezzlement and breach of fiduciary
duties, according to court documents, the report related.

Heidelberg, Germany-based Reutax AG provides information
technology services to clients, using free-lance information
technology experts. The Debtor was 60% owned by Contreg AG, an
entity owned by the Debtor's founder, Soheyl Ghaemian.  Hans-
Peter Wild, through an entity called Casun Invest AG, held a 40%
equity stake in exchange for a US$40 million investment.  Faced
with a liquidity squeeze, as well as EUR10 million in liabilities
to its IT consultants, the Debtor halted operations and on
March 20, 2013, filed a petition to open insolvency proceedings
over its assets.

Tobias Wahl was appointed the insolvency administrator in June
2013.  He filed a Chapter 15 petition for Reutax (Bankr. D. Del.
Case No. 13-12135) on Aug. 21, 2013.  The Debtor is estimated to
have assets and debt of US$10 million to US$50 million.

Michael Joseph Custer, Esq., at Pepper Hamilton LLP, in
Wilmington, Delaware, serves as counsel to the foreign
representative and insolvency administrator for Reutax.

Bankruptcy Judge Mary F. Walrath presides over the case.
Mr. Wahl has filed a motion for a Rule 2004 examination and
scheduled a hearing for Aug. 22.


IRISH BANK RESOLUTION: Files Chapter 15 in Delaware
The liquidation vehicle for what was once one of Ireland's
largest banks filed a Chapter 15 petition (Bankr. D. Del. Case
No. 13-12159) on Aug. 26 to protect U.S. assets of the former
Anglo Irish Bank Corp. from being seized by creditors.

Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that Irish Bank Resolution is seeking assistance from the
U.S. court in liquidating Anglo Irish Bank Corp. and Irish
Nationwide Building Society.

The two banks failed and were merged into IBRC in July 2011.
IBRC was tasked with winding them down and liquidating their

In February, when Irish lawmakers adopted the Irish Bank
Resolution Corp., IBRC was placed into a special liquidation in
the Irish High Court to complete liquidation and distribution of
the two banks' assets.

IBRC's principal asset as of June 2012 was a loan portfolio
valued at some EUR25 billion (US$33.5 billion). About 70 percent
of the loans were to Irish borrowers. Some 5 percent of the
portfolio was under U.S. law, according to a court filing.  Total
liabilities in June 2012 were about EUR50 billion, according to a
court filing.

Most assets in the U.S. have been sold already.  IBRC is involved
in lawsuits in the U.S.

The IRBC liquidators want the U.S. bankruptcy judge to rule that
Ireland is home to the so-called foreign main bankruptcy
proceeding.  If the judge agrees and determines that IBRC
otherwise qualifies, creditor actions in the U.S. will halt

The liquidators say they aren't seeking any relief from the U.S.
court, such as halting lawsuits, before the ruling on Chapter 15
qualification. Once IBRC is formally in Chapter 15, the U.S.
court can also assist in collecting assets in the U.S.

The liquidators say they intend to sell off the remaining assets
to the highest bidders, so long as the offers exceed appraised

JOE O'DONOVAN: Firms in Receivership Over EUR500MM Debt
Peter Flanagan and Ralph Riegel at Irish Independent report that
almost a dozen firms controlled by one of Ireland's biggest
property barons have been placed in receivership with estimated
debts of EUR500 million.

Eleven companies in Joe O'Donovan's property empire were placed
in receivership apparently at the behest of the National Asset
Management Agency (NAMA) after a High Court deadline expired in
relation to an ongoing debt repayment schedule, according to
Irish Independent.

The report notes that Mr. O'Donovan, whose property empire is
largely based in Cork, is currently in Moldova, where he has been
for over a year.

Eoin Ryan, of McKeogh, Gallagher, Ryan & Associates, was
appointed receiver to the firms which control properties ranging
from pubs, retail outlets and residential properties, the report

Mr. Ryan, the report relays, met with employees of the various
firms involved yesterday and briefed them on developments.

The companies put into receivership are:

   * Alvonway Ltd,
   * Padlake Ltd,
   * Carhuh,
   * Footwear Distributors,
   * June Developments,
   * Cechyman, Steadsord,
   * Melcollege,
   * Lamarral,
   * Bastinein, and
   * Hellinbar Ltd.

The report discloses that former Anglo Irish Bank held charges
over Padlake Ltd, which in turn controls a host of other
companies.  At the end of 2010, Padlake Ltd had long-term debt of
some EUR222 million and it acknowledged its ability to repay its
debt was "uncertain," the report says.

The report notes that Mr. O'Donovan amassed one of Ireland's most
valuable property portfolios following shrewd investments from
the 1980s through to the Celtic Tiger boom.

* IRELAND: Number of Insolvent Firms Drops 40% in August
Patrick Edwards at reports that there was a 40%
decrease in the number of businesses failing in August, according
to the latest figures from credit risk company Vision-net.

According to, figures for August
2013 show that a total of 2,769 companies and businesses were
established this month, an average of 106 per day.

This represents an increase of 13% on the same month last year,
the report notes. say fewer than four companies a day closed this
month, with insolvencies down by 40% compared to the same month
last year.

Of the 91 companies declared insolvent in August, 43 were
liquidated, 46 entered receivership, with just two examiners
appointed, relays.

When compared to August 2012, liquidations are down 54%,
receiverships are down 18% while examinerships remain in line
with the same period last year, according to


VENUS-1 FINANCE: Fitch Lowers Rating on Class D Notes to 'CC'
Fitch Ratings has downgraded Venus-1 Finance S.r.l. as follows:

EUR15.1m class A (IT0004148026) downgraded to 'Bsf' from "BBBsf';
Outlook Negative

EUR8.2m class B (IT0004148034) downgraded to 'CCCsf' from 'BBsf';
Recovery Estimate (RE) of 75% assigned

EUR6.3m class C (IT0004148042) downgraded to 'CCCsf' from 'Bsf';
RE 0%

EUR9.1m class D (IT0004148059) downgraded to 'CCsf' from 'CCCsf';
RE 0%

EUR6.5m class E (IT0004148067) affirmed at 'CCsf'; RE 0%

Venus-1 Finance S.r.l. is a securitisation of two portfolios of
predominantly unsecured non-performing loans (NPLs), Monviso 1
and Monviso 2, which are serviced by FBS SpA.

Key Rating Drivers

The downgrades are driven by the stagnation in the pace of
collection, which mirrors the persistent challenges facing all
types of borrower in Italy. Moreover, the scale of the downgrades
reflects the effect of considerable issuer operating leverage in
the form of heavy fixed costs, including for servicing (despite
poor collections volume performance).

