TCREUR_Public/131204.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, December 4, 2013, Vol. 14, No. 240



NURBURGRING AUTO: ADAC Offer to Buy Circuit Rejected
WIESMANN: Files Application to Dismiss Insolvency Proceedings




ALLIED IRISH: Raises EUR500 Million in Term Funding
ANGLO IRISH: Gets More Than 30 Bids for Two Loan Portfolios
BANK OF IRELAND: Needs to Set Aside Extra Loan Loss Provisions
NEWBRIDGE CREDIT: Was "Within A Week" of Liquidation


RIFLE: Italian Jeanswear Firm Goes Into Liquidation


AEG POWER: S&P Puts 'CC' Corp. Credit Rating on Watch Negative


BANK SOYUZ: S&P Revises Outlook to Positive & Affirms 'B' Rating


PYMES SANTANDER 3: S&P Lowers Rating on Class C Notes to 'D'
SPAIN: S&P Revises Outlook on Five Financial Groups


CREDIT SUISSE: S&P Rates New Tier 1 Capital Notes 'BB-'

U N I T E D   K I N G D O M

ALBEMARLE & BOND: Opts to Put Business Up for Sale
DEVILFISH CREATIVE: Performers Left Out of Pocket
HEARTS OF MIDLOTHIAN: Bob Jamieson's Actions May Ruin Rescue Bid
IFA BERKELEY: Placed in Compulsory Liquidation
ILFORD IMAGING: Declares Insolvency as Investor Backs Out

ROYAL BANK: Forced SMEs to Default, Report Says
UK: PRA Eases Tough Capital Demands for Bank-Specific Risks


* European Union Threatens Action Against Big Three Ratings Firms



NURBURGRING AUTO: ADAC Offer to Buy Circuit Rejected
---------------------------------------------------- reports that the German automobile club ADAC is no
longer in the running to buy the embattled Nurburgring.

2013 race promoter ADAC, the Allgemeiner Deutscher Automobil-
Club, had submitted a non-binding offer to buy the fabled but
insolvent circuit, recalls.

But Speed Week reported that ADAC's offer was only for the
circuit, not the theme park and connected commercial area, which
would be demolished, according to

"That's right," ADAC chief Peter Meyer told Bild newspaper.  "We
have not been approved for the next step of the bidding process.
We were told only that our offer was considered too low," Bild
newspaper quotes Mr. Meyer as saying, reports. relates that Speed Week said ADAC's offer was for
a "double-digit million (Euro) sum."

As reported in the Troubled Company Reporter-Europe on July 20,
2012, Spiegel Online said The Nurburgring was facing bankruptcy
because its private operating company, Nurburgring GmbH, is no
longer able to pay the interest on a EUR330 million loan it was
provided by the ISB investment and structural bank, which belongs
to the state of Rhineland-Palatinate.  The company also hasn't
been able to cover its lease payments, according to Spiegel
Online.  A report in the Rhein-Zeitung newspaper stated that the
operating company has debts of EUR413 million, including the ISB
loan and EUR83 million in other outstanding loans, Spiegel Online
disclosed. If the track were to be sold, it could come at a loss
of several hundred million euros for taxpayers, Spiegel Online

The Nurburgring has been the main venue for the German Grand Prix
since World War II but has shared duties with Hockenheim since
2009.  The race track is owned by the German government, with the
private operator, Nurburgring GmbH, responsible for the day-to-
day running.

WIESMANN: Files Application to Dismiss Insolvency Proceedings
Carscoops reports that Wiesmann said in a statement on its
Web site that the company has requested the court to end the
bankruptcy procedure.

"The management board of the Wiesmann corporation has filed the
application to dismiss the insolvency proceedings due to
abolition of the insolvency reasons.  The creditors' meeting is
postponed to December 16, 2013," Carscoops quotes the statement
as saying.

Wiesmann didn't indicate the reasons for the change, but the
important thing is the company will come up with a plan for the
future together with its creditors later this month and will
hopefully continue to offer BMW-powered sports cars, Carscoops

In August this year, the carmaker filed for insolvency at a local
court in Muenster and went under the protection of an
administrator, Carscoops recounts.

Wiesmann is the German manufacturer of retro-styled sports cars.


Standard & Poor's Ratings Services said that it raised to 'BB-'
from 'B+' its long-term corporate credit rating on Greek
integrated telecommunications operator Hellenic
Telecommunications Organization S.A. (OTE).  At the same time,
S&P affirmed its 'B' short-term corporate credit rating on OTE.
The outlook is stable.

In addition, S&P raised to 'BB-' from 'B+' its issue ratings on
the debt issued by OTE's wholly owned financing vehicle OTE PLC.
Finally, S&P removed the corporate credit and issue ratings from
CreditWatch, where S&P placed them with positive implications on
Nov. 26, 2013, in conjunction with its criteria redesign.

"We base our upgrades primarily on our assessment that OTE is
unlikely to default in a hypothetical stress scenario that would
likely accompany a sovereign default of Greece, primarily due to
the company's currently very solid balance sheet, including large
cash deposits at foreign banks.  In addition, we expect OTE to be
able to generate meaningful free operating cash flow despite
continued revenue declines, primarily due to the company's strong
track record of cost cutting.  In such a stress scenario, we also
believe that OTE would be able to maintain "adequate" liquidity,"
S&P said.

