TCREUR_Public/131017.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

           Thursday, October 17, 2013, Vol. 14, No. 206

                            Headlines

C R O A T I A

HRVATSKA BANKA: S&P Affirms 'BB+/B' Issuer Credit Ratings


F R A N C E

CASINO GUICHARD-PERRACHON: Fitch Rates DS Notes 'BB(EXP)'
CMA CGM: Moody's Upgrades CFR to B2 & Sr. Unsec. Notes to Caa1


G E R M A N Y

FAENZA ACQUISITION: Moody's Rates Sr. Sec. Credit Facilities Ba3
VOERDE ALUMINIUM: Creditors Agree to Extend Production


G R E E C E

LOUTRAKI CLUB: Negotiates Public Sector Debt; Faces Bankruptcy


I R E L A N D

CALYPSO CAPITAL: S&P Assigns 'B+(sf)' Rating to Class B Notes
RMF EURO: Moody's Lowers Rating on Class IV Notes to Ba2
* IRELAND: Government Sets Out Seventh Year Austerity Plan


I T A L Y

ALITALIA SPA: Air-France to Impose Tough Refinancing Conditions


L A T V I A

LIEPAJAS METALURGS: Bankruptcy Looms as Debts Pile Up


L U X E M B O U R G

HOLDCO BILBAO: S&P Assigns Preliminary 'B' CCR; Outlook Stable
OXEA SARL: Moody's Puts 'B2' CFR on Review for Upgrade


M A C E D O N I A

* MACEDONIA: Fitch Affirms 'BB+' Long-Term Issuer Default Ratings


N E T H E R L A N D S

SILVER BIRCH: Moody's Upgrades Rating on Class E Notes to 'B3'


S E R B I A

* SERBIA: Moody's Says Consolidation Commitment Faces Challenges


S P A I N

CAJA LABORAL: Moody's Confirms 'Ba1' Long-term Deposit


S W E D E N

SELENA OIL: Creditor Files Bankruptcy Petition in Stockholm Court


U K R A I N E

UKRINBANK: Moody's Withdraws Caa1 Local Currency Deposit Ratings


U N I T E D   K I N G D O M

BAKHU PHARMA: Enters Administration, Cuts 30 Jobs
OPTICAL EXPRESS: Major Landlords Balk at Restructuring
UNITY MINE: Talks Over Future After it Enters Administration


X X X X X X X X

* Europe SME CLOs See Deteriorating Asset Performance
* Asset Performance is Dominant Downgrade Driver for EMEA SF
* Upcoming Meetings, Conferences and Seminars


                            *********


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HRVATSKA BANKA: S&P Affirms 'BB+/B' Issuer Credit Ratings
---------------------------------------------------------
Standard & Poor's Ratings Services affirmed its foreign and local
currency issuer credit ratings on Croatian state-owned Hrvatska
banka za obnovu i razvitak (HBOR) at 'BB+/B'.  The outlook is
negative.

The ratings on HBOR are equalized with those on the Republic of
Croatia.  This is because S&P classifies HBOR as a government-
related entity (GRE) and consider it "almost certain" that the
Croatian government would provide timely and extraordinary
support if HBOR ran into financial difficulties.

HBOR was established in June 1992, tasked with the objective of
financing the reconstruction and development of the Croatian
economy.  HBOR lends to both the public and the private sectors,
either directly or through commercial banks.  These onlend HBOR
funds to the ultimate borrower, who benefits from HBOR's lower
funding cost, while still providing subsidized loans to Croatian
corporates.

S&P assess HBOR's stand-alone credit profile (SACP) at 'bb'.
This primarily reflects S&P's view of the bank's very strong
capitalization and the sustainability of its business model, as a
government-owned development bank and export credit agency.

HBOR's SACP is also based on S&P's 'bb' anchor for banks
operating primarily in Croatia.  The anchor assessment is the
starting point for assigning an SACP.  It reflects S&P's view
that Croatia's economic growth prospects are constrained by
depressed domestic demand and moderate credit growth, which has
restricted the banking system's profitability.  The bank's SACP
balances S&P's view that HBOR is a well-capitalized bank with a
Standard & Poor's risk-adjusted capital ratio of about 20%.  It
also reflects HBOR's relatively stable earnings and liquid
balance sheet.  This is set against a tougher operating
environment, in which the bank is exposed to the economic cycle
and is susceptible to higher-than-average credit losses, due to a
fast growing and changing loan book portfolio.  The bank also
exhibits significant single-name concentrations and is greatly
exposed to the Croatian banking system; about 70% of its loan
book comprises loans to Croatian banks, primarily to provide
second-floor lending to small and midsize enterprises.  S&P also
considers the bank's reliance on concentrated wholesale funding,
with no established liquidity facilities with the central bank,
as a weakness for the rating.

The negative outlook on HBOR reflects that on Croatia.  S&P would
lower the ratings on HBOR if it lowered the sovereign ratings on
Croatia.

Conversely, S&P would revise the outlook on HBOR to stable if it
revises to stable the outlook on Croatia.  S&P could also lower
the ratings on HBOR if it changes its view on HBOR's role in the
government, or the link between HBOR and the government.  This
would change S&P's view of the likelihood of HBOR receiving
sufficient and timely extraordinary support from the government,
if it were needed, which would likely prompt S&P to reconsider
the ratings.

RATINGS SCORE SNAPSHOT

Issuer Credit Rating            BB+/Negative/B
SACP                            bb
Anchor                          bb
Business Position               Adequate (0)
Capital and Earnings            Very strong (+2)
Risk Position                   Moderate (-1)
Funding and Liquidity           Below Average and Adequate (-1)

Support                         +1
  GRE Support                   +1
  Group Support                 0
  Sovereign Support             0

Additional Factors              0



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CASINO GUICHARD-PERRACHON: Fitch Rates DS Notes 'BB(EXP)'
---------------------------------------------------------
Fitch Ratings has assigned Casino Guichard-Perrachon SA's
(Casino; BBB-/Stable) proposed deeply subordinated fixed to reset
rate (DS) Notes a 'BB(EXP)' expected rating. Fitch will apply a
50% equity credit treatment to the issue. The final rating is
contingent on the receipt of final documents conforming
materially to the preliminary documentation.

The rating reflects the highly subordinated nature of the notes,
which are considered to have lower recovery prospects than pure
debt instruments in a liquidation or bankruptcy scenario. The
equity credit reflects the structural equity-like characteristics
of the instruments including subordination, a maturity in excess
of five years and deferrable interest coupon payments with no
look-back provisions. The equity credit is limited to 50%, given
the cumulative interest coupon, a feature considered more debt-
like in nature.

The notes' rating and assignment of equity credit are based on
Fitch's hybrid methodology.

Key Rating Drivers for the Notes

Equity Treatment Given Equity-like Features

The securities qualify for 50% equity credit as they meet Fitch's
criteria with regard to deep subordination, remaining effective
maturity of at least five years and deferrable interest coupon
payments at the option of the issuer. Fitch regards these as key
equity-like characteristics, allowing Casino more financial
flexibility. The terms and conditions of the notes also avoid
mandatory repayments, and exclude covenant defaults as well as
all other events of default, including cross default, that could
trigger a general corporate default or liquidity need.

No Maturity Date

The notes are undated securities and have no specified maturity
date. The issuer first has the option to redeem the notes on the
first reset date.

Cumulative Coupon Limits Equity Treatment

The coupon payments are cumulative and incur interest where
overdue by more than one year. The company will be obliged to
make a mandatory settlement of interest arrears payments under
certain circumstances, including following the payment of a
dividend. This is a feature similar to debt-like securities and
provides the company with reduced financial flexibility. Fitch
has therefore only applied equity treatment of 50% of the notes.

Rating Reflects Deep Subordination

The notes have been notched down by two notches from Casino's IDR
given their deep subordination and consequently the lower
recovery prospects in a liquidation or bankruptcy scenario
relative to the senior obligations. The notes only rank senior to
the claims of equity shareholders.

Key Rating Drivers For Casino

Strengthening Business Model

In 2013, Casino gained full control of Monoprix in France, and
GPA in Brazil following the agreement reached with Mr Diniz on 6
September. The full integration of Monoprix from Q213 and the
full consolidation of GPA into its accounts in 2013 strengthen
the group's business profile in terms of format and geographic
diversification, as well as in terms of sales growth prospects
and profit margin resilience.

Growing Exposure to Emerging Markets

Over the past three years, Casino's acquisitions have enlarged
international operations, including GPA in Brazil and Carrefour
stores in Thailand. These significantly increase its exposure to
markets with underlying favorable growth trends, although they
also expose the group to country risk in the markets where it
operates. Fitch expects international operations to represent
more than 60% and 73% of Casino's 2013 revenues and EBIT compared
with 38% and 41%, respectively, in 2010.

Challenging French Economy

Key challenges facing Casino relate to the soft consumer
environment in France, which mainly negatively affects its larger
formats (hyper- and supermarkets). Since 2012, the group has been
cutting prices and adjusting its product offer to meet anaemic
consumer demand and intense competition from other large food
retailers. Any meaningful positive impact from these initiatives
on hyper- and supermarket sales and profit margins has yet to be
seen despite the positive momentum seen in Q313.

Free Cash Flow to Improve

Fitch expects Casino to benefit from Monoprix's and GPA's full
integration in terms of cash flow generation as they are more
profitable and cash-generative than Casino. Although remaining a
low percentage of sales, Fitch expects FCF to strengthen beyond
EUR200 million in 2013 and EUR300 million in 2015.