As of the June 2013 semi-annual interest payment date (IPD),
cumulative total collections since 2005 closing stood at EUR78.3
million. At the last two IPDs, only EUR0.6 million was
distributed to noteholders as principal, which compares
unfavorably with the two preceding 12 month outturns (EUR1.7
million and EUR2.3 million, in reverse chronological order). This
appears to confirm a downwards trend that makes a reversion
towards previous stronger performance far less credible. This
judgment has contributed to the downgrades.

Collection performance on a claim-by-claim basis remains sound,
with recovery rates on total collections and closed positions of
77% and 94% by gross book value (GBV), respectively. It is
throughput rather than profitability that is underperforming, and
unless declines in collections volumes can be stemmed, liquidity
facility drawings will be necessary to maintain timely interest
on the notes. Without some improvement, total issuer available
funds will not be sufficient to repay principal on the class B to
E notes; the repayment prospects of the class A notes will also
be in doubt, as reflected by the Negative Outlook.

Gross collections are a multiple of the redemption amount. At the
last two IPDs, interest expenses on the notes amounted to a
further EUR1.2 million, with the balance of the EUR5.3 million in
gross collections comprising issuer senior expenses, principally
servicing fees and legal expenses.

The reported outstanding GBV of the portfolio is EUR237.0
million, 92% of which is unsecured. Whilst recovering enough from
this to repay the EUR45.2 million of principal outstanding may
appear feasible (even with the paucity of underlying collateral),
this is to a large extent cosmetic. Adverse selection embedded
within an aging book makes even a sub-20% advance rate excessive,
which underpins the weakness in performance.

Considering the current Italian economic environment, going
through the judicial resolution process is, in Fitch's view, the
only realistic workout option for much of the remainder of the
portfolio, as successful discounted pay-off strategies and sales
of claims to third parties become less likely.

Since 2011, Fitch has highlighted certain positive features of
the portfolio, including part of the unsecured positions being
effectively backed by mortgages (ipoteca volontaria), as well as
a "rolling" cash-in-court balance comprising a fraction of
collections from resolved positions supposedly awaiting
distribution. However, judging from recent performance, it is
increasingly unclear if and how these factors will support the
transaction in the six years until bond maturity in 2019.

The portfolios were originated in Italy by Sanpaolo IMI Group,
now part of Intesa Sanpaolo Spa (A-/Negative/F2), and were
acquired in 2005 by ABN AMRO Bank N.V. (A+/Stable/F1+) and FBS
Luxembourg S.a.r.l., which acquired a small subordinated
position. The outstanding portfolio is split between claims
against corporates (47% by GBV) and individuals (53%)
concentrated in the southern regions of Italy (45%). The majority
(68%) of defaulted positions have a balance of less than EUR30k.

Rating Sensitivities

With a six-year term to note maturity, it will take an increase
in the pace of collections to prevent defaults on the class B and
C notes, and an outright surge in activity to rescue investors in
the class D and E notes. Relieving downward pressure on the
rating of the class A notes requires stabilization in collections
volumes and a contribution from cash-in-court amounts.


S&B MINERALS: S&P Assigns B+ Corp. Credit Rating; Outlook Stable
Standard & Poor's Ratings Services said that it assigned its 'B+'
long-term corporate credit rating to Luxembourg-registered S&B
Minerals Finance S.C.A. (S&B).  The outlook is stable.

At the same time, S&P assigned its 'B+' issue rating to the
EUR275 million senior secured notes maturing in 2020, co-issued
by S&B Minerals Finance S.C.A. and S&B Industrial Minerals North
America Inc., guaranteed by the key operating subsidiaries of the
group.  S&P currently don't rate the EUR40 million revolving
credit facility (RCF) due in 2020.

The final capital structure is broadly in line with the
preliminary capital structure, and leverage remains in line with
S&P's expectations despite the coupon on the bond being slightly
above its initial assumptions.

The rating on S&B reflects S&P's assessment of its business risk
profile as "weak" and its financial risk profile as "aggressive."

S&P bases its view of S&B's business risk profile on the

   -- Its limited scale of business, with about EUR470 million in
      sales in 2012;

   -- The cyclicality of end markets, including the steel,
      construction, and auto industries;

   -- The concentration of the asset base in Greece, where 44% of
      noncurrent assets are located; and

   -- Its exposure to commodity-type bauxite (14% of noncurrent
      assets), which is unprofitable.

These factors are partly offset by S&B's good positions in the
concentrated niche industries of bentonite (46% of revenues in
2011), continuous casting fluxes (CCF, 22%), and perlite (15%)
where the company is one of the two largest producers globally.
The company also acquired NYCO, a leading wollastonite producer,
in late 2012.  Therefore, the company has historically
experienced stable prices, although volumes are volatile and
depend on activity levels in customer industries.  Despite S&B's
small size, its products produced, customer industries served,
and geography of sales make the company well diversified.  It
derives 7% of sales from Greece, 7% from the rest of Southern
Europe, 22% from Germany, 30% from other European countries, 22%
from North America, and a remaining 12% from a collection of
countries with smaller contributions.  Overall, this contributed
to resilient performance in 2010-2012 and the first quarter of

"We base our opinion of S&B's financial risk profile on its
aggressive leverage, with EUR275 million of gross debt and
EUR340 million of adjusted debt--including our adjustments for
pensions, operating leases, and asset retirement obligations.  In
our base-case scenario for 2013-2014, we expect debt to EBITDA of
about 4.0x-4.5x each year.  We also factor into our assessment
the company's aggressive financial policy, owing notably to the
39% stake in S&B that private equity company Rhone Capital owns,
balanced by the 61% stake that Kyriacopoulos family shareholders
have in the company.  Nevertheless, we see liquidity as adequate
since the transaction, has no debt maturities until 2020, when
both the bond and the RCF will mature.  We also expect free
operating cash flow (FOCF) to be moderately positive, given the
absence of ambitious capital expenditure plans.  However, we
factor in that the company will likely use FOCF for bolt-on
acquisitions or dividends," S&P said.

"In our base case, we expect the company's performance to remain
resilient, with EBITDA of EUR75 million-EUR85 million in 2013 and
EUR80 million-EUR90 million in 2014, compared with EUR19 million
in the first quarter of 2013.  This would represent a moderate
improvement compared with EUR75 million in adjusted EBITDA in
2012, largely reflecting the acquisition of NYCO in late 2012 and
the absence of nonrecurring costs, including NYCO-related
expenses and the Kerneos provision in 2012.  The generally weak
environment in the steel industry globally and in the automotive
industry in Europe will continue to weigh negatively on EBITDA in
2013-2014, however," S&P added.

The stable outlook reflects S&P's expectation that S&B will
maintain a broadly stable ratio of debt to EBITDA of 4.5x or
below and will be able to largely cover potential dividends or
bolt-on acquisitions with FOCF.  S&P also take into account its
anticipation of the company's resilient operating performance in
the next couple of years, despite challenging economic conditions
in Europe.