OTE is nonetheless subject to pricing restrictions from the Greek
regulator and generates moderate revenues from the Greek
government.  In addition, although S&P currently assess the
likelihood of an exit of Greece from the eurozone (European
Economic and Monetary Union) as low, an increase in S&P's
assessment of this likelihood toward 33% or above would cause S&P
to cap the long-term corporate credit rating on OTE at 'B'.  As a
result, S&P assess that a rating cap of three notches above the
sovereign credit rating on Greece (B-/Stable/B) is currently

"We assess OTE's business risk profile as "fair."  This primarily
incorporates our view of the telecoms and cable industry's
"intermediate" risk, and "high" country risk for Greece, where
OTE generates about 80% of its revenues.  Our assessment of
business risk also reflects the adverse regulation and fierce
competition that OTE is facing in Greece.  This is partly offset
by OTE's leading market positions for mobile and fixed-line
services and our belief that the company will continue to
undertake cost-cutting measures that will support its operating
margins despite declining revenues," S&P added.

S&P assess OTE's financial risk profile as "intermediate."  This
is primarily based on S&P's view that the company will continue
to deleverage using free cash flow and maintain a solid balance
sheet in light of "high" country risk in Greece and uncertainty
over OTE's access to the capital markets.

In S&P's view, OTE will maintain "adequate" liquidity and
generate free operating cash flow of about EUR0.4 billion
annually in 2013 and 2014.  Despite the still-weak economic
environment in Greece, S&P forecasts lower revenue declines from
2014 onward, primarily due to reduced regulatory pressure on
prices.  Furthermore, S&P believes that OTE is able to maintain
its current EBITDA margins thanks to its continued cost cutting.

Rating upside could arise if we raise our sovereign rating on
Greece and if, at the same time, OTE's liquidity remains at least
"adequate."  In addition, S&P could raise the ratings if it
believed that DT's commitment to OTE had strengthened.  Stronger
support could take the form of a substantial increase in DT's
stake in OTE or other explicit forms of financial support.

S&P currently sees limited ratings downside.  S&P could lower the
ratings, however, if its assessment of OTE's free operating cash
flow generation prospects or liquidity weakens.  Furthermore, S&P
could lower the ratings, potentially by multiple notches, if it
assess that the likelihood of Greece's exit from the eurozone has
increased toward 33% or higher.


ALLIED IRISH: Raises EUR500 Million in Term Funding
Allied Irish Banks, p.l.c., has agreed a EUR500 million two-year
floating rate bilateral term funding transaction through BofA
Merrill Lynch and Deutsche Bank, secured by a high quality
portfolio of Irish credit card receivables.

This is the first transaction of its kind for an Irish Bank and
establishes a structure which is expected to provide a stable
source of cost effective funding into the future.  It is
consistent with AIB's stated strategy to engage with the market
in a balanced and measured manner with a series of well placed,
appropriately structured and priced transactions.

Fergus Murphy, director of Products at AIB, said, "This
transaction is another step in diversifying AIB's funding base
and will further reduce AIB's reliance on monetary authority

The transaction has no impact on AIB's credit card customers.

                      About Allied Irish Banks

Allied Irish Banks, p.l.c. -- is a
major commercial bank based in Ireland.  It has an extensive
branch network across the country, a head office in Dublin and a
capital markets operation based in the International Financial
Services Centre in Dublin.  AIB also has retail and corporate
businesses in the UK, offices in Europe and a subsidiary company
in the Isle of Man and Jersey (Channel Islands).

Since the onset of the global and Irish financial crisis, AIB's
relationship with the Irish Government has changed significantly.

As at Dec. 31, 2010, the Government, through the National Pension
Reserve Fund Commission ("NPRFC"), held 49.9% of the ordinary
shares of the Company (the share of the voting rights at
shareholders' general meetings), 10,489,899,564 convertible non-
voting ("CNV") shares and 3.5 billion 2009 Preference Shares.  On
April 8, 2011, the NPRFC converted the total outstanding amount
CNV shares into 10,489,899,564 ordinary shares of AIB, thereby
increasing its holding to 92.8% of the ordinary share capital.

In addition to its shareholders' interests, the Government's
relationship with AIB is reflected through formal and informal
oversight by the Minister and the Department of Finance and the
Central Bank of Ireland, representation on the Board of Directors
(three non-executive directors are Government nominees),
participation in NAMA, and otherwise.

The Company reported a loss of EUR2.29 billion in 2011, a loss of
EUR10.16 billion in 2010, and a loss of EUR2.33 billion in 2009.

Allied Irish's consolidated statement of financial position for
the year ended Dec. 31, 2011, showed EUR136.65 billion in total
assets, EUR122.18 billion in total liabilities and EUR14.46
billion in shareholders' equity.

Allied Irish's balance sheet at June 30, 2012, showed EUR129.85
billion in total assets, EUR116.59 billion in total liabilities
and EUR13.26 billion in total shareholders' equity.

ANGLO IRISH: Gets More Than 30 Bids for Two Loan Portfolios
Peter Flanagan at reports that more than 30 bids
have been submitted for two commercial property loan portfolios
from the former Anglo Irish Bank, as demand for the loan books
hots up.

