TCREUR_Public/130920.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, September 20, 2013, Vol. 14, No. 187



PEUGEOT SA: Fitch Affirms 'B+' Long-Term Issuer Default Rating
RENAULT SA: Fitch Affirms 'BB+' Long-Term Issuer Default Rating


PRAKTIKER AG: Globus Submits Non-Binding Bid for Max Bahr Unit
SR TECHNICS: Moody's Assigns 'B2' Corp. Family Rating


ANGLO IRISH: Two Vulture Funds Object to Bankruptcy Application
CARLYLE GLOBAL 2013-2: Fitch Rates EUR7.8MM Cl. E Notes 'B-(EXP)'


BANCA CARIGE: Weak Performance Cues Moody's to Cut Rating to 'B2'
BANCA POPOLARE: Moody's Downgrades Deposit Ratings to 'B1'
FIAT SPA: Fitch Affirms 'BB-' Long-Term Issuer Default Ratings
* ITALY: Fitch Says Small Bank Rescues Threat to Mid-Sized Banks


CENTRAL-ASIAN ELECTRIC: Fitch Rates Unsecured Bond 'B+(EXP)'


GLOBAL SENIOR: Fitch Affirms, Withdraws 'BB' Fund Notes Rating


* PORTUGAL: S&P Puts 'BB' Rating on CreditWatch Negative


RUSSNEFT OJSC: S&P Maintains 'B+' CCR on CreditWatch Negative
* SMOLENSK REGION: Fitch Affirms 'B+' Long-Term Currency Ratings
* Tariff Freeze Adds to Uncertainty for Russian Utilities


NCG BANCO: Fitch Affirms 'BB+' Long-Term Issuer Default Rating
PESCANOVA SA: Wants Creditors to Accept 75% Debt Haircut
PESCANOVA SA: Roig Won't Invest; 28 Funds Express Interest


SR TECHNICS: S&P Assigns Preliminary 'B+' CCR; Outlook Stable

U N I T E D   K I N G D O M

AVIA HEALTH: Close to Finalizing Company Voluntary Arrangement
BN TOPCO: S&P Assigns Preliminary 'B-' CCR; Outlook Stable
BROOKLANDS SCHOOL: Closes After Going Into Administration
HERON TOWER: Facing Receivership After Owners' Row
TRANSEUROPA: New Ferry Operator Sought After Administration

* EUROPE: Barnier's Bank Plan Faces German-Led Opposition


* BOOK REVIEW: Bankruptcy Crimes



PEUGEOT SA: Fitch Affirms 'B+' Long-Term Issuer Default Rating
Fitch Ratings has affirmed Peugeot SA's (PSA) Long-term Issuer
Default Rating (IDR) at 'B+' and senior unsecured rating at 'BB-'
with a Recovery Rating (RR) of 'RR3'. The Outlook on the Long-
term IDR is Negative.

The rating reflects the group's weakened position and poor credit
metrics, driven notably by continuous cash burn as expected by
Fitch in 2013 and 2014, in particular at the core automotive
division. The Negative Outlook reflects the on-going challenges
faced by the group to increase sales and revenue and curb
operating losses and cash absorption in a continuously adverse
market environment. PSA still derives a majority of its sales
from Europe, in the mass-market segment where competition and
price pressure are the fiercest, and we believe that a profitable
sales increase outside Europe will be a long and difficult

However, H113 results confirmed that the group was on track with
its restructuring and that the situation has not deteriorated
further since 2012. This gives us comfort that the worse may be
behind for PSA and pressure on the rating has eased. Nonetheless,
longer-term uncertainty and execution risk remain high regarding
the group's ability to implement its overall business plan and
its product strategy to produce results.

Key Rating Drivers

Uncertain Timing of Recovery

The ratings reflect our cautious expectations regarding PSA's
ability to return to positive automotive profitability and
operating free cash flow (FCF) by end-2014. We believe that the
adverse environment, the potential for sustained weak economic
conditions and thus poor new car sales, notably in France and
Germany, as well as notable execution risks in implementing the
group's strategy could delay PSA's targets until 2015.

Adverse Environment

In Europe, we currently expect sales to decline for the sixth
consecutive year by a further 4% in 2013, and pricing pressure to
remain intense, especially in PSA's main segments. While we
expect the contribution of non-European markets to steadily
increase in the foreseeable future, both to the top line and
profitability, competition will intensify in these markets as all
manufacturers target them to mitigate losses in other parts of
the world.

Product Positioning

PSA recently updated its product strategy to clarify the
positioning of its two brands, Peugeot and Citroen. We believe
this strategy makes sense overall but carries substantial
execution risk and could take many years to bear fruit. In
particular, we are concerned that the existence of both entry-
level/basic models and aspiring higher-end products within the
two brands will not be easily understood and accepted by
customers. In addition, several other manufacturers are following
the same path and competition will remain persistent.

Negative Profitability and FCF

The automotive division posted a material negative 3.9% operating
margin in 2012 although positive results from Faurecia and Banque
PSA Finance (BPF) nearly offset these losses and led to a
negative 1% group operating margin in 2012. However, H113 results
were stronger and we expect an improvement of automotive and
group margins to negative 3% and negative 0.3%, respectively, in
2013. Negative FCF from industrial operations was a significant
EUR3.1 billion before EUR2.4 billion in asset sales and
exceptional dividends from BPF and Gefco and a EUR1.1 billion
capital increase.

Weak Metrics

Fitch believes funds from operations (FFO) gross adjusted
leverage will be down to about 6.4x at end-2013, (6.7x at end-
2012, 3.3x at end-2011), net leverage about 3.5x, and cash from
operations/adjusted debt to improve only moderately to less than
15% at end-2013, from 5% at end-2012. These ratios are typically
commensurate with the 'B' rating category.

Progress in Restructuring

The group is well on track with its restructuring actions
including plant closures and workforce reduction, and cash-
preservation measures. Expected synergies from the alliance with
General Motors Company (BB+/Stable) have been confirmed and
include logistic, purchasing and product development.

Solid Liquidity

Immediate liquidity issues are not a concern. PSA reported EUR10
billion in cash at end-June 2013, including EUR8.1 billion at
industrial operations, further bolstered by EUR3.2 billion of
total undrawn credit facilities. Refinancing of BPF, which is
critical to support the group's sales, has been secured by a
French state guarantee for up to EUR7 billion.

Rating Sensitivities

Future developments that may, individually or collectively, lead
to negative rating action include

  - The environment continuing to deteriorate, leading to
    further revenue decline and continuous negative operating
    margins (actual or expected) at the automotive division

  - Further negative FCF in 2015

  - Deteriorating liquidity

Future developments that may, individually or collectively, lead
to positive rating action include

  - The group's automotive operating margins becoming positive
    on a sustained basis

  - FCF remaining positive, leading in particular to FFO
    adjusted gross leverage below 3x

RENAULT SA: Fitch Affirms 'BB+' Long-Term Issuer Default Rating
Fitch Ratings has affirmed Renault SA's (Renault) Long-term
Issuer Default Rating (IDR) and senior unsecured rating at 'BB+'.
The Outlook on the Long-term IDR has been revised to Positive
from Stable.

The Outlook revision reflects the relative resilience of
Renault's profitability and underlying cash generation in a
difficult and adverse environment, notably for volume
manufacturers, and particularly in the group's domestic market.
We believe that Renault could be upgraded to 'BBB-' in the next
12 to 18 months if group operating margins trend towards 3%,
including automotive profitability trending towards 2% combined
with positive free cash flow (FCF), in line with our current base
case. We will also assess the group's ability to generate
consistent funds from operations (FFO) and to demonstrate that
improving leverage is coming from underlying operations rather
than asset sales and positive changes in working capital, which
can be reversed.

Key Rating Drivers

Relative Resilience of Profitability

Renault's operating margin declined further to 1.8% in 2012 from
2.6% in 2011, but automotive operations were about breakeven in
an adverse environment. Fitch expects a gradual strengthening of
group margins towards 3% by 2014/2015 and of automotive margins
towards 1.5%. The cost base benefited from increased synergies
with Nissan, cost-cutting measures and increased production
outside western Europe.

Improved Credit Metrics

Net financial debt has fallen substantially since 2009 as a
result of positive FCF and asset sales, while EBITDA and FFO
rebounded in the same period. Fitch assumes Renault's FFO
adjusted net leverage will remain broadly unchanged at 0.3x at
end-2013, after decreasing from 1x at end-2010 and 4.8x at end-
2009, and cash from operations (CFO) on adjusted debt will
stabilize around 34% at end-2013 in line with end-2012, before
rebounding to about 40% at end-2014.

Weak but Improving Mix

Renault's sales are concentrated in Europe, with a bias to weaker
Southern markets such as Spain, Italy and France, where the
eurozone debt crisis has had the most impact on new car sales.
This remains the case, despite ongoing and successful
diversification. Renault also derives the majority of its revenue
from the less profitable small- and medium-sized car segments,
where competition is fiercest and price pressure is strongest.

Entry-Level Models Success

The success of the growing Dacia brand is pivotal in compensating
for the sales declines of the core Renault models, and also
favours geographical diversification. In addition, profitability
of the entry range is higher than the automotive average and
therefore bolsters group operating profit.

Relationship With Associates

Nissan Motor Co., Ltd's (BBB/Stable) latest performance plan
calls for increased FCF generation and a higher dividend payment
to Renault, its 43.4%-shareholder. However, the group intends to
redistribute all of the dividends received from its associates,
therefore limiting the benefit for Renault's creditors. Renault
should also benefit from a gradual recovery of JSC AvtoVAZ (B-
/Stable), but Fitch believes that this will only happen in the
medium term.

Rating Sensitivities

Future developments that may, individually or collectively, lead
to negative rating action include

  - Negative operating margins, coming notably from falling
    global sales

  - Deterioration of key financial metrics, including net
    adjusted leverage remaining above 1.5x and CFO/adjusted debt
    below 25%

Future developments that may, individually or collectively, lead
to positive rating action include

  - Sustainable improvement in financial metrics, including net
    adjusted leverage below 0.5x and CFO on total adjusted debt
    above 40%

  - Sustainable increase in market shares, combined with improved
    profitability, in particular, group operating margin trending
    towards 3% and auto operating margins trending towards 2%
    combined with positive FCF


PRAKTIKER AG: Globus Submits Non-Binding Bid for Max Bahr Unit
According to Bloomberg News' Dalia Fahmy, Frankfurter Allgemeine
Zeitung, citing an interview with Globus CEO Thomas Bruch,
reported that Globus submitted a non-binding bid for Praktiker
AG's Max Bahr unit.

A consortium led by Hellweg is also bidding for Max Bahr,
Bloomberg discloses.

As reported by the Troubled Company Reporter-Europe on August 1,
2013, Reuters related that the insolvency administrators of
Praktiker on July 30 said they have stepped up the search for an
investor by appointing Macquarie as advisor.  The administrators
hope that by finding an investor they can secure as many jobs and
stores as possible at the group, which has around 20,000 full and
part-time employees, Reuters disclosed.  They said they did not
expect any results from the search before the start of September,
but that all the 300 stores affected by the insolvency would
continue trading for now, Reuters related.  Of the 300 stores in
the insolvency process, 168 are Praktiker stores, 78 are Max Bahr
stores and a further 54 are Praktiker-branded shops that have
recently been converted to the Max Bahr signage, Reuters noted.

Praktiker AG is a German home-improvement retailer

SR TECHNICS: Moody's Assigns 'B2' Corp. Family Rating
Moody's Investors Service has assigned a first-time corporate
family rating of B2 and probability of default rating of B3-PD to
SR Technics Holdco 1 GmbH, the parent of SR Technics' group.
Concurrently, Moody's has assigned a provisional (P)B2 rating to
$370 million 6-year term loan and (P)Ba2 rating to CHF50 million
5-year revolving credit facility (RCF) proposed under the credit
agreement between the lenders and SR Technics. The outlook on all
ratings is stable.

The proceeds from the credit facilities will be used to refinance
the existing loan facilities and will include approximately CHF22
million cash overfunding.

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

Ratings Rationale:

The CFR of B2 reflects SR Technics' (i) exposure to cyclical
airline industry; (ii) limited track record of stable financial
performance; (iii) pricing pressure in the industry due to
competition and continued sluggish macroeconomic conditions; (iv)
uncertainty of future growth regarding fleet volume expansion and
achievability of cost savings; (v) leveraged capital structure
with gross leverage (as adjusted by Moody's) at c. 5.0x and
limited cash flow generation proforma for new debt structure.

Positively, the ratings are supported by SR Technics' (i) market
position as the leading independent integrated maintenance,
repairs and overhaul (MRO) provider; (ii) presence on key
platforms with some of the fast-growing main clients; (iii)
significant contracted repeat business with major clients
supported by the leasing arrangement with Sanad; (iv)
historically supportive major shareholder.

