TCREUR_Public/131127.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, November 27, 2013, Vol. 14, No. 235

                            Headlines

A L B A N I A

BELLE AIR: Temporarily Suspends Flights Due to Financial Woes


A U S T R I A

BEE FIRST: Fitch Rates EUR6.6MM Class D Notes 'BB+(EXP)sf'


F I N L A N D

TALVIVAARA MINING: Espoo Court Postpones Ruling on Restructuring


F R A N C E

LUMENEO SAS: EV Maker in Liquidation Due to Low Sales


I R E L A N D

IRISH BANK: US Court Hears New Submission in Flynn Case


I T A L Y

ASTALDI SPA: S&P Assigns Preliminary 'B+' CCR; Outlook Stable
BANCA MONTE: Four Banks to Underwrite EUR3-Bil. Stock Sale


K A Z A K H S T A N

CONDENSATE JSC: Fitch Affirms 'B-' Long-term IDR; Outlook Stable
MANGISTAU ELECTRICITY: Fitch Affirms 'BB+' Issuer Default Rating


P O R T U G A L

PORTO CITY: Fitch Affirms 'BB+/B' Long-Term Currency Ratings


R O M A N I A

OLTCHIM RAMNICU: Two Chinese Firms Sign Letter Of Intent


R U S S I A

ISR TRANS: Moody's Assigns B3 Corp. Family Rating; Outlook Stable
MECHEL OAO: Enters Agreement with Banks on Covenant Holiday


S E R B I A

SERBIA: Fitch Rates US$1BB Eurobond Due December 2018 'BB-'


S P A I N

PYMES SANTANDER 7: Moody's Assigns 'Ca' Rating to Serie C Notes
PYME VALENCIA 1: Fitch Affirms 'Csf' Rating on Class E Notes


U N I T E D   K I N G D O M

2K MANUFACTURING: Goes Into Administration
ARCH CRU: Fund Investors Seek Better Payout
CAPERFLY: Studio Enters Liquidation
LINPOP: Quickline Acquires Firm Out of Administration
LLOYDS SYNDICATE: Moody's Gives Neg. Outlook to 'B-' Opinion

MARSTON AGRICULTURAL: In Administration, Cuts 20 Jobs
RIVERMILL FOODS: Bakery Placed Into Liquidation
YALES LEISURE: In Administration, Remains Open for Business


X X X X X X X X

EUROPE: Moody's Says Prospects Improving for B2B Companies


                            *********


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A L B A N I A
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BELLE AIR: Temporarily Suspends Flights Due to Financial Woes
-------------------------------------------------------------
Top Channel reports that Belle Air has temporarily suspended all
flights due to financial problems, while hundreds of travelers
were blocked in Italian airports.

"After eight years of successful operations from Albania to
European destinations, Belle Air has been obliged to suspend its
flights temporarily.  The reasons that brought this are the
general economic situation, the dropping of the buying power,
recession in the markets where we operate and the blockage of all
bank accounts for more than 18 days," Top Channel quotes the
company as saying.

According to Top Channel, 200 people who were blocked in Verona,
Italy, obliged to pass the night in a hotel.  Many of them cannot
buy tickets to other lines for returning to Albania, Top Channel
discloses.  Top Channel contacted with passengers, who said that
they had not been notified about the canceling.

Belle Air Sh.p.k. is a privately owned low-cost airline, founded
in 2005, with its head office in Tirana, Albania.



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A U S T R I A
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BEE FIRST: Fitch Rates EUR6.6MM Class D Notes 'BB+(EXP)sf'
----------------------------------------------------------
Fitch Ratings has assigned Bee First Finance S.A. - Compartment
Edelweiss 2013-1 (Edelweiss)'s notes the following expected
ratings:

  EUR230.5m Class A notes, due December 2021: 'AAA(EXP)sf';
  Outlook Stable

  EUR18.3m Class B notes, due December 2021: 'A(EXP)sf'; Outlook
  Stable

  EUR9.3m Class C notes, due December 2021: 'BBB(EXP)sf'; Outlook
  Stable

  EUR6.6m Class D notes, due December 2021: 'BB+(EXP)sf'; Outlook
  Stable

The final ratings are contingent upon the receipt of final
documents conforming to the information already received and on a
satisfactory review of final legal opinions to support the
agency's analytical approach.

The transaction is a one-year revolving securitization of vehicle
lease receivables originated in Austria by EBV Leasing GmbH & Co.
KG (EBV), ultimately owned by Erste Bank Group AG (Erste Bank,
A/Stable/F1).

Key Rating Drivers:

Lessee defaults
Fitch has assumed a base case default rate of 2.8% and applied
default multiples of 6.8x in a 'AAAsf' scenario, 4x in 'Asf',
2.9x in 'BBBsf' and 1.8x in 'BB+sf', reflecting primarily the
presence of balloon risk, the revolving nature of the pool and a
concentration towards employees of Erste Bank and Vienna
Insurance Group (VIG). Fitch set its recovery base case at 67.7%,
applying haircuts of up to 45% in 'AAAsf'.

Revolving Period Additional Risk
The transaction envisages a one-year revolving period. Fitch
considers that the early amortization triggers, along with the
eligibility criteria and available credit enhancement, mitigate
the risk added by the revolving period. The agency analyzed
potential changes in the pool composition during this period and
assumed a shift towards a more risky -- considering Fitch's loss
assumptions -- composition.

Limited Residual Value Risk
The lessee's right to return the vehicles at maturity, in lieu of
settling balloon payments, exposes the issuer to residual value
(RV) risk; however, these rights are restricted under the lease
contracts. Additionally, if a lessee exercises such rights, they
remain liable for 75% of any RV loss incurred. In Fitch's
opinion, the RV risk therefore lies largely with the lessees,
exposing the transaction to balloon risk when obligors are faced
with stressed economic circumstances and limited re-financing
options.

Stable Asset Outlook
Fitch expects the repayment abilities of Austrian consumers to
remain stable, based on flat unemployment rates (4.7% expected
throughout 2014), an improvement in GDP growth (1.4% forecasted
for 2014, up from 0.4% in 2013) and stable interest rates.

Transaction Characteristics:

Key Counterparties
EBV, the originator will continue to service the portfolio. EBV
belongs to the Erste Bank Group and Erste Bank will act as back-
up servicer from closing. Additionally, PwC Transaction Services
is appointed as servicer facilitator, in case Erste Group Bank is
unable to take over the servicing activity upon servicer
termination.

HSBC Bank plc (AA-/Stable/F1+) will provide an amortizing
liquidity facility (LF) sized at 1.6% of the collateral balance.
The LF will cover senior expenses and interest payments on all
the classes of notes.

The issuer will enter into a fixed-floating interest rate swap
with Erste Bank to hedge the interest rate mismatch between the
fixed-rate assets in the portfolio (16.2% of the initial
portfolio) and the floating-rate notes.

Portfolio Features
As of September 2013, the securitized portfolio included 21,884
variable- (83.8%) and fixed-rate (16.2%) monthly-paying lease
receivables originated by EBV to Austrian private (42.4%) and
commercial (57.6%) obligors for the purchase of new (64.3%) and
used/demo vehicles (35.7%). The weighted-average (WA) seasoning
of the pool and the WA remaining term were 25 and 34 months,
respectively.

The lease claims will be purchased by the issuer at their net
present value, which is the sum of all scheduled principal
payments over the lease term discounted at the contractual yield
on the lease minus a security deposit ('Kaution').

Credit Enhancement (CE)
The transaction features a principal deficiency ledger mechanism
(PDL) for each class of notes, according to which certain
interest funds will be allocated to the principal waterfall in an
amount implicitly equal to the receivables classified as
defaulted in a given period, with debiting starting from the
class D PDL. Hence, excess spread provides the first layer of
protection against losses, with a minimum weighted-average margin
of 2.45% over the three-month Euribor (or the swap rate for
fixed-rate loans) being guaranteed during the revolving period.

