TCREUR_Public/131023.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

                           E U R O P E

          Wednesday, October 23, 2013, Vol. 14, No. 210

                            Headlines

B U L G A R I A

UNIONBANK EAD: Fitch Lowers LT Issuer Default Rating to 'BB-'


C Y P R U S

SOLWAY INVESTMENT: S&P Lowers CCR to 'CCC+'; Outlook Negative


F R A N C E

NEXANS SA: S&P Affirms 'BB/B' Corp. Credit Ratings; Outlook Neg.


G E R M A N Y

GERMAN RESIDENTIAL 2013-2: Fitch Rates EUR47.8-Mil. Notes 'BB'


G R E E C E

EUROBANK ERGASIAS: S&P Cuts Rating on EUR200MM Securities to 'C'


H U N G A R Y

MAGYAR TELEKOM: Seeks Court Hearing for Debt-Equity Swap Approval


I R E L A N D

SIAC CONSTRUCTION: May Seek Court Protection This Week
* IRELAND: EU/IMF Bailout Extended Until Early Next Year


S P A I N

SPAIN: CSIC Gets Cash Injection; More Funds Needed for Survival


U K R A I N E

NAFTOGAZ: Near-Missed Coupon Heightens Investors Worries


U N I T E D   K I N G D O M

CHARLES GEE: Acute Cashflow Pressures Prompt Administration
CO-OPERATIVE BANK: Pledges to Stick to Ethical Stance
GALAXY FINCO: Moody's Assigns 'B2' CFR; Outlook Stable
GALAXY FINCO: S&P Assigns Preliminary 'B' CCR; Outlook Stable
GLASTONBURY 2007-1: Fitch Affirms 'C' Ratings on 3 Note Classes

INEOS GROUP: Fails to Get Union Support for Survival Program
WINDERMERE XI: Moody's Reviews Ba2 Rating on GBP570MM Notes


X X X X X X X X

* ECB President Challenges EU Bank-Aid Rules Over Forced Losses


                            *********


===============
B U L G A R I A
===============


UNIONBANK EAD: Fitch Lowers LT Issuer Default Rating to 'BB-'
-------------------------------------------------------------
Fitch Ratings has downgraded Bulgaria-based Unionbank EAD's
(formerly MKB Unionbank EAD) Long-term Issuer Default Rating
(IDR) to 'BB-' from 'BBB+', its Support Rating to '3' from '2'
and its Viability Rating (VR) to 'b-' from 'b+'. At the same
time, Fitch has removed Unionbank's IDRs and Support Rating from
Rating Watch Negative (RWN) and assigned a Stable Outlook to its
Long-term IDR.

The rating actions follow the sale of a 100% stake in Unionbank
held by Hungary's MKB Bank Zrt (Support Rating 2 on RWN) to First
Investment Bank (FIBank; BB-/Stable/b-), which was completed on
10 October 2013 after the required regulatory approvals have been
obtained. A legal merger with Unionbank is expected to be
accomplished within one year. Unionbank's former ultimate parent
was Bayerische Landesbank (A+/Stable) of Germany.

Key Rating Drivers - IDRs, Support Rating and VR

The equalisation of Unionbank's IDRs with that of FIBank reflects
the planned merger of both institutions and Fitch's assumption
that, prior to the merger, potential state support for FIBank
would likely flow through to Unionbank, which Fitch believes is a
core subsidiary to its new owner. The agency has also considered
the national regulator's support for the transaction. FIBank's
Long-term IDR is driven by its Support Rating Floor (SRF) of
'BB-', reflecting Fitch's view of the bank's systemic importance
and therefore potential support available from the Bulgarian
sovereign.

The downgrade of Unionbank's VR and its equalization with
FIBank's VR reflects effective control of Unionbank by FIBank at
management and supervisory board level, and Fitch's view of high
contagion risks from the lower-rated new parent. In Fitch's view
potential contagion channels include corporate governance and
risk management standards. Customer deposit outflows at Unionbank
have been limited since the announcement of the acquisition and
in any case would likely be offset by parent bank support.

Fitch's assessment of Unionbank's stand-alone profile considers
its modest capitalization in light of high credit risks embedded
in its loan book, weak internal capital generation, and
significant exposure to wholesale funding.

Rating Sensitivities - IDRs, Support Rating and VR

Unionbank's ratings are likely to be affirmed and withdrawn
following the merger with FIBank. If, contrary to Fitch's
expectations, a merger does not take place, Unionbank's ratings
are likely to remain closely tied to those of FIBank given the
already high management integration and that the parent and the
subsidiary operate in the same jurisdiction.

Fitch does not yet have sufficient information on the acquisition
(in particular its price) to assess the impact on FIBank.
However, as noted in the agency's commentary of 23 August, it is
unlikely that the transaction will result in a change in the
bank's VR.

FIBank's, and hence Unionbank's, IDRs depend on potential support
from the Bulgarian authorities. In Fitch's view, there is a clear
intention to ultimately reduce state support for systemically
important banks in Europe, which might result in Fitch revising
banks' SRFs downwards. The timing and degree of any change would
depend on jurisdiction-specific developments. If the agency
changes its view on the propensity of the Bulgarian authorities
to provide support to FIBank, this would lead to downward
pressure on its IDRs, Support Rating and SRF.

Fitch recently detailed its current thinking about sovereign
support for banks in two special reports ('The Evolving Dynamics
of Support for Banks' and 'Bank Support: Likely Rating Paths',
both dated 11 September 2013). Fitch has stated that in cases
where sovereign support is seen as weakening, any rating actions
will most likely be preceded by Outlook revisions to IDRs,
potentially as soon as Q413.

The rating actions are:

Unionbank

  Long-term IDR downgraded to 'BB-'from 'BBB+'; off RWN, Stable
  Outlook

  Short-term IDR downgraded to 'B' from 'F2'; off RWN

  Viability Rating downgraded to 'b-' from 'b+'

  Support Rating downgraded to '3' from '2'; off RWN



===========
C Y P R U S
===========


SOLWAY INVESTMENT: S&P Lowers CCR to 'CCC+'; Outlook Negative
-------------------------------------------------------------
Standard & Poor's Ratings Services said it lowered its long-term
corporate credit rating on Cyprus-registered metals and mining
company Solway Investment Group Ltd. to 'CCC+' from 'B+'.  The
outlook is negative.