Rating Headroom to Improve

From a financial perspective, the rating headroom is currently
limited at the current 'BBB-' rating. Casino's lease-adjusted net
FFO leverage peaked at 4.5x in FY12, while the FFO fixed charge
cover was relatively weak at 2.3x (both ratios with GPA
proportionally consolidated: lease-adjusted net Debt/EBITDAR
equivalent is 3.9x). The group should regain reasonable headroom
under its rating in the next two years, thanks to the 100%
consolidation of GPA and Monoprix from FY13 onwards. Casino
should also benefit from further asset disposals in FY13 and
FY14. The scale of debt reduction that can be achieved through
these disposals will therefore be considered a supporting factor
to the ratings.

Rating Sensitivities

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

  - The group's capacity to maintain positive like-for-like
     growth.

  - FFO fixed charge cover above 3.0x.

  - Lease-adjusted FFO net leverage (adjusted for debt-like
    obligations) below 3.5x on a sustainable basis (equivalent
    to 3.0x lease-adjusted net debt/EBITDAR).

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

  - Sharp contraction in group's like-for-like sales growth and
    EBIT.

  - FFO fixed charge cover below 2.0x.

  - Lease-adjusted FFO net leverage (adjusted for debt-like
    obligations) above 4.2x (equivalent to 3.7x lease-adjusted
    debt/EBITDAR) on a sustained basis.


CMA CGM: Moody's Upgrades CFR to B2 & Sr. Unsec. Notes to Caa1
--------------------------------------------------------------
Moody's Investors Service has upgraded CMA CGM S.A.'s corporate
family rating (CFR) to B2 from B3 and the company's probability
of default rating to B2-PD from B3-PD. Concurrently, the rating
agency has upgraded to Caa1 (LGD5/84) from Caa2 (LGD5/80) CMA
CGM's EUR325 million and US$475 million worth of senior unsecured
notes maturing in 2019 and 2017, respectively. The outlook on the
ratings is stable.

"We have upgraded CMA CGM's rating to B2 to recognize the return
of the company to a more stable operating and financial profile
following the completion of its restructuring and because of its
strengthened liquidity position after the sale of 49% of its
terminal business and an US$150 million equity injection as part
of its restructuring," says Marco Vetulli, a Moody's Vice
President - Senior Credit Officer and lead analyst for CMA CGM.

Ratings Rationale:

Rating action reflects Moody's acknowledgement that after the
strengthening of its liquidity position, the company can fully
focus on exploiting its competitive position in an industry
which, however, remains volatile.

The material improvement in CMA CGM's liquidity is due to (1) the
company completing the sale of 49% of its terminals business,
Terminal Link, to China Merchants Holdings International for
US$528 million; and (2) the subscription of $150 million in
mandatory convertible bonds by Fonds Strategique d'Investissement
(FSI).These two transactions represented the final step of CMA
CGM's financial restructuring, undertaken during the past year
and they have enabled the company to significantly improve its
financial flexibility and hence its credit profile.

Furthermore, Moody's notes that CMA CGM is one of the most
efficient companies in the container shipping space because of
its ongoing and successful efforts to improve its cost structure.

As a result of the strong operating efficiency, CMA CGM was able
to achieve good results in first half 2013, despite negative
market conditions. Moreover, Moody's expects that the company
will maintain a consolidated financial profile that is
commensurate with a B2 rating on sustainable basis, even if
freight rates in the container shipping sector remain low over
the next 12-18 months, as a result of oversupply.

CMA CGM's B2 corporate family rating (CFR) is constrained by two
main factors. The first constraint is the high cyclicality in the
container shipping market, which is exacerbated by both (1) the
fierce competition between the main players, which limits CMA
CGM's ability to recover increases in certain operating costs
(especially bunker costs); and (2) the high reliance of this
shipping segment on short-term contracts, which limits visibility
with regard to CMA CGM's revenues. These market characteristics
have credit-negative implications for the ratings of container
shipping companies, on account of their high operating leverage
and high sensitivity to operating cash-flow shifts.

The second constraint on the rating is CMA CGM's weak credit
metrics. These weak metrics are a result of the company's
leveraged capital structure, with debt/EBITDA, on an adjusted
basis, of around 6.2x as of end-June 2013.

However, the rating also takes into account (1) CMA CGM's sound
business profile, stemming from its leading market positions,
which have been gained as a result of the successful commercial
and operational strategies implemented by its management; (2) its
low capital investment commitments relative to its main
competitors; (3) the flexibility of its fleet (due to the fairly
80% of its chartered vessels that can be redelivered in the
coming 2 years); (4) the company's operating efficiency; and (5)
its strong asset base.

Rationale for Stable Outlook:

The stable rating outlook incorporates Moody's expectation that
CMA CGM will be able to maintain its current operating
performance, with the potential for further improvements over the
next two to three years if market conditions improve. The outlook
also takes into account Moody's expectation that the company will
maintain a prudent liquidity profile while demonstrating its
ability to refinance its debt maturity in timely manner.

What Could Change the Rating Up/Down:

Before any upgrade, the Company should evidence its capacity in
weathering difficult market conditions by building a track record
of more stable operating performance. Upward rating pressure
could materialize as a result of (1) a reduction in CMA CGM's
financial leverage sustainably below 5.5x; and (2) an increase in
its funds from operations (FFO) interest expense coverage above
3.5x on a sustainable basis.

Conversely, immediate downward rating pressure could develop as a
result of pressure on the company's liquidity, although Moody's
does not currently expect this. Longer term, downward rating
pressure could result if a lack of short-term improvement in
market conditions leads to (1) financial leverage above 7x for an
extended period of time; or (2) FFO interest expense coverage
below 2.5x.



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FAENZA ACQUISITION: Moody's Rates Sr. Sec. Credit Facilities Ba3
----------------------------------------------------------------
Moody's Investors Service has assigned definitive Ba3 ratings to
the EUR647.4 million equivalent senior secured credit facilities,
issued by Faenza Acquisition GmbH and CeramTec Acquisition
Corporation. At the same time Moody's assigned a definitive Caa1
rating on the EUR306.7 million 8.25% senior notes due August 15,
2021, issued by Faenza GmbH.

Moody's definitive ratings on these debt obligations confirm the
provisional ratings assigned on July 18, 2013. The assignment of
definitive ratings follows Moody's review of the final
documentation of these debt instruments and the successful
closing of the transaction.

The Corporate Family Rating of B2 and Probability of Default
Rating of B2-PD on Faenza GmbH remain unchanged. The outlook on
all ratings is stable.

The following definitive ratings were assigned:

Faenza GmbH:

   - EUR306.7 million 8.25% global senior notes due August 15,
     2021 to Caa1 (LGD5, 86%) from (P)Caa1 (LGD5, 86%)

Faenza Acquisition GmbH:

   - EUR223.36 million senior secured term loan B-1 due August
     30, 2020 to Ba3 (LGD3, 32%) from (P)Ba3 (LGD3, 32%)

   - $336.87 million senior secured term loan B-1 due August 30,
     2020 to Ba3 (LGD3, 32%) from (P)Ba3 (LGD3, 32%)

   - $33.17 million senior secured term loan B-2 due August 30,
     2020 to Ba3 (LGD3, 32%) from (P)Ba3 (LGD3, 32%)

   - EUR67.94 million senior secured term loan B-2 due August 30,
     2020 to Ba3 (LGD3, 32%) from (P)Ba3 (LGD3, 32%)

   - $102.35 million senior secured term loan B-3 due August 30,
     2020 to Ba3 (LGD3, 32%) from (P)Ba3 (LGD3, 32%)

   - EUR100 million senior secured revolving credit facility due
     August 30, 2018 to Ba3 (LGD3, 32%) from (P)Ba3 (LGD3, 32%)

Ratings Rationale:

The Ba3 (LGD3, 32%) rating on the EUR647.4 million equivalent
senior secured credit facilities reflects their priority position
in the group's capital structure and the benefit of the loss
absorption provided by the unsecured debt below it. The senior
secured credit facilities comprise around EUR547.4 million in
EUR and USD term loans due August 30, 2020 and a EUR100 million
revolving credit facility due August 30, 2018, issued by Faenza
Acquisition GmbH and CeramTec Acquisition Corporation. The senior
secured credit facilities benefit from share pledges and asset
pledges of all material operating subsidiaries. Faenza's rated
debt benefits from guarantees from all material group entities
representing at least 80% of the group's EBITDA and consolidated
assets. For the last twelve months period per March 31, 2013, the
guarantors represented over 90% of the group's EBITDA and held
87% of the group' property, plant and equipment.

The EUR306.7 million of senior unsecured notes due 2021, issued
by Faenza GmbH, share the same guarantors with the senior secured
credit facilities but do not benefit from any security, which is
reflected in the Caa1 (LGD5, 86%) rating on the notes.

The B2 Corporate Family Rating continues to balance the group's
modest scale (EUR425 million revenues in 2012), the product and
customer concentration in its medical applications business unit
and high expected leverage at the closing of the transaction of
around 7.3x adjusted debt/EBITDA, with its solid market positions
in its niche of high-performance ceramics materials and products,
and good historical operating performance.

Moody's expect future EBITDA margins over the next 12-18 months
to be in line with historical levels of around 29-32% in the
period 2010-12 supported by modest revenue growth and higher and
more stable reported EBITDA margins at its medical applications
business unit compared to the more cyclical and more capital
intensive industrial applications activities. Future headwinds on
operating performance could stem from the risk of product
substitution, pricing pressure and cost inflation. As a
consequence, the group is required to continuously improve
product efficiency in order to protect profit margins.