According to, a slew of international bidders,
including some of the top US funds who specialize in buying
so-called distressed debt are believed to have made first round
bids for the loan books, known as Project Rock and Project Salt.

Project Rock is worth about EUR7.8 billion in total, but a little
over EUR2 billion worth of those loans -- mostly UK commercial
real estate -- are up to date and are expected to be refinanced
by the borrower, discloses.  That leaves more than
EUR5.5 billion worth of loans that are in arrears,

Project Salt, meanwhile, is made up mostly of Irish commercial
property loans, with close to EUR2 billion worth of lending that
is now in arrears, says.

IBRC's special liquidators -- KPMG's Kieran Wallace and
Eamonn Richardson -- are believed to have sought bids for the
entire portfolios, a single tranche, or any combination of
multiple tranches, states.

According to, the loans were valued by KPMG when
the liquidation process began, and Finance Minister
Michael Noonan has barred the Project Rock and three other
portfolios from being sold at a discount to the valuation.

That has sparked concern that the market for IBRC's loan books
may be tighter than had been expected, with potential investors
warning about the "rigid" nature of the sale process, says.

The special liquidators, however, have repeatedly said they were
"not unhappy" with the scale of interest they had seen in the
IBRC portfolio, relates.

                         About Anglo Irish

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

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

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

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

BANK OF IRELAND: Needs to Set Aside Extra Loan Loss Provisions
Ciara Kenny at The Irish Times reports that Bank of Ireland's
capital adequacy ratios have suffered a sharper than expected
drop after the Central Bank of Ireland said following an
industrywide review that the Bank of Ireland needed to make extra
loan loss provisions.

According to The Irish Times, the health checks, carried out just
before Ireland exits its EU/IMF bailout, are seen as a preview
for the European Central Bank's (ECB) own tests of euro zone
banks next year, when capital holes running to 10s of billions of
euros are expected to be uncovered.

Bank of Ireland, as cited by The Irish Times, said it was not
required to raise additional capital after the central bank
review and said it was in talks with the Central Bank about its

"The outcome of this engagement cannot be anticipated with
certainty and actions taken following engagement with the Central
Bank of Ireland may adversely impact capital ratios," The Irish
Times quotes Bank of Ireland as saying in a statement.

Under the review, the bank's Core Tier 1 capital adequacy ratio
fell to 9.85% of risk-adjusted assets from 13.8% as of June 30,
calculated on the basis of a gradual introduction of tougher
global capital rules, The Irish Times discloses.

Bank of Ireland, as cited by The Irish Times, said it expected to
maintain a Core Tier 1 capital ratio above 10% on that basis.

According to The Irish Times, in a note, Citi said it believed
Bank of Ireland had a significant capital shortfall relative to
its UK and European peers and reiterated its sell rating.

In its review, the Central Bank estimated that Bank of Ireland
needed to set aside an extra EUR360 million to cover potential
loan losses on Irish mortgages, an additional EUR486 million to
cover potential losses on business loans and EUR547 million on
defaulted loans, The Irish Times discloses.

The central bank also increased Bank of Ireland's risk-weighted
assets, usually loans adjusted for the likelihood of non-payment,
by EUR6.8 billion, The Irish Times notes.

Bank of Ireland said last week that it may raise new equity to
help repay EUR1.8 billion of state-owned preference shares the
bank had to issue as part of its 2009 bailout, The Irish Times

According to The Irish Times, a source familiar with the deal
told Reuters it will raise between EUR500 and EUR600 million of
equity as early as this week and the rest by issuing debt to
private investors.

Headquartered in Dublin, Bank of Ireland -- provides a range of banking and
other financial services.  These include checking and deposit
services, overdrafts, term loans, mortgages, business and
corporate lending, international asset financing, leasing,
installment credit, debt factoring, foreign exchange facilities,
interest and exchange rate hedging instruments, executor,
trustee, life assurance and pension and investment fund
management, fund administration and custodial services and
financial advisory services, including mergers and acquisitions
and underwriting.  The Company organizes its businesses into
Retail Republic of Ireland, Bank of Ireland Life, Capital
Markets, UK Financial Services and Group Centre.  It has
operations throughout Ireland, the United Kingdom, Europe and the
United States.

NEWBRIDGE CREDIT: Was "Within A Week" of Liquidation
Fionnan Sheahan at Irish Independent reports that Newbridge
Credit Union was "within a week" of going bust, Finance Minister
Michael Noonan has revealed.  "It went within a week of being
forced into liquidation," the report quotes Mr. Noonan as saying.

The credit union was taken over by Permanent TSB last month,
following a court application by the Central Bank.

Irish Independent relates that Mr. Noonan said the Irish
Government's preferred option was to merge Newbridge with Naas
Credit Union, but this was rejected.  He said the Central Bank's
action was necessary.

Newbridge Credit Union is a community based, non-profit making
financial co-operative.


RIFLE: Italian Jeanswear Firm Goes Into Liquidation
Maria Cristina Pavarini at reports that
historical Italian jeanswear company Rifle has gone into

The company registered EUR7 million losses in 2012 and expects
EUR4 million losses in 2013.  Antonio Arcaro, who is involved in
rescuing other brands in the market, has started a restructuring
phase to save the company, the report says.