The class A, class B, class C and class D notes will be redeemed
sequentially. This mechanism ensures that potential losses will
be first allocated to the junior notes, providing CE to the more
senior ones.

Additionally, a static cash reserve, funded at closing by the
originator through a subordinated loan, equal to 1.25% of the
portfolio balance, will provide CE by covering for any unpaid
PDL.

Initial CE is thus 14.15% for the Class A, 7.25% for the Class B,
3.75% for the class C, and 1.25% for the class D.

Rating Sensitivities:

The rating of the Class D notes cannot exceed the Issuer Default
Rating of Erste Group Bank. This is due to the exposure of up to
5% of the portfolio to Erste Bank's employees (see Default Risk
below). In addition, Fitch has used the contractual servicing
/back-up servicing fee of 20bp in its modelling for the lower
rating categories (instead of its normal servicing fee assumption
of 70bp) as in such scenarios the agency assumes that Erste Bank
will perform its obligations. For those reasons, significant
changes to Erste Bank's IDR may lead to changes to the ratings of
the class D notes.

Unexpected increases in the default rate and loss severity on
defaulted loans could produce loss levels higher than the base
case and could result in potential rating actions on the notes.

Rating Sensitivity to Increased Default Rate Assumptions
Class A / Class B / Class C / Class D
Current default base case: 'AAAsf' / 'Asf' / 'BBBsf' / 'BB+sf'
Increase in default rate base case by 10%: 'AA+sf' / 'Asf' /
'BBB-sf' / 'BB+sf'
Increase in default rate base case by 25%: 'AAsf' / 'A-sf' /
'BBB-sf' / 'BBsf'
Increase in default rate base case by 50%: 'AA-sf' / 'BBB+sf' /
'BBB-sf' / 'BBsf'

Rating Sensitivity to Reduced Recovery Rate Assumptions
Class A / Class B / Class C / Class D
Current recovery rate (RR) base case: 'AAAsf' / 'Asf' / 'BBBsf' /
'BB+sf'
Reduce RR base case by 10%: 'AA+sf' / 'Asf' / 'BBB-sf' / 'BBsf'
Reduce RR base case by 25%: 'AA+sf' / 'A-sf' / 'BBB-sf' / 'BB-sf'
Reduce RR base case by 50%: 'AAsf' / 'BBB+sf' / 'BBB-sf' / 'Bsf'

Rating Sensitivity to Multiple Factors
Class A / Class B / Class C / Class D
Current base case assumptions: 'AAAsf' / 'Asf' / 'BBBsf' /
'BB+sf'
Mild stress: Increase in default rate by 10%, reduce recovery
rate by 10%: 'AA+sf' / 'A-sf' / 'BBB-sf' / 'BBsf'
Moderate stress: Increase in default rate by 25%, reduce recovery
rate by 25%: 'AA-sf' / 'BBB+sf' / 'BBB-sf' / 'Bsf'
Severe stress: Increase in default rate by 50%, reduce recovery
rate by 50%: 'Asf' / 'BBB-sf' / 'BBsf' / 'CCC to D'



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F I N L A N D
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TALVIVAARA MINING: Espoo Court Postpones Ruling on Restructuring
----------------------------------------------------------------
Kati Pohjanpalo at Bloomberg News reports that the district court
of Espoo postponed ruling on Talvivaara Mining Co.'s application
for corporate restructuring from Nov. 26 after one creditor
withdrew support.

According to Bloomberg, Talvivaara has until 4:15 p.m. on Nov. 29
to provide further information.

                        Bankruptcy Threat

As reported by the Troubled Company Reporter-Europe on Nov. 25,
2013, Reuters related that Talvivaara edged closer to bankruptcy
on Nov. 21 after saying unnamed stakeholders had balked at
providing additional funds to help restructure debt of more than
EUR300 million (US$404 million).  According to Reuters,
Talvivaara, hurt by falling nickel prices and production
problems, said it was assessing other funding options and could
use its own cash to help it through the overhaul process.  It
said it had enough cash to last through the first quarter of
2014, but admitted bankruptcy was a possibility, Reuters noted.
In a statement on Nov. 21, the company said it had sought EUR40
million to help restructure its debt but the stakeholders in
question had turned this down, Reuters recounted.  The group has
around EUR333 million in outstanding bonds, Reuters disclosed.
It also has EUR130 million of general purpose loans maturing next
year, Reuters noted.  Including loans and upfront payments from
Belgium's Nyrstar and Canada-based uranium miner Cameco Corp, it
ended the third quarter with EUR865.6 million in total
liabilities, Reuters said.

Talvivaara Mining Co. Ltd. is a Finnish nickel producer.



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F R A N C E
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LUMENEO SAS: EV Maker in Liquidation Due to Low Sales
-----------------------------------------------------
InsideEVs reports that Lumeneo, a small French manufacturer of
electric vehicles established in 2006, is now in liquidation.

Struggling with low sales, Lumeneo missed its target of 500 units
in 2013 by almost 500, InsideEVs says. Production since mid-2012
did not even exceed 10 units (including three Neoma).

InsideEVs relates that Lumeneo was selling two models -- the
Smera a two-seater (in tandem) and Neoma four-seat city car
presented at the 2012 Paris Motor Show.  Bosch Car Service was
contracted to service these vehicles.

Neoma starts from EUR21,700 or EUR14,700 after a EUR7,000
incentive and this excludes the battery pack, which must be
rented, InsideEVs discloses.



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I R E L A N D
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IRISH BANK: US Court Hears New Submission in Flynn Case
-------------------------------------------------------
John Mulligan at Independent.ie reports that lawyers for US-based
Irish developer John Flynn have argued that recognising Irish
Bank Resolution Corporation's liquidation in Ireland for the
purpose of granting it bankruptcy protection in the United States
would be "manifestly contrary" to the rights of US citizens and a
host of the country's public policy interests.

Independent.ie relates that Mr. Flynn's lawyers, seeking to
prevent IBRC being granted the bankruptcy protection, told a
Delaware court in documents filed on November 12 that the
direction of IBRC's liquidation was "completely unknown in
advance" and that Mr. Flynn and others risk being "deprived of
their right to due process".

The submission to the court was made following hearings earlier
this month in the US, where lawyers for IBRC, formerly Anglo
Irish Bank, urged a judge to offer the institution bankruptcy
protection there, Independent.ie notes.

According to Independent.ie, Mr. Flynn, who is also a US citizen,
and two US firms owned by Switzerland-based Irish developer
John McCann -- Castleway and Walnut-Rittenhouse -- have sought to
prevent IBRC being granted court protection in the United States.

Following the hearings, the judge presiding over the case,
Christopher Sontchi, asked both side to submit so-called proposed
findings of fact and conclusions of law as he makes his
deliberations, the report relays.

Those documents were submitted on November 12 in the US and the
judge has said he will make a quick ruling on the case due to its
nature, Independent.ie reports.

Mr. Flynn's lawyers have insisted that the special liquidation of
IBRC in Ireland is not a court proceeding, the report adds.

                    About Irish Bank Resolution

Irish Bank Resolution Corp., the liquidation vehicle for what was
once one of Ireland's largest banks, filed a Chapter 15 petition
(Bankr. D. Del. Case No. 13-12159) on Aug. 26, 2013, to protect
U.S. assets of the former Anglo Irish Bank Corp. from being
seized by creditors.  Irish Bank Resolution sought assistance
from the U.S. court in liquidating Anglo Irish Bank Corp. and
Irish Nationwide Building Society.  The two banks failed and were
merged into IBRC in July 2011.  IBRC is tasked with winding them
down and liquidating their assets.  In February, when Irish
lawmakers adopted the Irish Bank Resolution Corp., IBRC was
placed into a special liquidation in the Irish High Court to
complete liquidation and distribution of the two banks' assets.

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

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

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



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I T A L Y
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ASTALDI SPA: S&P Assigns Preliminary 'B+' CCR; Outlook Stable
-------------------------------------------------------------
Standard & Poor's Ratings Services said that it has assigned its
'B+' preliminary long-term corporate credit rating to Astaldi
SpA, the parent company of Italy-incorporated civil engineering
and construction group Astaldi.  The outlook is stable.