S&P could downgrade S&B if debt to EBITDA increased above 4.5x,
triggered by a less resilient operating performance than S&P
currently expects or a more aggressive financial policy.
Material negative free cash flow of the commodity-type bauxite
operations or unstable economic conditions in Greece, such as
strikes, could also pressure the rating.

S&P don't anticipate rating upside in the next couple of years,
due to S&B's small size and S&P's view of its aggressive
financial policy.


DUCHESS IV: Moody's Upgrades Rating on Class D Notes to 'Ba1'
Moody's Investors Service has upgraded the ratings of the
following notes issued by Duchess IV CLO B.V.:

EUR38M Class B Notes, Upgraded to Aaa (sf); previously on Jan 22,
2013 Upgraded to Aa1 (sf)

EUR30.1M Class C Notes, Upgraded to A1 (sf); previously on Jan
22, 2013 Upgraded to A3 (sf)

EUR32.8M Class D Notes, Upgraded to Ba1 (sf); previously on Jan
22, 2013 Upgraded to Ba3 (sf)

EUR4M (Currently EUR2.77m Rated Balance Outstanding) Class W
Combination Notes, Upgraded to A2 (sf); previously on Jan 22,
2013 Upgraded to Baa1 (sf)

Moody's affirmed the rating of the Class A-1 notes issued by
Duchess IV CLO B.V.:

EUR307M (Currently EUR123.2m outstanding) Class A-1 Notes,
Affirmed Aaa (sf); previously on Jan 22, 2013 Affirmed Aaa (sf)

Moody's also placed under review uncertain the ratings of the
following combination notes:

EUR12.8M (Currently EUR9.93m Rated Balance Outstanding) Class L
Combination Notes, Baa2 (sf) Placed Under Review Direction
Uncertain; previously on Jan 22, 2013 Downgraded to Baa2 (sf)

EUR4.977M (Currently EUR3.78m Rated Balance Outstanding) Class N
Combination Notes, Baa2 (sf) Placed Under Review Direction
Uncertain; previously on Jan 22, 2013 Downgraded to Baa2 (sf)

EUR9.634M (Currently EUR7.31m Rated Balance Outstanding) Class V
Combination Notes, Baa2 (sf) Placed Under Review Direction
Uncertain; previously on Jan 22, 2013 Downgraded to Baa2 (sf)

Duchess IV CLO B.V., issued in May 2005, is a multi-currency
Collateralized Loan Obligation ("CLO") backed by a portfolio of
mostly high yield European loans. The portfolio is managed by
Babson Capital Europe Limited. This transaction passed its
reinvestment period in May 2010. It is predominantly composed of
senior secured loans.

Ratings Rationale:

According to Moody's, the rating actions taken on the notes
result primarily from an improvement in the overcollateralization
ratios of the rated notes pursuant to amortization of the
portfolio. The Class A-1 notes amortized by approximately
EUR25 million (or 15%) on the payment date in May 2013, and by
approximately EUR42 million (or 25%), since the last rating
action in January 2013.

As a result of this deleveraging, the overcollateralization
ratios (or "OC ratios") of the notes have increased since the
rating action in January 2013. As of the trustee report dated
June 28, 2013, the Class B, Class C, Class D and Class E OC
ratios are reported at 155.03%, 130.65%, 111.53% and 105.12%,
respectively, versus November 2012 levels of 141.66%, 123.35%,
108.13% and 102.67%, respectively. Moody's notes that it has
received, and taken into consideration, the latest note holder
valuation report dated August 12, 2013.

In its base case, Moody's analyzed the underlying collateral pool
to have a performing par and principal proceeds balance of EUR
240.42 million, defaulted par of EUR10.17 million, a weighted
average rating factor of 3587 (corresponding to a default
probability of 23.11% over 3.49 years), a weighted average
recovery rate upon default of 47.09% for a Aaa liability target
rating, a diversity score of 27 and a weighted average spread of
3.59%. The default probability is derived from the credit quality
of the collateral pool and Moody's expectation of the remaining
life of the collateral pool. The average recovery rate to be
realized on future defaults is based primarily on the seniority
of the assets in the collateral pool. For a Aaa liability target
rating, Moody's assumed that 91.7% of the portfolio exposed to
senior secured corporate assets would recover 50% upon default,
while the remainder non first-lien loan corporate assets would
recover 15%. In each case, historical and market performance
trends and collateral manager latitude for trading the collateral
are also relevant factors. These default and recovery properties
of the collateral pool are incorporated in cash flow model
analysis where they are subject to stresses as a function of the
target rating of each CLO liability being reviewed.

In addition to the base case analysis, Moody's also performed
sensitivity analyses on key parameters for the rated notes:
Deterioration of credit quality to address the refinancing and
sovereign risks -- Approximately 26.5% of the portfolio are
European corporate rated B3 and below and maturing between 2014
and 2016, which may create challenges for issuers to refinance.
Approximately 7.81% of the portfolio are exposed to obligors
located in Ireland, Italy and Spain. Moody's considered a model
run where the base case WARF was increased to 4186 by forcing
ratings on 25% of such exposure to Ca. This run generated model
outputs that were within one notch from the base case results.

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

Moody's notes that the rating action taken on Classes L, N and V
are a result of the long term senior unsecured Baa2 rating of
Citigroup Global Markets Holdings Inc. being placed under review
uncertain on August 22, 2013.

Classes L, N and V consist of the unrated Class F subordinated
notes and Euro Medium Term Notes (or EMTNs) issued by Citigroup
Global Markets Holdings Inc. The principal amount of each EMTN
component is equal to the principal amount of the corresponding
combination notes. The Rated Balance of these combination notes
has been reduced by distributions from the Class F component.
Moody's analyzed the historical cash-flows to these combination
notes and concluded that their ratings reflect the rating of
Citigroup Global Markets Holdings Inc. as the issuer of the

Moody's notes that this transaction is subject to a high level of
macroeconomic uncertainty, which could negatively impact the
ratings of the notes, as evidenced by 1) uncertainties of credit
conditions in the general economy and 2) the large concentration
of speculative-grade debt maturing between 2014 and 2016 which
may create challenges for issuers to refinance. CLO notes'
performance may also be impacted either positively or negatively
by 1) the manager's investment strategy and behavior and 2)
divergence in legal interpretation of CDO documentation by
different transactional parties due to embedded ambiguities.