According to local newspapers the restructuring will continue, reports.  "The liquidation phase will bring
about heavy restructuring, but the activity of the company will
continue," quotes the company's manager Simone
Anichini as saying. relates that the restructuring plan is yet to
be defined and will include a cutting of jobs as well as of a
change in management following the arrival of Mr. Arcaro.

A new strategy and the creation of a new company is expected to
start with the beginning of 2014, together with an overall new
project that -- according to a source within the company -- could
be announced within the upcoming edition of Pitti Uomo, adds

Rifle is one of the oldest Italian jeans brands. It was founded
in 1958 by brothers Giulio and Fiorenzo Fratini who initially
started importing jeans from the US, and then started producing
them directly. In 1968, they were the first company to export
them to Eastern Europe.  The company presently employs 192


AEG POWER: S&P Puts 'CC' Corp. Credit Rating on Watch Negative
Standard & Poor's Ratings Services placed on CreditWatch with
negative implications its 'CC' long-term corporate credit rating
on Netherlands-based AEG Power Solutions B.V.

The CreditWatch placement reflects S&P's view that there is a
high risk that 3W Power, the parent holding company of AEG Power
Solutions, will not make the coupon payment on its EUR100 million
notes, maturing in 2015, within the 30 days following the
coupon's Dec. 1, 2013 due date.

3W Power has suspended its decision to pay the 9.25% coupon until
after a second noteholder meeting, which the company plans to
hold on Dec. 18, 2013.

This date is within the 30-day grace period allowed by the bond
documentation for remedying the non-payment.  According to S&P's
criteria, if the interest on the notes is not paid before this
period expires, this would constitute an event of default.

If, as a result of the second noteholder meeting, the coupon
payment is deferred and/or a financial restructuring is
consummated, S&P would lower the rating on AEG Power Solutions to
'SD' (Selective Default).

S&P aims to resolve the CreditWatch shortly after the second
noteholder meeting on Dec. 18, 2013 and within the 30-day grace
period after the coupon due date.

S&P could affirm the rating at 'CC' if the company makes the
required coupon payment before Dec. 30, 2013.  Nevertheless, the
ratings would remain constrained by the announced review of AEG
Power Solutions' capital structure and the associated high risk
of a distressed exchange offer, which S&P would view as a default
under its criteria.

S&P will lower the corporate credit to 'D' (Default) if 3W Power
does not make the coupon payment within the grace period, which
ends on Dec. 30, 2013, or to 'SD' (Selective Default) if the
coupon payment is deferred and/or a financial restructuring is


BANK SOYUZ: S&P Revises Outlook to Positive & Affirms 'B' Rating
Standard & Poor's Ratings Services said it had revised its
outlook on Russia-based Bank Soyuz to positive from stable.

At the same time, S&P affirmed the 'B' long-term counterparty
credit rating and raised the short-term counterparty credit
rating to 'B' from 'C'.  S&P also raised its Russia national
scale rating on the bank to 'ruA' from 'ruA-'.

The rating actions reflect S&P's view that Bank Soyuz's earnings
capacity and the quality of its revenues are improving, which
should support a gradual buildup of capital.  S&P believes this
stems from Bank Soyuz's new strategy, which focuses on increasing
the efficiency of its cooperation with parent company Ingosstrakh
and with Basic Element.

S&P anticipates that the bank's credit portfolio will start to
increase in 2014 and achieve growth rates of 20%-25% in 2015.  In
S&P's view, Bank Soyuz is unlikely to obtain additional external
capital over the next two to three years.  Therefore, S&P
considers retained earnings to be its only means of building up
capital in the near future.  At the same time, increasing the
retail loan portfolio would support a net interest margin of
about 4% in next 12-18 months.

As a result of cost optimization and loan portfolio recovery,
Bank Soyuz has shown substantially improved profitability this
year. For the nine months ended Sept. 30, 2013, the bank recorded
a net profit of Russian ruble (RUB) 1.7 billion (about $53
million), compared with RUB289 million for the corresponding
period in 2012.

"We expect this trend to continue in 2014, with the bank
generating RUB1.5 billion to RUB2 billion of net profit and a
return on equity of 12%-14%.  The bank's future profitability
will likely benefit from higher margins in the retail segment and
cooperation with Ingosstrakh -- one of the largest non-life
insurers in Russia -- which has a large retail client base.  We
believe cross-selling capacities are substantial, and access to
Ingosstrakh's clients could become a competitive advantage for
Bank Soyuz, whose own retail franchise is otherwise limited.  As
a result, we believe that retained earnings will support the
bank's capitalization at least at current levels.  We project a
risk-adjusted capital (RAC) ratio for Bank Soyuz, before
adjustments for diversification, of 5%-6% over the next 12-18
months," S&P said.

However, although improving, S&P still assess Bank Soyuz's
earnings capacity as moderate because of challenges relating to
its new strategy.  For example, growth in retail banking could be
difficult to achieve because this is a relatively new area for
the bank.  Moreover, S&P foresees pressure on the net interest
margin, owing to increasing competition.

S&P bases its ratings on Bank Soyuz on its 'bb' anchor for banks
operating predominantly in Russia, and its view of the bank's
"moderate" business position, "weak" capital and earnings, "weak"
risk position, "average" funding, "adequate" liquidity, and "low"
systemic importance in Russia, as defined in S&P's criteria.