"The downgrade reflects our assessment that Solway's liquidity
has deteriorated significantly to "weak" from "less than
adequate," as our criteria define the terms.  The impairment is
due to a potential covenant breach under its US$130 million pre-
export facility together with heavy negative free cash flow owing
to large capital expenditure (capex), and insufficient liquidity
sources.  We now assess Solway's financial risk profile as
"highly leveraged," down from "aggressive." In addition, we have
lowered our assessment of Solway's business risk profile to
"vulnerable," following the severe decline in operating cash flow
in the first half of 2013 and the worsened outlook for nickel
prices, the key profit driver for Solway's Ukrainian ferro-nickel
plant and its Guatemalan Fenix nickel project," S&P said.  S&P
has also lowered Solway's management and governance score to
"weak" from "fair."

S&P expects Solway's free operating cash flow (FOCF) to remain
heavily negative in the second half of 2013 and first quarter of
2014, until the commissioning of its Fenix project.  Solway's
negative free cash flow in the first half was about US$150
million, which it funded through disposal of securities, and S&P
expects free cash flow to remain heavily negative until Fenix
ramps up to its design capacity of 22,000 tonnes of nickel per
year, targeted by the second quarter of 2014.  In addition,
Solway has about US$40 million of debt maturing over the next 12
months.

S&P therefore believes that Solway's current liquidity sources --
reported at US$128 million on June 30, 2013, including US$60
million in cash and the rest in debt and equity securities --
will not be enough to cover its liquidity needs unless Fenix
capex is delayed or the company is able to raise additional
funding.  Solway has already sold most of its liquid assets to
finance construction of Fenix.  S&P understands that Solway still
has some non-core assets on its balance sheet, but these are not
very liquid and therefore the timing of any sale is uncertain.
S&P also understands that the company's management is expecting
proceeds from the sale of residential apartments owned by its
shareholder, but S&P has limited insight into this transaction.
Solway failed to place medium-term notes in mid-2013, because of
unfavorable market conditions, and S&P believes the company's
access to financing is limited.

Furthermore, S&P expects Solway's 2013 operating performance to
be much weaker than it previously anticipated, owing to low metal
prices and the underperformance of some units.  Under S&P's base-
case scenario, 2013 EBITDA could be as low as US$40 million,
compared with US$110 million in 2012. EBITDA was only US$17
million, calculated under Standard & Poor's methodology, in the
first half of 2013.

Under S&P's base-case scenario Solway will likely breach its
covenant limiting the ratio of consolidated net debt to EBITDA at
2.5x.  Solway's gross reported debt at the end of June amounted
to US$154 million, most of which relates to drawings under the
pre-export facility (PXF).  Under the terms of the PXF, covenant
breach can lead to default.  S&P understands that the next
covenant test will be performed when full 2013 financials are
available, probably in April 2014.

The negative outlook reflects S&P's view that Solway is running a
risk of a further downgrade and potentially a default in the next
six to twelve months unless it manages to raise additional funds,
sell non-core assets, and renegotiate the covenants under the
PXF.

S&P will revise the outlook to stable if the company manages to
improve its liquidity by accelerating the sale of its non-core
assets, while renegotiating covenants under the PXF.  A revision
to stable would also depend on some improvement in metal prices,
especially for nickel.



===========
F R A N C E
===========


NEXANS SA: S&P Affirms 'BB/B' Corp. Credit Ratings; Outlook Neg.
----------------------------------------------------------------
Standard & Poor's Ratings Services said it had affirmed its
'BB/B' long- and short-term corporate credit ratings on France-
based cable manufacturer Nexans S.A.  The outlook is negative.

The affirmation follows Nexans' announcement on Oct. 15, 2013,
that it had lowered its earnings guidance for 2013.  On the same
date, the company announced a EUR284 million equity increase, and
provided further details on its costs-savings program.  S&P now
expect the company's Standard & Poor's-adjusted EBITDA margins
will be slightly above 4% in 2013, less than the already low 5%
reported in 2012.  This is despite recovery in Nexans' high-
voltage submarine transmission segment.  On a full-year basis,
S&P expects the company's land high-voltage transmission segment
will remain a drag on margins, owing to structural market
overcapacity. Difficult economic conditions in Europe and lower
demand from specific end markets related to the mining sector in
Australia and the oil and gas sector in North America will also
continue to weigh on revenues and profitability in the more
cyclical distributor and installers segment. Group revenues
declined organically by 2.9%, year on year, for the nine months
to Sept. 30, 2013, and, over the same period, revenues for the
distributor and installers segment fell by 7.3%.

S&P believes, however, that proceeds from the announced
EUR284 million equity increase will improve financial flexibility
and be partly used for EUR100 million debt redemption.  As a
result, S&P believes Nexans' credit metrics will improve slightly
from year-end 2013.  Owing to weaker earnings prospects, S&P
still expects Nexans' ratio of adjusted funds from operations
(FFO) to debt at year-end 2013 will fall short of the 15%-20%
range S&P sees commensurate with a 'BB' rating.

S&P expects a modest turnaround in working capital in the second
half of 2013 and stronger profitability than in first half,
leading to slightly positive free operating cash flow (FOCF) for
the year.  S&P's base case assumes a limited decrease in the
copper price for 2013 compared with 2012.

S&P's assessment of Nexans' financial risk profile remains
unchanged at "aggressive".

Nexans has announced a cost reduction and restructuring plan,
which S&P expects will lead to a gradual improvement in its
operating margin over the next three years.

The negative outlook reflects a one-in-three chance that S&P
could lower its ratings on Nexans in the coming six months if
proceeds from the announced equity injection are not used to
reduce adjusted debt, which includes the EU antitrust fine, or if
S&P believed operating performance and profitability showed
limited signs of improvement in 2014.

S&P could consider revising the outlook to stable once Nexans'
plan for cost reduction and reorganization is well underway,
leading to a turnaround in its operating performance that S&P
believes can be sustained over time.  Any upgrade would depend on
a further reduction in Nexans' adjusted debt through FOCF
generation, leading to an improvement in credit metrics to a
level solidly commensurate with a "significant" financial risk
profile, according to S&P's criteria, such as adjusted FFO to
debt of 20%-30%.



=============
G E R M A N Y
=============


GERMAN RESIDENTIAL 2013-2: Fitch Rates EUR47.8-Mil. Notes 'BB'
--------------------------------------------------------------
Fitch Ratings has assigned German Residential Funding 2013-2
Limited final ratings.