Sources of additional performance uncertainties:

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

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

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

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

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

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

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

This model was used to represent the cash flows and determine the
loss for each tranche. The cash flow model evaluates all default
scenarios that are then weighted considering the probabilities of
the binomial distribution assumed for the portfolio default rate.
In each default scenario, the corresponding loss for each class
of notes is calculated given the incoming cash flows from the
assets and the outgoing payments to third parties and
noteholders. Therefore, the expected loss or EL for each tranche
is the sum product of (i) the probability of occurrence of each
default scenario; and (ii) the loss derived from the cash flow
model in each default scenario for each tranche. Therefore,
Moody's analysis encompasses the assessment of stressed

In addition to the quantitative factors that are explicitly
modeled, qualitative factors are part of the rating committee
considerations. These qualitative factors include the structural
protections in each transaction, the recent deal performance in
the current market environment, the legal environment, specific
documentation features, the collateral manager's track record,
and the potential for selection bias in the portfolio. All
information available to rating committees, including
macroeconomic forecasts, input from other Moody's analytical
groups, market factors, and judgments regarding the nature and
severity of credit stress on the transactions, may influence the
final rating decision.

SAKTHI SUGARS: Dutch Subsidiaries File for Liquidation
Myiris News reports that Sakthi Sugars said on Thursday the
company's step down subsidiaries Sakthi Holdings BV, Sakthi
European Foreign Sales Corporation BV, and Sakthi Netherlands BV
in Netherlands have filed for liquidation, as a part of the
restructuring of the step down subsidiaries in Europe, on
Aug. 21, 2013 and Aug. 23, 2013 respectively.

Earlier on Aug. 12, the company reported a loss of Rs407.30
million compared with a profit of Rs13.74 million in the same
quarter previous year, Myiris News discloses.  According to
Myiris News, net sales for the quarter declined 28.94% to Rs2,544
million, compared with Rs3,580 million for the prior year period.

Sakthi Sugars is a sugar manufacturing company based in
Coimbatore in the Indian state of Tamil Nadu.


NATIONAL RESERVE: Moody's Cuts Long-Term Deposit Ratings to 'B3'
Moody's Investors Service has downgraded to B3 from B2 the long-
term local- and foreign-currency deposit ratings of National
Reserve Bank (Russia). Concurrently, Moody's affirmed the bank's
E+ standalone bank financial strength rating (BFSR), as well as
its Not Prime short-term local- and foreign-currency deposit
ratings. The outlook on all of the bank's long-term ratings is

The rating action primarily reflects National Reserve Bank's
weakening earnings generation and its poor profitability and
cost-efficiency metrics.

Moody's rating action on National Reserve Bank's ratings is
primarily based on the bank's audited financial statements for
2012 prepared under IFRS.

Ratings Rationale:

National Reserve Bank's business volumes have contracted over the
past 18 months, prompting weakening earnings generation, and poor
profitability and cost-efficiency metrics. The bank's holdings of
substantial investments in securities have aggravated this weaker
performance because the securities render the bank's financial
results vulnerable to negative market trends. Moody's notes that
National Reserve Bank's capital adequacy levels have been
suppressed by a prolonged track record of weak financial
performance, and capital remains under pressure, which underpins
the negative outlook on the bank's long-term ratings.

Materially Weakened Franchise

Moody's explains that due to negative publicity surrounding
National Reserve Bank throughout 2012 the bank scaled down its
third-party business. As a result of these developments, the
total gross loan portfolio has contracted by more than two-thirds
over the past 18 months, and the customer deposit base more than
halved over the same period, with around half of these volumes
now represented by related-party business. National Reserve Bank
reduced its network to three regional offices as of August 2013
from 15 offices as of year-end 2012.

Loss-Making Performance

National Reserve Bank posted a net IFRS loss of RUB1.8 billion in
2012. The loss-making performance was driven by: (1) the
reduction in the bank's recurring earnings (as a result of
reduction in the loan book) which were insufficient to cover the
bank's administrative costs: the bank's cost-to-income ratio
surged to 218% in 2012 and Moody's expects the ratio to exceed
100% in 2013; (2) the plunge in the value of the bank's
investments in equity securities, which at year-end 2012
accounted for 62% of National Reserve Bank's total shareholder
equity; and (3) heightened loan loss provisions accounting for
3.9% of the bank's average gross loan portfolio in 2012.

Weakened Capital Base

National Reserve Bank's loss-making performance, coupled with a
substantial dividend payout in 2012, led to a material reduction
of its statutory capital adequacy (N1) ratio, which declined to
23.97% at mid-2013 from 28.43% reported at January 1, 2012,
despite the substantial decrease in the bank's risk-weighted
assets over the same period.

Stabilized Liquidity

More positively, Moody's notes that National Reserve Bank's
liquidity profile and depositor base stabilized by mid-2013 after
the bank had experienced significant outflow of customer deposits
during 2012. According to the bank's management data, only
approximately RUB2 billion (less than 10% of the bank's total
assets) of all customer funding is now owed to third-party
customers (individuals and corporate clients); the rest of
National Reserve Bank's funding mainly stems from the bank's
related parties and market facilities collateralized by the
bank's securities holdings. Moody's believes that National
Reserve Bank's liquidity risks have now moderated and are
additionally mitigated by the liquidity cushion that accounts for
more than half of the bank's total assets.

What Could Move The Ratings Up/Down

An upgrade of National Reserve Bank's deposit ratings is unlikely
given the negative outlook on its ratings. A change of the
negative outlook to stable may only materialize following a
consistent reinstatement of the bank's third-party business if
the restoration of this business is accompanied by good
diversification and robust quality of newly generated assets. Any
significant improvement in the bank's recurring revenue
generation and cost-efficiency, as well as a substantial
reduction of its market risk exposures would also have positive
rating implications.

National Reserve Bank's ratings could be downgraded (1) if the
bank faces further significant losses due to low recurring income
streams that are insufficient to cover operating costs, negative
revaluation of its investments in securities and/or defaults by
any large borrowers; and (2) if these losses erode the bank's
capital buffer leading to a material decline of its capital
adequacy ratios.

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

Headquartered in Moscow, Russia, National Reserve Bank reported
total audited IFRS assets of US$990 million and total equity of
US$514 million as at year-end 2012. The bank's net IFRS loss for
2012 amounted to US$60 million.

WEST SIBERIAN: S&P Affirms 'B+/B' Counterparty Credit Ratings
Standard & Poor's Ratings Services said it affirmed its 'B+/B'
long- and short-term counterparty credit ratings on Russia-based
West Siberian Commercial Bank (WSCB).  The outlook is stable.  At
the same time, S&P raised its Russia national scale rating on the
bank to 'ruA+' from 'ruA'.

The affirmation reflects S&P's view of WSCB's strong position
within its home region, Tyumen Oblast.  It also reflects S&P's
expectation that the bank will gradually expand into other
business-attractive Russian regions, supported by its sufficient
capital cushion and professional management team.  S&P also
believe that the bank's financial profile will remain sound in
the next 12 months.  S&P notes that WSCB's valuable franchise in
a region that is richer than the Russian average gives it access
to more creditworthy retail and corporate clients, a granular
deposit base, and a less volatile earnings profile than its
peers.  Combined with efficient management, this gives its risk
profile stability, which S&P views as an advantage over similar-
size peers.