The airline MRO industry in which SR Technics operates is
considered fragmented and competitive, with players including
semi-captive MRO units of airlines, independent providers such as
SR Technics and the OEMs, who compete on delivery capability,
quality and depth of service as well as pricing. Additionally,
growth in SR Technic's addressable MRO market relies, among other
things, on continued outsourcing of currently in-house MRO
businesses of airlines and partnerships with OEMs.

Barriers to entry are considered to be higher in SR Technics'
Engine Services and Components divisions due to more specialized
nature of the businesses with fewer market players. Leasing
partnership with Sanad also provides a competitive advantage to
SR Technics.

SR Technics is considered to be well positioned to benefit from
the anticipated fleet growth given its presence on the most
widespread and growing platforms (such A320 and B737) and engine
types (CFM56 and PW4000), with favorable repair cycles.
Furthermore, SR Technic's positioning for growth is supported by
relatively high share of secured revenue and long-term
relationship with its customers, including fast-growing clients.
However, the projected growth is subject to a number of risks,
such as the volatility inherent in the airline industry,
continued weakness in Europe leading to further pricing pressure
and the ability to capture new business and platforms. Similarly,
further cost savings are subject to execution risk of cost
reduction initiatives.

The company's historical financial performance, despite marked
improvement in 2012, lacks proven record of stability following
the turnaround of the business during 2010-2011. Free cash flow
(as defined by Moody's) was negative in 2012 and is expected to
remain limited. With total gross leverage (as defined by Moody's)
expected to be at approximately 5.0x at the end of 2013, the
company's financial profile is considered to be significantly
leveraged. Further deleveraging is dependent on EBITDA growth
rather than debt amortization.

Moody's acknowledges the benefits that the company has
experienced through the ownership by Mubadala Development Company
PJSC ("Mubadala") (Aa3, stable), leading to c. CHF925 million
shareholder loans in the current structure. Moody's understands
it's a condition precedent to the proposed transaction that the
shareholder loans from Mubadala to SR Techncis group will be
converted into equity.

Liquidity is considered to be adequate, supported by c. CHF120
million cash on balance sheet expected at the transaction
closing, CHF50 million RCF and two covenants expected to be set
at c. 30% headroom.

Moody's also understands that the company will continue to enter
into adequate hedging arrangements aiming to minimize foreign
exchange risk, which may be substantial, given the company's
structural exposure to $ revenue.

The proposed capital structure includes $370 million Term Loan
and CHF50 million RCF, ranking senior to the loan via the terms
of the intercreditor agreement. The (P)B2 rating on the loan
reflects the limited amount of super-senior debt in the capital
structure whereas the (P)Ba2 rating on the RCF is supported by
the presence of the junior debt. Both the term loan and RCF will
benefit from opco guarantees.

The stable rating outlook is based on Moody's expectation that
the company will deliver further growth and cost savings
following the recent turnaround of the business.

What Could Change The Rating Up/Down

Positive pressure on the ratings could arise if Moody's adjusted
gross Debt/EBITDA ratio is sustained at around 4.0x and a free
cash flow/net debt ratio reaches around 5%. Negative pressure
could arise due to difficulties in implementing the envisaged
growth strategy leading to the Debt/EBITDA ratio remaining above
5.0x over the next twelve months and/or free cash flow turning

The principal methodology used in this rating was the Global
Aerospace and Defense published in June 2010. Other methodologies
used include Loss Given Default for Speculative-Grade Non-
Financial Companies in the U.S., Canada and EMEA published in
June 2009.

Founded in the 1930s, SR Technics was spun off from Swissair in
2002 and is currently 100% owned by Mubadala Development Company
PJSC (Aa3, stable), a wholly owned investment vehicle of the
Government of Abu Dhabi (Aa2, stable). SR Technics is a leading
independent integrated MRO provider offering a wide range of
services worldwide. The revenue diversification benefits from c.
22% of 2012 revenue coming from Asia / Far East, c. 13% from
Middle East / Africa and c. 5% from Americas, although c. 60% of
revenue is reliant on Europe.


ANGLO IRISH: Two Vulture Funds Object to Bankruptcy Application
Mark Paul at The Irish Times reports that two so-called vulture
funds in the United States, which hold US$75 million of
subordinated bonds issued by the former Anglo Irish Bank, are
threatening to scupper an attempt by the bank's liquidators to
protect US$1 billion of its US assets from seizure by its

Kieran Wallace and Eamonn Richardson of KPMG, the special
liquidators to Irish Bank Resolution Corporation (IBRC, formerly
Anglo), have applied to a US bankruptcy court for Chapter 15
protection for its US$1 billion of US assets, The Irish Times
relates.  This would prevent bondholders and other creditors from
seizing its US assets until the bank's wind-down in Ireland has
been completed, The Irish Times says.

The Burlington funds have objected to the application on the
basis that the liquidation "strips away" most of the protection
normally afforded to creditors in an insolvency, The Irish Times
discloses.  IBRC is being liquidated outside the normal
insolvency regime, under a law passed by the Dail in an all-night
session, The Irish Times notes.

The case is due for hearing today, Sept. 20, The Irish Times
states.  The vulture funds, who it is understood bought the US$75
million of Anglo debt from Fir Tree Capital within the past year,
have asked for the hearing to be delayed for two weeks, The Irish
Times relates.  Fir Tree lost a separate case over the loan notes
against IBRC 18 months ago, The Irish Times recounts.

In court documents, the Burlington funds said they wanted the
court to allow discovery of material relating to the role of
Minister for Finance Michael Noonan in IBRC's liquidation, and
access to documents that would cover the transfer of IBRC's
assets to the National Asset Management Agency, The Irish Times

The funds, as cited by The Irish Times, said "potential conflicts
of interest" may be "hanging over" the IBRC liquidation.
According to The Irish Times, they said the law to liquidate IBRC
gave unfair advantage to the Government over the rights of other

"[The funds] will show the Irish Government took deliberate and
inappropriate actions.  The process is being run by the Irish
Government, for the sole benefit of the Irish State," The Irish
Times quotes the funds as saying.

A consortium led by developer John Flynn also filed an objection
to the Chapter 15 proceedings this week, arguing that the
proceedings are designed to "frustrate" an action by them against
IBRC, The Irish Times recounts.

                        About Anglo Irish

Anglo Irish Bank was an Irish bank headquartered in Dublin from
1964 to 2011.  It went into wind-down mode after nationalization
in 2009.  In July 2011, Anglo Irish merged with the Irish
Nationwide Building Society, with the new company being named the
Irish Bank Resolution Corporation (IBRC).

Standard & Poor's Ratings Services said that it lowered its long-
and short-term counterparty credit ratings on Irish Bank
Resolution Corp. Ltd. (IBRC) to 'D/D' from 'B-/C'.   S&P also
lowered the senior unsecured ratings to 'D' from 'B-'.  S&P then
withdrew the counterparty credit ratings, the senior unsecured
ratings, and the preferred stock ratings on IBRC.  At the same
time, S&P affirmed its 'BBB+' issue rating on three government-
guaranteed debt issues.

The rating actions follow the Feb. 6, 2013, announcement that the
Irish government has liquidated IBRC.

The former Irish bank sought protection from creditors under
Chapter 15 of the U.S. Bankruptcy Code on Aug. 26, 2013 (Bankr.
D. Del., Case No. 13-12159).  The former bank's Foreign
Representatives are Kieran Wallace and Eamonn Richardson.  Its
U.S. bankruptcy counsel are Mark D. Collins, Esq., and Jason M.
Madron, Esq., at RICHARDS, LAYTON & FINGER, P.A., in Wilmington,

CARLYLE GLOBAL 2013-2: Fitch Rates EUR7.8MM Cl. E Notes 'B-(EXP)'
Fitch Ratings has assigned Carlyle Global Market Strategies Euro
CLO 2013-2 Ltd's notes expected ratings, as follows:

EUR179.0m Class A-1: 'AAA(EXP)sf'; Outlook Stable
EUR31.5m Class A-2A: 'AA(EXP)sf'; Outlook Stable
EUR19.9m Class A-2B: 'AA(EXP)sf'; Outlook Stable
EUR19.4m Class B: 'A(EXP)sf'; Outlook Stable
EUR18.8m Class C: 'BBB(EXP)sf'; Outlook Stable
EUR19.9m Class D: 'BB(EXP)sf'; Outlook Stable
EUR7.8m Class E: 'B-(EXP)sf'; Outlook Stable
EUR39.6m Subordinated notes: not rated

Transaction Summary

Carlyle Global Market Strategies Euro CLO 2013-2 (the issuer) is
an arbitrage cash flow CLO. Net proceeds from the issuance of the
notes will be used to purchase a EUR325 million portfolio of
European leveraged loans and bonds. The portfolio is managed by
CELF Advisors LLP (part of The Carlyle Group LP). The
reinvestment period is scheduled to end in 2017.

Key Rating Drivers

Portfolio Credit Quality

Fitch expects the average credit quality of obligors to be in the
'B'/'B-' range. Fitch has credit opinions on 78 of the 80
obligors in the indicative portfolio.

Above-Average Recoveries

At least 90% of the portfolio will comprise senior secured
obligations. Recovery prospects for these assets are typically
more favorable than for second-lien, unsecured, and mezzanine
assets. Fitch has assigned Recovery Ratings to 77 of the 80
assets in the indicative portfolio.

Limited Reset Risk

The transaction uses an interest smoothing account and a
liquidity facility (LF) to mitigate reset risk. The notes will
initially pay interest quarterly, then switch to semi-annual
payments once the LF matures. The LF expires at the latest upon
the repayment of the class A-1 notes. Fitch only relied on the
interest smoothing mechanism in its analysis as the transaction
lacks a minimum Fitch rating requirement for the LF provider. The
eligibility criteria prevent the purchase of assets paying
interest less frequently than semi-anually.

Partial Interest Rate Hedge

Up to 12.5% of the portfolio may be invested in fixed rate assets
while fixed rate liabilities account for 5.9% of total
liabilities. This provides a partial hedge against excess spread
compression in a rising interest rate environment. However, the
efficacy of the hedge is sensitive to the timing of defaults and
the share of fixed rate assets in the portfolio over the life of
the transaction.

Limited FX Risk

Asset swaps are used to mitigate any currency risk on non-euro-
denominated assets. The transaction is allowed to invest up to
10% of the portfolio in non-euro-denominated assets, provided
that suitable asset swaps can be entered into.

Amendments to Documents

The transaction documents may be amended subject to rating agency
confirmation or note holder approval. Where rating agency
confirmation relates to risk factors, Fitch will analyze the
proposed change and may provide a comment if the change would not
have a negative impact on the then current ratings. Such
amendments may delay the repayment of the notes as long as
Fitch's analysis confirms the expected repayment of principal at
the legal final maturity.

If in the agency's opinion the amendment is risk-neutral from the
perspective of the rating Fitch may decline to comment.
Noteholders should be aware that the structure considers the
confirmation to be given in the case where Fitch declines to

Rating Sensitivities

A 25% increase in the expected obligor default probability would
lead to a downgrade of zero to two notches for the rated notes.

A 25% reduction in the expected recovery rates would lead to a
downgrade of one to four notches for the rated notes.


BANCA CARIGE: Weak Performance Cues Moody's to Cut Rating to 'B2'
Moody's Investors Service has downgraded Banca Carige's long-term
issuer and deposit rating to B2 from Ba2, and lowered the bank's
standalone baseline credit assessment (BCA) to b3 from ba3. All
ratings remain on review for further downgrade.

Rationale For The Downgrade

Moody's says that the lowering of the standalone BCA by three
notches was triggered by a combination of four key risks factors:
(1) Banca Carige's severe asset quality erosion reported for the
quarter ended June 2013; (2) Moody's significantly weaker
profitability outlook for the bank for 2013 and 2014 (both of
these factors have deteriorated beyond Moody's earlier
expectations at the time of the last rating action in July); (3)
the possible impact of forthcoming changes in the bank's board of
directors, including the Chairman, which will likely coincide
with changes to the bank's governance practices that could, in
turn, have an impact on the bank's capital; and (4) Moody's view
of the heightened execution risk for the bank's capital raising.

Problem loans as percentage of gross loans increased to 11.2% in
June 2013, up from 8.5% at December 2012. The rating agency notes
that these figures significantly exceed the average of 6.4%
reported between 2008 and 2011. These weaker figures place Banca
Carige more in line with the Italian banking system average. Over
the past three to four years, the bank's reported figures were
better than the Italian average, a key driver of the bank's
higher ratings in the past.