The positive outlook reflects the possibility of an upgrade if
the quantity and quality of Bank Soyuz's profitability continue
to improve, allowing the bank to sustain its capital position at
least at the current level.  Stable core earnings sufficient to
sustain a RAC ratio exceeding 5% over the business cycle would
support an upgrade.

S&P might consider revising the outlook back to stable if the
bank's profitability were to deteriorate, notably because of
inability to reduce earnings volatility that could result in an
erosion of capitalization.

In addition, S&P might take a negative rating action if the link
between Bank Soyuz and Ingosstrakh were to weaken.  In
particular, this could follow a weakening of the business links
between the two entities, leading S&P to review the likelihood of
group support and remove any related uplift for the rating.


PYMES SANTANDER 3: S&P Lowers Rating on Class C Notes to 'D'
Standard & Poor's Ratings Services lowered to 'D(sf)' from
'CC(sf)' its credit rating on Fondo de Titulizacion de Activos,
PYMES SANTANDER 3's class C notes.

At closing, the class C notes' issuance proceeds funded the
reserve fund.  This class of notes is subordinated in the
priority of payments.  On the October 2013 interest payment date,
the issuer used the reserve fund for the first time.
Consequently, the class C notes' interest was not paid.

S&P's ratings on PYMES SANTANDER 3's notes address timely payment
of interest and payment of principal during the transaction's
life.  S&P has therefore lowered to 'D (sf)' from 'CC (sf)' its
rating on the class C notes.

PYMES SANTANDER 3 closed in July 2012 and securitizes secured and
unsecured loans that Banco SANTANDER S.A. granted to small and
midsize enterprises (SMEs).

SPAIN: S&P Revises Outlook on Five Financial Groups
Standard & Poor's Ratings Services said it has revised the
outlook on five Spanish financial groups and three branches of
European banks:

   -- It revised to stable from negative the outlooks on four
      Spanish banking groups (and some group entities): Banco
      Bilbao Vizcaya Argentaria, S.A. (BBVA) and its highly
      strategic U.S. subsidiaries BBVA Compass Bancshares Inc.
      (BBVA Compass) and Compass Bank; Caixabank, S.A.
      (Caixabank) and its parent Caja de Ahorros y Pensiones de
      Barcelona (la Caixa); Ibercaja Banco, S.A. (Ibercaja); and
      Cecabank, S.A. (CECA).

   -- S&P also revised to stable from negative the outlooks on
      three branches of European banks: Barclays Bank plc (Madrid
      Branch), Deutsche Bank (Madrid branch), and BNP Paribas
      Securities Services (Madrid branch).

   -- S&P revised to positive from stable the outlook on
      Bankinter S.A.

The outlook on the following six Spanish banking groups remains
negative: Bankia, S.A. (Bankia) and its parent Banco Financiero y
de Ahorros, S.A. (BFA); Banco Popular Espanol, S.A. (Popular);
Banco de Sabadell, S.A. (Sabadell); Kutxabank, S.A. (Kutxabank);
Barclays Bank, S.A. (BBSA); and NCG Banco, S.A. (NCG).

S&P has affirmed all ratings on the above-mentioned institutions.

S&P has not included Banco Santander, S.A. and its subsidiary
Santander Consumer Finance S.A. as part of this review.  The
ratings on both entities remain on CreditWatch with positive
implications, where they were placed on Nov. 22, 2013.

S&P has also not included in this review an assessment of the
impact on any of the above-mentioned institutions of the Royal
Decree-Law 14/2013, published on Nov. 30, 2013.  S&P understands
that this Royal Decree has modified, among other things, the
legislation on income tax and the characteristics of certain
deferred tax assets for Spanish financial institutions.  S&P is
currently undertaking a review of this recently published
legislation and will determine and communicate within the next
few weeks if it considers that it will likely affect its
assessment of the creditworthiness of the above-mentioned Spanish
financial institutions.

The outlook revision on BBVA relates directly to the outlook
revision of the long-term sovereign credit rating on Spain to
stable from negative, as the ratings on BBVA are limited by S&P's
current assessment of the sovereign creditworthiness.  The
outlook revision on BBVA led to a similar outlook revision on its
highly strategic U.S. subsidiaries, BBVA Compass and Compass

Similarly, the outlook revision of Barclays Bank plc (Madrid
Branch), Deutsche Bank (Madrid branch), and BNP Paribas
Securities Services (Madrid branch) is also directly related to
the outlook revision of the long-term sovereign credit rating on
Spain to stable from negative, in accordance with S&P's criteria
for assessing the creditworthiness of EU branches of EU banks.
The rating on a branch of an EU bank based in another EU
jurisdiction is the lower of the bank's ICR and a level that is
four notches above S&P's foreign currency rating on the host
sovereign if that rating is 'BBB-' or higher.

The outlook revision to positive on Bankinter, and to stable on
Caixabank and its parent la Caixa, Ibercaja, and CECA, reflects
S&P's view that downside risks for banks in the operating
environment in Spain are diminishing.