High interest expense associated with the new debt instruments
will weigh on the group's future free cash flow (FCF) generation,
which Moody's expects to be positive but modest compared to
outstanding debt over the next 12 to 18 months. The group's short
term liquidity profile is good benefiting from a EUR100 million
undrawn revolving credit facility despite a low cash balance
expected at closing of the refinancing. The rating also considers
the lenient terms of the new debt instruments which allow for a
substantial amount of incremental indebtedness if certain
conditions are met.

In addition, the rating considers the group's exposure to product
liability claims in its medical applications business unit.
However, as a component supplier Faenza is less exposed to
product liability risk than the hip joint implant system
manufacturers.

The stable rating outlook reflects Moody's expectation that
Faenza will maintain stable operating performance and will reduce
adjusted gross leverage to around 6.5x debt/EBITDA over the next
12-18 months with visibility that the group will make further
progress in deleveraging towards 6.0x. Leverage reduction is
expected to be the result of revenue and EBITDA growth and excess
cash flow being applied to debt reduction

What Could Change the Rating Up/Down:

Moody's could downgrade the rating as a result of (1) weakening
operating performance; (2) loss of market share; (3) product
recalls; (4) large debt-financed acquisitions that result in
higher leverage, such that EBITA/interest approaches 1.0x and
debt/EBITDA exceeds 6.5x by end of 2014; or (5) negative free
cash flow generation.

Conversely, Moody's could upgrade the rating if the company is
able to deleverage such that its debt/EBITDA approaches 5.0x and
its FCF/debt is sustainably around 5%.


VOERDE ALUMINIUM: Creditors Agree to Extend Production
------------------------------------------------------
Michael Hogan at Reuters reports that a spokesman for Voerde
insolvency administrator Frank Kebekus said on Monday creditors
of the insolvent German aluminium plant voted to extend
production to the end of next year while the search for a buyer
continues.

The Voerde smelter, which makes about 10% -- or 115,000 tonnes
-- of Germany's yearly aluminium output a year, declared
insolvency in May 2012, Reuters recounts.

According to Reuters, the spokesman said that uncertainty about
energy policy after Germany's inconclusive general election in
September was an added difficulty.  He said that the insolvency
process could be concluded in March 2014, Reuters relates.

U.S. metals group Aleris bought Voerde's cast house last August,
Reuters recounts.  Buyers are now being sought for the separate
electrolysis and anode production units at the plant, Reuters
discloses.



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LOUTRAKI CLUB: Negotiates Public Sector Debt; Faces Bankruptcy
--------------------------------------------------------------
Abed Alloush at Greek Reporter reports that at the Multi Member
First Instance Court of Korinthos' Hall, Club Hotel Casino
Loutraki S. was forced to deal with its overwhelming debt to the
public sector, to its employees and insurance funds.

According to Greek Reporter, an administrative staff member said
that the reports referring to Club Hotel Casino Loutraki S.A as a
very probable candidate to enter article 99 of the bankruptcy
code are "false and groundless".

"We are not asking for protection from our creditors, as we have
already reached an agreement with them" the administrative staff
member, as cited by Greek Reporter, said.  "We have applied to
Justice for an approval demand of the dept adjustment agreement.
In any case, if these reports are true, we have to underline that
it is not easy for any company to enter into article 99."

Both casinos' supervisory authority and Greek Ministry of finance
had to suspend the permission of Club Hotel Casino Loutraki S.A,
as its debts to public sector reached the amount of
EUR25,225,286.72, Greek Reporter relates.

Along with the economic crises that Greece faces, there is a
dramatic decline in all casinos annual revenue (approximately 40-
50%), Greek Reporter notes.



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CALYPSO CAPITAL: S&P Assigns 'B+(sf)' Rating to Class B Notes
-------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB- (sf)' rating
to the class A notes and 'B+ (sf)' rating to the class B notes
issued by Calypso Capital II Ltd. and sponsored by AXA Global
P&C, the risk transfer counterparty.

The class A and B notes cover on a per occurrence basis losses
from European windstorm events that occur in Belgium, Denmark,
France (excluding overseas territories), Germany, Ireland,
Luxemburg, The Netherlands, Norway, Switzerland, Sweden, and the
U.K between Jan. 1, 2014 and Dec. 31, 2017 or 2018, respectively.

The ratings are based on the lower of the rating on the
catastrophe risk ('BB-' for class A and 'B+' for class B) and the
issuer credit rating on the European Bank for Restructuring and
Development (EBRD) as the issuer of the assets held in the
collateral accounts ('AAA').

S&P do not rate AXA Global P&C.  To isolate noteholders from the
risk of AXA Global P&C failing to make its quarterly periodic
premium payments, a periodic payment deposit account was set up,
in which AXA Global P&C has deposited three months' worth of
premium.  This ensures that the issuer can pay scheduled interest
up to the redemption date if the notes are redeemed due to AXA
Global P&C's failure to make its quarterly interest payment.


RMF EURO: Moody's Lowers Rating on Class IV Notes to Ba2
--------------------------------------------------------
Moody's Investors Service has upgraded the ratings of the
following notes issued by RMF Euro CDO III PLC:

    EUR252M (current outstanding balance of EUR131.5M) Class I
    Senior Secured Floating Rate Notes, due 2021, Upgraded to Aaa
    (sf); previously on Aug 4, 2011 Confirmed at Aa1 (sf)

    EUR20.1M Class II Senior Secured Floating Rate Notes, due
    2021, Upgraded to Aa1 (sf); previously on Aug 4, 2011
    Upgraded to A1 (sf)

    EUR14.7M Class III Deferrable Mezzanine Floating Rate Notes,
    due 2021, Upgraded to A2 (sf); previously on Aug 4, 2011
    Upgraded to Baa1 (sf)

Moody's also downgraded the ratings of the following notes:

    EUR23.3M Class IV Deferrable Mezzanine Floating Rate Notes,
    due 2021, Downgraded to Ba2 (sf); previously on Aug 4, 2011
    Upgraded to Ba1 (sf)

    EUR10.5M (current outstanding balance of EUR4.8M) Class V
    Deferrable Mezzanine Floating Rate Notes, due 2021,
    Downgraded to B1 (sf); previously on Aug 4, 2011 Upgraded to
    Ba3 (sf)

Moody's also withdrew the rating of the Class P Combination Notes
due to the rated balance being reduced to zero:

    EUR11.42M Class P Combination Notes, due 2021, Withdrawn
    (sf); previously on Sep 16, 2005 Definitive Rating Assigned
    Aaa (sf)

RMF Euro CDO III PLC, issued in August 2005, is a Collateralised
Loan Obligation ("CLO") backed by a portfolio of mostly high
yield senior secured European and US loans, managed by Pemba
Credit Advisers. This transaction ended its reinvestment period
in August 2011.

Ratings Rationale:

According to Moody's, the upgrade actions taken on the Class I,
II and III notes are primarily a result of significant
amortization of the Class I notes and subsequent improvement of
the senior overcollateralization ratio. The downgrade actions on
the Class IV and V notes are driven by the reduced granularity of
the underlying collateral pool and an increased exposure to
assets rated Caa1 and below.

Moody's notes that the Class I notes have been paid down by
approximately 48% or EUR120.4 million since closing and 15.7% or
EUR39.6 million on the last payment date in May 2013.
Furthermore, EUR56.8 million of principal proceeds are currently
available and will be applied to paydown the class I note on the
next payment date in November 2013. As of the latest trustee
report in September 2013, the Class I/II, III, IV and V
overcollateralization ratios are reported at 137.24%, 125.11%,
109.74% and 107.02%, respectively, compared to 128.90%, 119.70%,
107.54% and 105.32% on the last payment date in May 2013. All
overcollateralization tests are currently in compliance.

The ongoing deleveraging of the transaction has led to a
reduction in the granularity of the portfolio, decreasing the
trustee reported diversity score of the transaction to 22 from 28
in May 2013. In addition, the concentration of assets with credit
estimates has increased in the portfolio which resulted in a
deterioration of the WARF assumed in the analysis due to the
stress applied to large credit estimate exposures. The proportion
of assets rated Caa1 and below remains elevated at 14.7%.

Moody's notes that the key model inputs used by Moody's in its
analysis, such as par, weighted average rating factor, diversity
score, and weighted average recovery rate, are based on its
published methodology and may be different from the trustee's
reported numbers. In its base case, Moody's analyzed the
underlying collateral pool to have a performing par and principal
proceeds balance of EUR210.9 million, defaulted par of EUR18.4
million, a weighted average default probability of 27.7%
(consistent with a WARF of 4023), a weighted average recovery
rate upon default of 45.78% for a Aaa liability target rating, a
diversity score of 19 and a weighted average spread of 3.94%.

The default probability is derived from the credit quality of the
collateral pool and Moody's expectation of the remaining life of
the collateral pool. The average recovery rate to be realized on
future defaults is based primarily on the seniority of the assets
in the collateral pool. For a Aaa liability target rating,
Moody's assumed that 87.9% of the portfolio exposed to first lien
senior secured corporate assets would recover 50% upon default,
while the remainder non first-lien loan corporate assets would
recover 15%. In each case, historical and market performance
trends and collateral manager latitude for trading the collateral
are also relevant factors. These default and recovery properties
of the collateral pool are incorporated in cash flow model
analysis where they are subject to stresses as a function of the
target rating of each CLO liability being reviewed.