The transaction is a multi-family (MFH) CMBS arranged for the
refinancing of a commercial real estate loan advanced to the
sponsor (the Gagfah group), itself refinancing loans previously
securitized as part of the DECO 17 - Pan Europe 7 Limited
transaction.

EUR76.6m senior debt: not rated

EUR431m class A due November 2024 (ISIN XS0973049983): 'AAAsf';
Outlook Stable

EUR83.6m class B due November 2024 (ISIN XS0973050569): 'AAsf';
Outlook Stable

EUR53.7m class C due November 2024 (ISIN XS0973050726): 'Asf';
Outlook Stable

EUR59.7m class D due November 2024 (ISIN XS0973051021): 'BBBsf';
Outlook Stable

EUR23.9m class E due November 2024 (ISIN XS0973051294):
'BBB-sf'; Outlook Stable

EUR47.8m class F due November 2024 (ISIN XS0973051450): 'BBsf';
Outlook Stable

EUR36.9m class G due November 2024 (ISIN XS0977930261): not
rated

Key Rating Drivers

The final ratings are based on Fitch's assessment of the
underlying collateral, available credit enhancement and the
transaction's sound legal structure.

GRF 2013-2 benefits from geographical diversification, with
Hamburg accounting for 27% by market, and economically strong
areas of Germany such as Hannover at 20%, Braunschweig 6%,
Gottingen 4% and Osnabruck 2%.

The portfolio includes exposures also to less affluent areas of
Germany (Mecklenburg-Vorpommern and Brandenburg as well as some
areas of Schleswig-Holstein). Of the portfolio approximately 15%
is seen as non-core by the sponsor and is targeted to be sold
during the loan term. These assets are largely located in
economically weaker, smaller cities, exhibiting higher-than-
average vacancy levels.

The portfolio's performance has been stable, with occupancy
fluctuating between 94%-95% since 2010. Minimum capital
expenditure requirements, agreed as part of privatization
agreements with local authorities and covenanted in the loan
agreement, should also support portfolio performance. Overall,
Fitch considers the collateral quality as average.

Taking into account the EUR76.6 million senior continuing debt,
the reported loan-to-value (LTV) is 65%. Annual scheduled
amortization of 0.5% per annum will reduce the exit LTV to 62.8%
by loan maturity. This leverage is slightly higher than for MFH
CMBS peers but in line with the German Residential Funding 2013-1
(GRF 2013-1) transaction. A contingent and additional 0.5%
amortization per annum may be triggered on any loan payment date
on or after 20 February 2016, if the sponsor is not able to meet
its target net operating income margin of 61% (currently reported
at 59%).

The transaction features a six-year tail period between loan
scheduled maturity (2018) and legal final maturity of the notes
(2024), although the borrower benefits from a one-year extension
option. This extension option reduces the risk of an uncompleted
workout by bond maturity, particularly given the complex borrower
structure and some sales restrictions relating to the
privatization agreement. The borrowers are pre-existing German
limited partnerships with no employees or material outstanding
liabilities. The borrowers' general partners are not insolvency-
remote and their failure would lead to a solvent liquidation of
the partnerships. Therefore, Fitch has concentrated its analysis
on the enforceability of the security under this scenario.

Deutsche Bank AG, London Branch (A+/Stable/F1+) is hedge
provider, while Bank of America N.A., London Branch (A/Stable/F1)
is liquidity facility provider. While hedging expires at the
loan's scheduled maturity in 2018, Euribor on the notes
thereafter will be capped at 5%, partially mitigating interest
rate risk during the tail.

The controlling class of notes from time to time will be the most
junior tranche with sufficient equity as evidenced by the most
recent valuation. Another material feature in the structure is
that the note waterfall changes after loan maturity, so that
interest on the class A and B notes will rank ahead of principal,
with remaining funds allocated on an interest principal-interest
principal basis from class C through E.

Rating Sensitivities

Fitch tested the rating sensitivity of the class A to F notes to
various scenarios, including an increase in cost assumptions,
capitalization rates and vacancy assumption. Fitch for example
noted that an increase in these three assumptions would result in
the following downgrades.

Expected impact upon the notes' ratings of shift in
capitalization rate, cost and vacancy assumptions (class A/class
B/class C/class D/class E/class F):

  Current Rating: 'AAAsf'/'AAsf'/'Asf'/'BBBsf'/'BBB-sf'/ 'BBsf'

  Deterioration in all factors by 1.1x: 'AA-sf'/'A-sf'/'BBB-
  sf'/'BBsf'/'B+sf'/'CCCsf'

  Deterioration in all factors by 1.2x: 'A-sf'/BBB-sf/'BB-
  sf'/'CCCsf'/'CCCsf'/'CCCsf'



===========
G R E E C E
===========


EUROBANK ERGASIAS: S&P Cuts Rating on EUR200MM Securities to 'C'
----------------------------------------------------------------
Standard & Poor's Ratings Services said that it has lowered to
'C' from 'CC' its issue rating on the EUR200 million 6.0% series
C perpetual preferred securities issued by ERB Hellas Funding
Ltd. and guaranteed by Greece-based Eurobank Ergasias S.A.
(Eurobank), of which EUR50.4 million remains outstanding
following two liability management exercises.  The ISIN number is
XS0234821345.

The rating action follows Eurobank's nonpayment of dividends on
its preferred securities on the due date of Oct. 9, 2013, in line
with its announcement on Oct. 4, 2013, of its intention to
suspend dividend payments on these securities.  The suspension is
in accordance with the terms and conditions of these instruments.



=============
H U N G A R Y
=============


MAGYAR TELEKOM: Seeks Court Hearing for Debt-Equity Swap Approval
-----------------------------------------------------------------
Telecompaper reports that Magyar Telekom announced plans to apply
to the High Court of Justice in England and Wales for a court
hearing to be held no earlier than Oct. 28 for approval of its
earlier announced debt-equity swap.

According to Telecompaper, this should include permission to
convene a meeting of creditors for approving the scheme.

Based on the preliminary agreement reached in July, holders of
more than 70% of the operator's senior secured notes due 2016
have agreed to support the restructuring, Telecompaper recounts.

Magyar Telekom -- http://www.telekom.hu-- provides
telecommunications services in Hungary. The Company provides
voice services and data communication services.



=============
I R E L A N D
=============


SIAC CONSTRUCTION: May Seek Court Protection This Week
------------------------------------------------------
Ciaran Hancock and Colm Keena at The Irish Times report that Siac
Construction is expected to seek the protection of the courts
this week as losses in Poland threaten the 100-year-old business.