"In particular, we believe that Spanish banks have made
significant progress in structurally rebalancing their funding
profiles -- a trend that we expect to continue in the context of
the stabilizing sovereign creditworthiness.  Banks' loan books
have fallen sharply while domestic deposits are growing.  This
has resulted in an increase in the weight of stable funding
sources in the banks' funding mix.  We expect core domestic
deposits (as we define them) to account for 57% of the domestic
loan book by end-2013.  Since the beginning of 2013, the cost of
domestic deposits has also fallen sharply.  The financial
system's net external liabilities -- equivalent to 14% of
domestic loans as of June 2013 -- are well below the 24% average
reported in the 2008-2011 period, as issuance in the
international capital markets remains limited. Furthermore, we
note that banks' net reliance on funding from the European
Central Bank (ECB), while still high (EUR234 billion in October
2013), is trending downward, having reduced by 40% from the peak
in August 2012," S&P said.

These factors all support S&P's revised view of the trend for
industry risk in the Spanish banking system as stable.

S&P continues to view the trend for economic risk, in the context
of its assessment of the financial industry, as stable.  S&P
expects the housing market correction to persist.  In S&P's view,
real estate prices will fall further in 2014 and 2015 and
activity will remain modest.  However, following the significant
provisioning efforts in 2012, S&P believes that Spanish banks
have already recognized most of the credit losses generated by
the bursting of the real estate bubble.  This will allow credit
provisions on aggregate to gradually decline from this year
onward, despite banks having to continue allocating provisions to
cope with expected asset quality deterioration in the rest of
their portfolios (primarily on non-real-estate corporate
exposures and residential mortgages).  S&P believes that economic
recovery will be modest and gradual, and will remain mainly
export-driven in 2014.  Weak trends in domestic demand will
therefore continue to put pressure on the creditworthiness of
private sector agents and challenge their resilience.  S&P do not
expect the financial system to start reducing its volume of
problem assets until 2015.

S&P expects the anchor for banks operating in Spain to remain at
'bb+' in the medium term, reflecting the stable trend that S&P
sees for economic and industry risk in the Spanish banking
sector. The anchor is the starting point in assigning a bank's
issuer credit rating.

Despite S&P's view that risks in the operating environment in
Spain are easing, it maintains negative outlooks on a number of
institutions.  This is because S&P considers that there are bank-
specific factors (in most cases related to the banks' ability to
strengthen capital) that could negatively affect our current
assessments of those banks' stand-alone credit profiles (SACPs),
as detailed below.

                          STABLE OUTLOOKS

Banco Bilbao Vizcaya Argentaria S.A. and subsidiaries.  The
stable outlook on the long-term rating on BBVA mirrors that on
Spain. This is because the long-term rating on BBVA is
constrained by the long-term sovereign credit rating on Spain.
The stable outlook also reflects S&P's belief that BBVA's asset
quality will continue to outperform its peers in most of the
markets where it operates, and that the bank will be able to
absorb the impact of still-high provisioning charges while
reporting sound net operating performance.

A revision of the outlook to positive or negative would depend on
a similar action on the outlook on Spain.

The stable outlook on BBVA Compass and Compass Bank reflects the
outlook on their parent, BBVA.  S&P do not currently view BBVA
Compass or Compass Bank as insulated subsidiaries, therefore S&P
do not incorporate any uplift for potential extraordinary
government support and cap its ratings on them at the level of
the parent's 'bbb-' group credit profile.

   Caixabank S.A. and Caja de Ahorros y Pensiones de Barcelona

The stable outlook on Caixabank reflects S&P's belief that the
bank should be able to absorb the impact of still-high credit
impairments while posting positive bottom line performance.
This, combined with strong deleveraging and additional actions
recently undertaken by the bank to enhance its solvency, should
allow Caixabank to continue strengthening its capitalization in
coming quarters.  S&P also believes that Caixabank's credit
quality will remain better than the system average, in line with
its track record of superior asset quality performance.

S&P could revise the outlook to negative if asset quality
deteriorates more than it expects, and if S&P anticipates that
credit losses could potentially exceed the bank's loss-absorption
capacity and significantly affect its solvency.  If S&P believes
that the quality of Caixabank's loan book is moving closer to the
system average, it could also revise the outlook to negative.  A
revision of the outlook on the long-term rating on Spain to
negative would also trigger a similar action on the outlook on

S&P considers an outlook revision to positive as unlikely in the
next 12-18 months, although this could occur if S&P revises the
outlook on the long-term rating on Spain to positive, if economic
conditions in Spain improve substantially, and if Caixabank
preserves its financial strength through the cycle.

The stable outlook on la Caixa mirrors that on Caixabank.  Any
rating action on Caixabank would trigger a similar action on la

                        Ibercaja Banco S.A.

The stable outlook on Ibercaja reflects S&P's belief that,
following the acquisition of Cajatres, Ibercaja's asset quality
will continue to outperform that of its Spanish domestic peers.
In addition, S&P considers that the bank will maintain its
conservative approach to credit underwriting and acquisitions.
The stable outlook also factors in S&P's view that, over the next
18-24 months, Ibercaja will maintain relatively stable solvency
levels as the impact of modest organic capital generation will be
mitigated by the repayment of state aid received by Cajatres.

S&P could revise the outlook to negative if it anticipated that,
contrary to its current expectations, Ibercaja's asset quality
would likely deteriorate to converge with the system average in
Spain or the bank would make further acquisitions of weaker
players.  S&P could revise the outlook to positive if the
economic and operating environment in Spain improves and if
Ibercaja is able to strengthen its solvency position
substantially above its current expectations.