In addition to the base case analysis described above, Moody's
also performed sensitivity analyses on key parameters for the
rated notes, which includes deteriorating credit quality of
portfolio to address the refinancing and sovereign risks.
Approximately 27.20% of the portfolio consists of European
corporate assets rated B3 and below maturing between 2014 and
2016, which may create challenges for issuers to refinance, while
4.7% of the portfolio is exposed to obligors located in Ireland,
Spain and Italy. Moody's considered a model run where the base
case WARF was increased to 4401 by forcing ratings on 25% of
refinancing and sovereign risk exposures to Ca. This run
generated model outputs that were within one notch from the base
case results.

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

Sources of additional performance uncertainties are described
below:

1) Portfolio amortization: The main source of uncertainty in this
transaction is the pace of amortization of the underlying
portfolio. Pace of amortization could vary significantly subject
to market conditions and this may have a significant impact on
the notes' ratings. In particular, amortization could accelerate
as a consequence of high levels of prepayments in the loan market
or collateral sales by the Collateral Manager or be delayed by
rising loan amend-and-extend restructurings. Fast amortization
would usually benefit the ratings of the senior notes but may
negatively impact the mezzanine and junior notes.

2) Moody's also notes that around 55.4% of the collateral pool
consists of debt obligations whose credit quality has been
assessed through Moody's credit estimates. Large single exposures
to obligors bearing a credit estimate have been subject to a
stress applicable to concentrated pools as per the report titled
"Updated Approach to the Usage of Credit Estimates in Rated
Transactions" published in October 2009.

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

Moody's modelled the transaction using the Binomial Expansion
Technique, as described in Section 2.3.2.1 of the "Moody's Global
Approach to Rating Collateralized Loan Obligations" rating
methodology published in May 2013.

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

The cash flow model used for this transaction, whose description
can be found in the methodology listed above, is Moody's CDOEdge
model.

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

As such, Moody's analysis encompasses the assessment of stressed
scenarios.

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

On August 14, 2013, Moody's released a report, which describes
how Moody's proposes to incorporate/assess the additional credit
risk of exposures domiciled in countries with country ceilings
that are single A or lower when rating CLO tranches that carry
ratings higher than those ceilings.


* IRELAND: Government Sets Out Seventh Year Austerity Plan
----------------------------------------------------------
Eamon Quinn and Paul Hannon at The Wall Street Journal report
that Ireland's government Tuesday set out its plan for a seventh
year of painful austerity in 2014, hoping to convince bond
investors of its commitment to cutting its budget deficit as it
prepares to survive without bailout loans from the European Union
and International Monetary Fund.

Ireland's economy slid into crisis in 2008 when the bursting of
its property bubble wrecked the country's banks and brought the
euro-zone member close to bankruptcy, the Journal recounts.  In
late 2010, the government secured EUR67.5 billion (US$91.54
billion) in loans from the EU and IMF, the last of which will be
disbursed over the next two months, the Journal relates.  From
next year, the government will have to finance itself exclusively
through the bond markets, the Journal notes.

According to the Journal, Finance Minister Michael Noonan told
lawmakers that the budget will introduce up to EUR2.5 billion in
new tax increases and spending cuts, saying that Ireland will
better the deficit target for 2014 that was set under its bailout
agreement.  Under the budget, the deficit is planned to fall to
4.8% of gross domestic product in 2014 from 7.3% this year, the
Journal discloses.  The government is committed to reducing its
deficit to below 3% of GDP in 2015, the Journal says.

Required to keep cutting its deficit over the next two years,
Ireland's government will then be obliged to endure a tight
regime of fiscal oversight for many more years to cut its
towering national debt, the Journals states.

Despite those constraints, Mr. Noonan told lawmakers that in
ending its dependence on bailout loans, the nation would regain
control over its own destiny, the Journal says.

The EU and IMF and other institutions, such as the Irish Fiscal
Advisory Council and the Irish central bank, had urged the
government to go further and meet in full a proposed EUR3.1
billion in deficit cuts, to safeguard its finances, the Journal
relays.  But the coalition projects that it will still meet its
bailout budget targets in 2014 and 2015, and help promote jobs,
the Journal notes.

According to the Journal, Mr. Noonan noted that many countries
have in the past sought "backstop" loan facilities when emerging
from IMF programs, partly in order to reassure bond investors
that they can survive a new international crisis.  But he also
noted that the government has built up a cash reserve of
EUR25 billion, which he said means Ireland "has in effect a
credible backstop in place."

He declined to rule out seeking a precautionary credit line from
the euro zone, saying he would consult with the European
Commission, the European Central Bank and the IMF before making a
decision later this year, the Journal relates.



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


ALITALIA SPA: Air-France to Impose Tough Refinancing Conditions
---------------------------------------------------------------
David Pearson, Gilles Castonguay and Daniel Michaels at The Wall
Street Journal report that an official at Air France-KLM SA,
which owns 25% of Alitalia SpA, said the company will impose
tough conditions on the Italian flag carrier in return for taking
part in the emergency capital increase that Alitalia's
shareholders agreed to in principle early Tuesday.

After an Alitalia board meeting, Air France-KLM and Alitalia's
other shareholders approved in principle a capital increase of as
much as EUR300 million (US$407 million) for the Italian flag
carrier, the Journal relates.  They have 30 days to decide
whether they will take part in the refinancing, the Journal
states.  Alitalia's creditor banks have agreed to extend the
airline EUR200 million in new credit lines if the capital
increase goes ahead, the Journal discloses.

According to the Journal, a person familiar with the talks said
some tough negotiations are likely over the next month to ensure
Alitalia comes up with a convincing business plan to assure its
long-term profitability.

"It would be unseemly to be spending more money on Alitalia only
for them to come back and ask for more in five years' time," the
Journal quotes the person familiar with the negotiations as
saying.

Alitalia shareholders argued over a capital injection of
EUR300 million that would likely see the Italian state return as
a partial owner after just five years, the Journal relays.
Italy's state-owned post office, Poste Italiane, has pledged to
buy EUR75 million of shares in the capital increase should any of
Alitalia's current shareholders decline to take part in the
refinancing, the Journal discloses.

According to the Journal, Air France-KLM has little to show for
its initial EUR322 million investment in 2009 in the then-
bankrupt carrier.  Alitalia's board on Tuesday agreed to value
the airline's equity at just EUR50 million before the planned
capital increase, the Journal recounts.  So Air France's stake is
worth just EUR12.5 million, the Journal relates.  Alitalia had
net debt of EUR946 million at the end of June, the Journal
discloses.

Air France-KLM Chief Executive Alexandre de Juniac has said
Alitalia is a good strategic fit but not until its chronic
problems are addressed, the Journal notes.  Air France-KLM has
long complained that it doesn't understand Alitalia's strategy of
focusing its hub operations on Rome instead of Milan, Italy's
financial capital, the Journal says.

According to the Journal, a stumbling block for Air France-KLM to
take control of Alitalia is that it doesn't want to be saddled
with the Italian partner's debt were its shareholding to rise
above 30% and trigger a mandatory bid for the whole company.

Alitalia's other shareholders also have four weeks to decide
whether they will contribute to the capital increase, the Journal
states.

                         About Alitalia

Alitalia-Compagnia Aerea Italiana has navigated its way through
a successful restructuring.  After filing for bankruptcy
protection in 2008, Alitalia found additional investors, acquired
rival airline Air One, and re-emerged as Italy's leading airline
in early 2009.  Operating a fleet of about 150 aircraft, the
airline now serves more than 75 national and international
destinations from hubs in Fiumicino (Rome), Milan, Turin, Venice,
Naples, and Catania.  Alitalia extends its network as a member of
the SkyTeam code-sharing and marketing alliance, which also
includes Air France, Delta Air Lines, and KLM.  An Italian
investor group owns a majority of the company, while Air France-
KLM owns 25%.



===========
L A T V I A
===========


LIEPAJAS METALURGS: Bankruptcy Looms as Debts Pile Up
-----------------------------------------------------
Toomas Hobemagi at Baltic Business News reports that Liepajas
Metalurgs is losing hope to avoid bankruptcy as debt claims keep
piling up.

The last one to file a lawsuit against the steelmaker was
Stemcor, one of the world's leading steel traders, that is
claiming US$19 million from the company, BBN recounts.  Two other
creditors that have already filed lawsuits against Lieapajas
Metalurgs are gas utility Latvijas Gaze and power utility
Latvenergo, BBN notes.

Liepajas Metalurgs has also ceased production due to the shortage
of working capital, BBN relates.

According to BBN, the company's administrator said that he would
file for the company's insolvency if no money is injected in
Liepajas Metalurgs by the end of October.

Liepajas metalurgs is a Latvian metallurgical company.  The
company has 2,300 employees.



===================
L U X E M B O U R G
===================


HOLDCO BILBAO: S&P Assigns Preliminary 'B' CCR; Outlook Stable
--------------------------------------------------------------
Standard & Poor's Ratings Services said that it assigned its
preliminary 'B' long-term corporate credit rating to Bilbao
(Luxembourg) S.A., the parent holding company for leading
European steel and aluminum waste recycler Befesa Medio Ambiente
(BMA).  The outlook is stable.

At the same time, S&P affirmed its 'B' long-term corporate credit
rating on Befesa Zinc S.A.U., BMA's fully owned subsidiary.  S&P
also removed the rating from CreditWatch, where it was placed
with developing implications on April 19, 2013.  The outlook on
Befesa Zinc is stable.

In addition, S&P assigned its preliminary 'CCC+' issue rating to
Bilbao (Luxembourg)'s proposed EUR150 million payment-in-kind
(PIK) toggle notes.  The preliminary recovery rating on this
instrument is '6', indicating S&P's expectation of negligible
(0%-10%) recovery for creditors in the event of a payment
default.