At the same time, S&P assigned its preliminary 'B+' issue rating
to Astaldi's proposed EUR400 million senior unsecured bond, with
a preliminary '4' recovery rating, indicating S&P's expectation
of average (30%-50%) recovery in the event of a payment default.

Astaldi is planning to issue EUR400 million of senior unsecured
seven-year bonds to redeem existing outstanding banking debt for
the same amount.

Final ratings will depend on S&P's receipt and satisfactory
review of all final transaction documentation.  Accordingly, the
preliminary ratings should not be construed as evidence of final
ratings.  If Standard & Poor's does not receive final
documentation within a reasonable time frame, or if final
documentation departs from materials reviewed, S&P reserves the
right to withdraw or revise its ratings.  Potential changes
include, but are not limited to, utilization of bond proceeds,
maturity, size and conditions of the bonds, financial and other
covenants, security and ranking.

The ratings are based on S&P's expectation that the proposed
refinancing will be completed as presented to us by Astaldi.

Astaldi plans to issue a EUR400 million senior unsecured seven-
year bond to refinance its capital structure.  Bond proceeds will
be used in full to redeem existing outstanding banking debt,
restore capacity to draw up to EUR305 million under its
EUR325 million revolving credit facility, and generally extend
its maturity profile.

The ratings on Astaldi reflect S&P's view that the company's
business risk profile is at the upper-end of "fair" and that its
financial risk profile is "highly leveraged," as S&P's criteria
define these terms.

The stable outlook reflects S&P's view that Astaldi's credit
ratios in the coming 12 months should remain commensurate with
the rating, such as adjusted FFO to debt above 10% and debt to
EBITDA below 6.0x.  The existing backlog and generally solid
market positions in transportation infrastructure, including
outside Italy, should enable the company's profit measures to
remain resilient this year and next.

S&P also expects the company to report limited negative free
operating cash flow over 2013-2014, despite an increase in
capital expenditures, and to maintain "adequate" liquidity.

S&P could raise the rating if Astaldi achieved stronger credit
metrics on a sustainable basis -- such as adjusted FFO to debt in
the 12%-20% range and debt to EBITDA below 5.0x -- reduced its
absolute amount of adjusted debt, and showed continuing
moderation in terms of external growth and shareholder
distributions.

S&P could lower the rating if Astaldi's credit ratios
deteriorated, including adjusted debt to EBITDA exceeding 6x and
adjusted FFO to debt materially below 10%.  Substantially
negative discretionary cash flow -- in excess of EUR100 million
per year -- or an inability to consistently maintain adequate
liquidity under S&P's criteria could also put downward pressure
on the rating.


BANCA MONTE: Four Banks to Underwrite EUR3-Bil. Stock Sale
-----------------------------------------------------------
Elisa Martinuzzi and Ruth David at Bloomberg News report that
Citigroup Inc., Goldman Sachs Group Inc., Mediobanca SpA and
UBS AG will underwrite Banca Monte dei Paschi di Siena SpA's
EUR3 billion (US$4 billion) stock sale.

According to Bloomberg, two people with direct knowledge of the
transaction said the four banks will lead at least nine firms in
an underwriting group that Monte Paschi was set to review at a
board meeting on Nov. 25.

Monte Paschi, engulfed by investigations into alleged misconduct
by its former managers, plans to tap shareholders in a rights
offer as soon as January to repay part of the EUR4.1 billion it
received in state aid, Bloomberg relates.

European Union authorities demanded the repayment in 2014 after
the bank restated accounts to reflect losses hidden by previous
management in 2008 and 2009 and first revealed by Bloomberg News
in January.

Banca Monte dei Paschi di Siena SpA -- http://www.mps.it/-- is
an Italy-based company engaged in the banking sector.  It
provides traditional banking services, asset management and
private banking, including life insurance, pension funds and
investment trusts.  In addition, it offers investment banking,
including project finance, merchant banking and financial
advisory services.  The Company comprises more than 3,000
branches, and a structure of channels of distribution.  Banca
Monte dei Paschi di Siena Group has subsidiaries located
throughout Italy, Europe, America, Asia and North Africa.  It has
numerous subsidiaries, including Mps Sim SpA, MPS Capital
Services Banca per le Imprese SpA, MPS Banca Personale SpA, Banca
Toscana SpA, Monte Paschi Ireland Ltd. and Banca MP Belgio SpA.

                          *     *     *

As reported by the Troubled Company Reporter-Europe on Sept. 18,
2013, Fitch downgraded MPS's Viability Rating (VR) to 'ccc' from
'b' and removed it from Rating Watch Negative (RWN).

As reported by the Troubled Company Reporter-Europe on June 19,
2013, Standard & Poor's Ratings Services said that it lowered its
long-term counterparty credit rating on Italy-based Banca Monte
dei Paschi di Siena SpA (MPS) to 'B' from 'BB', and affirmed the
'B' short-term rating.  S&P also lowered its rating on MPS' Lower
Tier 2 subordinated notes to 'CCC-' from 'CCC+'.  S&P affirmed
the ratings on MPS' junior subordinated debt at 'CCC-' and on its
preferred stock at 'C'.  At the same time, S&P removed the
ratings from CreditWatch, where it placed them with negative
implications on Dec. 5, 2012.



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K A Z A K H S T A N
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CONDENSATE JSC: Fitch Affirms 'B-' Long-term IDR; Outlook Stable
----------------------------------------------------------------
Fitch Ratings has affirmed JSC Condensate Long-term foreign
currency Issuer Default Rating (IDR) at 'B-'. The Outlook is
Stable.

The ratings reflect Condensate's small scale, off-taker risks and
expected high debt levels. It currently does not have any debt,
but plans to borrow up to US$150 million for a refinery upgrade
program. Fitch expects that after the planned debt-funded capex
Condensate's gross funds from operations (FFO)-adjusted leverage
will peak at 5x in 2015 before falling below 4x when the upgrade
project is complete.

Key Rating Drivers:

   -- Small Single-Site Operations
Condensate's ratings are capped in the 'B' rating category
because of its small size and single site operations in north-
west Kazakhstan. Its refinery has an annual refining capacity of
600,000 tons of gas condensate, which mainly produces heavy
distilled liquid fuel and straight-run gas oil fraction. Its
actual refining throughput in 2012 was lower due to the use of
crude oil as the primary feedstock and a short-term interruption
in outbound logistics at the beginning of 2012. In 2012,
Condensate generated revenues of KZT32.1 billion (US$251 million)
and EBITDA of KZT3.9 billion (US$26 million).

   -- Off-Taker Risks Remain
Condensate's high reliance on a single off-taker remains a risk
as it sells its products on credit. In 2011-2012, Condensate sold
almost all its finished products to Great Eastern Oil Limited
(UK). At end-2012 the trade receivables from Great Eastern Oil
Limited amounted to KZT5 billion (US$33 million), implying an
average receivable collection period of 55 days. On
March 1, 2013, Condensate began selling its products to
Occidental Energy Logistics Ltd., also a UK-registered company,
and terminated relationships with Great Eastern Oil Limited. The
new sales contract with Occidental Energy Logistics Ltd. is valid
for one year until February 28, 2014. From March 1 to
September 30, 2013, Occidental Energy Logistics Ltd. accounted
for 90% of Condensate's sales.

On November 1, 2013, the accounts receivable balance due from
Occidental Energy Logistics Ltd. to Condensate reached US$60.4
million, up from US$45 million on September 30, 2013. Fitch
expects that Condensate's customer base will become more
diversified once it starts to produce high-octane gasoline in
4Q15.

   -- Ambitious Upgrade Program
Condensate plans to upgrade its refinery to produce Euro-5
quality gasoline, which entails installation of pre-fabricated
US-made equipment. The upgrade would allow the company to improve
profitability by increasing sales of higher value-added products
and to diversify its customer base. Condensate estimates that the
project will be completed in 4Q15 and will require capital
investments of around US$200 million, of which the company has
already spent around US$30 million of its own funds.