According to The Irish Times, it is expected the application to
the courts will be supported by the group's main lenders, Bank of
Ireland, KBC and Bank of Scotland Ireland.

Last year, the group cancelled a EUR400 million road project in
Poland because of a dispute it was having with a local authority
there, The Irish Times recounts.

The Irish Times relates that Siac chief executive Finn Lyden said
the company was going seek damages of EUR22 million and make a
complaint to the European Commission.

Earlier this year, the European Commission announced it was
freezing hundreds of millions of euro in development aid for
Poland, because of fears of corruption in road-building, The
Irish Times discloses.

Siac also pulled out of Polish road-building projects last year
citing delays and unexpected costs associated with the Polish
roads authority, as did Irish firm Roadbridge, The Irish Times
notes.

Siac Construction is one of Ireland's largest construction
groups.  The Siac group has operations in Ireland, Britain,
Belgium, Canada and Poland and has approximately 560 employees.


* IRELAND: EU/IMF Bailout Extended Until Early Next Year
--------------------------------------------------------
BreakingNews.ie reports that Ireland's European
Union/International Monetary Fund bailout has been officially
extended.

Ministers attending a meeting in Luxembourg have signed off on
extending the scheme until early next year, BreakingNews.ie
relates.

However the extension will not mean that Ireland is subject to
any extra scrutiny from the Troika, BreakingNews.ie notes.

According to BreakingNews.ie, the two-month extension means the
Troika has time to complete its final inspection of Ireland's
progress, which was delayed because of the Budget being brought
forward.



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


SPAIN: CSIC Gets Cash Injection; More Funds Needed for Survival
---------------------------------------------------------------
Michele Catanzaro at Nature reports that Spain's National
Research Council (CSIC) has been brought back from the brink of
financial disaster by a cash injection.

According to Nature, the government approved additional funds of
EUR70 million on Friday -- close to the EUR75 million the
institute's director had said was needed before the end of the
year to save the institution from ruin.

CSIC, Spain's largest scientific organization, is responsible for
more than 100 institutes, employing about 6,000 scientists,
Nature discloses.  But annual funding from the government has
been cut over the last five years to 30% of 2008 levels,
Nature notes.

The government gave CSIC an extra EUR25 million at the end of
June and, by clawing back unspent grant money from its
institutes, the research council slashed its spending,
Nature relates.  But in July, Emilio Lora-Tamayo, CISC's
president, told reporters that the institution faced
"catastrophe" -- with the closure of some institutes -- unless a
further EUR75 million were found before the end of the year,
Nature recounts.

Emilio Criado, a retired chemist formerly at CSIC, and member of
the Workers' Commissions (CCOO), Spain's largest trade union,
agrees that CSIC has avoided bankruptcy for now, Nature
discloses.  But the funding will barely keep the institution
afloat, Mr. Criado, as cited by Nature, said: "Now the engine is
on, but there is not enough gasoline to make the car move."

Nature notes Mr. Criado said Spain's draft budget for next year
increases CSIC's budget by EUR50 million, but that is only about
half of the EUR95 million that was required this year to ensure
the funder's survival.



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


NAFTOGAZ: Near-Missed Coupon Heightens Investors Worries
--------------------------------------------------------
Fitch Ratings says that last week's market reaction around NJSC
Naftogaz of Ukraine's (Naftogaz, CCC) near miss on its eurobond
coupon highlights the negative sentiment that Ukrainian issuers
are facing.

Funds to pay Naftogaz's US$75.8 million semi-annual coupon
payment on its US$1.595 billion eurobond that matures in
September 2014 arrived with bondholders just two days before the
grace period deadline of 10 October, owing to the UK court-
imposed freeze of funds on its account. The company says it
originally transmitted the funds on 30 September. The coupon
payment on the bond guaranteed by Ukraine was made without
calling on the state guarantee.

The payment followed market speculation on whether Naftogaz had
run out of money to pay the coupon and on whether it had to
request for emergency funds from the state. While we do not see
this as an indication of a larger looming liquidity shortage at
the company, poor market sentiment underlines the lack of
confidence in the company's ability to service its obligations; a
perception that may also apply to other lowly-rated Ukrainian
corporates. The latter is particularly true in light of Ukraine's
weak external finances.

"We continue to view Naftogaz's stand-alone financial profile and
liquidity as weak. At end-June 2013 (latest available accounts
under national accounting standards), Naftogaz had UAH26.5
billion (US$3.3 billion) in short-term debt including a 8.5% US$2
billion (UAH16 billion) loan from Gazprombank (BBB-/Stable) that
was extended in October 2013 with a new state guarantee. It had
UAH1.7bn in cash on that date, well short of short-term
maturities," Fitch says.

"Naftogaz's EBITDA in H113 was negative UAH4.7 billion, implying
that the company was haemorrhaging cash during this period. We
expect the company to generate negative free cash flow (FCF) in
2013 and 2014 based on Fitch's estimate of import gas price of
around US$400 per thousand cubic meters (mcm) for the same
period, and on existing domestic gas tariffs. Since late
September 2013, the yield on Naftogaz's eurobonds has been
fluctuating between 16%-17%, worsening the company's already weak
access to debt markets.

"We rate Naftogaz's 2014 eurobonds at 'B' because of the
sovereign guarantee. Had the coupon not been paid within 30 days,
it would have triggered a cross default on all Ukraine's
sovereign debt."



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


CHARLES GEE: Acute Cashflow Pressures Prompt Administration
-----------------------------------------------------------
John Collingridge at Press Association reports that Charles Gee
Group has been forced into administration after running out of
cash.

Charles Gee called in restructuring firm FRP Advisory after
suffering "acute cashflow pressures" following years of tough
trading, Press Association relates.

Administrators warned job losses among its 250 staff are possible
as they look for buyers of its various subsidiaries, Press
Association notes.

According to Press Association, a spokesman for the
administrators said Charles Gee had hoped to win work on the new
nuclear plant, which on Monday got the green light after lengthy
delays over agreeing taxpayer subsidies.

"We are highly focused on working with the group's customers and
suppliers and in engaging with interested parties," Press
Association quotes Geoff Rowley, FRP Advisory joint
administrator, as saying.  "In line with economic issues facing
many businesses, Charles Gee has faced challenging trading
conditions for a number of years and despite the support of its
loyal customer base, recent cash flow problems have prompted the
need to seek the protection of administration."

Charles Gee is a haulier and shipping group.  The group serves
the nuclear power industry, and has offices in Clevedon and
Bridgewater.