S&P views WSCB business position as moderate.  With total assets
of about Russian ruble (RUB) 82.7 billion (US$2.6 billion) WSCB
ranked at No. 66 among Russian banks on July 1, 2013, indicating
a moderate size in the context of the Russian banking system.

However, in the local context, S&P notes that the bank has a
sound commercial franchise and good market penetration, with a
stable 10% market share in major business lines in Tyumen Oblast.
This compares well with top-tier Russian banks, notably
government-owned ones.

WSCB operates mostly in the oil-rich Russian regions of Tyumen
Oblast (not rated), Khanty-Mansiysk Autonomous Okrug, and Yamal-
Nenets Autonomous Okrug.  S&P notes that these regions have
higher GDP per capita than the Russian average, and a higher-
than-average ratio of disposable income to loans.

S&P views management's strategy for 2013 to 2015 of reasonable
expansion to Russian regions with good economic performance as
the start of better business diversification.  S&P believes that
the goals of a 20% share of net income from regional branches and
a position in the top 50 Russian banks ranked by total assets is
realistic.  Potential hindrances to this expansion include some
growth in credit costs and rising cost-to-income ratios.

S&P believes that the slowing Russian economy may lead to a more
difficult operating environment.  S&P do not have significant
concerns over the bank's expansion in unsecured retail lending
because most of the retail loan growth comes from existing
payroll services clients, employees of WSCB's corporate clients.
S&P considers this growth base to be less risky than traditional
retail lending.

The stable outlook reflects S&P's expectation that the bank will
continue its steady franchise development, increase its presence
in selected Russian regions, and maintain its sound funding
profile while keeping capitalization and earnings capacity
stable. However, S&P thinks that cost of risk will rise closer to
average industry levels.

S&P considers the possibility of a positive rating action to be
remote in the next 12 months.  However, S&P would consider an
upgrade if it was to see enhanced business and geographic
diversification arising from manageable asset growth in the
bank's home region and other Russian administrative areas,
combined with stable asset quality ratios above the industry
average.  S&P might also consider a positive rating action if
WSCB's business growth increased its systemic importance within
the Russian banking sector by acquiring a bigger portion of
aggregate Russian customer deposits.

S&P might consider a negative rating action if the bank
aggressively managed expansion , with loan growth worsening the
bank's asset quality and leading to credit losses substantially
higher than the 2% of total loans S&P expects for the industry,
and a strain on capitalization causing the risk-adjusted capital
ratio before adjustments to fall below 5%.


NOSTRA EMPRESAS 1: Fitch Keeps BB+ Note Ratings on Watch Negative
Fitch Ratings has maintained TDA SA Nostra Empresas 1 and 2,
FTA's notes on Rating Watch Negative (RWN) as follows:

TDA SA Nostra Empresas 1 FTA:
Series C (ISIN: ES0377969029): 'BB+sf'; maintained on RWN
Series D (ISIN: ES0377969037): 'BB+sf'; maintained on RWN

TDA SA Nostra Empresas 2 FTA:
Series C (ISIN: ES0377957024): 'BB+sf', maintained on RWN

Key Rating Drivers

The ratings of the notes are credit linked to the ratings of
Banco Mare Nostrum (BMN; BB+/RWN/B), the originator and servicer,
which holds the reserve fund. Most of the credit enhancement to
the notes is provided by the reserve fund. The maintained RWN on
the notes reflects the RWN on BMN's ratings.

Rating Sensitivities

The ratings of the notes are sensitive to the resolution of the
RWN on BMN's ratings. For example, a one-notch downgrade of BMN's
ratings would result in a one-notch downgrade of the notes'


BANK FINANCE: Moody's Keeps Caa1 Deposit Ratings; Outlook Stable
Moody's Investors Service has affirmed the Caa1 long-term local
and foreign-currency debt and deposit ratings of Bank Finance and
Credit, as well as the standalone bank financial strength rating
(BFSR) of E, equivalent to a baseline credit assessment (BCA) of
caa1, and National Scale Rating (NSR) of The bank's Not
Prime short-term local- and foreign-currency deposit were also

The outlook on the bank's BFSR and the long-term local currency
deposit and foreign currency debt ratings is stable, while the
long-term foreign-currency deposit rating has a negative outlook
and the NSR carries no specific outlook.

Moody's affirmation of Bank Finance and Credit's ratings at low
level reflects the bank's weak capital buffer, low profitability
metrics, and refinancing risks stemming from its dependence on
wholesale funding. The affirmation also captures the bank's high
credit-risk appetite, reflected by very high single-name and
related-party credit-risk concentrations. At the same time, the
ratings take into account the bank's visible deposit-taking
position in Ukraine.

Ratings Rationale:

Weak Capital Buffer

Moody's says that Bank Finance and Credit's weak loss-absorption
capacity is one of the key factors constraining the affirmed
ratings at their low levels. The bank reported a Tier 1 capital
adequacy ratio as low as 7.1% as at December 31, 2012 and
internal capital generation remained weak as the bank reported
close to break-even bottom-line results for three consecutive
years. Its restructured loan portfolio (around 40% of gross loan
book) is not sufficiently provisioned and could require
additional coverage over next 12-24 months.

At the same time the rating agency takes into account the key
shareholder's commitment to support the bank's capitalization.
Mr. Konstantin Zhevago plans to inject UAH1.5 billion (US$180
million, UAH200 million came in 1H 2013) by year-end 2014, which
will strengthen Bank Finance and Credit's currently weak capital

Low Profitability Metrics

In 2012, Bank Finance and Credit's financial performance was
suppressed by net interest margin (NIM) compression, which
contracted to 0.9% in 2012 from an already modest 1.8% a year
before. Price competition for local depositors was the key driver
for the NIM decline in 2012 and Moody's does not expect the
bank's NIM to recover in 2013-14 given the challenging credit
conditions in the country. However, the bank introduced several
settlements products, which enabled it to increase fee generation
capacity: commissions demonstrated 15% growth and accounted for
55% of the bank's revenues in 2012. However, it was not
sufficient to compensate for the contraction of interest income
and to cover high operating expenses, with the cost-to-income
ratio exceeding 100% in 2012. Going forward the bank aims to
diversify its business to higher-yielding consumer loans, which
is likely to support NIM recovery, while expected to call for new
provisions as well.

Refinancing Risks

Around 40% of Bank Finance and Credit's funding represents
wholesale facilities, including those from National Bank of
Ukraine (NBU), with gradual repayments within the next 2.5 years.
Moody's considers that in absence of refinancing opportunities,
the bank's liquidity position could face pressure and require
external liquidity support.

Risk Appetite Is High

At the same time, Moody's notes that Bank Finance and Credit
demonstrated high appetite for credit risk as measured by single-
name and related-party concentrations. The bank's profitability
and capitalization is vulnerable to the financial performance of
a handful borrowers because (1) the exposure to its top-20
borrowers absorbed over 650% of Tier capital as at year-end 2012;
and (2) loans to related companies accounted for over 570% of
Tier 1 capital as of the same date.