Following two inspections by the Bank of Italy, Banca Carige
reported loan loss charges of EUR241 million in 1H 2013 (1H 2012:
EUR74 million), which led to a EUR31 million net loss. This loss
follows another asset quality-driven loss recorded in 2012 of
EUR63 million (EUR324 million loss if one-off tax gains are

Furthermore, Moody's notes that Banca Carige's loan loss coverage
is still significantly below the system average; in June 2013,
the bank's loan loss reserves accounted for 46% of problem loans,
which compares with a 55% system average as at December 2012. In
the agency's opinion, these lower loan loss coverage levels may
indicate the need for additional provisioning in the future.

Moody's believes that Banca Carige's internal capital generation
capacity will remain significantly weakened over the short- to
medium term given (1) the additional loan loss charges reported
in June; and (2) the increased likelihood that provisions will
remain high in 2H 2013 and also in 2014.

Additionally, Moody's notes that the bank will be appointing a
new board of directors at the end of September, including a new
Chairman, which will coincide with a change in the bank's
governance practices. The Bank of Italy inspections revealed some
deficiencies in Banca Carige's classification of problem loans,
which in the past led to a lower-than-average cost of credit.
Going forward, Moody's believes that the new management's review
of the bank's asset valuation and reserving policies, and
introduction of improved standards upon recommendation from the
regulator, may have an impact on the bank's asset quality,
coverage, profitability, and ultimately capital. Therefore Banca
Carige's planned EUR800 million capital strengthening may not be
sufficient to reach a level of capital commensurable with a
standalone BCA of b3. At the end of October, the bank is due to
present a new business plan, in which any such decision might be

Moody's notes elevated execution risk associated with the bank's
planned rights issue. This capital increase needs to be
implemented by end-Q1 2014. Banca Carige aims to implement the
first phase of its capitalization program through the sale of
non-core assets, with funds for the second phase being raised via
a capital increase. However, the sale of non-core assets has not
yet fully materialized, thus increasing the risk that most of the
EUR800 million capital increase will be raised by tapping the
equity markets. Moody's also notes that the criteria and
parameters of the impending Asset Quality Review to be undertaken
by the ECB have not yet been specified. This uncertainty
constitutes a further obstacle to attracting potential investors
to the share offering against the background of any clarity that
the ECB review may yield regarding Banca Carige's solvency
levels. The bank's weaker-than-expected performance in 1H 2013,
together with the governance changes, should also increase the
challenge to raise the necessary capital.

Moody's says its systemic (government) support assumptions for
Banca Carige remain moderate, reflecting the bank's size and
importance in the Italian banking system. The probability of
support results in an unchanged one-notch uplift from the bank's
standalone BCA of b3 to the long-term issuer and deposit rating
of B2.

Rationale For The Review

Moody's says that the continued review for downgrade will focus
primarily on Banca Carige's ability to successfully execute its
capital increase. The review will also assess the bank's ability
to manage the managerial transition and the impact this may have
on governance, underwriting and reserve coverage policies.

What Could Move The Ratings Up/Down

As evidenced by the review for downgrade, upward pressure on
Banca Carige's ratings is limited.

Any deviation from the planned capital strengthening, or further
deterioration in Banca Carige's asset quality, would exert
downward pressures on all of the bank's long-term and standalone

Banca Carige's ratings could be confirmed following (1)
successful implementation of the planned capital strengthening;
(2) a complete fulfillment of the Bank of Italy's requests raised
following the two inspections; (3) evidence of stabilization of
asset quality; and (4) a return to satisfactory recurring

(note 1) Unless noted otherwise, data in this report are sourced
         from company's reports or Moody's Financial Metrics.

(note 2) Problem loans include: non-performing loans
         ('sofferenze'), watchlist ('incagli'), restructured
         ('ristrutturati') and past due loans ('scaduti').
         adjusts these numbers and only incorporates 30% of
         watchlist category as an estimate of those over 90 days

(note 3) Source: Bank of Italy's 2012 annual report, published in
         May 2013.

The principal methodology used in these ratings was Global Banks
published in May 2013.

BANCA POPOLARE: Moody's Downgrades Deposit Ratings to 'B1'
Moody's Investors Service has downgraded Banca Popolare di Milano
(BPM)'s long-term debt and deposit ratings to B1 from Ba3
prompted by the concurrent lowering of the bank's standalone
baseline credit assessment (BCA) to b2 from b1.

The outlook is negative, in line with the majority of Italian
banks, reflecting the bank-specific issues surrounding corporate
governance, as well as the ongoing pressure from the operating

This rating action concludes the review for downgrade which has
been initiated on May 16, 2013.

Rationale For Downgrade

Moody's says that the lowering of the standalone BCA by one notch
was triggered primarily by the ongoing delay in reforming the
corporate governance structure of the bank, a point that the Bank
of Italy (BoI) has stressed several times in its inspections of
the bank. Moody's believes that this prolonged postponement of
necessary reforms may impact the ability of the bank's senior
management to focus on, and in turn successfully complete, the
turnaround of the bank. The b2 rating level also factors in the
bank's continuing deterioration in asset quality as well as the
challenges it faces in successfully executing the capital raising
at a time when an increasing number of Italian banks is forced to
shore up their capital base by tapping the equity markets.

The agency notes that BPM will update its business plan by end
October 2013. This plan must include proposed changes in the
corporate governance of the bank. In line with statement's from
the bank's senior management, the plan is likely to propose
measures to modify BPM's governance structure, by reducing the
substantial influence of its employees/shareholders and
increasing the power of institutional investors.

Following the results of the BoI inspection concluded in May
2013, Moody's expects a partial removal, in the coming months, of
the Risk Weighted Assets (RWA) add-ons, which were imposed by the
BoI in April 2011, following the outcome of a regulatory
inspection, which unveiled significant deficiencies in risk
management. According to BPM, the regulator will remove the add-
on if it is satisfied with (1) the corporate governance changes
taking place at the bank; and (2) the actions to resolve the
critical issues related to three organizational aspects: (a)
exposure to the real-estate sector; (b) real-estate guarantees
for mortgage loans; and (c) operational risks. Considering the
positive results already obtained in the turnaround of the bank,
the rating agency anticipates this process may be relatively
short. Progress in this respect is a factor limiting the
downgrade taken to one notch.

Furthermore, Moody's positively notes that in June BPM's
extraordinary shareholders meeting approved a EUR500 million
rights issue. This is planned to take place after the
presentation of the new business plan and the new corporate
governance measures, thus providing more clarity to potential

In H1 2013, BPM booked an adjusted (note 1) pre-tax income of
EUR236 million (H1 2012: EUR151 million). Even though it declined
year-on-year, net interest income (NII) showed an improvement in
Q2 2013, because of a 7% quarter-on-quarter increase (excluding
some extraordinary items), as a result of more cost-effective
funding and a stable contribution from carry trades. Commission
income increased by 14.4% year-on-year, owing to higher fees from
asset-management product placements, while an increase in trading
and other revenues (+57.7% year-on-year) was primarily driven by
trading income from the bank's securities portfolio, which rose
by around EUR73 million in H1 2013.

Following the appointment of a new CEO in January 2012, the new
management team started to implement a heavy cost-cutting
program, with the double objective of improving the bank's
efficiency and streamlining the organization. Some improvements
are already visible, with a material headcount reduction since
end-H1 2012, and the liquidation or merging of various
subsidiaries. These improvements mirrored the decline in
operating expenses, as the most recent (normalized) levels
decreased by 7.1% in 2012 (net of any recurring income items such
as EUR213 million from staff restructuring). The trend was
further confirmed by H1 2013 results, which pointed to an
additional 4.7% year-on-year reduction in operating expenses.
Despite the large loan-loss provisions already made in Q4 2012,
these remained high in H1 2013 (39.5% of pre-provision income)
and increased compared with H1 2012 (+27.5%).

The banks' ratings reflect the increase in BPM's ratio of problem
loans (note 2) to gross loans to 10% at end-H1 2013 (end-2012:
8.6%). At end-H1 2013, loan-loss reserves as percentage of
problem loans stood at 49.6% (end-2012: 52.8%), below the 55%
end-2012 system average (note 3). Problem loans as percentage of
the sum of shareholder equity and loan-loss reserves stood at 65%
at end-H1 2013, up from 55% of end-2012, mainly driven by the
reduction in capital, following the Tremonti bond repayment.

(note 1) Unless noted otherwise, data in this report are sourced
         from company's reports or Moody's Financial Metrics.

(note 2) Problem loans include: non-performing loans
         watchlist (incagli), restructured (ristrutturati) and
         past due loans (scaduti). Moody's adjusts these numbers
         and only incorporates 30% of watchlist category loans as
         an estimate of those 90+ days overdue.

(note 3) Source: Bank of Italy's 2012 annual report, published in
         May 2013.

What Could Move The Rating -- Down/Up

A further downgrade of BPM's ratings could result from (1)
inability to present and implement effective measures to improve
the bank's corporate governance; (2) a delay or a stop in the RWA
add-on removal process because of corporate governance issues;
(3) a delay or an inability to raise the full EUR500 million of
fresh equity; and (4) a delay or a stop in the bank's turnaround
process, and lack of sustainable improvements in profitability.

At present, there is no upward pressure on the ratings,
considering the negative outlook. However, the following elements
could have a positive impact on the ratings over the medium term
(1) a material and sustainable improvement in the internal
capital generation; and (2) strengthening of the capital base on
top of the planned EUR500 million equity issuance.

List Of Affected Ratings

- Baseline Credit Assessment: lowered to b2 from b1

- Senior unsecured debt and EMTN, and bank deposits: downgraded
   to B1 from Ba3, and to (P)B1 from (P)Ba3

- Subordinate debt and EMTN: downgraded to B3 from B2, and to
   (P)B3 from (P)B2

- Tier III EMTN: downgraded to (P)B3 from (P)B2

- Junior subordinate EMTN: downgraded to (P)Caa1 from (P)B3

- Non-cumulative Preferred stock: downgraded to Caa3(hyb) from

- BPM Capital Trust I (Non-cumulative Preferred stock):
   downgraded to Caa3(hyb) from Caa2(hyb)

All ratings carry a negative outlook.

BPM is headquartered in Milan, Italy, and had consolidated total
assets of EUR50.97 billion as at June 2013.

The principal methodology used in these ratings was Global Banks
published in May 2013.

FIAT SPA: Fitch Affirms 'BB-' Long-Term Issuer Default Ratings
Fitch Ratings has affirmed Fiat Spa's (Fiat) Long-term Issuer
Default Ratings (IDR) and senior unsecured rating at 'BB-' and
the Short-term IDR at 'B'. The Outlook on Fiat's Long-term IDR is
Negative. The agency has also affirmed Fiat Finance & Trade Ltd,
S.A.'s (FFT) senior unsecured rating at 'BB-'.

The ratings and Negative Outlook reflect Fiat's weak financial
profile and key credit metrics for the rating category, on a
standalone basis, as well as poor mass-market product portfolio
of Fiat excluding Chrysler. The ring-fencing of Chrysler's debt
and cash flows limits the benefit of Chrysler's consolidation for
Fiat from a financial standpoint. Nonetheless, the ratings take
into account the positive impact of controlling Chrysler on the
group's overall business profile, including higher product and
geographic diversification and the potential for product
development and manufacturing synergies.

Full access to Chrysler's cash and cash flows will be seen
positively but material uncertainties remain regarding the extent
of investment to increase Fiat's stake in Chrysler, as well as
how these cash outflows will be financed, and therefore the final
net impact on key credit metrics. A Chrysler IPO could possibly
take place in early 2014 and help set a value on the stake Fiat
does not own and for which they are at loggerheads with the other
owner, the VEBA Trust.

The Negative Outlook also reflects the significant execution
risks related to the group's strategy to reposition its brands
more upscale and increase production in Europe aimed at exporting
to international markets. The total capex and R&D necessary to
finance revenue growth will weigh on free cash flow (FCF)
generation in the foreseeable future, in particular if the
environment remains depressed in Europe.

Key Rating Drivers

Poor Cash Generation

Fitch expects further negative FCF in the next two to three
years, even when Chrysler is included. Negative cash flows in
Europe should be mitigated by the solid, albeit declining,
performance in Brazil and from other divisions including from its
luxury brands. However, improving funds from operations (FFO)
will be absorbed by rising investment to make up for the cuts
made in past years.

Weak Credit Metrics

Fiat's standalone gross adjusted EBITDA leverage stabilized
around 6x at end-June 2013, up from 4x at end-2011, while cash
from operations/adjusted debt fell to just 15%, which are ratios
typically more commensurate with the 'B' rating category. This is
mitigated by better metrics on a net basis, in light of Fiat's
healthy liquidity.