S&P also affirmed its 'B' issue rating on EUR300 million senior
secured notes issued by orphan special-purpose entity Zinc
Capital, which has onlent the proceeds to Befesa Zinc.  The
recovery rating on the notes remains unchanged at '3', indicating
S&P's expectation of meaningful (50%-70%) recovery in the event
of payment default.

The preliminary issue rating on the EUR150 million PIK toggle
notes is based on draft documentation and is subject to S&P's
review of the final terms and conditions.  Any change to the
final terms and conditions could affect the ratings.

The preliminary rating on Bilbao (Luxembourg) (hereafter, "the
BMA group") reflects the group's capital structure pro forma for
Triton's acquisition of BMA.  It also reflects S&P's assessment
of BMA's business risk profile as "fair" and its financial risk
profile as "highly leveraged," as S&P's criteria define the
terms.

"The affirmation of our rating on Befesa Zinc reflects the
resolution of the CreditWatch placement following Triton
finalizing its plans for the financing of the acquisition of
Befesa Medio Ambiente from Abengoa S.A.  The rating on Befesa
Zinc reflects our assessment of its business risk profile as
"fair" and its financial risk profile as "aggressive,"
incorporating our view that the new capital structure will have
no impact on Befesa Zinc's leverage.  Our stand-alone credit
profile on Befesa Zinc remains at 'b+'.  However, our long-term
corporate credit rating on Befesa Zinc is one notch lower at 'B'
because it is constrained by our rating on the BMA group, in
accordance with our criteria for parent/subsidiary links," S&P
said.

The purchase price for the acquisition amounted to EUR387 million
(adjusted for certain non-cash items and the conversion value of
the convertible bond).  The transaction was financed through
EUR367 million of funds from Triton and funds from two issuances
positioned at LuxMidCo (a holding company outside the restricted
group): EUR48 million of a vendor loan due 2018, and a
convertible bond due 2028 issued to Abengoa with a current
conversion value of EUR9 million (EUR225 million par value).  The
convertible bond is highly subordinated, with no acceleration or
default covenants.

In 2012, BMA reported sales of EUR642 million (41% from Befesa
Zinc) and EBITDA of EUR122 million (69% from Befesa Zinc).  The
company holds long-established leading positions as a recycler of
waste byproducts from steel manufacturing (such as recycled zinc
from crude and stainless steel dust, handled by Befesa Zinc) and
of recovered salt slag and spent pot linings, as well as
secondary aluminum production.  S&P understands from management
that BMA holds a market share in Europe of about 50% in steel
dust recycling, and about 60% in aluminum byproducts.  The
company operates predominantly in Europe, which accounted for 90%
of its 2012 EBITDA (including 21% from Germany, 17% from Spain,
17% from Belgium, and 5% from France).

"Our assessment of BMA's "highly leveraged" financial risk
profile incorporates our forecast of adjusted debt to EBITDA of
about 5.9x at year-end 2013 (including EUR152 million PIK notes
at the holding company Bilbao [Luxembourg]).  However, including
about EUR230 million for the deeply subordinated convertible bond
at LuxMidCo (including accrued interest), the company's adjusted
leverage would increase to 7.8x.  We forecast that BMA could
generate neutral free operating cash flows (FOCF) in 2013 but
negative FOCF in 2014 because we expect growth investments to
increase.  Partly offsetting these financial constraints are our
assessment of BMA's historical strong resilience, the
improvements we anticipate to EBITDA and leverage from 2015, and
the company's "adequate" liquidity position, although we forecast
initial tight headroom under leverage and interest cover
financial covenants incorporated into BMA's EUR135 million term
loan.  Pro forma the transaction, BMA will have a comfortable
maturity profile," S&P noted.

S&P's assessment of BMA's business risk profile as "fair" takes
into account its exposure to the underlying cyclicality of steel
and aluminum production, as well as its exposure to current low
and volatile zinc and aluminum prices.  Supporting factors
include the company's service-oriented business model, which
benefits from European environmental regulations governing the
disposal of hazardous steel and aluminum industry waste
byproducts; multiyear customer contracts; and a systematic
hedging program for zinc (although the remaining tenor of hedges
until mid-2014 only provides limited visibility).

S&P assess Befesa Zinc's stand-alone financial risk profile as
"aggressive," one notch above BMA's "highly leveraged" financial
risk profile.  This is primarily because Befesa Zinc's leverage
is lower than BMA's.  S&P forecasts Befesa Zinc's adjusted debt
to EBITDA at 4.5x at year-end 2013.  S&P views Befesa Zinc's
business risk profile as "fair," reflecting the company's focus
on the cyclical steel and aluminum industries and limited
geographic diversity, partly offset by its fairly stable EBITDA
margins over the past five years.

"Under our base-case scenario, we expect BMA to report stable
EBITDA of about EUR120 million for 2013, increasing slightly in
2014, when the benefits of the company's growth projects should
materialize.  This is underpinned by our expectation that GDP in
the European Economic and Monetary Union (eurozone) will contract
by 0.7%, with no material recovery in the second half of 2013,
and grow by a mere 0.8% in 2014, as well as our base-case
expectation of aluminum prices at EUR1,510 (US$2,010) per metric
ton and zinc prices at EUR1,242 (US$1,654) per metric ton.  We
also take into account that BMA will no longer pay about EUR10
million in management fees to Abengoa. In addition, Befesa Zinc
has hedged about 60% of its 2013 sales at a price of EUR1,700 per
metric ton," S&P said.

"We forecast BMA's Standard & Poor's-adjusted debt to be about
EUR700 million at year-end 2013 (pro forma the transaction, or
EUR930 million when including the Abengoa convertible bond).
Debt at the restricted group includes EUR300 million of Befesa
Zinc's senior secured notes, a EUR135 million term loan at BMA
level, and EUR152 million of PIK notes (assuming interest
accruing at 10% per annum) at Bilbao (Luxembourg).  In addition,
we assume about EUR50 million utilized under factoring lines.
Finally, our adjusted debt also includes a EUR48 million vendor
loan from Abengoa and EUR230 million convertible bond at holding
company LuxMidCo, above the PIK notes restricted group," S&P
said.

The issue rating on the PIK toggle notes issued by Bilbao
(Luxembourg) is 'CCC+', two notches below the corporate credit
rating.  The recovery rating is '6', indicating S&P's
expectations of negligible (0%-10%) recovery prospects for
noteholders in the event of default.

The stable outlook reflects S&P'sview that the liquidity of the
BMA group will remain "adequate" over the next few years and that
both BMA and Befesa Zinc will continue to perform satisfactorily
in 2013-2014, notwithstanding the currently difficult economic
climate in Europe and the tough operating climate in the steel
and aluminum industries.

For BMA, S&P views an adjusted ratio of debt to EBITDA of about
6.0x (excluding the highly subordinated Abengoa convertible bond)
as commensurate with the current rating.  The rating on Befesa
Zinc is constrained by the preliminary rating on Bilbao
(Luxembourg), in accordance with S&P's criteria for
parent/subsidiary links.

S&P could lower the rating on Bilbao (Luxembourg) if BMA's
liquidity weakens or its adjusted debt to EBITDA materially
exceeds 6.0x without short-term prospects of recovery.  In S&P's
view, this could happen if the company showed less operating
resilience to the current tough economic climate, or if its debt-
financed growth investments are unsuccessful or more aggressive
than S&P assumes.

S&P is unlikely to raise the rating on Bilbao (Luxembourg) in the
near term.  However, if BMA is able to demonstrate adequate
operating resilience and deliver significant EBITDA growth in
2015 from its various growth projects (for example, in Turkey and
Korea), S&P could consider raising the rating.  An upgrade would
also depend on sufficiently supportive financial policies and
adjusted debt to EBITDA decreasing to about 4x-5x.


OXEA SARL: Moody's Puts 'B2' CFR on Review for Upgrade
------------------------------------------------------
Moody's Investors Service has placed the B2 corporate family
rating and B2-PD probability of default rating of Oxea S. r.l.,
the ultimate holding company of the subsidiary guarantors to the
group's senior secured credit facilities, as well as the B1
rating on the first-lien senior secured credit facility and the
Caa1 rating on the second-lien senior secured credit facility due
2020 at Oxea's subsidiary Oxea Finance & Cy S.C.A. on review for
upgrade. This follows the announcement of the proposed
acquisition of Oxea by Oman Oil Company S.A.O.C. unrated,
although wholly owned by the Government of Oman -- rated A1).

Ratings Rationale:

The rating announcement reflects Moody's belief of the fact that,
should the acquisition complete, Oxea is likely to benefit from
the replacement of private equity with a more strategic owner in
the form of a Government (rated A1) owned commercial company,
pursuing investments in the wider energy sector, consistent with
the long-term strategy of the sovereign and might in the future
benefit from access to cheaper feedstock from OOC as part of an
integrated chemical platform. However, at this stage the legal
and capital structure of Oxea post-acquisition by OOC as well as
the degree of integration is not known. No announcement has been
made regarding intentions with respect to Oxea's senior secured
credit facilities. Although Moody's notes that there are clauses
in the debt documentation regarding permitted change of controls
that would not require the debt to be refinanced in certain
circumstances.

On October 10, 2013, OOC announced that it had signed an
agreement with Advent International to acquire Oxea for an
undisclosed amount. Moody's notes that the purchase price must be
more than 25% greater than the total outstanding debt to meet one
of the terms of permitted change of control. The proposed
transaction is subject to antitrust approval and satisfaction of
other conditions. The rating agency expects this to be received
within the next three months due to the apparent lack of
overlapping businesses.