CO-OPERATIVE BANK: Pledges to Stick to Ethical Stance
-----------------------------------------------------
Andrew Bounds at The Financial Times reports that Euan Sutherland
sought to stave off an exodus of Co-operative Bank customers by
pledging the group would stick to its ethical stance amid signs
of widespread hostility to the prospect of having hedge funds
among Co-operative members.

The FT relates that the Co-operative Group chief executive said
in a video message that it was "embedding co-operative principles
in the constitution of the bank to guarantee them" after social
media sites erupted with customers asking where they should move
their money.

"Hedge funds may retain the co-operative ethos for fear of losing
customers in droves.  But they'll need to convince it's not just
another bank," the FT quotes Adam Scorer, director of Consumer
Futures, a campaign group, and a customer, as saying.  He said he
had heard "zilch" from the bank, the FT notes.

According to the FT, the Co-op Bank said it had no evidence of
customers moving and it would continue to implement the ethical
stance it embraced in 1992 and give priority to customer service.
It turns away about GBP100 million of business a year from
companies it considers unethical, the FT notes.

There could even be a legal challenge about the use of the name,
the FT says.  A new business can only call itself a
"co-operative" if it meets internationally agreed co-operative
values and principles, including one member, one vote, the FT
states.

However, the legal status of existing companies is unclear,
according to the FT.

                           Rescue Deal

As reported by the Troubled Company Reporter-Europe on Oct. 22,
2013, Philip Aldrick at The Telegraph related that the
Co-operative Group agreed to cede control of its stricken banking
arm after bondholders threatened to block the lender's rescue.
The supermarkets-to-funerals mutual has torn up its original
restructuring plan after proposals to fill a GBP1.5 billion black
hole in its banking arm were rejected by creditors, The Telegraph
disclosed.  Under a new rescue deal that has been agreed in
principle and will ensure the lender survives, the group will
retain only a minority stake in its subsidiary, the Co-operative
Bank, according to The Telegraph.  The bulk of the bank's GBP1.3
billion of subordinated debt holders will be swapped into bank
equity, handing them 70% of business, the Telegraph said.  The
Co-op will hold the remaining 30% and be the bank's biggest
shareholder, The Telegraph noted.  Despite the Co-op's loss of
control, the lender will continue to operate under the Co-
operative brand and keep its distinctive ethical offering, The
Telegraph stated.

                     About Co-operative Bank

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

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

                           *     *     *

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


GALAXY FINCO: Moody's Assigns 'B2' CFR; Outlook Stable
------------------------------------------------------
Moody's Investors Service assigned a B2 corporate family rating
(CFR) and B1-PD probability of default rating (PDR) to Galaxy
Finco Limited (Domestic & General or D&G), the UK-based warranty
services provider. Concurrently, Moody's assigned a (P)B2 rating
to the GBP150 million senior secured floating rate notes due 2019
and the GBP200 million senior secured notes due 2020 issued by
Galaxy BidCo Limited and a (P)B3 rating to the GBP150 million
senior notes due 2021 raised by D&G. The outlook on all ratings
is stable.

Ratings Rationale:

Domestic & General's B2 CFR is constrained by the company's high
initial leverage of 6x (based on last twelve months to June 2013,
pro-forma and on a Moody's adjusted basis) following the
refinancing. In addition, Moody's negatively views the
competitive nature of the market in the UK for extended
warranties at the point of sale which is dominated by large
retailers such as Dixons. Finally, the company is subject to
client concentration as the top 3 clients represented
approximately 52% of fiscal year (FY) 2013 revenues. These
challenges are counter-balanced by Domestic & General's track
record of sustained revenue growth despite a difficult macro-
economic environment and cash flow generation. This positive
performance has been supported by the company's solid market
position in the UK as the largest independent extended warranty
provider and its long-standing relationship with 10 of the 12
largest white goods OEMs.

Moody's recognizes the company's progress over recent years in
diversifying its revenues outside of the UK -- the international
business accounted for 20% of group revenues in FY2013 compared
to 10% in FY2010. D&G's original equipment manufacturer (OEM)-
based business model continues to be new to many markets outside
the UK providing Domestic & General a growth opportunity going
forward, in particular in Germany which is the largest
international market for D&G representing 11% of revenues in
FY2013 compared to 6% in FY2010. In its core UK market, the
company aims to further leverage existing customer data and
relationships through new, targeted marketing campaigns for which
the pace of success is more difficult to estimate.

Finally, Moody's notes that Domestic & General is subject to a
degree of regulatory event risk as a significant portion of the
company's revenues and EBITDA are generated from its insurance-
type activities.

The (P)B2 rating for senior secured floating and fixed rate notes
(due 2019 and 2020) reflects their subordination to the GBP80
million super senior revolving credit facility due 2019.
Similarly, the (P)B3 rating for the GBP150 million senior notes
(due 2021) incorporates the substantial amount of notes ranking
ahead. The guarantee and security package (share pledges
primarily) supporting the notes comprise at least 85% of D&G's
unregulated subsidiaries which accounted for approximately half
of sales and a third of group EBITDA (following the
reclassification of Sky customers). Moody's also notes that D&G
has flexibility to incur GBP130 million of debt (not subject to
debt incurrence test) under the bond agreements including
drawings under the GBP80 million super senior revolving credit
facility due 2019.

Moody's views D&G's liquidity profile as adequate. Following the
refinancing, the company will have no cash available outside the
regulated subsidiaries for debt service, but will instead rely on
its GBP80 million revolving credit facility due in 2019 of which
GBP35 million will be reserved for letters of credit and
internally generated free cash flow. The revolving facility does
not carry any financial maintenance covenants.

D&G's liquidity profile is also supported by substantial cash
balances and conservative short-term investments in the regulated
business. Although the company has taken the decision to reduce
the capital buffer over minimum capital requirements to 30% from
70% (pending regulatory approvals) to reduce the equity
contribution of equity investors, Moody's would nevertheless
expect D&G to maintain its conservative approach to investments
as well as a visible capital buffer in the regulated business.

The stable outlook reflects Moody's view that D&G will continue
to deliver visible growth and positive free cash flow.

Negative pressure would arise if Debt/EBITDA increases above
6.25x or free cash flow approaches zero. In any case, a weakening
liquidity profile would create downward rating pressure.

The rating could come under positive pressure if D&G executes
successfully on its domestic and international growth plans so
that Debt/EBITDA approaches 5.5x and the company enhances its
liquidity position.