Revised Strategic Plan

Fiat's revised strategy to reposition its brands more upscale and
make Italy a production hub for export makes sense according to
Fitch but will take time and carries significant execution risk,
particularly in the current extremely difficult competitive
environment where other companies are following the same route,
and given the group's poor track record in its previous attempts
to do so. This strategy entails an acceleration of capex and R&D
in the next few years and the success of the current
manufacturing reorganization in Italy.

Chrysler Stake Increase

The current ring-fencing of Chrysler's debt and cash flows limits
the benefit of Chrysler's improvements to Fiat. Fiat can only
receive up to US$500 million + 50% of cumulative net income from
January 1, 2012 under its financing documentation. However, it
remains committed to reach full ownership of Chrysler by 2014 and
then fully access its cash. Fiat has exercised three 3.3% options
to increase its stake from 58.5% but the deal relies on a court
judgment regarding pricing. Overall, the timing, cost and
financing of future stake increases remain uncertain, as well as
the timing to refinance Chrysler's debt and thus remove the ring-
fencing. An IPO of Chrysler is an alternative route and is likely
to occur in early 2014.

Sound Liquidity

Fiat ex-Chrysler reported EUR8.7 billion in cash and equivalents
at end-June 2013 and EUR2 billion of undrawn credit lines. This
largely covers EUR6.1 billion of debt maturing in H213-2014, as
well as the negative FCF projected by Fitch in H213. However,
future stake increases in Chrysler may weaken the group's
liquidity if financed from existing cash. Chrysler has EUR0.6
billion of debt maturing in H213-2014, largely covered by EUR9.1
billion in cash and marketable securities and EUR1 billion of
undrawn credit lines.

Rating Sensitivities

Future developments that may, individually or collectively, lead
to a negative rating action include:

  - Sustained fall in revenue and operating margins
  - Mounting liquidity issues, including refinancing concerns
  - Consolidated FFO gross adjusted leverage above 3x on a
    sustained basis
  - Fiat standalone (ex-Chrysler)'s gross adjusted leverage above
    5x on a sustained basis
  - Evidence of tangible support to Chrysler

Future developments that may, individually or collectively, lead
to a positive rating action include:

  - Sustained positive FCF
  - Higher margins at Fiat auto mass market, EMEA and group level
  - Full access to Chrysler's cash, without weakening the group's
    capital structure in parallel

* ITALY: Fitch Says Small Bank Rescues Threat to Mid-Sized Banks
The ratings of Italian mid-sized banks that participate in
rescuing the rising number of small cooperative and savings banks
under special administration could come under pressure, Fitch
Ratings says.

The acquisition of small troubled banks is likely to damage
already challenged asset quality and erode capital. Most Italian
mid-sized banks are already reorganizing and restructuring, so
the acquisition of weak banks that require significant management
time to cut costs and re-establish viability would further
threaten their already fragile earnings.

"We expect mid-sized banks to have more appetite to be involved
in rescuing troubled small lenders than larger banks. The latter
have either recently stated their reluctance to rescue troubled
domestic lenders or are not in a position to do so. In general,
large Italian banks do not want to engage in acquisitions that
generate goodwill and dilute capital. The two largest --
Unicredit and Intesa Sanpaolo -- could also face antitrust issues
if they were to increase their domestic presence further in some
regions, and therefore are more likely to be interested in
foreign acquisitions," Fitch says.

"We believe there is renewed interest in small bank rescues ahead
of the European Central Bank taking up its role as direct
supervisor, which we expect to be by end-2014. It will be more
difficult for the Bank of Italy to orchestrate rescue
acquisitions for banks that fall under the single supervisory
mechanism once it is in place. In the past, small banks in
difficulty were often acquired by larger ones under the
coordination of the Italian regulator, avoiding expensive state

"But the weak operating environment means no such rescue
acquisition has taken place since mid-2011. The domestic
operating environment remains extremely difficult, despite some
indications that Italy might be exiting recession. Gross doubtful
loans for the system peaked at a high EUR140 billion at end-July
2013, over 7% of total gross loans.

"We do not believe that small banks facing serious difficulties
and placed in special administration are a material threat to the
Italian banking system, as they represent a small percentage
(below 2%) of total sector assets. Some small banks in
difficulties have in some instances managed to raise fresh
capital, mainly from retail investors. Others are rumored to be
looking to raise quite significant capital resources from groups
of entrepreneurs with business in the banks' home regions."

Special administration is a pre-resolution crisis-management
procedure. The Bank of Italy can recommend that a bank in crisis
be placed under special administration, under the Italian Banking
Act. Administrative bodies are dissolved and commissioners are
appointed to take over the management of the bank. The aim is to
assess the bank's financial situation and suggest solutions in
the interest of depositors while the bank continues to operate
and remains viable. This can last up to 12 months, with
extensions possible. But if the commissioners conclude that a
solution is not possible, the bank would be placed in compulsory


CENTRAL-ASIAN ELECTRIC: Fitch Rates Unsecured Bond 'B+(EXP)'
Fitch Ratings has assigned Kazakhstan-based integrated energy
company JSC Central-Asian Electric Power Corporation's (CAEPCo)
proposed local currency KZT10 billion 10-year unsecured bond an
expected rating of 'B+(EXP)'. This is one notch below CAEPCo's
Long-Term foreign and local currency Issuer Default Ratings
(IDRs) of 'BB-'. Fitch also assigned the bond a local currency
unsecured National Rating of 'BBB-(EXP)(kaz)'.

The bond's proceeds will be used to fund working capital and
CAEPCo's significant investment program aimed at modernizing its
ageing generation capacity as well as upgrading the distribution
network at its operating subsidiaries.

Key Drivers for the proposed Unsecured Bond Rating
Unguaranteed, Unsecured, Structurally Subordinated.
The proposed notes are issued by CAEPCo and do not benefit from
upstream guarantees from the operating subsidiaries. The bonds
will also have no security over operating assets and have no
cross defaults to other facilities. As mentioned at the time of
the initial rating if unsecured debt is issued at the CAEPCo
(holding) level without guarantees from the operating companies
and if secured debt exceeds 2x EBITDA, we consider such holdco
debt as structurally subordinated.

Currently all drawn debt facilities (both secured and unsecured)
are at the operating company level and represent 2.3x FY2012
Fitch adjusted EBITDA. In addition over 60% of committed debt
(pro forma for the proposed bond) is currently secured,
representing over four times Fitch adjusted FY2012 EBITDA. This
includes the recent European Bank for Reconstruction and
Development (AAA/Stable) secured facility of KZT21bn which was
undrawn at June 2013.

Recoveries on the proposed notes are therefore likely to be below
average leading to a notes rating at 'B+', a one notch
differential from CAEPCO's IDRs of 'BB-'. The current proposed
KZT10 billion issuance is part of a KZT15 billion note program.

Key Rating Drivers For CAEPCo

Large Capex Program

CAEPCo's substantial capex program over the next five years will
likely result in negative free cash flow over the same period,
and require a significant degree of debt funding given likely
continued dividend payments. This will likely result in a
sustained increase in funds from operations (FFO) adjusted
leverage to around 3x from 2.2x at FY12. The capex program is
aimed at modernizing over 50% of CAEPCo's ageing 1960s and 1970s
generation capacity by 2015, as well as upgrading its
distribution network. Capacity expansion will be moderate at
around 15% in total to 2015 but additional benefits will be
reduced losses and increased fuel efficiency.

Increasing Tariffs

Revenue and EBITDA growth are reliant on increasing generation
tariffs. Escalating tariff caps have been set in each of CAEPCo's
operating regions up until 2015, based on inflation and CAEPCo's
planned capex program. Actual tariffs achieved can be slightly
higher or lower than these caps, but importantly, the tariff
trend is still strongly upwards each year. Tariffs together with
supportive electricity supply/demand dynamics in Kazakhstan, and
CAEPCo's relatively low cost base should underpin forecast
increased revenue and EBITDA. Post-2015 the tariff regime is
uncertain, particularly for existing capacities. However, we
assume that fuel and other cost inflation will continue to be
reflected in energy prices, possibly with some support for new
capacities through capacity payments.

Some Volume Risk

The level of revenue and EBITDA growth is assisted by the
increasing volume of commercial electricity sales (generated and
purchased) which we forecast to grow in excess of 4% CAGR to 2015
for CAEPCo, in line with the expected country-wide electricity
demand growth. However, volume risk and cyclicality, particularly
with directly connected industrial customers, remains an issue
for CAEPCo. We note that there is some customer concentration but
Fitch views counterparty risk as manageable. Although we forecast
CAEPCo will remain short on generation, the potential to export
or sell on the wholesale market, currently at above the tariff
cap, remains an option should the company's net position reverse.

Benefit of Cheap Fuel

Kazakh coal prices are over 80% below international market rates.
The low price reflects the low calorific content and high ash
content of coal used domestically as well as low transport costs.
Additionally, to protect energy affordability, the coal price
charged to utilities is regulated annually and reflected in power
tariff caps. An unexpected and significant increase in the price
of coal above Fitch's current inflationary estimates of 7%-10%
per annum would have a negative impact on EBITDA, although this
is considered unlikely and should be reflected in higher tariffs.

Generation Dominates Despite Integration

CAEPCo's vertical integration gives it access to markets for its
energy output and limits customer concentration. The cash flow
smoothing effect is fairly limited as the non-generation
businesses of distribution and supply represented less than 10%
and 5% of Fitch adjusted EBITDA in 2012, respectively. The heat
distribution business is loss-making due to high heat loss and
regulated end user tariffs, which Fitch assumes are kept low for
social reasons (heat generation is reported within overall
generation and cash flow accretive), a situation that we assume
will persist but with gradual improvement.

No Parent Uplift or Constraint

Unlike most Fitch-rated utilities in CIS, CAEPCo is privately
owned and therefore not impacted by sovereign linkage. The
company is run as a standalone enterprise with two foreign
institutional shareholders and as such we do not assume any
impact on the ratings based on the credit profile of the
controlling parent, Central-Asian Power-Energy Company JSC
(CAPEC). The ratings therefore reflect CAEPCo's standalone credit

Potential Acquisitions

CAEPCo is likely to continue consolidating the Kazakh electricity
market. Fitch has included in its forecast the potential for some
near-term acquisitions, which could be margin enhancing and
moderately de-leveraging. Non-completion or completion with
higher debt and capital expenditure requirement than our
forecasts could push CAEPCo towards guidance for negative rating

Dividends to Delay Debt Reduction

CAEPCo's financial policy is to pay dividends and this could
delay de-leveraging in the long term. However, we believe that
should tariffs and volumes underperform CAEPCo retains the
flexibility to lower dividends to preserve cash.

Debt Structure and Liquidity

Fitch views CAEPCo's short term liquidity as adequate supported
by KZT8 billion of cash at H113 and over KZT20 billion of
available facilities, including the facilities recently arranged
with EBRD (AAA/Stable). At H113, three-quarters of debt had
maturities greater than four years, with short term maturities
representing KZT7.3 billion. Fitch expects negative free cash
flow for 2013 given capital expenditure commitments.

The on-going capital expenditure program will likely require
significant additional debt funding during the next five years,
given potential continued dividend payments. Of this, total loans
in the amount of KZT21 billion have been entered into with EBRD
in May 2013. CAEPCo has proven access to domestic and some
international lenders, as well as domestic bond market.

Rating Sensitivities

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

  - Stronger financial profile than forecast by Fitch due to,
    among other things, higher than expected growth in electric
    and heat tariffs and/or generation electricity supporting FFO
    adjusted leverage below 2x and FFO interest coverage above 7x
    on a sustained basis would be positive for the ratings.

  - Increase of certainty regarding post 2015 regulatory
    framework could also be supportive of the ratings.

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

  - A substantially above inflation increase in coal price and/or
    tariffs materially lower than our forecasts, leading to FFO
    adjusted leverage forecast to be persistently higher than 3x
    and FFO interest coverage below 4.5x would be negative for
    the ratings.

  - Committing to capex without sufficient available funding,
    worsening overall liquidity position may also be rating


GLOBAL SENIOR: Fitch Affirms, Withdraws 'BB' Fund Notes Rating
Fitch Ratings has affirmed and withdrawn Global Senior Loan Index
Fund I B.V. as follows:

  Class A1 (ISIN XS0327321435): PIF
  Class A2 (ISIN XS0327323217): PIF
  Fund Notes (ISIN XS0327323647): affirmed at 'BBsf'; withdrawn

Key Rating Drivers

On July 11, 2013, the requisite percentage of fund noteholders
voted in favor of an optional redemption in accordance with
Condition 7(b)(i) (redemption at the option of the Fund
Noteholders). The optional redemption occurred on the 18 July
2013 payment date.

The redemption proceeds were EUR571,291,167.32 and the class A1
and A2 notes have been paid in full. The proceeds were
insufficient to fully redeem the Fund Notes, leaving a shortfall
of EUR3,209,713.26.