The ratings review will monitor progress towards completing the
transaction, as well as OOC's intentions regarding the legal and
capital structure of Oxea, including the level of integration
into OOC, potential increased capital expenditure plans and
funding policies.



=================
M A C E D O N I A
=================


* MACEDONIA: Fitch Affirms 'BB+' Long-Term Issuer Default Ratings
-----------------------------------------------------------------
Fitch Ratings has affirmed Macedonia's Long-term foreign and
local currency Issuer Default Ratings (IDR) and senior unsecured
bond ratings at 'BB+'. The Outlook is Stable. Fitch has also
affirmed Macedonia's Short-term rating at 'B' and Country Ceiling
at 'BBB-'.

Key Rating Drivers

The affirmation reflects the following key rating drivers:

   - Improving growth prospects

After stagnating in 2012, real GDP growth grew by a strong 3.4%
year on year in H113. A strong boost from construction in H1 is
likely to dissipate in the remainder of 2013, but Fitch forecasts
that GDP growth will average 2.7% for the whole year. The agency
forecasts that growth will strengthen in 2014-15, as exports and
public investment gather pace. Foreign investors in technological
development zones (TDZs) already contribute over one-fifth of
total export value and are likely to invest in new capacity.
However, it remains questionable whether strong activity in TDZs
can spill over to the rest of the economy and help to reduce the
(official) unemployment rate, which despite recent improvements
stood at a very high 28.8% in Q213.

   - Still moderate budget deficit and debt

The (central) government budget deficit overshot slightly its
target of 3.5% of GDP in 2012, coming in at 3.9%. Fitch estimates
that on this basis the deficit will be broadly in line with the
official target of 3.5% in 2013, but that it will not fall to 3%
until 2015 as the government keeps capital expenditure high.
Under Fitch's baseline scenario, Macedonia's gross general
government debt (GGGD) will rise modestly to around 36% in 2015,
still below the 'BB' median.

   - Stable currency peg with no external imbalances
The Macedonian denar's long-standing peg to the euro is backed by
international reserves at the National Bank of the Republic of
Macedonia amounting to an estimated five months of current
account payments. Macedonia does not suffer from major external
imbalances, with the current account deficit projected to remain
broadly stable over 2013-15 at below 4% of GDP, although this
masks a large structural trade deficit financed primarily by
current transfers. Net external debt is higher, albeit not
materially, than the 'BB' median at 15% of GDP.

   - Stable banking sector
Fitch does not deem the banking sector represents a significant
risk of contingent liabilities to the sovereign balance sheet.
The sector is well capitalized, with a Tier 1 capital adequacy
ratio of 14.7% in mid-2013. Non-performing loans rose to 11.8% of
the total but are fully provisioned. However, two of the three
largest banks have parents domiciled in Greece and Slovenia,
which may pose residual risks.

   - Political risk
NATO accession and EU membership negotiations are on hold pending
resolution of the "name issue" with Greece. No meaningful
progress has been achieved on the issue since Fitch's last
sovereign review. Relations between the Macedonian majority and
the ethnic Albanian minority are stable, but Fitch cannot rule
out that the continuing lack of a NATO or EU perspective could
eventually lead to renewed tensions.

   - Income levels and human development indicators are stronger
than the 'BB' median.

Rating Sensitivities
The Stable Outlook reflects Fitch's assessment that upside and
downside risks to the rating are currently well balanced.

The main risk factors that, individually or collectively, could
trigger a positive rating action are:

   -- Successful diversification of the domestic economy that
      leads to stronger, sustainable economic growth and
      continuing improvement in labor market indicators

   -- Resolution of disputes with neighboring countries that
      clear the path towards membership of international
      organizations.

The main risk factors that, individually or collectively, could
trigger a negative rating action are:

   -- A significant fiscal loosening or a crystallization of
      contingent liabilities that jeopardizes the stability
      of public finances and the currency peg.

   -- A sharp drop in demand for Macedonian exports in key
      trading partners, contributing to a prolonged domestic
      recession.

   -- A serious breakdown in ethnic relations or other political
      shock that leads to prolonged instability.

Key Assumptions

   -- Fitch assumes that the government will broadly meet the
      targets set down in its medium-term fiscal framework,
      which project a reduction in the budget deficit to 2.6%
      of GDP by 2016 and cap the GGGD ratio at 37% of GDP.

   -- Fitch assumes that the EU economy, Macedonia's largest
      trade partner, will continue to recover gradually.

   -- Fitch assumes that the unwinding of extraordinary global
      monetary stimulus will proceed in a broadly orderly
      fashion.


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


SILVER BIRCH: Moody's Upgrades Rating on Class E Notes to 'B3'
--------------------------------------------------------------
Moody's Investors Service announced that it has upgraded the
ratings of the following notes issued by Silver Birch CLO I B.V.:

EUR18M Class B Senior Secured Floating Rate Notes due 2020,
Upgraded to Aaa (sf); previously on Sep 23, 2011 Upgraded to Aa2
(sf)

EUR21M Class C Senior Secured Deferrable Floating Rate Notes due
2020, Upgraded to A1 (sf); previously on Sep 23, 2011 Upgraded to
Baa1 (sf)

EUR18M Class D Senior Secured Deferrable Floating Rate Notes due
2020, Upgraded to Ba1 (sf); previously on Sep 23, 2011 Upgraded
to B1 (sf)

EUR7.5M Class E Senior Secured Deferrable Floating Rate Notes due
2020, Upgraded to B3 (sf); previously on Sep 23, 2011 Confirmed
at Caa3 (sf)

Moody's also affirmed the ratings of the following notes:

EUR205.5M (current outstanding balance of EUR23.5M) Class A
Senior Secured Floating Rate Notes due 2020, Affirmed Aaa (sf);
previously on Sep 23, 2011 Upgraded to Aaa (sf)

Silver Birch CLO I B.V. issued in August 2005, is a
Collateralised Loan Obligation ("CLO") backed by a portfolio of
mostly high yield senior secured European loans. The portfolio is
managed by Alcentra Limited. This transaction has ended the
reinvestment period in August 2010.

Ratings Rationale:

According to Moody's, the rating actions taken on the notes is
primarily a result of deleveraging of the class A note following
amortization of the underlying portfolio since the payment date
in January 2013.

Moody's notes that the class A note has been paid down by
approximately EUR45.7 million (66%) since the last payment date
in July 2013 and EUR182 million (88%) since closing. As a result
of the deleveraging the overcollateralization ratios have
increased. As of the latest trustee report dated August 2013 the
Class A/B and Class C overcollateralization ratios are reported
at 204.78% and 136.01%, respectively, as compared to 148.96% and
120.06%, respectively, in July 2013.

Moody's notes that the key model inputs used by Moody's in its
analysis, such as par, weighted average rating factor, diversity
score, and weighted average recovery rate, are based on its
published methodology and may be different from the trustee's
reported numbers. In its base case, Moody's analyzed the
underlying collateral pool to have a performing par and principal
proceeds balance of EUR105.1 million, defaulted par of EUR5.3
million, a weighted average default probability of 28.8%
(consistent with a WARF of 4269), a weighted average recovery
rate upon default of 48.6% for a Aaa liability target rating, a
diversity score of 13 and a weighted average spread of 3.69%.

The default probability is derived from the credit quality of the
collateral pool and Moody's expectation of the remaining life of
the collateral pool. The average recovery rate to be realized on
future defaults is based primarily on the seniority of the assets
in the collateral pool. For a Aaa liability target rating,
Moody's assumed that 94% of the portfolio exposed to first lien
senior secured corporate assets would recover 50% upon default,
while the remainder non first-lien loan corporate assets would
recover 15%. In each case, historical and market performance
trends and collateral manager latitude for trading the collateral
are also relevant factors. These default and recovery properties
of the collateral pool are incorporated in cash flow model
analysis where they are subject to stresses as a function of the
target rating of each CLO liability being reviewed.

In addition to the base case analysis described above, Moody's
also performed sensitivity analyses on key parameters for the
rated notes, which includes deteriorating credit quality of
portfolio to address the refinancing and sovereign risks.
Approximately 28% of the portfolio is European corporate rated B3
and below and maturing between 2014 and 2016 , which may create
challenges for issuers to refinance. Moody's considered a model
run where the base case WARF was increased to 4664 by forcing
ratings on 25% of refinancing to Ca. This run generated model
outputs that were within one notch from the base case results.

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

Sources of additional performance uncertainties are described
below:

1) Portfolio amortization: The main source of uncertainty in this
transaction is the pace of amortization of the underlying
portfolio. Pace of amortization could vary significantly subject
to market conditions and this may have a significant impact on
the notes' ratings. In particular, amortization could accelerate
as a consequence of high levels of prepayments in the loan market
or collateral sales by the collateral manager or be delayed by
rising loan amend-and-extend restructurings. Fast amortization
would usually benefit the ratings of the senior notes but may
negatively impact the mezzanine and junior notes.

2) Moody's also notes that around 46% of the collateral pool
consists of debt obligations whose credit quality has been
assessed through Moody's credit estimates. Large single exposures
to obligors bearing a credit estimate have been subject to a
stress applicable to concentrated pools as per the report titled
"Updated Approach to the Usage of Credit Estimates in Rated
Transactions" published in October 2009.