   -- Debt-Funded Capex
To finance the refinery upgrade Condensate plans to raise US$150
million in loans from local banks and/or on the bond market.
Fitch expects that after the planned debt-funded transactions
Condensate's gross FFO adjusted leverage will peak at 5x in 2015
before falling below 4x when the upgrade project is complete. FFO
interest coverage will fluctuate around 3x until end-2015. These
metrics imply a fairly high debt load relative to other Russian
and Kazakh oil and gas peers but are, nonetheless, commensurate
with the 'B' category ratings.

   -- Competitive Location; Rising Competition
Condensate's location in the north-west of Kazakhstan, near the
Russian border and more than 500km away from the closest domestic
Atyrau refinery by car (over 1,000km by railroad), will be an
important competitive advantage once the company starts to
produce gasoline at end-2015. The company has preliminary
agreements with traders and retailers to sell all its gasoline
produced after the modernization. In Fitch view, the main threat
is a surplus of motor fuels in Kazakhstan and Russia after a
number of refineries complete their modernization programs by
2016, which may put downward pressure on gasoline prices.

   -- Volatile Earnings
Condensate's refining margins (EBITDA to barrels refined) ranged
from US$11/bbl in 2012 to US$24/bbl in 2011, illustrating the
company's high earnings volatility exacerbated by the company's
lack of its own raw material base. Refining margins in both
Kazakhstan and Russia, where the company may potentially sell its
gasoline, are driven by industry-specific taxes and movements of
regional supply and demand. Fitch base case scenario is for
Condensate's refining margins to average US$9-US$10/bbl over the
medium term.

Rating Sensitivities:

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

   -- A successful completion of the refinery upgrade program in
      2015. Fitch expects that post-upgrade Condensate will
      generate additional revenues and margins from sales of
      higher value-added oil products

   -- Diversification of the customer base

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

   -- Failure to complete or significant delays in completion of
      the refinery upgrade, leading to an erosion of its
      financial profile

   -- FFO gross adjusted leverage above 4x on sustained basis

   -- Liquidity problems such as Condensate's failure to secure
      and maintain credit facilities to complete the refinery
      upgrade program

Liquidity & Debt Structure:

Currently, Condensate does not have any debt outstanding. Its
liquidity at September 30, 2013 was made up of cash balances and
short-term deposits totaling KZT5.9 billion (US$39 million),
which were mostly kept at the company's accounts with Kazakh
subsidiary Bank Sberbank of Russia OJSC (BBB-/Stable) and Bank
Centercredit (B+/Stable). For the upgrade project, Halyk Bank of
Kazakhstan (BB-/Rating Watch On) agreed to provide Condensate
with a long-term US$130 million credit line. The company expects
to finance its refinery upgrade project either by a bank loan or
by domestic bond/ eurobond issue.

The rating actions are as follows:

JSC Condensate

  Long-term foreign currency Issuer Default Rating (IDR):
  affirmed at 'B-', Stable Outlook

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

  Long-term local currency IDR: affirmed at 'B-', Stable Outlook

  National Long-term rating: affirmed at 'B+(kaz)', Stable
  Outlook

  Local currency senior unsecured rating: affirmed at 'B-'

  National senior unsecured rating: affirmed at 'B+(kaz)'


MANGISTAU ELECTRICITY: Fitch Affirms 'BB+' Issuer Default Rating
----------------------------------------------------------------
Fitch Ratings has affirmed Kazakhstan-based Mangistau Electricity
Distribution Company JSC's (MEDNC) Long-term Issuer Default
Rating (IDR) at 'BB+'. The Outlook is Stable.

The affirmation reflects the unchanged strength of the links
between MEDNC and its ultimate parent, Kazakhstan (BBB+/Stable).

Key Rating Drivers:

   -- Three Notches below Sovereign
MEDNC's ratings are notched down from those of Kazakhstan by
three levels, reflecting the moderate strength of the links
between the company and ultimate parent. MEDNC's direct parent,
indirectly fully state-owned JSC Samruk-Energo (S-E), has not
provided tangible financial assistance to MEDNC since Fitch
widened the notching from the sovereign rating to three levels
from two in 2011. S-E does not view MEDNC as strategic; however,
it is not actively pursuing a reduction of its stake in the
company. The ratings are based on the assumption that S-E will
retain at least majority ownership of MEDNC over the rating
horizon and Fitch does not expect significant changes to the
relationship in the near-term. Fitch views MEDNC's standalone
profile as commensurate with a 'BB-' rating.

   -- Near-Monopoly Position in the Region
MEDNC's credit profile is supported by its near-monopoly position
in electricity transmission and distribution in the Region of
Mangistau, one of Kazakhstan's strategic oil and gas regions. It
is also underpinned by prospects for economic development and
expansion in the region, in relation to both oil and gas and
transportation, and by favourable three-year tariffs. MEDNC
further benefits from limited foreign-exchange risks and from the
absence of interest-rate risks.

   -- Small Scale, Concentrated Customer Base
The ratings are constrained by MEDNC's small scale of operations
limiting its cash flow generation capacity, by its high exposure
to a single industry (oil and gas) and, within that, by high
customer concentration (the top-four customers represented over
67% of 2012 revenue). The latter is somewhat mitigated by the
state ownership of some customers, and by prepayment terms under
transmission and distribution agreements.

   -- Favorable Tariffs
Between 2012 and 9M13 MEDNC's revenue growth was mainly driven by
a transmission and distribution tariff increase to KZT3.1 per kWh
in 2013 from KZT2.39 in 2012 and from KZT1.95 in 2011. Further
tariff increases have been approved at about 5% on average for
2014 and 2015. The tariff increase in 2012 was partly driven by
an increase of MAEK-Kazatomprom's electricity prices.

From 2013 onwards MEDNC's tariffs are approved by Kazakstan's
Agency on Regulating Natural Monopolies and Competition
Protection (AREM) for a three-year period, rather than the
one-year period previously, in conjunction with the capex
program. MEDNC expects its 2016 tariffs to be approved by end-
November 2013. Fitch positively views the switch to medium-term
tariff approval. The tariff system for transmission and
distribution segments, which is predominantly based on
benchmarking with the intention to increase the company's
efficiency, should result in favorable tariffs for MEDNC.

   -- CAPEX to Increase Leverage
MEDNC's ratings are constrained by its large prospective
investment program relative to the small scale of its operations.
At end-2012 MEDNC reported funds flow from operations (FFO)
adjusted leverage of 1.5x, down from 2.2x at end-2011. The
company's ambitious capex program of about KZT27.8 billion over
2013-2017 will likely result in negative free cash flow over the
same period and require significant debt funding. Fitch expects
that it may result in FFO-adjusted leverage increasing to around
3x by end-2015 and towards 4x by end-2016 under the agency's
conservative assumptions.

The capex will be spent on the construction of two new
electricity transmission lines at the cost of KZT13.5 billion, on
the reconstruction of current transmission lines and substations
for KZT4.6 billion and on some other projects. The currently
approved capex program amounts to KZT12 billion for 2013-2015. At
end-2012 FFO interest cover slightly improved to around 4x from
3.6x at end-2011 and Fitch expects that it will remain in the
single digits over 2013-2016.

   -- Stable CFO, Negative FCF Expected
Fitch expects MEDNC to continue generating solid and stable cash
flow from operations (CFO) over 2013-2016. However, free cash
flows are likely to turn negative in 2013 and onwards, mainly
driven by substantial capex plans. For 2013, Fitch estimates
MEDNC's CFO at KZT2.2 billion, before capex (KZT3.4 billion) and
dividends (KZT250 million). Fitch expects MEDNC to rely on new
borrowings to finance cash shortfalls.

   -- Elevated Dividend Payout
Fitch notes that for 2012 MEDNC's dividend payout ratio was
increased to 75% (or KZT250 million) from 50% (or KZT88 million)
for 2011; however, management expects it to decrease to around
50% over the medium term. If dividends remain elevated at a time
of increasing capex Fitch may view it as a sign of weakening
links with the ultimate parent and may revise its rating approach
to one of bottom-up from one of top-down.