The Fund Notes represented the equity in the structure and did
not benefit from loss protection in the form of subordination or
overcollateralization, with excess spread as the main credit
support. The Fund Notes had a fixed coupon of 25bps. Any
distributions in excess of the rated coupon were used to redeem
the note principal, which was reduced to EUR106,245,209.26 from
EUR156,500,000.00 as a result of excess spread.

The manager informed Fitch that while some noteholders abstained
from the vote, none of the holders of the Fund Notes actually
voted against the redemption proposal. In addition, Fitch
understands that none of the noteholders incurred an economic
loss on their original note investment as a result of the
optional redemption being exercised.

In assessing the rating impact of the optional redemption, Fitch
applied the principles of its distressed debt exchange criteria
for structured finance. Under this criteria, for a default to be
considered as having occurred as a result of the vote for
redemption, a number of conditions would apply, including:

  -- The relevant noteholder suffers a material reduction in
     economic terms

  -- The redemption averts a probable future payment default on
     the underlying notes

  -- The decision to redeem is effectively involuntary as a
     result of expectations of future default and loss

Fitch considers that the transaction's performance up to the call
date was in line with expectations and a payment default on the
Fund Notes was not expected up to the level of a 'BBsf' rating.
As a result, none of the conditions for the redemption to be
viewed as a default were fulfilled. Consequently, the rating was
affirmed at 'BB' and withdrawn.

Global Senior Loan Index Fund I B.V. is a managed cash arbitrage
securitization of secured leveraged loans, primarily domiciled in

In accordance with Fitch's policies the issuer appealed and
provided additional information to Fitch that resulted in a
rating action that is different than the original rating
committee outcome.


* PORTUGAL: S&P Puts 'BB' Rating on CreditWatch Negative
Standard & Poor's Ratings Services placed its 'BB' long-term
foreign and local currency sovereign credit ratings on Portugal
on CreditWatch with negative implications.  At the same time, S&P
affirmed its short-term sovereign credit ratings on Portugal at


The CreditWatch placement reflects S&P's view that there are
rising risks to Portugal's ambitious fiscal consolidation
objectives and an increased likelihood of noncompliance with the
current EU/IMF program.  Risks include further challenges to
fiscal and reform measures by Portugal's Constitutional Court,
weaker-than-expected economic performance, and a resurgence of
political tension leading to delays in 2014 budget or program

Constitutional Court challenges have created additional
uncertainties for a significant part of the government's fiscal
consolidation plans during the past year.  Most recently, on
Aug. 29, 2013, the Court rejected a key government reform: the
termination of permanent contracts for public-sector workers who
signed their contract before 2008.  This ruling followed the
Court's April 2013 rejection of fiscal measures amounting to 0.8%
of GDP, a significant proportion of the measures proposed.

In S&P's opinion, these Court decisions raise doubts as to
whether Portugal will be able to comply with the ambitious debt
stabilization target set out in its current IMF/EU program.  S&P
also perceives the July 2013 ministerial resignations as
symptomatic of weakening political backing for further fiscal and
structural reforms.  Taken together, S&P believes that these
developments make it less likely that Portugal will successfully
reduce its large and relatively less productive (compared to
higher rated eurozone peers) public sector.  S&P therefore
expects that corrections to fiscal deficits and the government's
debt burden could be slower and more complicated than it
previously anticipated.

"We understand that the upcoming combined eighth and ninth IMF/EU
program review of the Portugal support package will focus on the
EUR4.7 billion (3% of 2013 GDP) spending measures that were
agreed in the seventh review of the program. Based on recent
Constitutional Court rulings, we consider that some of these
measures may be overturned by the Portuguese courts--for example
a planned increase in working hours for public-sector workers--
thereby requiring additional program negotiations.  These could
test coalition cohesion once more, and potentially result in
delays in finalizing the 2014 budget and upcoming program
reviews," S&P said.

"Accordingly, we see an increasing risk that Portugal will not
regain full capital market access early next year and that the
Portuguese government will require a second official support
program after the current program expires in June 2014.
Portugal's creditworthiness appears to us, therefore, to
increasingly depend on the support and flexibility of its
official creditors.  At this stage, we are uncertain as to
whether a second program would consist of contingency lending
lines or additional loans from the ESM.  Nor is it clear whether
additional official financing would fully cover principal
payments on general government commercial debt, which we estimate
to be about 23% of GDP between 2014-2016," S&P added.

Nevertheless, S&P notes that Portugal's economy is showing
preliminary signs of stabilizing.  In particular, exports are
stronger than S&P expected, and unemployment (albeit high at
16.5%) is stabilizing.  Although the economy is continuing to
contract this year on an annual basis, and some seasonal factors
are at play, confidence indicators are consistent with a gradual

During the three months to June, GDP expanded on a quarterly
basis for the first time since third-quarter 2009.  Better-than-
expected export performance points to a more rapid external
adjustment, including current account surpluses beginning in 2013
and a gradual reduction of the Portuguese banking sector's
reliance on external funding.  Nevertheless, S&P continues to
believe that the rebalancing Portugal requires to lower its net
external liability position -- which S&P estimates will peak at
117% of GDP this year
-- may indicate several more years of stagnating domestic demand.
This poses challenges for fiscal sustainability, employment
opportunities, and overall social and political cohesion.

One of the challenges we see for economic growth comes from the
fiscal side.  In particular, the government replaced expenditure
measures, which could be less disruptive to economic growth, with
revenue measures (such as tax increases) following the
Constitutional Court's decisions on public sector wage cuts.
Additionally, the recent Constitutional Court decision to uphold
job security for public sector workers with permanent contracts
signed before 2008 creates, in S&P's view, a significant
distortion in the public sector labor force.

Portuguese banks are deleveraging (with loans to residents
contracting by 6.2% year-on-year in June), while Banco do
Portugal reported a broad definition of nonperforming loans
("credit at risk") at just under 10% of loan books at Dec. 31,
2012.  Household deposits are increasing slightly, while other
nonbank private sector deposits continue to shrink in the first
six months of 2013.  As banks continue to delever, S&P expects
depository corporation claims on the resident nongovernment
sector to shrink further in 2013 and 2014 to about 140% by 2016
from its 175% of GDP peak of 2009.  Apart from Banif, which
received a capital injection of about 0.7% of GDP earlier in
2013, the European regulator has approved the restructuring plans
of all other banks.


The CreditWatch negative reflects S&P's view that there are
significant risks that Portugal will not be able to comply with
its IMF/EU program because of its uncertain fiscal consolidation
path.  There is a one-in-two chance that S&P could lower the
ratings in the next few months if fiscal performance falls short,
if reform plans falter, if official support waivers, or if
increased political tensions lead to delays in 2014 budget or
program reviews.

S&P could consider lowering the ratings if the government is
unable to agree with official lenders on fiscal measures for the
upcoming program reviews, or if the agreed fiscal and structural
measures again encounter judiciary or political opposition that
cannot be addressed without negative implications for the economy
and structural reform agenda.  Additionally, if economic
conditions deteriorate meaningfully beyond S&P's current
expectation and recovery remains elusive, challenges to fiscal
consolidation could arise and the debt burden increase further
beyond 2014.  If this happened, S&P could consider a downgrade.

Moreover, given the importance of official support for Portugal's
creditworthiness, a change in official creditors' appraisal of
Portugal's debt sustainability could significantly increase the
possibility of some form of commercial debt restructuring.  S&P
believes this risk could increase if the government's political
and institutional challenges, along with bail-out fatigue in some
of the core eurozone members, become more prominent.  In this
case, S&P could lower the ratings by more than one notch.

The ratings could stabilize at the current level if the
government maintains key program commitments in a timely and
predictable manner, such that official support continues and the
economy stabilizes.  In this scenario, a program exit consistent
with debt market access at reasonable rates could become
increasingly likely.

In accordance with S&P's relevant policies and procedures, the
Rating Committee was composed of analysts that are qualified to
vote in the committee, with sufficient experience to convey the
appropriate level of knowledge and understanding of the
methodology applicable.  At the onset of the committee, the chair
confirmed that the information provided to the Rating Committee
by the primary analyst had been distributed in a timely manner
and was sufficient for Committee members to make an informed

After the primary analyst gave opening remarks and explained the
recommendation, the Committee discussed key rating factors and
critical issues in accordance with the relevant criteria.
Qualitative and quantitative risk factors were considered and
discussed, looking at track-record and forecasts.  The chair
ensured every voting member was given the opportunity to
articulate his/her opinion.  The chair or designee reviewed the
draft report to ensure consistency with the Committee decision.
The views and the decision of the rating committee are summarized
in the above rationale and outlook.


Ratings Affirmed; CreditWatch/Outlook Action
                                        To                 From
Portugal (Republic of)
Sovereign Credit Rating                BB/Watch Neg/B
Senior Unsecured                       BB/Watch Neg       BB
Transfer & Convertibility Assessment   AAA
Short-Term Debt                        B
Commercial Paper                       B

BANIF Banco Internacional do Funchal S.A.
Senior Unsecured*                      BB/Watch Neg       BB

Comboios de Portugal E.P.E
Senior Unsecured*                      BB/Watch Neg       BB

Metropolitano de Lisboa E.P.
Senior Unsecured*                      BB/Watch Neg       BB

Caixa Geral de Depositos S.A.
Senior Unsecured*                      BB/Watch Neg       BB

Banco Espirito Santo S.A.
Senior Unsecured*                      BB/Watch Neg       BB

* Guaranteed by the Republic of Portugal.


RUSSNEFT OJSC: S&P Maintains 'B+' CCR on CreditWatch Negative
Standard & Poor's Ratings Services has maintained its 'B+' long-
term corporate credit rating and 'ruA+' Russia national scale
rating on Russian oil exploration and production company Oil And
Gas Company Russneft OJSC on CreditWatch with negative
implications.  S&P had placed the ratings on CreditWatch negative
on June 21, 2013.

The CreditWatch follows the acquisition in July 2013 of a 49%
stake in Russneft from Russian holding company Sistema for
US$1.2 billion by investors close to Russneft's founder and CEO,
Mikhail Gutseriev, who already owns 49% of the company.  The
CreditWatch reflects the potential risks we see for Russneft's
business, debt, financial policy, and liquidity, after this

The financing of this acquisition is unclear at this stage.  In
S&P's opinion, the deal could increase Russneft's adjusted debt,
impair its liquidity, or push up dividends.

S&P also understands that Sistema has a call option expiring in
late September 2013 to purchase Russneft's Urals-based oil
production assets for an undisclosed price. Russneft generates
about 30% of its production volumes and almost half of its EBITDA
with these assets.  Although the sale proceeds could help reduce
Russneft's debt, the loss of control over these key assets could
adversely affect S&P's assessment of Russneft's business risk
profile, owing to the company's likely lower profitability, size,
and diversity.

In addition, S&P continues to see uncertainties around Russneft's
financial policy now that Mr. Gutseriev has become the
controlling shareholder.  The company's past financial policy
aimed at deleveraging was a consensus between the key
stakeholders, including Mr. Gutseriev, Sistema, global
diversified mining group Glencore Xstrata PLC, and Russia's
Sberbank.  In particular, S&P will seek clarification on the
company's leverage target, dividend requirements, and any risks
of related party transactions.

The ratings on Russneft are constrained by its high adjusted debt
of US$5.15 billion at year-end 2012, translating into a ratio of
adjusted debt to EBITDA of 3.1x. Russneft's funding base is
narrow.  The company relies on Glencore and Russian state-owned
banks for financing. Russneft's asset quality is only fair, in
S&P's view, with higher-than-peers' costs and mature fields.
Like other Russian oil companies, Russneft faces a heavy tax
burden. Most of the company's total costs are outside its control
and set by the government via taxes and regulated transportation

On the positive side, Russneft's operations are fairly
diversified across Russian regions and benefit from the natural
hedge via taxes and foreign exchange rates, like other Russian
companies.  S&P believes that Russneft should continue generating
profits and positive free operating cash flow, based on its
forecast for Brent prices at US$95/barrel (bbl) for the rest of
2013, US$90/bbl in 2014, and US$80/bbl thereafter.

S&P plans to resolve the CreditWatch when it has clarification on
Russneft's future financial policy, liquidity, and any impact
from the recent shareholder change on the company's adjusted
debt.  S&P will also take into consideration Russneft's potential
sale of its Urals assets, including the exercise price, and the
resulting effect on the company's future EBITDA, debt, and
capital expenditure needs.

At this stage, S&P believes any potential downgrade of Russneft
would be limited to one notch, unless it lowers its assessment of
liquidity to "weak."

* SMOLENSK REGION: Fitch Affirms 'B+' Long-Term Currency Ratings
Fitch Ratings has revised Smolensk Region's Outlook to Negative
from Stable and affirmed its Long-term foreign and local currency
ratings at 'B+', National Long-term Rating at 'A-(rus)' and
Short-term foreign currency rating at 'B'.