                           Cecabank S.A.

The stable outlook on Cecabank reflects S&P's belief that the
bank has been able to maintain an adequate business position and
diversify into new business lines.  As a result, S&P believes
that the bank has managed to offset weaker revenues from its
historical business with former savings banks.  In addition, in
the context of improving funding conditions in the Spanish
banking system S&P no longer sees material pressures on the
funding and liquidity position of the bank.

S&P could revise the outlook to negative if, contrary to its
current expectations, funding becomes more market sensitive or
if, despite recent successful diversification efforts, Cecabank's
business prospects were to deteriorate sharply.  Alternatively, a
review of the outlook to positive would hinge on an improvement
in the economic and operating environment in Spain.

Barclays Bank PLC (Madrid Branch), Deutsche Bank (Madrid branch),
and BNP Paribas Securities Services (Madrid Branch)

The stable outlook on Barclays Bank PLC (Madrid Branch) and
Deutsche Bank (Madrid branch) reflects the stable outlook on
their respective parents, Barclays Bank PLC and Deutsche Bank AG,
as well as the stable outlook on the long-term sovereign credit
rating on Spain.  The stable outlook on BNP Paribas Securities
Services (Madrid Branch) reflects the stable outlook on the long-
term sovereign credit rating on Spain.

                          POSITIVE OUTLOOK

                          Bankinter, S.A.

The positive outlook on Bankinter reflects the possibility that
S&P could raise the ratings on the bank if it anticipated that it
would likely maintain a level of solvency such that its RAC ratio
would be comfortably and sustainably above 5%, underpinned by
stable earnings growth.  An upgrade could also follow a continued
successful transformation of the business model, increasing
profitability and reducing the reliance of its business model on
access to cheaper wholesale markets.  S&P believes the positive
trends Bankinter is experiencing in both its capital and business
model transformation could mitigate the pressure S&P still sees
on its profile from the need to rebalance its funding profile.

However, failure to continue reducing its reliance on funding
from the ECB and achieve a balanced funding structure without
central bank support could trigger a revision of the outlook back
to stable, particularly if S&P believes that progress in shifting
its business profile was weakening or it perceived that Bankinter
would be unlikely to sustain strengthened capital levels.

                         NEGATIVE OUTLOOKS

                           Kutxabank S.A.

The outlook on Kutxabank remains negative, reflecting the
possibility that S&P could lower the ratings if, contrary to its
current expectations, the bank proves unable to substantially
enhance its capital position.  Specifically, this could occur if
the bank's organic capital generation weakens significantly
compared with current levels, mainly on the back of rising credit
losses, or if Kutxabank is not able to complete some of the
actions it has planned to strengthen its solvency, including the
disposal of noncore assets.  If, as a consequence, S&P
anticipates that Kutxabank would not be able to raise its risk-
adjusted capital (RAC) ratio before diversification sustainably
above 5%, S&P could lower the ratings.

Conversely, S&P could revise the outlook to stable if it
anticipates that Kutxabank will successfully achieve its stated
capital targets, therefore enhancing its solvency measures in
line with its expectations.

                    Banco Popular Espanol S.A.

The negative outlook on Popular reflects S&P's view of the
challenges that management faces in containing the ongoing
deterioration of the bank's financial profile.  In particular,
S&P takes into account the risk that higher loan loss provisions
could weaken its capital assessment and the possibility that
ongoing pressure on the bank's financial profile could weaken
Popular's business position or stability.  The outlook also
reflects the possibility that S&P could lower the ratings if,
contrary to its current expectations, Popular is not able to
rebalance its liquidity position to an "adequate" level according
to its criteria by the time the long-term refinancing operation
(LTRO) expires.

S&P could revise the outlook to stable if the downside risks it
currently sees for Popular's asset quality and overall financial
position abate and, in its view, the bank's management team deals
effectively with the challenges it faces.

                          NCG Banco, S.A.

The negative outlook on NCG reflects S&P's view that it could
lower the ratings if the bank underperforms its capital forecasts
due to lower-than-expected deleveraging or weaker-than-expected
performance.  In addition, S&P could lower the rating if,
contrary to its current expectations, the bank fails to
progressively reduce its reliance on ECB funding.

A review of the outlook to stable would depend on the bank being
able to maintain its solvency and overall financial position
through the rest of its restructuring process.

                      Banco de Sabadell S.A.

The negative outlook on Sabadell reflects the pressures S&P
continues to see on Sabadell's asset quality and funding and
liquidity position.  In S&P's view, there are still downside
risks to Sabadell's asset quality performance, taking into
account the sizable stock of nonperforming assets (NPAs)
accumulated throughout the downturn and the weak asset quality of
its acquisitions through the crisis, particularly that of Banco
CAM S.A.  The negative outlook also reflects the possibility that
S&P could lower the ratings if, contrary to its current
expectations, Sabadell is unable to improve its liquidity
position to an "adequate" level according to its criteria and,
therefore, continues relying on short-term wholesale funding,
including the ECB facilities.

S&P could revise the outlook to stable if the bank manages Banco
CAM's stock of NPAs effectively and improves its asset quality
performance so that it is more in line with the system average
(as it was before acquiring Banco CAM).  An outlook revision to
stable would also hinge on Sabadell meeting S&P's expectation
that it will sustain a stronger level of capital both in
quantitative and qualitative terms, including a RAC ratio
comfortably and sustainably above 5%.