Rating Sensitivities:

The Stable Outlook reflects Fitch's assessment that upside and
downside risks to the rating are currently balanced. The main
factors that may individually or collectively lead to rating
action are as follows:

Positive:

   -- A positive change to Kazakhstan's ratings provided the
      links between MEDNC and the sovereign do not weaken.

   -- Stronger links with the ultimate parent.

   -- Enhancement of the business profile, such as
      diversification and scale with only modest increase in
      leverage would be positive for the standalone profile.

Negative:

   -- A negative change to Kazakhstan's ratings.

   -- Weaker links with the ultimate parent, such as a reduction
      of S-E's stake in MEDNC to less than 50% or an elevated
      dividend payout, insufficient tariffs and increased capex
      contributing to weaker credit metrics. This may result in
      Fitch reconsidering its rating approach to one of bottom-up
      from the top-down that is being currently applied.

   -- Deterioration in MEDNC's FFO adjusted leverage to 4x or
      above and FFO interest cover to 2.0x or below on a
      sustained basis would be negative for the standalone
      profile.

Liquidity and Debt Structure:

Fitch views MEDNC's liquidity as manageable, comprising solely
cash as the company does not have any available credit lines. At
end-3Q13, MEDNC's cash balance of KZT2.9 billion was sufficient
to cover short-term maturities of KZT962 million. Cash balances
are mostly held in local currency with domestic banks including
Halyk Bank of Kazakhstan (BB-/Rating Watch Evolving) and Nurbank,
which is a risk.

At end-3Q13, most of MEDNC's debt was represented by two
unsecured fixed-rate bonds of KZT812 million and KZT1.7 billion
maturing in 2014 and in 2023, respectively. The rest of the debt
is represented by interest-free loans with maturity up to 2036
from MEDNC's customers to co-finance new network connections.
MENDC's ambitious capex program will likely require additional
debt funding over the medium term. MEDNC has proven access to the
domestic bond market. During 2013 MEDNC issued KZT1.7 billion of
bonds to partly finance its substantial capex need (KZT3.4
billion) for the year. The remainder is expected to be financed
by MEDNC's own funds.

Full List of Mednc's Ratings:

  Long-term foreign currency IDR affirmed at 'BB+', Outlook
  Stable

  Long-term local currency IDR affirmed at 'BBB-', Outlook Stable

  National Long-term rating affirmed at 'AA(kaz)', Outlook Stable

  Short-term foreign currency IDR affirmed at 'B'

  Foreign currency senior unsecured rating affirmed at 'BB+'

  Local currency senior unsecured rating, including that on
  KZT1.7bn and KZT800m bonds, affirmed at 'BBB-'



===============
P O R T U G A L
===============


PORTO CITY: Fitch Affirms 'BB+/B' Long-Term Currency Ratings
------------------------------------------------------------
Fitch Ratings has affirmed the City of Porto's Long-term foreign
and local currency ratings at 'BB+' and Short-term foreign
currency rating at 'B'. The Outlooks on the Long-term ratings are
Negative.

Key Rating Drivers:

Porto's ratings reflect the supportive institutional framework,
the ability to post a healthy operating margin, the moderate debt
level as well as the comfortable debt repayment schedule.

The Negative Outlook reflects that on Portugal's ratings.

Operating revenues dropped again in 2012, principally due to
negative development of several taxes reflecting the downturn of
the Portuguese economy in the past few years and also a small
decline on current transfers from the central government.
Operating revenue dropped EUR11 million or 7% y.o.y. Despite this
adverse context, Porto was able to improve its operating balance.
This was primarily the result of reducing civil servants'
salaries and lower transfers and subsidies. Porto posted a sound
operating margin of 20.4% in 2012.

Debt with financial institutions continued to decrease in 2012,
to reach EUR102 million, while it was above EUR145 million in
2008. Fitch expects the debt to remain stable in the medium term.
The amount of debt in relation with the current balance generated
is very good at 3.1 years. Porto has traditionally had a
favorable debt repayment calendar, and its operating balance has
always coved (1.6x) its debt service requirements since 2006.

Rating Sensitivities:

If the sovereign ratings were downgraded, Porto's rating would
also be downgraded. Porto could also be downgraded in case of
drastic deterioration of budgetary performance which Fitch
considers unlikely in the medium term.

An upgrade of the sovereign would likely lead to an upgrade of
Porto, provided that the city's fundamentals remain sound.



=============
R O M A N I A
=============


OLTCHIM RAMNICU: Two Chinese Firms Sign Letter Of Intent
-------------------------------------------------------
Ecaterina Craciun at Ziarul Financiar reports that the legal
administrators of Romanian insolvent chemical plant Oltchim
Ramnicu Valcea on Nov. 25 signed a letter of intent with Chinese
companies Baota Petrochemical Group and Junlun Petroleum, which
have expressed interest in participating in Oltchim's planned
privatization.

As reported by the Troubled Company Reporter-Europe on May 10,
2013, Romania-Insider.com said Oltchim is currently functional at
only 27% of its capacity, and the company has been under
insolvency procedures since January 2013.

Oltchim is a Romanian chemical producer.



===========
R U S S I A
===========


ISR TRANS: Moody's Assigns B3 Corp. Family Rating; Outlook Stable
-----------------------------------------------------------------
Moody's Investors Service has assigned a B3 corporate family
rating (CFR) and B3-PD probability of default rating (PDR) to ISR
Trans LLC. The outlook on all ratings is stable. This is the
first time Moody's has assigned a rating to ISR Trans.

Ratings Rationale:

The B3 rating reflects ISR Trans's (1) small size on a global
scale, reflected by revenue of US$703 million for the last 12
months to June 2013; (2) high industry and customer
concentration, with the company's two largest customers
representing a 75% portion of its revenue for 2012, which renders
ISR Trans's business dependent on its continuing relationships
with these customers; (3) highly concentrated ownership, which
creates the risk of rapid changes in the company's strategy and
development plans, along with the risk of a revision of its
financial policy and an increase in shareholder distributions;
(4) high key person risk, as one of ISR Trans's ultimate owners,
Mr. Rakhman Khalilov, is its CEO and is directly involved in its
operating management; and (5) the company's history of material
related-party transactions, which in Moody's view lack
transparency.

The rating also takes into account (6) the fairly high average
age of the company's own tank car fleet (17 years); (7) high
leverage, reflected by debt/EBITDA of 4.7x (Moody's-adjusted) as
of June 2013, with limited potential for a reduction in the near
term, as the company intends to finance its substantial
investment program largely with debt; (8) weak liquidity and
significant foreign currency risk, as 62% of the company's debt
owed to unrelated parties is denominated in the US dollar, while
only 10%-20% of its revenues are linked to it; and (9) the
company's overall exposure to an emerging market operating
environment with a less developed regulatory, political and legal
framework.

More positively, the rating factors in (1) Moody's expectation
that ISR Trans will be able to improve its financial metrics in
the medium term; (2) the company's fairly large fleet of more
than 19,000 tank cars in operation as of year-end 2012 (of which
nearly 8,000 units were in operating leasing) and its substantial
share in the Russian oil and oil products rail transportation
market in terms of cargo volumes (around 6%); (3) its seven-year
history of relationships with key customers; (4) its robust
operating margin of above 15%; and (5) its balanced debt maturity
profile.

Rationale for Stable Outlook:

The stable outlook on the rating reflects Moody's expectation
that ISR Trans will (1) deleverage to 4.0x debt/EBITDA or below
and maintain its EBIT interest coverage around 2.0x or above on a
sustainable basis (all metrics are as adjusted by Moody's); and
(2) adequately manage its liquidity and maintain robust operating
performance.

What Could Change the Rating Up/Down:

Moody's could consider ISR Trans's rating for an upgrade if the
company reduces its debt/EBITDA to below 3.5x (Moody's-adjusted)
on a sustainable basis, while (1) improving customer
diversification; (2) maintaining adequate liquidity; and (3)
demonstrating strong operating performance.