What Could Change The Ratings Up/Down

Bank Finance and Credit's ratings may be upgraded if it (1)
substantially improves its capital base via an injection of Tier
1 capital; (2) demonstrates stabilization of asset-quality trends
over the next 12-18 months; and (3) demonstrates improvements in
recurring revenues sufficient to compensate for credit--risk
costs. The bank's ratings may be downgraded if asset quality
deteriorates beyond Moody's current expectations, or if the bank
fails to further improve its liquidity profile by reducing its
dependence on NBU funding.

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

Headquartered in Kyiv, Ukraine, Bank Finance and Credit reported
total assets of UAH21.4 billion (US$2.7 billion) as of December
31, 2012 (in accordance with audited IFRS).

ITC: Declared Bankrupt by Volin Court
Telecompaper, citing, reports that ITC, the owner of the
CDMA Ukraine brand, has been recognized bankrupt by the Volin
regional commercial court.

According to Telecompaper, a liquidation procedure has been

The debt of ITC totals UAH494.03 million, Telecompaper discloses.

Mobile operator CDMA Ukraine switched its subscribers to mobile
operator Intertelecom at the end of November 2012, Telecompaper

ITC is a Ukrainian telecommunications company.

U N I T E D   K I N G D O M

BUSINESS MORTGAGE: Moody's Cuts Ratings on 2 Note Classes to 'Ca'
Moody's Investors Service has downgraded 18 tranches and affirmed
10 tranches in BMF 4, 5, 6 and 7 (amounts reflects initial

Issuer: Business Mortgage Finance 4 PLC (BMF 4)

GBP15M B Notes, Downgraded to Caa1 (sf); previously on Jul 21,
2011 Downgraded to B3 (sf)

GBP41.25M M Notes, Downgraded to Ba1 (sf); previously on Jul 21,
2011 Downgraded to Baa2 (sf)

Detachable A Coupons Notes, Affirmed Aa2 (sf); previously on Dec
21, 2011 Downgraded to Aa2 (sf)

GBP186.5M A Notes, Affirmed Aa2 (sf); previously on Dec 21, 2011
Downgraded to Aa2 (sf)

MERC Notes, Affirmed Aa2 (sf); previously on Dec 21, 2011
Downgraded to Aa2 (sf)

Issuer: Business Mortgage Finance 5 PLC (BMF 5)

GBP12M B1 Notes, Downgraded to Caa3 (sf); previously on Jul 21,
2011 Downgraded to Caa1 (sf)

EUR11.5M B2 Notes, Downgraded to Caa3 (sf); previously on Jul 21,
2011 Downgraded to Caa1 (sf)

GBP27M M1 Notes, Downgraded to B2 (sf); previously on Jul 21,
2011 Downgraded to Ba3 (sf)

EUR36.5M M2 Notes, Downgraded to B2 (sf); previously on Jul 21,
2011 Downgraded to Ba3 (sf)

A1 DAC Notes, Affirmed Aa2 (sf); previously on Dec 21, 2011
Downgraded to Aa2 (sf)

A2 DAC Notes, Affirmed Aa2 (sf); previously on Dec 21, 2011
Downgraded to Aa2 (sf)

GBP100M A1 Notes, Affirmed Aa2 (sf); previously on Dec 21, 2011
Downgraded to Aa2 (sf)

EUR180M A2 Notes, Affirmed Aa2 (sf); previously on Dec 21, 2011
Downgraded to Aa2 (sf)

MERC Notes, Affirmed Aa2 (sf); previously on Dec 21, 2011
Downgraded to Aa2 (sf)

Issuer: Business Mortgage Finance 6 PLC (BMF 6)

GBP106M A1 Notes, Downgraded to A1 (sf); previously on Dec 21,
2011 Confirmed at Aa2 (sf)

EUR400.7M A2 Notes, Downgraded to A1 (sf); previously on Dec 21,
2011 Confirmed at Aa2 (sf)

A1 DAC Notes, Downgraded to A1 (sf); previously on Dec 21, 2011
Confirmed at Aa2 (sf)

A2 DAC Notes, Downgraded to A1 (sf); previously on Dec 21, 2011
Confirmed at Aa2 (sf)

GBP38M M1 Notes, Downgraded to Caa2 (sf); previously on Jul 21,
2011 Downgraded to B1 (sf)

EUR55.6M M2 Notes, Downgraded to Caa2 (sf); previously on Jul 21,
2011 Downgraded to B1 (sf)

EUR39.1M B2 Notes, Downgraded to Ca (sf); previously on Jul 21,
2011 Downgraded to Caa3 (sf)

MERC Notes, Affirmed Aa2 (sf); previously on Dec 21, 2011
Downgraded to Aa2 (sf)

Issuer: Business Mortgage Finance 7 PLC (BMF 7)

A1 DAC Notes, Downgraded to Aa3 (sf); previously on Dec 21, 2011
Confirmed at Aa2 (sf)

GBP187.5M A1 Notes, Downgraded to Aa3 (sf); previously on Dec 21,
2011 Confirmed at Aa2 (sf)

GBP38.65M M1 Notes, Downgraded to Caa2 (sf); previously on Jul
21, 2011 Downgraded to Ba3 (sf)

GBP12.375M B1 Notes, Downgraded to Ca (sf); previously on Jul 21,
2011 Downgraded to Caa2 (sf)

EUR5M M2 Notes, Downgraded to Caa2 (sf); previously on Jul 21,
2011 Downgraded to Ba3 (sf)

MERC Notes, Affirmed Aa2 (sf); previously on Dec 21, 2011
Downgraded to Aa2 (sf)

Moody's does not rate the Classes C in BMF 4, BMF 5, BMF 6 and
BMF 7.

Ratings Rationale:

The rating action reflects: (i) the significant increase of
principal deficiency balance recorded in BMF 5, 6 and 7 over the
past nine months, (ii) the high arrears, litigation and
repossession levels for each pool; (iii) the diminution in all
four transactions of the credit enhancement provided by the
reserve funds; and (iv) Moody's concerns regarding the current
state of the UK real estate market for secondary and tertiary
quality assets and the challenging economic backdrop for small
businesses across the country. The analysis that led to the
rating actions was based on an updated pool cut for each
transaction and the recent performance history of each loan.

The rating on the Class A Notes in BMF 4 and 5 are affirmed
because the current credit enhancement levels are sufficient to
maintain the respective ratings despite the increased loss
expectation for the pools.

Moody's rating action on the Class A Detachable Coupons of BMF 4,
5, 6 and 7 is due to the expectation that scenarios in which the
ratings of the Class A Notes would be impacted would also impact
on the payment promise towards the Class A Detachable Coupons.