GALAXY FINCO: S&P Assigns Preliminary 'B' CCR; Outlook Stable
-------------------------------------------------------------
Standard & Poor's Ratings Services assigned its preliminary 'B'
long-term corporate credit rating to U.K.-based warranty services
provider Galaxy Finco Ltd. (trading as Domestic & General; D&G).
The outlook is stable.  At the same time, S&P assigned its
preliminary 'B' issue rating to the proposed GBP150 million-
equivalent senior secured floating-rate notes due 2019 and the
proposed GBP200 million senior secured notes due 2020, to be
issued by D&G's 100% subsidiary Galaxy Bidco.  The recovery
rating on both the senior secured floating-rate notes and the
senior secured notes is '4', indicating S&P's expectation of
average (30%-50%) recovery in the event of a payment default.  In
addition, S&P assigned its preliminary 'CCC+' issue rating to the
proposed GBP150 million senior notes due 2021 to be issued by
D&G. The recovery rating on the senior notes is '6', indicating
S&P's expectation of negligible (0%-10%) recovery for lenders in
the event of a payment default.  The preliminary ratings are
based on preliminary information and are subject to the
successful closing of the acquisition, debt issuance, and S&P's
satisfactory review of the final documentation.

                             Rationale

The ratings on D&G reflect S&P's assessment of the group's
financial risk profile as "highly leveraged" and business risk
profile as "fair," as S&P's define these terms.  D&G benefits
from good revenue visibility due to high customer contract
retention rates.  S&P anticipates that the group's revenues will
grow by more than 10% to about GBP635 million in the year to
March 31, 2014 (financial 2014).  At the same time, the group's
EBITDA margin should improve toward 14% as management continues
to optimize the cost base.  The group has historically benefitted
from robust cash flow generation, and S&P forecasts that D&G will
generate Standard & Poor's-adjusted funds from operations (FFO)
of nearly GBP48 million in financial 2014.

D&G is being acquired by private equity firm CVC, subject to
regulatory approval in the U.K. and Australia.  To fund the
acquisition, D&G will issue GBP150 million of new senior notes,
and Galaxy Bidco will issue GBP150 million of new senior secured
floating-rate notes and GBP200 million of new senior secured
notes.  D&G will use the proceeds of these new notes to repay
GBP318 million of existing term debt and GBP50.5 million of
existing shareholder loans and accrued payment-in-kind (PIK)
interest.

The group's new capital structure will include GBP125 million of
shareholder loans that accrue PIK interest at what S&P considers
to be an aggressive rate of 10%, and GBP113 million of preference
shares.  S&P views both the shareholder loans and preference
shares as debt under our criteria.  S&P forecasts that the
group's adjusted debt to EBITDA will be just less than 9x (or
about 6x excluding shareholder loans and preference shares) in
financial 2014, and that FFO to debt will be slightly more than
6% (about 9% excluding shareholder loans and preference shares).
S&P forecasts that cash interest coverage will be about 3x in the
near to medium term.  At this stage, S&P views any further
potential refinancing, recapitalization, or sizable acquisition
as posing "event risk" and therefore do not factor them into
S&P's analysis.  D&G's "fair" business risk profile reflects the
fact that the group's geographic footprint is relatively
concentrated, with a significant portion of sales generated in
the U.K.  The group is also vulnerable to potential reputational
damage and the risk of litigation.  Furthermore, D&G has
relatively high client concentration, with its top three original
equipment manufacturer (OEM) clients accounting for nearly one-
half of annual revenues.  On the other hand, D&G has significant
scale and a strong market position in the U.K.  The U.K. warranty
services market is generally well-developed and mature, whereas
the international market is underdeveloped and fragmented.

Overall, demand tends to be stable, with good customer retention
rates and relatively benign price competition.  Barriers to entry
are moderate.  Switching costs for end customers are low.
Despite the aforementioned client concentration, D&G benefits
from good revenue visibility due to long-established, multi-year
contracts with the OEMs.  The group has a strong track record of
operating performance and also benefits from the protection of
regulation, with which new entrants would have to comply in order
to do business characterized by low capital intensity, an ability
to quickly adjust their cost base, as well as some resilience to
short-term fluctuations in economic cycles.  S&P views these as
positive features that it factors into its assessment of D&G's
business risk profile.

S&P assess D&G's management and governance as "fair," reflecting
its experienced management team and clear organic growth plans.

                            Liquidity

S&P assess D&G's liquidity as "adequate" under its criteria.
Following the change in ownership and the refinancing of existing
debt through the issuance of GBP500 million of notes, the group
will have no near-term debt maturities.  The group will also
issue a new super senior revolving credit facility (RCF) of
GBP80 million, which S&P understands will remain undrawn at the
time of the acquisition.

S&P forecasts that D&G's liquidity sources will be more than
GBP900 million over the 12 months to March 31, 2014, including:

   -- GBP33 million in cash;

   -- The undrawn committed RCF of GBP80 million;

   -- S&P's forecast of unadjusted FFO of about GBP46 million;

   -- The proceeds from the issuance of GBP500 million in notes;
      And

   -- The proceeds of GBP125 million of new shareholders loans,
      GBP113 million of preference shares, and GBP10 million of
      pure equity.

S&P forecasts that D&G's uses of liquidity will total less than
GBP800 million over the 12 months to March 31, 2014, comprising:

   -- The repayment of existing bank debt of GBP318 million;

   -- The repayment of GBP50.5 million of shareholder loans and
      accrued interest;

   -- Capital expenditure of GBP9 million;

   -- A cash payment of GBP378.5 million to the existing
      shareholders on exit; and

   -- Transaction fees of about GBP42 million.

                         Recovery analysis

The preliminary issue rating on the GBP150 million-equivalent
senior secured floating-rate notes due 2019 and GBP200 senior
secured notes due 2020, to be issued by Galaxy Bidco, is 'B', in
line with the corporate credit rating on D&G.  The preliminary
recovery rating on the senior secured notes is '4', indicating
S&P's expectation of average (30%-50%) recovery in the event of a
payment default.

The preliminary issue rating on the GBP150 million senior notes
due 2021 to be issued by D&G is 'CCC+', two notches below the
corporate credit rating.  The preliminary recovery rating on the
senior notes is '6', indicating S&P's expectation of negligible
(0%-10%) recovery in the event of a default.