Conversely, negative pressure could be exerted on the rating if
(1) debt/EBITDA increases above 5.0x on a sustained basis; (2)
EBIT interest coverage declines below 1.5x on a sustained basis
(all metrics are Moody's-adjusted); or (3) there is a material
deterioration in ISR Trans's liquidity, market position or
operating performance, including operational disruptions or
termination of its contracts with key customers.

Established in 1997, ISR Trans is one of the largest private tank
car operators in Russia, with a fleet of more than 19,000 tank
cars in operation as of year-end 2012. The company is controlled
by three members of the Khalilov family, each owning equal non-
controlling shares of 33%. In the last 12 months to June 2013,
ISR Trans generated revenues of US$703 million, of which 91% was
derived from freight rail transportation and other related
services.


MECHEL OAO: Enters Agreement with Banks on Covenant Holiday
-----------------------------------------------------------
Courtney Weaver at The Financial Times reports that Mechel has
reached agreement with a syndicate of foreign banks on a covenant
holiday until the end of 2014, alleviating pressure on the highly
indebted Russian coal miner.

The company said international creditors including ING, Societe
Generale, UniCredit, Commerzbank, Raiffeisen and Russia's VTB had
granted it a waiver on its US$1 billion syndicated loan, just two
weeks after a collapse in Mechel's share price, the FT relates.

The FT notes that while Mechel said the stock's 40% intraday fall
on Nov. 13 had been speculative and did not reflect the state of
the group's negotiations with creditors, concerns had been
building over how it would go about reducing its US$9.6 billion
debt burden with little hope of a recovery in coal or steel
prices in the near future.

Russian Prime Minister Dmitry Medvedev offered support to Mechel
and indebted peers, including Rusal and Evraz, at a meeting on
Monday with the companies' owners, the FT relays.

Mechel's international loans account for slightly more than 20%
of its debt burden, with 60% of its debt due to Russian state
lenders Sberbank, VTB and Gazprombank, and the remainder to
holders of Mechel bonds, the FT states.

The company, the FT says, is in negotiations with the Russian
creditors on covenant holidays for US$2.5 billion in debt due
next year.  According to the FT, in a statement, Mechel's chief
financial officer Stanislav Ploschenko said the company hoped to
reach agreements on "the finalization of the financial covenant
holidays" in the coming weeks.

Mechel OAO is a Russian mining and metals company.  Its business
includes four segments: mining, steel, ferroalloy and power.
Mechel unites producers of coal, iron ore concentrate, nickel,
ferrochrome, ferrosilicon, steel, rolled products, hardware, heat
and electric power.  Mechel products are marketed domestically
and internationally.



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


SERBIA: Fitch Rates US$1BB Eurobond Due December 2018 'BB-'
-----------------------------------------------------------
Fitch Ratings has assigned Serbia's US$1 billion Eurobond, due
December 3, 2018, a 'BB-' rating. The Eurobond has a coupon rate
of 5.875%.

The rating is in line with Serbia's Long-term foreign currency
Issuer Default Rating, which has a Negative Outlook.



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


PYMES SANTANDER 7: Moody's Assigns 'Ca' Rating to Serie C Notes
---------------------------------------------------------------
Moody's Investors Service has assigned the following definitive
ratings to the debts to be issued by Fondo de Titulizacion de
Activos PYMES Santander 7 (the Fondo):

EUR1,360M Serie A Notes, Definitive Rating Assigned A3 (sf)

EUR340M Serie B Notes, Definitive Rating Assigned Ba1 (sf)

EUR340M Serie C Notes, Definitive Rating Assigned Ca (sf)

FTA PYMES SANTANDER 7 is a securitization of standard loans and
credit lines granted by Banco Santander S.A. (Spain) (Baa2/P-2;
Negative Outlook) to small and medium-sized enterprises (SMEs)
and self-employed individuals.

At closing, the Fondo -- a newly formed limited-liability entity
incorporated under the laws of Spain -- will issue three series
of rated notes. Banco Santander S.A. (Spain) will act as servicer
of the loans and credit lines for the Fondo, while Santander de
Titulizacion, S.G.F.T., S.A. will be the management company
(Gestora) of the Fondo.

Ratings Rationale:

As of October 2013, the audited provisional asset pool of
underlying assets was composed of a portfolio of 25,958 contracts
granted to SMEs and self-employed individuals located in Spain.
In terms of outstanding amounts, around 45.4% corresponds to
standard loans and 54.6% to credit lines. The assets were
originated mainly between 2011 and 2013 and have a weighted
average seasoning of 2.8 years and a weighted average remaining
term of 2.3 years. Around 2.8% of the portfolio is secured by
first-lien mortgage guarantees. Geographically, the pool is
concentrated mostly in Catalonia (22.3%), Madrid (19.9%) and
Andalusia (11.3%). At closing, any loans in arrears and exceeded
credit lines will be excluded from the final pool.

In Moody's view, the strong credit positive features of this deal
include, among others: (i) a relatively short weighted average
life of around 1.5 years; (ii) a granular pool (the effective
number of obligors over 600); and (iii) a geographically well-
diversified portfolio. However, the transaction has several
challenging features: (i) a strong linkage to Banco Santander
S.A. (Spain) related to its originator, servicer, accounts holder
and liquidity line provider roles; (ii) no interest rate hedge
mechanism in place; and (iii) a complex mechanism that allows the
Fondo to compensate (daily) the increase on the disposed amount
of certain credit lines with the decrease of the disposed amount
from other lines, and/or the amortization of the standard loans.
These characteristics were reflected in Moody's analysis and
definitive ratings, where several simulations tested the
available credit enhancement and 20% reserve fund to cover
potential shortfalls in interest or principal envisioned in the
transaction structure.

The ratings are primarily based on the credit quality of the
portfolio, its diversity, the structural features of the
transaction and its legal integrity.

In its quantitative assessment, Moody's assumed a mean default
rate of 9.1%, with a coefficient of variation of 70% and a
recovery rate of 35.0%. Moody's also tested other set of
assumptions under its Parameter Sensitivities analysis. For
instance, if the assumed default probability of 9.1% used in
determining the initial rating was changed to 11.83% and the
recovery rate of 35% was changed to 25%, the model-indicated
rating for Serie A, Serie B and Serie C of A3(sf), Ba1(sf) and
Ca(sf) would be Baa2(sf), Ba3(sf) and Ca(sf) respectively. For
more details, please refer to the full Parameter Sensitivity
analysis to be included in the New Issue Report of this
transaction.

The global V Score for this transaction is Medium/High, which is
in line with the score assigned for the Spanish SME sector and
representative of the volatility and uncertainty in the Spanish
SME sector. V-Scores are a relative assessment of the quality of
available credit information and of the degree of dependence on
various assumptions used in determining the rating. The main
source of uncertainty in the analysis relate to the Transaction
Complexity. This element has been assigned a Medium/High V-Score,
as opposed to Medium assignment for the sector V-Score. For more
information, the V-Score has been assigned according to the
report "V Scores and Parameter Sensitivities in the EMEA Small-
to-Medium Enterprise ABS Sector" published in June 2009.

In rating this transaction, Moody's used ABSROM to model 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 Inverse Normal distribution
assumed for the portfolio default rate. On the recovery side
Moody's assumes a stochastic (normal) recovery distribution which
is correlated to the default distribution. In each default
scenario, the corresponding loss for each class of notes is
calculated given the incoming cash flows from the assets and the
outgoing payments to third parties and noteholders. Therefore,
the expected loss or EL for each tranche is the sum product of
(i) the probability of occurrence of each default scenario; and
(ii) the loss derived from the cash flow model in each default
scenario for each tranche.

Therefore, Moody's analysis encompasses the assessment of stress
scenarios.