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



===========
S E R B I A
===========


* SERBIA: Moody's Says Consolidation Commitment Faces Challenges
----------------------------------------------------------------
The Serbian government's recent plans to stabilize public
finances show a commitment to fiscal consolidation and structural
economic reform. But weak economic growth and implementation
risks pose significant challenges to meeting targets, Fitch
Ratings says.

In advance of the 2014 budget, recently appointed Finance
Minister Lazar Krstic announced savings and revenue measures,
including cutting the salaries of up to 350,000 higher-earning
civil servants and raising VAT on some goods to 10% from 8%. The
government projects that the measures would yield EUR600 million-
EUR800 million, or 1.4%-1.8% of projected GDP, next year.

"Achieving this, and meeting the target of reducing the fiscal
deficit to 2%-3% of GDP in 2017, would lead to consolidation
similar to that assumed in our debt sustainability assessment in
July, which followed the government's supplementary 2013 budget,"
Fitch says.

The fiscal deficit has narrowed slightly as the government has
reined in spending growth in 2013. But revenue as a share of GDP
is falling because consumption is stagnating, even as the economy
recovers driven by a boost in exports. (Fitch expects real GDP
growth of 1.5% in 2013.)

Government debt, already among the highest in Emerging Europe at
58% of GDP, is rising steeply and could reach 64% of GDP by end-
2013 as contingent liabilities migrate onto the sovereign balance
sheet. A growing interest burden will make fiscal consolidation
more difficult.

The 2013 overall fiscal deficit will exceed the revised
consolidated general government target of 5.3% of GDP set out in
July. Bank recapitalization, arrears payments and the assumption
of guaranteed debt would add at least 1.5% of GDP, bringing the
overall deficit close to 7% of GDP.

The government's target of increasing real annual growth to 3%-5%
of GDP in 2016-2017 by improving economic competitiveness is
ambitious (we currently forecast real annual growth of 1.5% in
2014 and 2% in 2015). And Serbia's long-term growth potential
still depends on the political resolve to implement unpopular
structural reforms. This presents implementation risks, which may
be heightened if unresolved political tensions result in early
elections.

Previously announced plans to restructure 179 state-owned
enterprises are already underway. We do not expect this
restructuring to have a major fiscal impact in the short-term,
though it should increase economic efficiency in the medium term.
The finance minister also pledged to reform labor laws to speed
up growth and curb the shadow economy. And the announcement of a
future rise in the retirement age for women is a step towards
containing the cost of pensions, which remains one of the biggest
sources of pressure on the budget.

"We affirmed Serbia's 'BB-' rating with a Negative Outlook in
July. Failure to adopt a credible plan to reduce the deficit and
stabilize debt could lead to a downgrade, while doing so in a
manner that put public debt on a sustainable path would alleviate
pressure on the rating," Fitch says.



=========
S P A I N
=========


CAJA LABORAL: Moody's Confirms 'Ba1' Long-term Deposit
------------------------------------------------------
Moody's Investors Service has confirmed Caja Laboral Popular
Coop. de Credito long-term deposit ratings at Ba1, and its
standalone bank financial strength rating (BFSR) at D+
(equivalent to a ba1 baseline credit assessment or BCA). All
ratings carry a negative outlook. Rating action concludes the
review that Moody's initiated on July 19, 2013.

The confirmation of the ratings reflects the bank's ongoing
resilience to the challenging operating environment, as evidenced
by the very moderate asset-quality deterioration in Q2 2013,
significantly better than the Spanish banking system average.

Ratings Rationale:

Standalone BFSR and BCA:

The confirmation of Caja Laboral's standalone ratings reflects
its ongoing resilience to the challenging operating environment
in Spain. When placing Caja Laboral's standalone ratings on
review for downgrade in July 2013, Moody's considered that the
bank's better asset-quality track record (relative to domestic
peers) might proven unsustainable. Problem loans had increased
significantly during 2012 and in Q1 2013. However, more recent
asset-quality data from Q2 2013 have shown a reversal to a much
better-than-system performance, with only a very moderate
deterioration for the bank during this three-month period.
Moody's notes that, in previous quarters, the increase in problem
loans was largely due to the bank's application of conservative
loan classification criteria, whereby an important portion of
loans classified as problematic were current on their payment
obligations, especially in the commercial real estate (CRE)
portfolio. In Q1 2013, following the merger with Ipar Kutxa, Caja
Laboral applied its more conservative loan classification
criteria to Ipar Kutxa's original loan book and especially to its
CRE portfolio, resulting in a material increase in the volume of
problem loans.

As noted, following the bank's loan reclassification exercise,
asset-quality deterioration has significantly eased in Q2 2013,
which is significant given the sharp deterioration shown by the
system during this period: the bank's NPL ratio only increased by
0.08%, which compares with an increase of 1.14% for the system.
Moody's notes that Caja Laboral's residential mortgage book,
which represents two thirds of the bank's loan portfolio, has
been particularly resilient. NPLs for this asset class increased
by less than 0.10% in Q2 2013 (growing to 2.2% from 2.1%),
outperforming the system average that increased by almost 1%
during the same period, to 4.9% from 4.0%. The total NPL ratio of
Caja Laboral stood at 7.9% by end June 2013, which compares
favorably to a 12.0% NPL ratio for the system.

This stronger asset quality performance of Caja Laboral relative
to the system in Q2 2013 is also observed in other asset-quality
indicators monitored by Moody's. Real-estate assets acquired from
troubled borrowers amounted to 4.1% of the total loan book at end
June 2013, actually reducing from 4.3% as of March 2013, and
which compares favorably with a system-average ratio that Moody's
estimates at almost 7% of total loans. The rating agency also
notes that system-average asset-quality indicators have benefited
from the transfer of problematic assets to Sareb, which otherwise
would have resulted in a wider gap between the performance of
Caja Laboral and the system.

Moody's will closely monitor Caja Laboral's asset-quality
performance. The rating agency notes that any sign that the
bank's asset quality performs weaker than the system, and/or
any -- more than marginal -- downward revision of Moody's
economic outlook will exert downward pressure on Caja Laboral's
ratings.

Deposit Ratings:

Caja Laboral's deposit ratings were confirmed at Ba1 following
the confirmation of the bank's BFSR. Moody's does not incorporate
any expectation of systemic or other third-party support into the
ratings.

Rationale for the Negative Outlook:

The negative outlook that Moody's has assigned to the BFSR and
the deposit ratings incorporates the challenges faced by the
bank. These include the continuing weak operating environment in
Spain, which is characterized by (1) the recessionary domestic
economy and overall low growth expectations for the remainder of
2013 and 2014; (2) the ongoing real-estate crisis; (3) very high
unemployment; and (4) the broader euro area sovereign and banking
crisis. These conditions will likely lead to further asset-
quality deterioration across the banking system.

What Could Change the Rating Up/Down:

There is currently no upward pressure on the ratings given the
negative outlook. Any upward rating pressure over the medium term
would require a significant strengthening of either the Spanish
economy or the bank's risk-absorption capacity.

Downward rating pressure could ultimately result from: (1) an
acceleration in the trend of NPL formation, both on an absolute
level and in relation to the system average; (2) any worsening in
operating conditions beyond Moody's current expectations, (i.e.,
a broader economic recession beyond the rating agency's current
GDP forecast of a 1.4% contraction for 2013 and a GDP growth
forecast between 0% and 1% for 2014); and/or a (3) weakening of
Caja Laboral's internal capital generation and risk-absorption
capacity.

Headquartered in Mondragon, Spain, Caja Laboral reported total,
audited consolidated assets of EUR25 billion at the end of 2012.



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


SELENA OIL: Creditor Files Bankruptcy Petition in Stockholm Court
-----------------------------------------------------------------
A creditor has filed a bankruptcy petition at the district court
of Stockholm for Selena Oil & Gas Holding AB (publ) The CEO and
the Board of Directors of Selena Oil & Gas Holding AB (publ) have
today received a bankruptcy petition, filed at the district court
of Stockholm (Stockholms Tingsraett).   The petition has been
filed by a creditor and has relationship to an unpaid debt.  It
is the Board of Directors opinion that the petition is unfounded
and that Selena Oil & Gas Holding is solvent.

Selena Oil & Gas Holding AB (publ) (former Emitor Holding AB) is
engaged in the production and transportation of oil and gas in
the Volga-Ural region in the Russian Federation, including Perm
and Udmurtia.  The company is listed on NASDAQ OMX First North
Premier in Stockholm under the ticker SOGH.  Mangold
Fondkommission is the company's Certified Adviser and liquidity
provider.



=============
U K R A I N E
=============


UKRINBANK: Moody's Withdraws Caa1 Local Currency Deposit Ratings
----------------------------------------------------------------
Moody's Investors Service has withdrawn Ukrinbank's Caa1 long-
term local currency deposit ratings, Caa2 long-term foreign
currency deposit ratings, not prime short-term local and foreign
currency deposit ratings, and E standalone bank financial
strength rating (BFSR), equivalent to a caa1 baseline credit
assessment, as well as National Scale Rating (NSR) of Ba3.ua. At
the time of the withdrawal BFSR carried a stable outlook, while
all other ratings were on review for downgrade.

Ratings Rationale:

Moody's has withdrawn the rating for its own business reasons.

Headquartered in Kyiv, Ukraine, Ukrinbank reported total assets
of US$703 million and net income of US$0.3 million, according to
its 1H 2013 non-audited financial statements prepared under local
GAAP.

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



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


BAKHU PHARMA: Enters Administration, Cuts 30 Jobs
-------------------------------------------------
BBC News reports that joint administrators have been appointed to
run a pharmaceuticals plant in Dumfries and Galloway.