Moreover, the ratings of the MERCs Notes in BMF 4, 5, 6 and 7 are
affirmed and capped by operational risk. Payments under the MERCs
depend on prepayment amounts being identified by the servicer as
early redemption charges, and on the cash/bond administrator to
pay these amounts out to MERCs holders on each IPD. Although the
level and complexity of calculation is less than for other
categories of Notes, MERCs are still exposed to a similar level
of operational risk relating to the servicer and the cash

The key parameters in Moody's analysis are the default
probability of the securitized loans (both during the term and at
maturity) as well as Moody's value assessment for the properties
securing these loans. Moody's derives from those parameters a
loss expectation for the securitized pools. Based on Moody's
revised assessment of the parameters, the loss expectations for
the pools have increased since the last review.

In general, Moody's analysis reflects a forward-looking view of
the likely range of commercial real estate collateral performance
over the medium term. From time to time, Moody's may, if
warranted, change these expectations. Performance that falls
outside an acceptable range of the key parameters such as
property value or loan refinancing probability for instance, may
indicate that the collateral's credit quality is stronger or
weaker than Moody's had anticipated when the related securities
ratings were issued. Even so, a deviation from the expected range
will not necessarily result in a rating action nor does
performance within expectations preclude such actions. There may
be mitigating or offsetting factors to an improvement or decline
in collateral performance, such as increased subordination levels
due to amortization and loan re- prepayments or a decline in
subordination due to realized losses.

Primary sources of assumption uncertainty are the current
stressed macro-economic environment and continued weakness in the
occupational and lending markets. Moody's anticipates (i) lending
will remain constrained over the next years, while subject to
strict underwriting criteria and heavily dependent on the
underlying property quality, (ii) strong differentiation between
prime and secondary properties, with further value declines
expected for non-prime properties, and (iii) occupational markets
will remain under pressure in the short term and will only slowly
recover in the medium term in line with anticipated economic
recovery. Overall, Moody's central global macroeconomic scenario
for the world's largest economies is for only a gradual
strengthening in growth over the coming two years. Fiscal
consolidation and volatility in financial markets will continue
to weigh on business and consumer confidence, while heightened
uncertainty hampers spending, hiring and investment decisions. In
2013, Moody's expects no growth in the Euro area and only slow
growth in the UK.

Moody's Portfolio Analysis

BMF 4, 5, 6 and 7 represent true-sale securitizations by United
Kingdom lender Commercial First of four pools of loans mainly
granted to individuals and secured by first-ranking mortgages
over mixed-use commercial properties.

The most common property type in each of the pools is a mixed-use
commercial property, with a commercial use unit on the ground
floor, and a flat or maisonette for residential use situated
directly above it. However, the types of properties in the pools
are diverse and comprise various sorts of commercial uses,
including retail units, offices, hotels, light industrial
property and farmland. The properties securing the loans in the
pools are also well diversified in terms of location across the

Except for the Notes in BMF 4 that are all denominated in GBP,
the floating rate Notes have been issued in both EUR and GBP,
while the underlying loans are 100% GBP denominated. The
transactions have (i) hedging to mitigate basis risk, and for the
transactions with EUR tranches, cross-currency risk; (ii)
liquidity facilities; and (iii) cash reserve funds which are
fully depleted in BMF 5, 6 and 7. The transactions are now
amortizing principal sequentially.

Since closing of the transactions, Moody's has observed increases
in the rates of arrears in the pools, as well as in the
proportion of loans that are reported as being in litigation and
the number of property repossession cases. As of the April 2013
IPD, delinquencies >90 days as percentage of current balance for
BMF 4, 5, 6 and 7 were 32.9%, 29.1%, 27.6% and 23.8%
respectively. During the past two years, the reserve fund has
been used in BMF 4, 5, 6 and 7 to cover losses. The un-absorbed
losses were met by deductions to the reserve funds. The reserve
funds for BMF 5, 6 and 7 have been fully depleted, while BMF 4
stands at GBP3.9 mil. As of latest IPD, a principal deficiency
balance has been recorded in BMF 5 (GBP5.18 mil), 6 (GBP16.05
mil) and 7 (GBP4.83 mil) on the most junior class of Notes, not
rated by Moody's. The principal deficiency balance for those
three transactions increased substantially over the past nine

Rating Methodologies:

The methodologies used in these ratings were Moody's Approach to
Real Estate Analysis for CMBS in EMEA: Portfolio Analysis (MoRE
Portfolio) published in April 2006, and Moody's Approach to
Rating Structured Finance Interest-Only Securities published in
February 2012.

Other Factors used in these ratings are described in European
CMBS: 2013 Central Scenarios published in February 2013.

The updated assessment is a result of Moody's on-going
surveillance of commercial mortgage backed securities (CMBS)
transactions. The last Performance Overview for those transaction
were published in June 2013.

In rating this transaction, Moody's used both MoRE Portfolio and
ABSROM to model the cash-flows and determine the loss for each
tranche. MoRE Portfolio evaluates a loss distribution by
simulating the defaults and recoveries of the underlying
portfolio of loans using a Monte Carlo simulation. This portfolio
loss distribution, in conjunction with the loss timing calculated
in MoRE Portfolio is then used in ABSROM, where for each loss
scenario on the assets, the corresponding loss for each class of
notes is calculated taking into account the structural features
of the notes. As such, Moody's analysis encompasses the
assessment of stressed scenarios.

Moody's ratings are determined by a committee process that
considers both quantitative and qualitative factors. Therefore,
the rating outcome may differ from the model output.

CAVERN WALKS: Owners Go Into Administration
Liverpool Daily Post reports that the owner of Liverpool's Cavern
Walks shopping centre is to appoint administrators and suspend
trading in its securities.

London-based Warner Estate Holdings warned almost two weeks ago
that it could face insolvency as it battles with debts as a
consequence of the 2008 financial crash, according to Liverpool
Daily Post.

The group operates a wholly-owned fund comprising 42 commercial
sites as well as units in the Ashtenne Industrial Fund.

The report notes that it said last night, Aviva Investors, in its
capacity as operator of the Ashtenne fund, told the company that
it would pay Warner Estate's asset management fee quarterly, in
arrears, rather than monthly.

The report discloses that Warner Estate said it has been reliant
on the support of its lenders and other stakeholders because the
amount of cash held by the company has been low and the headroom

Warner Estate, the report notes, said the withdrawal of Aviva's
support "has significant implications for the group's cash flow
headroom, particularly given that this asset management agreement
accounts for over 90% of the group's current revenue".

Therefore, Warner Estate directors have agreed to appoint
administrators from CCW Recovery Solutions, which it believes
will be in the best interest of creditors, the report says.

Following the appointment of administrators, the Ashtenne fund is
expected to terminate its asset management agreement with Warner
Estate and enter into a contract with Hansteen Holdings, the
report notes.