PYME VALENCIA 1: Fitch Affirms 'Csf' Rating on Class E Notes
------------------------------------------------------------
Fitch Ratings has upgraded PYME Valencia 1, FTA's class A2 notes
and revised the Outlook on the class B notes to Stable, as
follows:

  EUR59.8m Class A2 (ISIN ES0372241010): upgraded to 'AA-sf' from
  'Asf'; Outlook Stable

  EUR47.6m Class B (ISIN ES0372241028): affirmed at 'BBsf';
  Outlook revised to Stable from Negative

  EUR34.0m Class C (ISIN ES0372241036): affirmed at 'CCsf'; RE
  25%

  EUR13.6m Class D (ISIN ES0372241044): affirmed at 'CCsf'; RE 0%

  EUR15.3m Class E (ISIN ES0372241051): affirmed at 'Csf'; RE 0%

Key Rating Drivers:

The upgrade of the senior class A2 notes reflects the increasing
credit enhancement (CE) due to regular amortization. Despite the
deterioration in the portfolio's performance, the CE of 53.5% is
sufficient to withstand the agency's 'AA-sf' rating stress
scenario.

The affirmation of the class B notes reflects the CE of 16.5%,
which enables them to withstand Fitch's 'BBsf' rating stress
scenario. The revision of the Outlook is a result of an increased
cushion on Fitch's 'BBsf' stress due to the protection offered by
the financial swap. The swap guarantees interest payment on the
class A2 to D notes and provides 65bps of excess spread even if
the performing balance of the portfolio is lower than the
aggregate outstanding notional of these notes.

The 'CCsf' rating on the class C and D notes reflects the low CE
available to the notes and their subordinated position in the
capital structure. CE for the class C and D notes is insufficient
to pass Fitch's base case expected loss rate and their repayment
is solely dependent on the recoveries realised on defaulted
assets.

The 'Csf' rating on the class E notes indicates that a default
appears inevitable. The notional of the reserve fund (RF) will be
applied to redeem the notes. Fitch considers it unlikely that the
RF, which has been fully depleted since September 2009, will be
replenished to its required amount of EUR13.5 million before the
notes' maturity.

During 2013, Banco de Valencia merged with CaixaBank S.A., which
continues to maintain a dynamic commingling reserve (CR), held at
Barclays Plc (A/Stable/F1), which will be utilized to redeem the
items in the priority of payments in case of a commingling loss
or a servicer's disruption event. The CR is updated monthly and
it is sized for 1.5 times the expected collections' notional at
10% prepayment rate. As of October 2013, the CR's notional was
EUR6.2 million.

Current defaults and loans more than 90 days in arrears account
for 25.1% and 6.1% of the outstanding portfolio balance,
respectively. The principal deficiency ledger balance has
increased to EUR26.3 million from EUR16.4 million at the last
review. Additionally, Fitch views as additional risks the
increased obligor concentration due to the portfolio's
deleveraging and the high portfolio exposure to the troubled
Spanish real estate sector. As of October 2013, the top 20
obligors accounted for 31.6% of the outstanding balance, while
loans to the real estate and building & materials sectors
accounted for 46.4% of the outstanding portfolio.

PYME Valencia 1, F.T.A. is a cash-flow securitization of loans
granted to Spanish small and medium enterprises (SMEs) by Banco
de Valencia (BB-/RWP/B). The transaction is substantially
collateralized with 92% of the loans secured by real estate
properties.

Rating Sensitivities:

Applying a 1.25x default rate multiplier to all assets in the
portfolio would not result in a downgrade of any of the notes.
Applying a 0.75x recovery rate multiplier to all assets in the
portfolio would not result in a downgrade of any of the notes.



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


2K MANUFACTURING: Goes Into Administration
------------------------------------------
StockMarketWire.com reports that Environmental Recycling
Technologies' UK licensee 2K Manufacturing has gone into
administration.

ERT announced in November 2012 that it had clawed back the
international license for its powder impression molding process
from 2K Manufacturing and restructured the debt owed to it by 2K
Manufacturing, according to StockMarketWire.com.

The report relates that ERT said that since then, it has received
an immaterial level of license income from 2K.  ERT adds that it
made a full provision for outstanding payment due from 2K
Manufacturing of GBP1.61 million in its interim results for the
period to June 30, 2013, the report relays.

ERT said it is closely monitoring the situation and will work
with the administrators to facilitate a solution that is in the
best interest of its shareholders and to maintain the production
of Ecosheet, the report says.

In the year to December 31, 2012, ERT estimates that 2K
Manufacturing sold less than 30,000 units of Ecosheet, the report
adds.

2K Manufacturing manufactures Ecosheet under license from
Environmental Recycling Technologies.


ARCH CRU: Fund Investors Seek Better Payout
-------------------------------------------
James Charles at The Sunday Times reports that victims of an
investment scandal are mounting a fight for better compensation.

About 20,000 investors had GBP363 million in the Arch Cru funds
when they were suspended in 2009 after a warning by the Financial
Services Authority, then the regulator, that the funds were
insolvent, the report discloses.

The Sunday Times says the open-ended investment companies, listed
in London and rated "cautiously managed" by the Investment
Management Association, a trade body, invested in sub-funds
listed on the Channel Islands stock exchange.  These put the
money into a huge range of risky investments. The value of assets
in the funds crashed by 40% after their suspension, the report
notes.

Capita Financial Managers, part of the outsourcing group Capita,
administered the funds and was responsible for oversight under
City rules.  The report recalls that in 2011, Capita, with HSBC
and BNY Mellon, the depositary banks for the funds, agreed to
provide GBP54 million compensation.  However, about 650 investors
have signed up to a potential action to recover larger
compensation, the report says.


CAPERFLY: Studio Enters Liquidation
-----------------------------------
Craig Chapple at develop-online.net reports that UK developer
Caperfly, set up by former Codemasters Studios boss Gavin
Cheshire, has entered liquidation.

Earlier this year, the Leamington-Spa based studio had received a
slice of Creative England's GBP1 million funding initiative,
which offered interest-free loans matched by company funds, the
report relays.

At the time, CEO Gavin Cheshire said the studio would use the
investment co develop apps based around real-world situations and
to improve its Consequences apps, according to develop-online.

Caperfly was formed in 2012, and developed services such as its
data aggregation platform Consequences.  The studio had housed
around 21 staff.


LINPOP: Quickline Acquires Firm Out of Administration
-----------------------------------------------------
The Lincolnite reports that Linpop will be taken over by wireless
internet service provider Quickline after the local firm went
into administration last month.

The deal has been made for an undisclosed sum, and under the
Quickline brand, new jobs have been offered to current Linpop
employees, according to The Lincolnite.

The report notes that Quickline will be taking over the servicing
of the customer base of Linpop and the firm said it will provide
a 'cohesive service' rather than competing in the same market.

Linpop, based at Hemswell Cliff, provided wireless internet
connectivity and coverage for parts rural Lincolnshire which do
not have access to fast enough broadband connections.


LLOYDS SYNDICATE: Moody's Gives Neg. Outlook to 'B-' Opinion
-----------------------------------------------------------
Moody's Analytics assigned a negative outlook to the B-
(Below Average), previously under review for possible downgrade,
Continuity Opinion of Lloyd's syndicate 0260(Canopius Managing
Agents Limited)in light of continuing losses being forecast /
budgeted by the syndicate in what remains a very competitive
Motor market.

The syndicate, 92% backed by Canopius Group Ltd and with a 2013
capacity of GBP70 million, writes a specialist Motoraccount.

In a recently released auction announcement, Canopius stated that
Lloyd's had confirmed its approval for the syndicate to trade for
the 2014 year of account but that Lloyd's was currently not
minded to agree to the syndicate trading for 2015, absent a
demonstrable, material and sustainable improvement in
performance.

Canopius also stated that should syndicate 260 not trade beyond
2014, it was their intention to seek Lloyd's consent to transfer
the business into syndicates 958 and 4444, as they regarded the
business as an important part of their UK retail strategy/
product offering and believed that it could operate
more successfully within a larger syndicate.

Canopius acquired the operation in June 2010 and have been re-
underwriting the account, although the open year, 3-year account
forecasts for the 2011 and 2012 accounts are currently forecast
to be loss-making, with mid-point losses of respectively 8% and
5% of capacity currently forecast. The current 2014 proposed SBF
is also for a loss of 5% of capacity.