Key Rating Drivers
The Outlook revision reflects the following rating drivers and
their relative weights:


  - The region's rapidly rising debt, which is expected to
increase by 25% in 2013 to about RUB18 billion. Smolensk's direct
risk will reach 62% of current revenue by year-end, and Fitch
expects the region's direct risk to reach 70% of current revenue
by end-2015. The region's deficit narrowed to 5.3% of total
revenue in 2012 from a high 16.3% and 15.2% in 2010 and 2011,
respectively. However, Fitch expects the region's deficit will
widen to 17% of total revenue in 2013 driven by capex postponed
from the previous year.

  - The weak debt coverage ratio (direct risk/current balance)
makes the region dependent on access to the market for
refinancing maturing debt and capex finance in the medium term.
Smolensk still faces some refinancing pressure, despite some
positive signs of debt structure shifting toward long-term
liabilities in 2013. Thus the region has contracted a RUB3
billion loan from the federal budget with a three-year maturity
and intends to issue RUB3 billion five-year domestic bonds by
end-2013. This should extend the direct risk maturity profile
till 2018.

  - Fitch expects the region's operating performance to remain
weak in 2013-2015, with negative operating balance. Historically,
the region has suffered from weak budgetary performance with a
negative operating balance since 2007. This demonstrates the
regional administration's inability to balance its operating
revenue and expenditure. The operating balance marginally
improved in 2011-2012, but was still negative, averaging 0.75% of
operating revenue (negative 4.9% in 2010).


  - Smolensk's economy is historically weaker than the average
Russian region. Its per capita gross regional product was about
15% lower than the Russia's median region in 2011. The
administration forecasts a stagnation of the local economy in
2013, which will lead to the tax base remaining weak and, hence,
dependence on financial transfers from the federation.

  - The region has weak tax capacity and federal transfers
constitute a notable proportion of total revenue (about 38% in
2012). It receives transfers for operating and investment
spending and they are to a large extent earmarked for specific
purposes. During 2010-2012 current transfers accounted on average
for 29% of current revenue, while capital transfers covers 60% of
capex. However, federal transfers add some stability during
recessions, making the region less vulnerable to negative
external shocks.

The ratings also reflect the following rating driver
  - The region's contingent liabilities, from issued guarantees
and public sector debt, accounted for a moderate 4% of operating
revenue in 2011. Indirect risk is well monitored by the region
and, in Fitch's view, does not expose the region to any material

Rating Sensitivities

Further growth of the region's total indebtedness above 70% of
total revenue accompanied by persistence negative operating
balance would lead to a downgrade.

Key Assumptions

  - Russia has an evolving institutional framework with the
    of intergovernmental relations between federal, regional and
    local governments still under development. However, Fitch
    expects Smolensk will continue to receive steady flow of
    transfers from the federation.

  - Russia's economy will continue to demonstrate modest economic
    growth. Fitch does not expect dramatic external macroeconomic

  - The federal government's budgetary performance will remain
    sound and will serve as a supporting factor for Smolensk

  - Smolensk will continue to have access to the domestic
    financial markets sufficient for refinancing maturing debt.

  - Increasing pressure on operating expenditure and capital
    spending will drive an increase in direct risk and debt and
    lead to weak debt coverage ratios.

* Tariff Freeze Adds to Uncertainty for Russian Utilities
Russia's plan to freeze tariffs for natural monopolies (including
network utilities) in 2014 is an example of the sector's
unpredictable regulatory framework, which Fitch Ratings sees as
the key constraint on utilities' ratings. "If the changes are
implemented across the utilities sector, we estimate that some
generating companies, such as Mosenergo, could benefit moderately
thanks to zero growth in gas prices. Networks such as MOESK,
however, would suffer, while the impact on Gazprom would be
limited," Fitch says.

Russian utilities have average operational and solid financial
profiles compared with international peers. But regulatory risk
is high, due to the unpredictable nature of the framework, which
makes it harder for companies to make long-term investment plans.
The plan to freeze tariffs in 2014 would increase the uncertainty
over operations and, as a result, their cash flow risk.

"Gas-fired power generators like Mosenergo could benefit from the
potential tariff changes if the wholesale electricity price
allows them to boost margins on the frozen fuel cost input, which
we had previously expected to grow much faster than inflation.
Networks like MOESK would probably face squeezed margins and a
subsequent rise in leverage, other things being equal. The impact
on integrated utilities (Atomenergoprom, Inter RAO UES, RusHydro)
would be varied, and likely to be negative to neutral." Fitch

"Russian utilities still have substantial headroom for improving
operational efficiencies and cutting costs, which could help
offset any adverse impact from the tariff freeze. We do not,
however, assume significant adjustments of capex programs in our
forecasts -- due to the high average age of the Russian power

"We believe Gazprom is well positioned to cope with the proposal
following a 19% average annual increase in regulated domestic gas
prices between 2007-2011. According to media reports, Gazprom
estimates that the impact would be a reduction of RUB510 billion
in revenue and RUB407 billion in capex compared with what it
would have reported in 2014-2016. We also believe that Gazprom
would have to cut its capex to mitigate the impact of lower
revenue. However, its major export-oriented projects such as
South Stream, Eastern Siberia and Far-Eastern LNG would not be

"We also believe that Gazprom would be able to negotiate smaller
increases in the mineral extraction tax, which is set to rise by
17% in 2014.

"Implications for Russian Railways would be negative, but
mitigated by a possible increase in direct subsidies -- depending
on the government's decision regarding the company's budget and
investment plans."


NCG BANCO: Fitch Affirms 'BB+' Long-Term Issuer Default Rating
Fitch Ratings has downgraded the Long-term Issuer Default Rating
(IDR) and Support Rating Floor (SRF) of Spain-based Bankia, S.A.
to 'BBB-' from 'BBB'. Fitch has also affirmed NCG Banco, S.A.'s,
Banco Mare Nostrum, S.A.'s (BMN) and Liberbank, S.A.'s IDRs and
SRFs at 'BB+'. Simultaneously, Fitch has removed these ratings
from Rating Watch Negative (RWN). The Outlooks on the Long-term
IDRs of these four entities is Negative.

Fitch has also taken rating actions on Bankia's parent bank,
Banco Financiero y de Ahorros, S.A. (BFA) and Liberbank's bank
subsidiary, Banco de Castilla-La Mancha (Banco CLM).

The downgrades of Bankia's IDRs and SRF reflect Fitch's re-
assessment of the bank's systemic importance. Bankia's franchise
has weakened since inception and the bank is still in the midst
of a large-scale mandatory restructuring. While Bankia remains
Spain's fourth-largest banking group, its size, relative to
Spain's three largest banks which have recently expanded their
franchises, has diminished. In Fitch's view, this results in a
potential reduction of the authorities' propensity to support
Bankia, in case of need.

NCG Banco's, BMN's and Liberbank's franchises have been less
impacted by continued restructurings and, in some cases, Fitch
has seen better than anticipated deposit dynamics. For these
reasons, Fitch does not expect a reduction in the authorities'
propensity to provide support to the banks, if required.

These banks' Viability Ratings (VRs) are unaffected by the above
rating actions and they are sensitive to the factors noted in
previous rating action commentaries.

Key Rating Drivers - IDRS, Senior Debt, Support Ratings and SRFS
The Long-term IDRs of all banks discussed in this commentary are
driven by their SRFs, which are higher than their VRs.

Bankia's Support Rating of '2' reflects a still high likelihood
of state support given its size and relative systemic importance,
with a deposit market share of almost 10%. Its franchise
continues to be meaningfully larger (albeit closer to) that of
second-tier Spanish banks. Bankia's SRF is therefore one notch
higher, at 'BBB-', than the SRFs of these second-tier banks.
BFA's SRF is lower than Bankia's, indicating a moderate
probability of support, and reflecting its role as a bank holding
company, rather than a deposit-taking bank.

NCG Banco's, BMN's and Liberbank's SRFs also reflect a moderate
probability of support given their more limited market shares of
between 2% and 3%. The agency acknowledges their relatively high
importance in their core regions.

Other factors supporting Bankia's, BFA's and BMN's SRFs include
the majority direct or indirect state ownership, held through the
FROB. Fitch believes that the FROB will be keen to safeguard the
value of its investment through additional support, if required.
Similarly, Liberbank's SRF benefits from the subscription by the
state of contingent convertible instruments.

NCG Banco is also majority owned by the state. However, the FROB
has to sell its stake in the bank within an agreed timeframe.
Fitch understands that there is a clear intent by the FROB to
auction it off before the end of 2013.

The Negative Outlook on the Long-term IDRs of these entities
mirrors the Rating Outlook on Spain's Long-term IDR

Rating Sensitivities - IDRS, Senior Debt, Support Ratings and

Bankia's, BFA's, NCG Banco's, BMN's and Liberbank's IDRs and
senior debt ratings will be downgraded if their SRFs are revised
lower. Their SRFs will be negatively affected by a downgrade of
Spain's sovereign ratings and/or by a more pronounced weakening
of their franchises, thus limiting the state's propensity to
provide support, if required.

These banks' SRFs are also sensitive to the weakening of legal,
regulatory, political and economic dynamics regarding potential
future sovereign support for senior creditors of banks across
many jurisdictions, as highlighted in the reports "The Evolving
Dynamics of Support for Banks" and "Bank Support: Likely Rating
Paths". If Fitch concludes that state support for Spanish banks
is likely to weaken, this will ultimately lead to negative rating

NCG Banco's SRF is also sensitive to ownership changes. The SRF
could be revised up if the bank is sold to a higher-rated
financial institution. The sale to a weaker shareholder may
negatively affect the bank's ratings. Failure to achieve a sale
is also a risk. NCG Banco's SRF, and therefore its IDRs, could be
revised downwards if the sale is delayed and if, as a result, the
authorities consider alternative options which may suggest a
reducing propensity to support this bank.

In addition to a downgrade of Spain's sovereign rating, BFA's
ratings are sensitive to a restructuring that is negative for
senior creditors, which Fitch does not currently anticipate. Its
ratings may be upgraded in the event that it is merged into

Subordinated Debt and Other Hybrid Securities - Key Rating
The ratings of NCG Banco's subordinated debt issues and preferred
stock have been affirmed at 'C' as these issues have been subject
to burden sharing, in line with the July 2012 Memorandum of
Understanding and Royal Decree Law 24/2012. NCG's burden sharing
was completed in June 2013 when these instruments were converted
into equity. As a result, Fitch has withdrawn these debt ratings.
For the same reasons, the ratings of two preferred stock issues
of BFA have been affirmed at 'C' and withdrawn.

Subsidiary and Affiliated Company - Key Rating Drivers and

Banco CLM is a 75%-owned subsidiary of Liberbank. Fitch regards
Banco CLM as a core subsidiary and, as such, aligns its Long- and
Short-term IDRs with Liberbank's. Banco CLM's IDRs are sensitive
to the same factors that might drive a change in Liberbank's

The rating actions are as follows:

Bankia, S.A.:

  Long-term IDR: downgraded to 'BBB-' from 'BBB'; removed from
  RWN; Outlook Negative

  Short-term IDR: downgraded to 'F3' from 'F2'; removed from RWN
  VR: unaffected at 'b'

  Support Rating: affirmed at '2'; removed from RWN

  SRF: revised to 'BBB-' from 'BBB'; removed from RWN

  Long-term senior unsecured debt: downgraded to 'BBB-' from
  'BBB'; removed from RWN

  Commercial paper: downgraded to 'F3' from 'F2'; removed from

  Market-linked senior unsecured securities: downgraded to 'BBB-
  emr' from 'BBBemr'; removed from RWN

  State-guaranteed debt: affirmed at 'BBB'

Banco Financiero y de Ahorros, S.A. (BFA):

  Long-term IDR: affirmed at 'BB'; removed from RWN; Outlook

  Short-term IDR: affirmed at 'B'

  VR: unaffected at 'b-'

  Support Rating: affirmed at '3'; removed from RWN

  SRF: affirmed at 'BB'; removed from RWN

  Long-term senior unsecured debt: affirmed at 'BB'; removed from

  Preferred stock (KYG0727Q1156; KYG0727Q1073): affirmed at 'C';

  State-guaranteed debt: affirmed at 'BBB'

NCG Banco, S.A.:

  Long-term IDR: affirmed at 'BB+', removed from RWN; Outlook

  Short-term IDR: affirmed at 'B'

  VR: unaffected at 'b+'

  Support Rating: affirmed at '3', removed from RWN

  SRF: affirmed at 'BB+', removed from RWN

  Long-term senior unsecured debt: affirmed at 'BB+', removed

  Commercial paper: affirmed at 'B'

  State-guaranteed debt: affirmed at 'BBB'

  Subordinated lower tier 2 debt (ES0214958045): affirmed at 'C';

  Subordinated upper tier 2 debt (ES0214843148 and ES0214958052):
  affirmed at 'C'; withdrawn

  Preferred stock (ES0112805041, ES0112805025 and XS0237727440):
  affirmed at 'C'; withdrawn


  Long-term IDR: affirmed at 'BB+'; removed from RWN; Outlook

  Short-term IDR: affirmed at 'B'

  VR: unaffected at 'b+'

  Support Rating: affirmed at '3', removed from RWN

  SRF: affirmed at 'BB+'; removed from RWN

  Commercial Paper Long-term rating: affirmed at 'BB+'; removed
  from RWN

  Commercial Paper Short-term rating: affirmed at 'B'

  Senior unsecured debt Long-term rating: affirmed at 'BB+';
  removed from RWN

  Senior unsecured debt Short-term rating: affirmed at 'B'

  State-guaranteed debt: affirmed at 'BBB'


  Long-term IDR: affirmed at 'BB+'; removed from RWN; Outlook

  Short-term IDR: affirmed at 'B'

  VR: unaffected at 'bb-'

  Support Rating: affirmed at '3'; removed from RWN

  SRF: affirmed at 'BB+'; removed from RWN

  State-guaranteed debt: affirmed at 'BBB'

Banco CLM:

  Long-term IDR: affirmed at 'BB+'; removed from RWN; Outlook

  Short-term IDR: affirmed at 'B'

  Support Rating: affirmed at '3'; removed from RWN

  Senior unsecured debt: affirmed at 'BB+'; removed from RWN

PESCANOVA SA: Wants Creditors to Accept 75% Debt Haircut
Pescanova SA will ask its bank creditors to accept losses of
between 70% and 75% on loans they made the company, Carlos Ruano
at Reuters reports, citing a source with knowledge of the matter.