It is understood 30 staff have been laid off so far at the Bakhu
Pharma factory at Newbie near Annan, according to BBC News.

The report relates that the news comes just over two years after
the company saved the site from closure.  The report discloses
that previous owners Phoenix Chemicals also went into
administration and Bakhu Pharma staged a "last minute rescue" of
the plant in 2011.

The factory - originally commissioned by Glaxo in 1980 - has gone
through a number of hands in recent years.

The report notes that in October 2008 Indian-owned Shasun Pharma
discloses plans to close the facility as it was "no longer
viable".

The report relates that a year later Merseyside-based Phoenix
Chemicals bought the plant with the help of a Scottish government
grant of GBP400,000.

However, the report says that business went into administration
in January 2011 before the site was taken on by Bakhu Pharma.


OPTICAL EXPRESS: Major Landlords Balk at Restructuring
------------------------------------------------------
Martin Flanagan at The Scotsman reports that Optical Express has
been rapped by a band of major landlords over a controversial
restructuring move that they claim will cost them money.

Glasgow-based Optical, run by David Moulsdale, called in
administrators at Begbies Traynor for its DCM Optical Clinic
business last week before buying back 16 of the 19 stores
immediately as part of a so-called pre-pack deal, The Scotsman
relates.

Optical Express made the same decision just a year ago to call in
administrators for another of its subsidiaries, which operated 80
stores, The Scotsman recounts.  It bought back 40 of these stores
and the remaining shops were closed, The Scotsman discloses.

According to The Scotsman, the British Property Federation has
written to Begbies Traynor demanding answers over the latest
administration, which will leave them owed three months' rent, as
it comes when the next quarter's rent payments are due.

However, a spokesman for Optical Express, as cited by The
Scotsman, said on Tuesday: "Had this course of action not been
taken, the subsidiary business in its entirety was unsustainable
-- this action has saved and protected hundreds of jobs and many,
many supplier contracts."

Optical Express is a Scottish opticians chain.


UNITY MINE: Talks Over Future After it Enters Administration
------------------------------------------------------------
BBC News reports that managers and workers at Wales' largest mine
are meeting after its owners said they were filing for
administration.

The future of the Unity Mine, a drift mine near Neath, has been
uncertain after management said they only had work for 66 of its
220 staff, according to BBC News.

Director Richard Nugent said the firm was "forced into the
process of filing for administration" but the workforce is being
kept on for now, the report notes.

The report relates that business Minister Edwina Hart said the
firm was being offered assistance.

However, the report discloses that Minister Hart said there were
wider financial pressures and challenges which had led to the
company going into administration.

"However, discussions with third party investors are on-going,
and I welcome the director's intention to protect the current
work force while fundraising negotiations are continuing with
various parties to seek to secure the long term future of the
mine and its highly skilled workforce," the report quoted Ms.
Hart as saying.

                         Potential Reserves


Wayne Thomas from the National Union of Mineworkers (NUM) said he
believes there is a future for the mine, BBC News discloses.

"I think many people who know the investment to date and the
infrastructure of the coal mine and certainly those who are aware
of the potential reserves for this mine, they would know there's
a future for this mine, the report notes. . . . We believe
there's at least 10, 15, 20 years work here.  We believe those
reserves are attainable.  "I'm convinced in my mind that a
solution can be resolved in the longer term and the sooner we get
to that the better," the report quoted Mr. Thomas as saying.

The report notes that, in recent months, the miners were told
there was not enough work for everyone.

BBC News notes that a meeting is due to take place with the
mine's 22 apprentices later and the entire workforce will meet
this week as administrators are appointed.

BBC News relays that 200 workers at Unity will remain while the
administrators do their work to see what can be made of this
business, the report notes.

                      'Fallen Over Backwards'

"We fully expected it to carry on, on a limited scale until the
situation with coal sales improved and then it would revert to
normal . . . . But it doesn't look as if it's going to go that
way now," the report quoted Mr. Price as saying.

Mr. Price told BBC News that: "If they can get more investment or
be taken over on a buy-out it will be an excellent thing for us.
. . . . Our MP [Peter Hain] has fallen over backwards in getting
licenses and planning permissions hurried through Neath Port
Talbot council for Unity mine because they applied to work on
opencast on top of the mountain to help out with coal coming down
from there.

Meanwhile, BBC News relates that Welsh government officials are
continuing to hold talks with the mine's management to try to
find a solution.



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


* Europe SME CLOs See Deteriorating Asset Performance
-----------------------------------------------------
Fitch Ratings says in its latest European SME CLO Performance
Tracker that SME CLOs continued to see deteriorating asset
performance since June 2012.

Two SME CLO securitizations were partially placed with investors
over the last 12 months. In particular, the Italian Berica PMI
Srl sold the senior notes at a spread of 240bp over Euribor. The
notes benefited from substantial credit enhancement at 43.2%.
Nevertheless, the average spread on the loans of 240bp was
evidence that SME securitizations were still not economically
viable. Hence, most banks in Italy and Spain retain SME CLOs and
use them for repo funding with the ECB. The average spread on
senior notes in retained transactions is around 50bp.

The report also highlights that funding support from UK and
French central banks -- since the ECB allows central banks to
lend against loan portfolios directly - has removed the need to
structure SME CLO securitizations for ECB repo funding.

In particular, French banks may use their ability to place loan
portfolios with the Banque de France. Likewise issuance of funded
SME securitizations have come to an abrupt halt in the UK since
the Bank of England's funding for lending scheme was introduced.
By contrast Spanish, Italian and Belgium banks still place SME
CLOs with the ECB.

In February 2013 Commerzbank AG issued the first European covered
bond backed by loans to SMEs. The bond is a direct obligation of
Commerzbank and benefits from a guarantee provided by a SPV
backed by the cash flows from the SME loan portfolio. The first
bond was issued with a fixed coupon of 1.5% per annum and a five-
year scheduled maturity. Fitch understands that the achieved
pricing was inside Commerzbank's senior unsecured spread levels.

In Italy, delinquency levels have increased significantly since
2011 and continued to rise. Fitch has revised its expected case
for Italy to an annual average default rate of 5%. The migration
trend of performing loans based on Italian banks' internal rating
system is showing a significant migration to lower rating
categories.

Delinquency levels in Fitch-rated Spanish SME CLOs reached a new
peak earlier this year at 6% of the outstanding balance and have
slightly fallen since. Transactions continue to deleverage
through amortization, building credit enhancement in relative
terms. SME system delinquencies, excluding real estate and
construction, stood at a record 10%.

Because banks in France, Germany and the UK often repurchase
credit-impaired loans from their securitization programs, the
reported default rate for securitized portfolios is not an
accurate indicator of performance.


* Asset Performance is Dominant Downgrade Driver for EMEA SF
------------------------------------------------------------
Fitch Ratings says in a new report on rating actions in EMEA
structured finance (SF) that asset underperformance was the
dominant driver of downgrades over the period under review,
accounting for 69% of negative rating actions.

At the highest rating levels asset underperformance is a far less
dominant driver of rating downgrades. "This suggests that
structured finance structures have operated as intended with
senior notes more insulated from instances of asset
underperformance," says Andrew Currie, Head of Surveillance for
EMEA Structured Finance.

Reduced creditworthiness of many financial institutions in recent
years has resulted in only 5% of downgrades. "This is because
structured finance structures typically include features that
mitigate counterparty risk as it increases, which has resulted in
structured finance ratings being more resilient than those of the
associated financial institutions."

Rating upgrades in EMEA SF were relatively evenly distributed, as
their main driver was repayment of note principal and
consequential increase in credit enhancement. In contrast,
downgrades were concentrated around the Lehman Brothers failure,
one-off global criteria adjustments for CDOs and general
weakening of asset performance in 2008-9.

ABS has proved the most resilient of the EMEA SF asset classes
accounting for only 5% of all SF downgrades, with upgrades being
more prevalent than downgrades. This is attributable to the
shorter scheduled lives compared to other sectors, resulting in
the rapid build-up of credit enhancement.

RMBS upgrades were spread in general proportion to the number of
tranches from each country. Downgrades were particularly
concentrated in transactions secured by collateral in the
eurozone periphery. Relatively few tranches were downgraded from
the UK prime and Dutch sub-sectors, despite having the largest
issuance volumes.

CMBS rating actions were dominated by the underperformance of the
underlying assets with 90% of all negative actions associated
with this ratings driver. This reflects increased balloon loan
repayment risk at a time when financing is scarce and property
values have fallen significantly.

The report, entitled "Rating Actions in EMEA SF" is available at
www.fitchratings.com. This report provides a breakdown of the
rating actions and how these have varied by asset class, country,
rating category, issuance vintage and over time.


* Upcoming Meetings, Conferences and Seminars
---------------------------------------------
Nov. 1, 2013
   AMERICAN BANKRUPTCY INSTITUTE
      NCBJ/ABI Educational Program
         Atlanta Marriott Marquis, Atlanta, Ga.
            Contact:   1-703-739-0800; http://www.abiworld.org/

Dec. 2, 2013
   BEARD GROUP, INC.
      19th Annual Distressed Investing Conference
          The Helmsley Park Lane Hotel, New York, N.Y.
          Contact:   240-629-3300 or http://bankrupt.com/

Dec. 5-7, 2013
   AMERICAN BANKRUPTCY INSTITUTE
      Winter Leadership Conference
         Terranea Resort, Rancho Palos Verdes, Calif.
            Contact:   1-703-739-0800; http://www.abiworld.org/


                            *********

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

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

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

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


                            *********


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

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

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

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

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

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


                 * * * End of Transmission * * *