In terms of reported annual results since the Canopius
acquisition, the syndicate recorded a loss of 7% NPE on
an annually accounted basis for 2012 on a combined ratio of 112%
(including forex) at 31.12.12, having recorded a loss of 23% NPE
for 2011 on a combined ratio of 123%, with 2-year average results
currently being in line with C+ / B- continuity opinion benchmark
returns in terms of indicative average annual returns on capital.

Canopius had sought to acquire the remaining capacity on the
syndicate earlier this year and had intended to merge syndicate
260's business into Canopius managed syndicates 958 and 4444,
which write business in parallel, subject to Lloyd's approval.
However, with the offer not being accepted by some of the third
party members, the syndicate is to trade forward as a stand-alone
syndicate for 2014.

With Canopius supporting 92% of the business and having affirmed
its commitment to syndicate 260's business, Moody's commented
that in terms of continuity of business relationships, it
currently considered the likelihood of the business being placed
into run-off at the end of 2014 as limited, with it more likely
that the syndicate would be merged into syndicates 958 and 4444.
Moody's continued, however, that with the syndicate's losses
continuing and the Motor market remaining very competitive amid a
changing legal landscape, the business faced some material
headwinds.

With regard to potential future returns for investors
participating on syndicate 260, Moody's stated that, should the
syndicate be merged into syndicates 958 and 4444, it expected
that a risk premium in terms of syndicate 260's RITC was likely
to apply, with the potential for returns for investors to be more
in line with benchmarks for the C+ (Below Average) peer group,
albeit that any such risk premium was likely to be significantly
less than might apply were the syndicate's business be placed
into run-off.

However, overall in terms of continuity of business
relationships, with Canopius having affirmed its commitment to
syndicate 260's business, improvement in the syndicate's returns
since the Canopius acquisition and with more recent results more
in line with B- (Below Average) benchmarks, but with the
syndicate continuing to be unprofitable and facing a very
competitive market, Moody's has therefore affirmed syndicate
260's B-(Below Average) Continuity Opinion and assigned a
negative outlook to the Opinion, reflecting Moody's view of
relative continuity prospects for the syndicate over the
insurance cycle.

The last action was in October 2013 when the syndicate's B-(Below
Average), stable outlook, Continuity Opinion was placed under
review for possible downgrade.

Canopius Syndicate 260 is a Motor syndicate, backed 92% by
Canopius Group Ltd, which operates within the Lloyds of London
insurance market.


MARSTON AGRICULTURAL: In Administration, Cuts 20 Jobs
-----------------------------------------------------
Grantham Journal reports that twenty employees have been made
redundant at Marston Agricultural Services after it went into
administration.

The receivers said the Marston company has most recently been hit
by challenging economic conditions which have had a significant
impact on trading, according to Grantham Journal.

Tyrone Courtman -- tyronec@cooperparry.com -- and Nick Edwards --
nicke@cooperparry.com -- of accountants and business advisory
firm Cooper Parry have been appointed as joint administrators to
the company.

The report notes that Tyrone Courtman, partner and Head of Cooper
Parry's Restructuring team said: "Unfortunately it has been
necessary for Marston's Directors to place the company into
administration which has resulted in a number of redundancies.
Our absolute focus now is on seeking a buyer for the firm and I
remain optimistic about this having already received expressions
of interest. I would urge anybody interested in acquiring the
business and assets as a going concern to contact me
immediately."

Marston Agricultural Services is a family-owned business which
manufactures agricultural trailers has been trading from Marston
for more than 60 years.  The company was started by Ernest Green
in the 1950s and since then has designed and developed
agricultural trailers.  The firm has an in-house design team and
although focused on the UK market, had been trading further
afield including in Africa, Asia and New Zealand


RIVERMILL FOODS: Bakery Placed Into Liquidation
-----------------------------------------------
Cliff Sanderson at dissolve.com.au reports that Rivermill Foods,
a Hexham bakery, has been placed into liquidation just months
after it was purchased out of administration.

dissolve.com.au relates that a creditor's meeting took place on
November 18.  During the meeting, Quantuma Restructuring was
appointed as liquidator.

In January, Rivermill purchased the bakery which traded as Nichol
& Laidlow.

Rivermill Foods is a supplier of cereal bars and cakes to
retailers and coffee shops. The company also produces products
for brands like The National Trust and Wild Trail.


YALES LEISURE: In Administration, Remains Open for Business
-----------------------------------------------------------
News North Wales reports that Yales Leisure Limited has gone into
administration, but remains open for business.

Chris Pole -- chris.pole@kpmg.co.uk -- and Mark Orton --
mark.orton@kpmg.co.uk -- from KPMG have been appointed joint
administrators to Yales Leisure Limited.

A license to occupy has been granted to a prospective purchaser,
allowing continued operation of the business while a sale of the
properties is finalized, according to News North Wales.

The report notes that Mr. Pole said the economic downturn had
proved to be a big factor in administrators being appointed.

"The business suffered significant losses in the wake of the
recession which was exacerbated by the general challenging
conditions facing the licensed trade," the report quoted Mr. Pole
as saying.  "We are pleased to have been able to secure a deal to
ensure trading continues from the premises, and hope to complete
a sale of the properties within the next 28 days," Mr. Pole
added, the report relates.

A statement for KPMG said: "Following appointment, all employees
were made redundant.  However it is understood the new occupier
of the property has subsequently taken on all of the staff in the
continuing business," the report discloses.

Yales Leisure Limited is a popular town centre cafe bar and live
music venue.



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


EUROPE: Moody's Says Prospects Improving for B2B Companies
----------------------------------------------------------
The 2014 outlook is becoming more positive for certain business-
to-business (B2B) companies as an uptick in operating performance
in Europe has been visible across the board from foodservice
companies to business travel, supported by a modest macroeconomic
improvement, says Moody's Investors Service in a Special Comment
report published.

Some B2B companies, whose financial performance is tied to the
evolution of GDP and subsequent activity at their corporate
clients, are increasingly reporting a return to organic growth or
a deceleration of sales declines for their European operations.
Moody's expects the European operations of several companies,
including Adecco S.A. (Baa3 stable) and ISS A/S (B1 positive), to
report positive organic growth by year end.

"Compared with the downturn in 2008-09, European B2B services
companies have been able to protect profitability," says
Knut Slatten, an Assistant Vice President in Moody's Corporate
Finance Group and author of the report. "Some, such as Carlson
Wagonlit B.V. (B1 stable) and Adecco, have restructured their
European operations and now have a leaner structure. La
Financiere Atalian S.A (B2 stable), Compass Group Plc (Baa1
positive) and Adecco have favored profitability over revenues by
giving up loss-making contracts."

Pressure on organic growth persists in France -- a key market for
a number of rated B2B services companies -- but the effect on
profit will be mitigated by the new French tax credit measure
(CICE ). France is among the largest markets for many of the
services companies. Whilst the operating environment remains
challenging, profitability will be helped by the recently
introduced tax credit; benefitting companies with a high number
of low-to-medium salaried employees such as Adecco, La Financiere
Atalian S.A. and Holdelis (B2 stable).

A return to economic growth would particularly benefit companies
with high operating leverage. European services companies tend to
have substantial fixed costs because of their greater proportion
of personnel expenses. Moody's expects that companies engaged in
high-volume activities, such as Adecco and CWT, will grow EBITDA
more quickly than revenues as they should be able to accommodate
faster growth rates without significantly adding to costs.

Restructuring costs should abate in 2014. Credit metrics for 2013
is likely to have been affected by restructuring costs as
Compass, ISS and CWT have all taken on restructuring costs to
address their European operations. However Moody's expects
restructuring costs to abate in 2014.

Moody's notes that current economic weakness has not led to a
significant deterioration of credit quality. There has been very
limited downward rating pressure on European services companies
over the past 12-15 months as balance sheets have remained
largely intact.


                            *********

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.


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