Administrators are expected to sell Warner's asset management
business to Hansteen and Warner will sell its 5.3% stake in
Ashtenne to Hansteen, Warner Estate relays.

All 95 Warner staff should be able to transfer to Hansteen, the
group said today.

"We have worked closely and consensually with our lenders and all
our key stakeholders over the last number of years since the 2008
financial crisis to realise sufficient value for them whilst
preserving the independent viability of the core asset management
business. . . . It is, therefore, with considerable regret that
the appointment of administrators means that any potential value
for our long standing and supportive shareholders has been
finally extinguished," the report quoted Chairman Philip Warner
as saying.

CO-OPERATIVE BANK: Posts GBP709MM Pre-Tax Loss in 1st Half 2013
Harry Wilson at The Telegraph reports that the Co-operative Group
has reported a loss for the first six month of the year of GBP559
million as a result of new writedowns in its struggling banking

According to the Telegraph, Co-op Bank made a pre-tax loss of
GBP709 million in the first half of the year as it was forced to
take a GBP496 million impairment charge against new writedowns on
its toxic assets.

The mutual society is currently attempting to raise GBP1.5
billion to recapitalize its lending business and said the losses
were already factored into its fundraising plans, The Telegraph

The bank said the writedowns came largely as a result of
reassessing the bank's assets, as well as the transfer of more
loans from the "core" part of its business to the "non-core"
division, The Telegraph relates.

Euan Sutherland, chief executive of the Co-op, apologized for the
problems at the bank, but insisted there was "no plan B" for the
business, The Telegraph relates.

According to The Telegraph, the Co-op will publish the details of
the recapitalization plan for the bank at the end of October,
which will see the mutual pump GBP1 billion into the unit, with
bondholders being asked to take a cut in the value of their
holdings to provide the remaining GBP500 million.

Co-op Bank also admitted for the first time that it faced a
financial liability over the mis-sale of interest rate hedging
products to small business, taking a GBP10 million charge for the
first half, The Telegraph discloses.  The bank took a further
GBP25 million provision against the mis-sale of PPI and a GBP26
million charge against the mis-sale of card and identify-theft
products, The Telegraph recounts.

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

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

                           *     *     *

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


* Fitch Says Neg. Outlooks Highest for Developed European Banks
Fitch Ratings' review of global bank rating trends in Q213 shows
that roughly one quarter of ratings assigned to developed market
(DM) banks are on Negative Outlook/Rating Watch Negative (RWN).
The comparative emerging markets (EM) figure is 12%. Rating
prospects for banks operating in European DM and EM are still the
weakest, with 30% on Negative Outlook/RWN. For Europe's DM banks
alone, the picture is bleaker still, with 41% of ratings on
Negative Outlook/RWN.

Global ratings stability is improving, albeit slowly. Of all
Issuer Default Ratings (IDR) assigned by Fitch to banks, 78% have
a Stable Outlook. Quarter-on-quarter, this trend is improving
(73% in Q312).

Positive actions outweighed negatives in Q213. There were only 22
rating actions on IDRs in Q213 (Q113: 34). Of these, positive
actions (55%) outweighed negatives, a trend rarely observed in
recent years. Even greater improvement was shown in Viability
Ratings (VR). Of a total 35 actions taken on VRs in Q213 (Q113:
37), 66% were positive (Q113: 49%). However, these figures
include nine very lowly rated banks (Spain and Greece) whose VRs
were upgraded from 'f' following the injection of new capital.

The impact of sovereigns on bank ratings was negligible in Q213.
Only 11 IDR actions were directly linked to sovereign actions,
all of which were positive. The sovereign upgrade of Mexico
resulted in a Country Ceiling upgrade, which eased parental
support-driven rating constraints on two banks, while in the
Philippines one systemically important bank was upgraded
following the sovereign upgrade. A revision of the Outlook to
Stable from Negative on India's sovereign ratings triggered
similar action on eight banks.

IDRs continue to cluster at the 'BBB' level, with around 33% of
global bank ratings in this category, split roughly equally
between DM and EM. Globally, two-thirds of banks are assigned
investment-grade ratings, but only 7% are rated between 'AAA' and
'AA-'. Globally, support is more prominent in EM. Support-driven
ratings make up 40% of all ratings assigned by Fitch to banks.
The proportion of support-driven ratings is higher in EM (47%)
and less prominent in DM (32%).

* Moody's Says Rising Yields Weigh Down Global Recovery
Rises in benchmark bond yields in the advanced economies and
weaker currencies and capital outflows among the emerging markets
have weighed on the global economy as it continues its slow
recovery, says Moody's Investors Service in a new report entitled
"Update to Global Macro Outlook 2013-2014: Rising yields dampen
recovery". As a result, Moody's forecasts for global growth are
slightly weaker than they were three months ago.

Moody's Global Macro Outlooks underpin the rating agency's
universe of ratings, providing a consistent benchmark for
analysts and investors. The new report reviews key recent
developments, provides an update on Moody's baseline forecasts
for 2013-2014, and discusses the key risks around the rating
agency's forecasts.

Moody's continues to expect only a modest recovery in the G-20
advanced economies, with real GDP growth of around 1.3% this
year, followed by 2.0% in 2014, broadly unchanged from the May
report. In the G-20 emerging economies, Moody's forecasts for
growth are somewhat weaker than they were three months ago.
Overall, Moody's now expects GDP growth in the major emerging
markets of around 5.25% in 2013, before rising toward 5.5% during

However, the balance of risks to the global economy outlook still
remains skewed to the downside, stemming from: (1) an even
deeper-than-currently-expected recession in the euro area
accompanied by deeper credit contraction, potentially triggered
by a further intensification of the sovereign debt crisis; (2)
slower-than-expected growth in major emerging markets; and (3) a
disorderly exit from monetary stimulus measures.

"The recent focus on the future direction of US monetary policy,
and associated spillovers to other economies, has demonstrated
that monetary conditions could easily tighten long before
official policy rates increase," says Colin Ellis, Moody's Senior
Vice President for Macro Financial Analysis. "Central bankers
therefore face a challenge in striking the right balance between
nurturing recovery and normalizing policy, with concurrent rises
in long-term yields likely to impede growth."

* BOOK REVIEW: Land Use Policy in the United States

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

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

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

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

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

A chapter is devoted to the arguments between the family farm ad
the "sentiment against concentration of wealth in the hands of a
few." The discussion of the Land Grant college system and its
contribution to international development closes with a quote
from Chester Bowles: "Can we, now the richest people on earth,
become creative participants in the unprecedented revolutionary
changes of our era, changes that the most privileged people will
oppose tooth and nail, but which for the bulk of mankind offer
the hopeful prospect of a little more food, a little more
opportunity, a doctor for their sick child, and sense of personal


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

                 * * * End of Transmission * * *