The proposed capital structure also includes an
GBP80 million super senior RCF, to be issued by Galaxy Bidco.
The senior secured notes and the RCF will share the same
security. However, S&P understands from the intercreditor
agreement that the RCF will rank super senior in terms of the
proceeds from the enforcement of security.  The security will
consist of all the group's assets, including bank accounts and
intercompany receivables, and all other assets inthe unregulated
subsidiaries.

The senior notes will be structurally and contractually
subordinated to the senior secured notes and the RCF.  The senior
notes will only benefit from a first-ranking pledge on the shares
of their issuer D&G, a second-ranking pledge over the shares of
Galaxy Bidco, and subordinated guarantees.

The recovery ratings are underpinned by D&G's U.K. jurisdiction,
which S&P considers to be favorable for creditors, and its track
record of solid performance and long-term partnerships.  However,
S&P acknowledges the risk of negative changes in regulation and
or damage to the group's reputation.

The documentation of the senior secured notes and RCF does not
include maintenance financial covenants.  However, it does
include a restriction on the incurrence of additional
indebtedness when fixed charge coverage is less than 2x and on
the incurrence of additional senior secured debt when senior
secured leverage is more than 4.25x.

To calculate recoveries, S&P simulates a hypothetical default
scenario.  S&P believes that a default would most likely occur in
2016, driven by a combination of a further economic downturn, a
reduction in consumer spending on new products, a negative change
in the regulatory environment, and increased competition.

S&P values D&G on a going concern basis, and believe that EBITDA
would decline to approximately GBP52 million at the point of
default.  S&P values the business using an EBITDA multiple of 5x,
resulting in a stressed enterprise value of approximately
GBP260 million.  From this, S&P deducts administrative expenses
and the priority-ranking RCF, which S&P assumes to be fully drawn
at the point of default and to include six months of prepetition
interest.  This results in a net enterprise value of
GBP164 million available for the senior secured noteholders.  At
the point of default, S&P assumes GBP363 million of senior
secured notes outstanding, including six months of prepetition
interest. This results in recovery prospects in the 30%-50% range
for the senior secured notes and in the 0%-10% range for the
senior notes.

                            Outlook

The stable outlook reflects S&P's view that demand for D&G's
services should remain strong over the next 12-18 months, and
that the group's margins will remain robust.

S&P believes that rating upside is limited at this stage, because
of D&G's high tolerance for aggressive financial policies and
very high leverage.  S&P could raise the ratings if D&G's credit
metrics were to improve to levels S&P's view as commensurate with
an "aggressive" financial risk profile.  This could occur if the
group's EBITDA margins were to rise or debt levels were to fall.
More specifically, an upgrade would require the group to improve
its adjusted FFO to debt to more than 12% and its adjusted debt
to EBITDA to less than 5x (including shareholder loans and
preference shares), with clear evidence that these improvements
were sustainable.

S&P could lower the ratings if D&G were to experience severe
margin pressure, or poorer cash flows, leading to weaker credit
metrics.  Downward rating pressure may also stem from debt-funded
acquisitions and/or increased shareholder returns.

Ratings List

New Ratings

Galaxy Finco Ltd. (Domestic & General)
  Corporate Credit Rating                B(prelim)/Stable/--
  Senior Unsecured                       CCC+(prelim)
  Recovery Rating                        6(prelim)

Galaxy Bidco Ltd.
  Senior Secured*                        B(prelim)
  Recovery Rating                        4(prelim)

* Guaranteed by Galaxy Finco Ltd.


GLASTONBURY 2007-1: Fitch Affirms 'C' Ratings on 3 Note Classes
---------------------------------------------------------------
Fitch Ratings has affirmed Glastonbury 2007-1 P.L.C.'s notes as
follows:

  GBP1m class X (XS0292542734): affirmed at 'AAAsf', Outlook
  Stable

  EUR123m class A1 EUR (no ISIN): affirmed at 'BBBsf', Outlook
  Negative

  GBP14.3m class A1 GBP (no ISIN): affirmed at 'BBBsf', Outlook
  Negative

  GBP33.0m class A2 (XS0292543039): affirmed at 'Bsf', Outlook
  Negative

  GBP32.8m class B (XS0292543112): affirmed at 'CCCsf'

  GBP32.8m class C (XS0292543468): affirmed at 'CCsf'

  GBP17.3m class D (XS0292543542): affirmed at 'Csf'

  GBP11.5m class E (XS0292543898): affirmed at 'Csf'

  GBP4.8m class F (XS0292543971): affirmed at 'Csf'

Key Rating Drivers

The affirmations reflect the notes' level of credit enhancement
relative to the portfolio's credit quality. Investment grade
assets comprise 72.95% of the pool up from 2012 when they
comprised 62.76% of the pool. The 'CCC' and below bucket has also
increased in size up to 20% of the pool from 11.9% at the
previous review. These increases reflect the natural reduction of
the pool size through maturities, defaults, sales, and paydowns
and not deterioration in the pool's asset quality. Total assets
have decreased to GBP190 million from GBP255 million at 2012's
review. The majority of the pool is comprised of CMBS (73%) with
the remainder commercial ABS (27%).

Classes A1 and A2 remain on a Negative Outlook to reflect the
portfolio's increasing obligor concentration. Currently 13 assets
remain in the pool and there are 11 obligors. The largest obligor
in the pool comprises 17% of the outstanding notional balance.
There are three 'CCC' assets in the pool and these make up 20% of
the outstanding notional balance. The transaction's reinvestment
period ended in May 2010.

All OC tests are failing apart from the class A
overcollateralization (OC) test which has a cushion of 7%. OC
levels have begun to decline after going through a period of
improvement after the end of the reinvestment period. Class A and
B interest coverage tests are passing with cushions of 172% and
109% respectively.

The class X notes rank senior to the class A1 notes and pay a
fixed installment of GBP125,000 every quarter. Their balance
currently stands at GBP1m and as such the notes are expected to
be fully redeemed on the August 2015 payment date.

Glastonbury Finance 2007-1 P.L.C. is a managed cash arbitrage
securitization of CMBS and WBS assets. The issuer has been
incorporated as a special-purpose vehicle to issue approximately
GBP354m of floating-rate and subordinated notes. The collateral
is actively managed by Palatium Investment Management. Since the
end of the reinvestment period, any amortization and sales
proceeds are used to sequentially repay the outstanding notes.

Rating Sensitivities
The class A1 is a dual currency class. This provides a natural
hedge to the assets which are denominated in euros. Fitch
performed a FX rate sensitivity analysis by depreciating the
pound against the euro to an exchange rate of 1 to 1 and
recalculating the credit enhancement for the notes. This had no
material effect on ratings. Fitch also recalculated the interest
coverage (IC) for the class A notes. The adjusted IC level passes
the IC test with a cushion of 130%.