According to Reuters, Pescanova's new chairman Juan Manuel
Urgoiti was due to meet with banks on Wednesday to discuss a plan
to re-float the firm, which an audit by KPMG showed had debt of
EUR3.6 billion (US$4.81 billion), making it one of Spain's
biggest bankruptcies.

Pescanova's creditor banks include Sabadell, Popular, Caixabank
and nationalized lender NovaGalicia, Reuters discloses.  It is
unknown how much of the debt is held by the banks, Reuters notes.

Meanwhile, accounting firm PwC is preparing a viability plan for
the company which is likely to include asset sales and the
exchange of debt for shares, a move that, independent of a
potential haircut on debt, would give banks control of the firm,
Reuters relates.

According to Bloomberg News' Bill Sills, Expansion newspaper
reported that Pescanova's seven biggest creditors told
Mr. Urgoiti they will seek an equity stake in the company.  The
banks are waiting to analyze the financial plan being drawn up by
PwC, Bloomberg says.  According to Bloomberg, the banks are
studying the debt level Pescanova can sustain, possible asset
sales, capital and liquidity needs.  They are expected to appoint
an external adviser as single representative.

According to Bloomberg, a banker, as cited by Expansion, said
"Today the company's value is zero, although the partners don't
want to accept that."

Pescanova is a Galicia-based fishing company.  The company
catches, processes, and packages fish on factory ships.  It is
one of the world's largest fishing groups.

Pescanova filed for insolvency on April 15, 2013, on at least
EUR1.5 billion (US$2 billion) of debt run up to fuel expansion
before economic crisis hit its earnings.  The Pontevedra
mercantile court in northwestern Galicia accepted Pescanova's
insolvency petition on April 25.  The court ordered the board of
directors to step down and proposed Deloitte as the firm's

PESCANOVA SA: Roig Won't Invest; 28 Funds Express Interest
According to Bloomberg's Ben Sills, Economista, citing people at
Pescanova SA and a spokesman at Mercadona Chairman Juan Roig's
investment holding company, reported that Mr. Roig declined an
offer to invest in Pescanova because he's looking to reduce his
portfolio exposure to the food industry.

According to Bloomberg, Pescanova adviser Deloitte said in a
bankruptcy report that 28 funds expressed interest in investing
in the company.

Deloitte discussed investment with Fidelity, Centerbridge and
German food producer Dr Oetker, Bloomberg discloses.

Pescanova is a Galicia-based fishing company.  The company
catches, processes, and packages fish on factory ships.  It is
one of the world's largest fishing groups.

Pescanova filed for insolvency on April 15, 2013, on at least
EUR1.5 billion (US$2 billion) of debt run up to fuel expansion
before economic crisis hit its earnings.  The Pontevedra
mercantile court in northwestern Galicia accepted Pescanova's
insolvency petition on April 25.  The court ordered the board of
directors to step down and proposed Deloitte as the firm's


SR TECHNICS: S&P Assigns Preliminary 'B+' CCR; Outlook Stable
Standard & Poor's Ratings Services said that it assigned its 'B+'
preliminary long-term corporate credit rating to Switzerland-
based aircraft maintenance, repair, and overhaul (MRO) service
provider SR Technics Holdco I Gmbh.  The outlook is stable.

At the same time, S&P assigned its 'BB' preliminary long-term
issue rating to SR Technics' Swiss franc (CHF) 50 million
revolving credit facility (RCF).  The preliminary recovery rating
on the RCF is '1', indicating S&P's expectation of very high
(over 90%) recovery prospects in the event of a payment default.

S&P also assigned its 'B+' preliminary long-term issue rating to
the company's $370 million term loan B.  The preliminary recovery
rating on the term loan B is '3', indicating S&P's expectation of
meaningful (50%-70%) recovery prospects in the event of a payment

The final ratings will depend on receipt and satisfactory review
of the final transaction documentation.  Accordingly, the
preliminary ratings should not be construed as indicative of the
final ratings.  If S&P do not receive the final documentation
within a reasonable time, or if the final documentation departs
from the material so far reviewed, it reserves the right to
withdraw or revise the ratings.

"The preliminary rating on SR Technics reflects our view that the
company has a "weak" business risk profile and an "aggressive"
financial risk profile, as our criteria define those terms.  Our
business risk assessment is constrained by our view of SR
Technics' exposure to the competitive and cyclical commercial
aerospace market, limited end-market diversity, and historically
volatile profitability. Offsetting these factors somewhat are SR
Technics' leading position among independent MRO providers, its
presence in the more stable segments of engine maintenance and
integrated component service, and its strong relationship, high
renewal rate, and long-term service contracts with its customers.
The company provides maintenance and repair services to
airlines--covering engines, aircraft frames, and components for a
wide range of commercial aircraft. It posted revenues of about
CHF1.1 billion in 2012," S&P said.

"In our base-case scenario, we assume that in 2013 and 2014 the
company's EBITDA margin will not change much from 2012, as the
company continues to benefit from the cost reduction measures
undertaken in 2011 and 2012.  We assume that revenue growth will
slow to about 3% in 2013 and then increase to 6% in 2014, in line
with the civil aviation market trend," S&P added.

SR Technics' financial profile is constrained by the company's
relatively high level of debt (although the proposed refinancing
transaction would materially reduce this), and the moderate free
operating cash flow (FOCF) that S&P expects the company will
generate over the next two-to-three years.  S&P notes that the
highly liquid nature of engine and air structure components
allows the company a certain degree of flexibility because it can
offset its capital expenditure to some extent by selling these
assets.  At the same time, SR Technics should be able to spread
out the capital expenditure required to maintain growth through
its leasing arrangements with its sister company Sanad.  Taking
these factors into account, in S&P's base-case scenario it
assumes that SR Technics will generate FOCF of about CHF15
million-CHF45 million in the next 24 months.  This should allow
the company to deleverage to a degree via the mandatory excess
cash flow mechanism.

Following the completion of the refinancing, SR Technics' capital
structure will comprise mainly the term loan B and seasonal
drawings on the RCF, which will be undrawn at closing.  This will
allow the company to maintain significantly stronger credit
metrics than it had in the past owing to its conversion of
shareholder debt-like instruments into equity.  S&P anticipates
that SR Technics will post a debt-to-EBITDA ratio close to 5x and
an FFO-to-debt ratio of about 14% at the end of 2013, which
allows for very limited headroom under the rating.  Under S&P's
base-case scenario, debt to EBITDA will improve to about 4.5x and
FFO to debt to about 20% by the end of 2014.

SR Technics is a leading provider of MRO services for aircraft
and engines for most Airbus, Boeing, and Embraer commercial
aviation jets.  In addition, the company provides component
supplies and repairs, aircraft refurbishment, completions and
modifications. The MRO business competes with other providers,
including the original manufacturers of the engines and aircraft,
numerous large and small independent MRO shops, and airlines.
However, SR Technics is the largest independent integrated
component services provider in the world and the third largest
including providers owned by original equipment manufacturers.
The key factors for MRO services are hours flown and the size of
the aircraft fleet, which are both increasing.  S&P believes that
SR Technics will continue to benefit from airlines' tendency to
outsource maintenance services in an effort to reduce costs.
Specialist providers' range of products and services and better
efficiency also make them appealing to airlines.

The stable outlook reflects S&P's opinion that over the next 12
months SR Technics will be able to maintain adjusted FFO to debt
of at least 10% and debt to EBITDA at no more than 5x.  S&P
considers FFO to debt of 12%-20% and debt to EBITDA of 4x-5x as
the ranges commensurate with a 'B+' rating.  S&P will also
monitor the EBITDA-to-interest cover ratio, which it anticipates
will be about 2x in 2013.  Beyond 2013, because of an increase in
SR Technics' earnings and debt reduction from the mandatory cash
flow sweep, S&P assumes that all three ratios will improve.

S&P could consider lowering the ratings if SR Technics' operating
performance worsened--for example, if it lost market share or
contracts with large, diverse clients.  This would lead to
material earnings deterioration, a decrease in the EBITDA-to-
interest cover ratio to materially below 2x, and to the company
being unable to generate positive reported FOCF.

S&P considers that an upgrade is unlikely in the next 12 months
because the credit metrics are at the lower end of the range
commensurate with the 'B+' rating.  A positive rating action
could be possible if SR Technics were to report EBITDA of about
CHF100 million in 2013 and generate positive FOCF.

U N I T E D   K I N G D O M

AVIA HEALTH: Close to Finalizing Company Voluntary Arrangement
Avia Health Informatics Plc on Sept. 19 disclosed that further to
the announcement made by the Company on July 16, 2013, the
Directors of Avia confirmed that the Company is close to
finalizing the proposed disposal of the Company's operating
business for a nominal sum, a Creditors Voluntary Arrangement and
a proposed placing of new ordinary shares to investors introduced
by Peterhouse Corporate Finance in order to inject new equity
capital into the Company.

The Proposals, which will be subject to shareholder approval,
will, if implemented, result in the Company becoming an investing
company focusing on acquiring and building businesses making use
of emerging technologies and advanced materials and with a new
management team.

It is expected that an announcement will be made and a circular
containing full details of the Proposals, will be posted to
shareholders in the near future.

The Directors consider that Proposals, in the absence of any
other viable funding alternatives, represent the most likely way
at present for Avia shareholders to retain some value and
potential for capital appreciation.

There can be no certainty that the Proposals will be entered into
or complete and, in that situation, unless an alternative source
of capital can be found, the Directors are likely to have no
alternative but to place the Company into creditors' voluntary
liquidation, or receivership, or seek the appointment of an

Avia Health Informatics Plc -- was
incorporated in the UK, which is also its main country of
operation.  Avia, via its trading subsidiary Plain Healthcare
Limited, develops, supports and maintains the Odyssey and
PathFinderRF clinical decision support software solutions and

BN TOPCO: S&P Assigns Preliminary 'B-' CCR; Outlook Stable
Standard & Poor's Ratings Services said it assigned its 'B-'
preliminary long-term corporate credit rating to U.K.-based
private club BN TopCo Ltd. (Soho House).  The outlook is stable.

At the same time, S&P assigned its preliminary 'B-' issue rating
to Soho House's proposed GBP105 million senior secured notes, in
line with the preliminary corporate credit rating on the company.
The preliminary recovery rating on the proposed notes is '4',
indicating S&P's expectation of average (30%-50%) recovery in the
event of a payment default.

The preliminary ratings on Soho House are based on S&P's
assumption that, in the next few months, the company will
refinance its outstanding debt by completing the following steps:

   -- Issuing GBP105 million of senior secured notes, maturing in

   -- Signing a GBP25 million revolving credit facility (RCF),
      maturing in 2018, with at least GBP20 million undrawn at

   -- Repaying its existing debt, which stood at GBP104 million
      on June 30, 2013, on a reported gross basis.

S&P also assumes that shareholder loans will total about
GBP20 million.

The preliminary ratings on Soho House also reflect S&P's view of
the company's "highly leveraged" financial profile and "weak"
business profile.