INEOS GROUP: Fails to Get Union Support for Survival Program
------------------------------------------------------------
Roland Gribben at The Telegraph reports that the future of the
Grangemouth petrochemical and refinery complex was set to be
decided at a meeting of Ineos shareholders yesterday, after the
company failed to win support it needed from the workforce for a
GBP300 million survival program and a no strike commitment.

Jim Ratcliffe, founder chairman and majority shareholder, who
will effectively make the decision, is under political pressure
to postpone a decision and restart negotiations with Unite, the
union, The Telegraph says.

He has bluntly warned that he is no longer prepared to tolerate
losses running at GBP10 million a month in a petrochemical
business unable to compete against cheap imports, The Telegraph
notes.

There has been speculation that he might offer the chemical side
of the business to the Scottish Government but this was being
denied in Ineos circles, The Telegraph states.

According to The Telegraph, both Ineos and Unite continued the
"hearts and minds" battle for the survival program up to the 6:00
p.m. voting deadline on Monday night with the union claiming the
company was well short of the majority it needed.  Ineos claimed
to have acceptances from more than 300 of the 1,300 workers at
one stage on Monday while Unite said it had 665 "no" votes, with
more expected, The Telegraph relays.

The union has advised members not to sign because the survival
program involves surrendering generous pension terms in return
for a GBP15,000 incentive payment, The Telegraph discloses.

Ineos knew it was taking a risk by asking for the undertakings
from staff since the outcome was not wholly dependent on majority
support but the backing of key personnel operating the plants,
The Telegraph notes.

Grangemouth has been shut for almost a week, after the initial
failure to win support for a no-strike vote, and the loss of
refinery output is beginning to cause concern, The Telegraph
recounts.

According to The Telegraph, Pat Rafferty, Unite's Scottish
Secretary, has accused Ineos of engaging in "bribes and
blackmail."  Mr. Rafferty, as cited by The Telegraph, said on
Monday the union had "continuously given assurances of no strikes
from now until December."

"Ineos wants to come to the negotiating table at the same time as
threatening our members and threatening people here with the sack
in 45 days.  You can't negotiate and impose at the same time,"
The Telegraph quotes Mr. Rafferty as saying.

                        About INEOS Group

INEOS Group is the world's third largest chemical company
consisting of some 15 businesses.  Product lines include ethylene
oxide-based specialty and intermediate chemicals, fluorochemicals
used as refrigerants and propellants, and phenol and acetate
products. INEOS Chlor makes chlor-alkali chemicals.  INEOS Group
was formed in 1998 after CEO Jim Ratcliffe, who controls the
group, led a management buyout.  It now operates more than 60
manufacturing facilities in 13 countries worldwide.  Ratcliffe
has placed INEOS among the world's top chemical companies (with
ExxonMobil, Dow, and BASF) through his many and varied
acquisitions.


WINDERMERE XI: Moody's Reviews Ba2 Rating on GBP570MM Notes
-----------------------------------------------------------
Moody's Investors Service has taken rating action on the
following class of Notes issued by Windermere XI CMBS plc
(amounts reflect initial outstanding):

  GBP570M A Certificate, Ba2 (sf) Placed Under Review for
  Possible Upgrade; previously on Jun 6, 2011 Downgraded to Ba2
  (sf)

Rating action does not impact the Class B Notes. Moody's does not
rate the Class C, Class D and Class E Notes.

Ratings Rationale:

The review for possible upgrade results from the better than
expected performance of the Devonshire House Mortgage Loan which
contributes 45% to the pool. The prime Mayfair, London office
property securing the loan has been successfully repositioned by
the sponsor. Through an extensive capex program the vacant space,
which reached 43% (per July 2013 reporting) and some common areas
were refurbished and according to market news, lettings at high
rental levels have been achieved. The expected increase in the
property's cash flow and the strong demand for prime office
properties in this area will positively impact Moody's value
assessment and refinancing expectation for the loan which matures
in April 2014. Moody's will conclude the review for possible
upgrade after it has received detailed information on the new
lettings.

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

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



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


* ECB President Challenges EU Bank-Aid Rules Over Forced Losses
---------------------------------------------------------------
Rebecca Christie, Jana Randow and Ian Wishart at Bloomberg News
report that European Central Bank President Mario Draghi
challenged rules that would bar banks from accessing public aid
unless they forced losses on junior bondholders, a central
building block of European Union protocols for handling
struggling banks.

According to Bloomberg, in a letter to EU Competition
Commissioner Joaquin Almunia, Mr. Draghi said EU rules need to be
clarified so regulators can order technically solvent banks to
strengthen their balance sheets without scaring off investors.

Bloomberg relates that Mr. Draghi said public capital needs to be
available -- without wiping out subordinated debt holders or
forcing them to convert to equity -- if a bank's holdings are
above regulatory minimums and also below what supervisors deem
necessary in a particular case.

"An improperly strict interpretation of the state-aid rules may
well destroy the very confidence in the euro-area banks which we
all intend to restore," Mr. Draghi said in a July 30 letter to
Mr. Almunia obtained by Bloomberg News.  The ECB president called
for the possibility of "precautionary recapitalizations" that
would dilute shareholders without hurting junior bondholders and
that also would give banks temporary access to public money,
Bloomberg recounts.

Mr. Draghi's comments come as EU officials squabble over what
backstops should be put in place should the ECB decide that
individual banks need more capital after a series of assessments
next year, Bloomberg relays.  The danger under the state-aid
rules addressed by Mr. Draghi's letter is that subordinated bond
holders could dash to dump their investments if a bank is deemed
to require cash, risking another round of market turmoil,
Bloomberg notes.

The ECB will announce today, Oct. 23, how it will handle
comprehensive assessments of euro-area banks, which are needed as
it prepares to take over the currency bloc's financial
supervision next year, Bloomberg discloses.  According to
Bloomberg, the Frankfurt-based central bank has said its reviews
need to be tougher than previous rounds of European stress tests
in order to reassure investors that euro-region banks aren't on
the brink of another crisis.

Mr. Draghi flagged the possibility that supervisors could decide
a bank needs more capital even if it isn't on the brink of
failure, and therefore might need to tap government backstops if
the lender couldn't raise money quickly enough on private
markets, Bloomberg states.


                            *********

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 * * *