Soho House's sizable debt and negative free operating cash flow
(FOCF) constrain S&P's assessment of its financial risk profile.
Pro forma for the refinancing, S&P expects the adjusted debt-to-
EBITDA and EBITDA-to-cash interest ratios will reach about 9x and
1.7x, respectively, at year-end 2013.  In S&P's view, reported
FOCF should remain negative over the next two years since the
company is investing heavily.  S&P forecasts that the reported
capital expenditure-to-revenue ratio will reach about 10%.  S&P
calculates adjusted debt of roughly GBP260 million at end-2013,
which consists of GBP105 million of notes, about GBP5 million of
other debts, approximately GBP130 million of operating leases
(applying a discount rate of 8%), and about GBP20 million of
shareholder loans.

"Our assessment of the business risk profile factors in our view
that Soho House is a small player in the leisure sector and that
its growth plans entail some degree of execution risk.  The
company plans to open several new locations in the coming years,
and we see a risk that growth may not meet the company's
expectations if new clubs fail to attract new members.  We note,
however, that the company has a good track record in this regard.
In our view, opening clubs also depresses profitability, since
new properties have a ramp-up period of two-three years.  We
therefore view Soho House's adjusted EBITDA margin as lower than
that of other single site club operators.  Additional risks
include a sensitivity of earnings to raw commodity prices (the
sale of food and beverages accounts for two-thirds of revenues)
and geographic concentration (the London area generates about
one-half of the company's cash flows)," S&P said.

However, the company has maintained positive like-for-like
revenue growth and stable profitability over the past five years,
despite adverse economic conditions.  In S&P's view, this sound
business model hinges on the loyalty of the company's membership
base: In 2009, at the peak of the recession, its attrition rate
was only 4%. Moreover, the long waiting list provides additional
support to the group's credit quality.

S&P forecasts that EBITDA generation will increase markedly over
the next 12 months.  S&P expects a low-double-digit rise in
revenues over the next two years, on the back of new openings and
the ramp-up of existing clubs.  However, S&P anticipates only a
limited improvement in credit ratios since Soho House should draw
its RCF to finance expansion.  In addition, S&P thinks that
operating leases are likely to increase.  As a result, S&P
believes that the adjusted debt-to-EBITDA and EBITDA-to-cash
interest ratios should remain at 7x-8x and 1.5x-2.0x,
respectively, in 2014.

The stable outlook reflects S&P's view that Soho House's
ambitious expansion plan will translate into marked earnings
growth, based on management's good track record and that
liquidity will remain adequate.  In particular, in S&P's forecast
for the next 12 months, it believes that the growth in adjusted
EBITDA will exceed 20%.  Additionally, the adjusted debt-to-
EBITDA and EBITDA-to-cash interest will stay at about 8x and
1.7x, respectively, also over the next 12 months.

S&P could lower the rating if liquidity weakens.  This could
occur if the growth plan fails to materialize--which would cause
a higher-than-expected drawdown under the RCF--or if headroom
under covenants were to tighten significantly.  Negative rating
pressure would also arise if the adjusted EBITDA to cash interest
fell to about 1.0x.  Moreover, S&P would also take a negative
rating action if it had reason to believe that the capital
structure had become unsustainable.

S&P could raise the rating on Soho House if the adjusted EBITDA-
to-cash interest ratio were to rise sustainably above 2.0x.  This
would require a successful implementation of Soho House's organic
growth strategy, notably in foreign markets.

BROOKLANDS SCHOOL: Closes After Going Into Administration
--------------------------------------------------------- reports that parents have been
scrambling around to find alternative places for their children
after a private school went into administration.

Brooklands School, in Eccleshall Road, Stafford, was placed in
the hands of administrators following financial problems,
according to  The report notes that
staff are facing redundancy and families have been told the prep
school could shut.

"The key immediate concern for us is the education of the
children, so the one thing the school has done is to create a
matrix of available places at schools in the area," the report
quoted Chris Lewis, chairman of governors, as saying.

The report relates that the Sentinel reported in 2011 how
Brooklands had been losing thousands of pounds a year linked to
falling pupil rolls.  At the time, a new head was drafted in to
transform its fortunes, the report says.

HERON TOWER: Facing Receivership After Owners' Row
--------------------------------------------------, citing Sky News, reports that bankers to the 46-
storey Heron Tower on Bishopsgate, which briefly became the
financial district's biggest skyscraper, are contemplating
calling in receivers in the coming days as a consequence of the

According to the report, the move, which would result in the
Tower being put up for sale, would come despite last-ditch talks
between its three investors, who are led by Heron International,
the developer headed by Gerald Ronson, the property entrepreneur.

The report notes that the other shareholders are the State
General Reserve of Oman and undisclosed members of the Saudi
Royal Family.

The report relates that the three are said to be in dispute over
the management of the building as well as the circumstances in
which they can realize value from their investments. discloses that the appointment of receivers would
underline a remarkable failure for a skyscraper hailed as a
symbol of the City's efforts to shed the legacy of the 2008
financial crisis when it opened three years later.

TRANSEUROPA: New Ferry Operator Sought After Administration
Paul Francis at KentOnline reports that a new ferry service could
be operating out of Ramsgate from next year under a fresh effort
to re-establish a line from the port.

Thanet council is to appoint consultants to help woo a new
operator to Ramsgate and says it is aiming to start a service
from next summer and possibly earlier, according to KentOnline.

The report notes that the development follows the demise of the
port's previous operator, Transeuropa, which collapsed and went
into administration in May.

The report relates that four the company owes the council GBP3
million in unpaid berthing fees after a secret deal was agreed
between the two in 2011.

The report relays that the surprise development has drawn a mixed
reaction from politicians, with the Green party saying the
council was "throwing good money after bad".

The report discloses that the council says it is looking to re-
establish a "suitable ferry service" as a priority and in a
tender document states: "It is our aspiration that this service
should commence as soon as possible but no later than summer

Consultants are expected to be appointed next month and will be
asked to provide a report detailing opportunities by next June,
the report relays.

"It is a tough market and it would have to be an experienced
operator to come in . . . . But there are things which are an
encouragement -- despite the all the competition, predictions are
that we will need extra capacity by 2020 and because of where it
is, it could prove more cost-effective for hauliers," the report
quoted Opposition Conservative leader on the council Cllr Bob
Bayford as saying.

The report notes that the state of the ferry market remains
fragile.  Before the collapse of Transeuropa, SeaFrance went into
liquidation in 2011, the report recalls.  Eurotunnel then bought
three of its four ferries for GBP52million, the report relays.

The report adds that a Thanet District Council spokesman said:
"In order to attract new business, the council is seeking
industry expertise to help locate and deliver a suitable

"Payment will only be awarded upon successful delivery of a new
operator so is a low financial risk to the council."

* EUROPE: Barnier's Bank Plan Faces German-Led Opposition
Rebecca Christie and Jim Brunsden at Bloomberg News report that
European Union attempts to centralize control of failing banks
stumbled under a German-led attack that may imperil efforts to
restore confidence in the euro zone's financial system.

According to Bloomberg, if the plan doesn't move forward quickly,
the European Central Bank won't be able to count on cross-border
backstops if it encounters problems at euro-area banks.  The ECB
is scheduled to begin supervising lenders in the currency zone as
soon as October 2014, forcing the EU to grapple with who should
decide when to close a bank and who will pay for it, Bloomberg

Mr. Schaeuble, as cited by Bloomberg, said that the European
Commission's proposal for a Single Resolution Mechanism must be
overhauled because it's on shaky legal ground and could endanger
national control of budgets.  In Vilnius, the German was joined
by critics from Sweden to Slovakia, Bloomberg discloses.

At the same time, finance ministers renewed pledges to strive for
an agreement quickly so financial markets won't lose confidence
that the currency zone is overcoming its crisis, Bloomberg notes.
Dutch Finance Minister Jeroen Dijsselbloem, who chairs meetings
of euro-area finance chiefs, said a deal on the resolution
mechanism is needed by year-end, Bloomberg relates.

The new resolution authority, along with ECB oversight, form the
core of an effort to create a euro-area banking union that would
sever the link between bank and sovereign debt, Bloomberg notes.
In the coming months, the ECB will assess the balance sheets of
banks it will later supervise, Bloomberg says.

According to Bloomberg, objections to the commission's strategy,
proposed by EU financial-services chief Michel Barnier, included
resistance to a planned common resolution fund and the scope of
the system.  Nations also voiced skepticism about expanded powers
for the Brussels-based commission, Bloomberg notes.

Mr. Barnier defended the core of his Single Resolution Mechanism,
which would involve a EUR55 billion (US$73 billion) resolution
fund and give the commission the power to close banks, Bloomberg

Bloomberg notes that Sweden's finance minister, Anders Borg,
echoed the concerns of a number of his colleagues when he said
handing the commission the power to shut down banks alongside its
existing role as the bloc's state-aid enforcer is a "conflict of

Mr. Borg emphasized the necessity for euro countries to band
together to prevent a resurgence of the sovereign debt crisis,
now in its fourth year, Bloomberg relays.

Germany has spearheaded calls to drop the common fund and
centralized authority in favor of a network of national
resources, a stance Mr. Barnier said would leave the euro area
vulnerable in future crises, Bloomberg notes.  Mr. Borg, as cited
by Bloomberg, said that similar arguments were made by the U.K.,
Sweden and the Czech Republic.


* BOOK REVIEW: Bankruptcy Crimes
Author: Stephanie Wickouski
Publisher: Beard Books
Softcover: 395 Pages
List Price: $124.95
Review by Gail Owens Hoelscher

Did you know that you could be executed for non-payment of debt
in England in the 1700s? Or that the nailing of an ear was the
sentence for perjury in bankruptcy cases in 1604? While ruling
out such archaic penalties, Stephanie Wickouski does believe "in
the need for criminal sanctions against bankruptcy fraud and for
consistent, effective enforcement of those sanctions." She
decries the harm done to individuals through fraud schemes and
laments the resulting erosion in public confidence in the
judicial system. This leading authoritative treatise on the
subject of bankruptcy fraud, first published in August 2000 and
updated annually with new material, will prove invaluable for
bankruptcy law practitioners, white collar criminal
practitioners, and prosecutors faced with criminal activity in
bankruptcy cases. Indeed, E. Lawrence Barcella, Jr. of Paul,
Hastings, Janofsky, and Walker, in Washington, DC, says, "If I
were a lawyer involved in a bankruptcy matter, whether civil or
criminal, and had only one reference work that I could rely
upon, it would be this book." And, Thomas J. Moloney with
Cleary, Gottlieb, Steen & Hamilton describes the book as "an
essential reference tool."

An estimated ten percent of bankruptcy cases involve some kind
of abuse or fraud. Since launching Operation Total Disclosure in
1992, the U.S. Department of Justice has endeavored to send the
message that bankruptcy fraud will not be tolerated. Bankruptcy
judges and trustees are required to report suspected bankruptcy
212 crimes to a U.S. attorney. The decision to prosecute is
based on the level of loss or injury, the existence of sufficient
evidence, and the clarity of the law. In some cases, civil
penalties for fraud are deemed sufficient to punish and deter.
Ms. Wickouski suggests that some lawyers might not recognize
criminal activity that the DOJ now targets for investigation.
She gives several examples, including filing for bankruptcy
using an incorrect Social Security number, and receiving
payments from a bankruptcy debtor that were not approved by the
bankruptcy court. In both of these real life examples, DOJ
investigations led to convictions and jail time.
Ms. Wickouski says that although new schemes in bankruptcy fraud
have come along, others have been around for centuries. She
takes the reader through the most common traditional schemes,
including skimming, the bustout, the bleedout, and looting, as
well as some new ones, including the bankruptcy mill.
The main substance of Bankruptcy Crimes is Ms. Wickouski's
detailed analysis of the U.S. Bankruptcy Criminal Code, chapter
9 of title 18, the Federal Criminal Code. She painstakingly
analyzes each provision, carefully defining terms and providing
clear and useful examples of actual cases. She ends with a good
chapter on ethics and professional responsibility, and provides
a comprehensive set of annexes.

Bankruptcy Crimes is never dry, and some of the cases will make
you nostalgic for the days of ear-nailing. This comprehensive,
well researched treatise is a particularly invaluable guide for
debtors' counsel in dealing with conflicts, attorney-client
relationships, asset planning, and an array of legal and ethical
issues that lawyers and bankruptcy fiduciaries often face in
advising clients in financially distressed situations.

Stephanie Wickouski is a partner in the New York office of Bryan
Cave LLP. Her practice is concentrated in business bankruptcy,
insolvency, and commercial litigation.

This book may be ordered by calling 888-563-4573 or through your
favorite Internet bookseller or through your local bookstore.


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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