        Bankia S.A. and Banco Financiero y de Ahorros S.A.

The negative outlook on Bankia primarily reflects the possibility
that the group may not deliver the profits or capital
strengthening that S&P expects.  For example, this could happen
if the cost that parent company, Banco Financiero y de Ahorros
(BFA), has to assume for compensating clients for the misselling
of hybrid instruments is well above the provisions that the group
has set aside for it, and if the extraordinary cost is not offset
by extraordinary capital gains on divestments of noncore assets.

S&P's assessment of Bankia's SACP, and therefore ultimately its
ratings, could also be under pressure if the ongoing
restructuring suffers significant deviations or delays that lead
to a meaningful loss of business and harm the bank's franchise.
This is not S&P's base-case scenario, however, and it expects
this risk to diminish over time.  In S&P's view, the ongoing
restructuring process is far reaching and goes beyond the branch
network restructuring that the bank has just announced it has

S&P could revise the outlook to stable if it had greater
visibility on the bank's ability to strengthen its capital and if
it continues to progress well in its restructuring.

The negative outlook on BFA mirrors that on Bankia, the group's
operating entity.

                         Barclays Bank S.A.

The negative outlook on BBSA reflects S&P's view that the bank's
ongoing restructuring poses a risk for a potential deterioration
in BBSA's business profile relative to domestic peers.  In
addition, any evidence of reduced commitment from Barclays Bank
PLC toward BBSA, although unlikely in the medium term, might lead
S&P to modify its view of the Spanish bank's strategic importance
to the group, which could lead to a lowering of the long-term
rating by one or more notches.

S&P might consider an outlook revision to stable if it believes
that BBSA is making sound progress with its restructuring,
relieving the pressure on its business position and delivering on
its parent bank's expectations.

Spain                            To                   From

BICRA Group                      6                    6

Economic risk                   7                    7
  Economic resilience       Intermediate risk    Intermediate
  Economic imbalances       Very High risk       Very High risk
  Credit risk in the economy     High risk            High risk

Industry risk                   5                    5
  Institutional framework   Intermediate risk    Intermediate
  Competitive dynamics      Intermediate risk    Intermediate
  Systemwide funding             High risk            High risk

  Economic risk trend            Stable               Stable
  Industry risk trend            Stable               Negative

* Banking Industry Country Risk Assessment (BICRA) economic risk
   and industry risk scores are on a scale from 1 (lowest risk)
   10 (highest risk).


Ratings Affirmed; Outlook Revised To Stable

                               To                   From
Banco Bilbao Vizcaya
Argentaria S.A.
  Counterparty Credit Rating   BBB-/Stable/A-3      BBB-/Neg/A-3

BBVA Compass Bancshares, Inc.
  Counterparty Credit Rating   BBB-/Stable/A-3      BBB-/Neg/A-3

Compass Bank
  Counterparty Credit Rating   BBB-/Stable/A-3      BBB-/Neg/A-3

CaixaBank S.A.
  Counterparty Credit Rating   BBB-/Stable/A-3      BBB-/Neg/A-3

Caja de Ahorros y Pensiones de Barcelona
  Counterparty Credit Rating   BB/Stable/B          BB/Neg/B

Cecabank S.A.
  Counterparty Credit Rating   BB+/Stable/B         BB+/Neg/B

Ibercaja Banco S.A.
  Counterparty Credit Rating   BB/Stable/B          BB/Neg/B

Deutsche Bank AG (Madrid Branch)
  Counterparty Credit Rating   A/Stable/A-1         A/Neg/A-1

Barclays Bank plc (Madrid Branch)
  Counterparty Credit Rating   A/Stable/A-1         A/Neg/A-1

BNP Paribas Securities Services (Madrid Branch)
Counterparty Credit Rating     A/Stable/A-1         A/Neg/A-1

Ratings Affirmed; Outlook Revised To Positive

Bankinter S.A.
  Counterparty Credit Rating   BB/Positive/B        BB/Stable/B

Ratings Affirmed; Outlook Remains Negative

Bankia S.A.
  Counterparty Credit Rating   BB-/Negative/B

Banco Financiero y de Ahorros S.A.
  Counterparty Credit Rating   B-/Negative/C

Banco Popular Espanol S.A.
  Counterparty Credit Rating   BB-/Negative/B

Banco de Sabadell S.A.
  Counterparty Credit Rating   BB/Negative/B

Barclays Bank S.A.
  Counterparty Credit Rating   BBB-/Negative/A-3

Kutxabank S.A.
  Counterparty Credit Rating   BBB-/Negative/A-3

NCG Banco, S.A.
  Counterparty Credit Rating   BB-/Negative/B

NB: This list does not include all ratings affected.


CREDIT SUISSE: S&P Rates New Tier 1 Capital Notes 'BB-'
Standard & Poor's Ratings Services said that it has assigned its
'BB-' long-term issue rating to the proposed undated additional
Tier 1 capital notes to be issued by Credit Suisse Group AG (A-
/Stable/--).  The rating is subject to S&P's review of the notes'
final documentation.

In accordance with S&P's criteria for hybrid capital instruments,
the 'BB-' rating reflects its analysis of the proposed
instruments, and its assessment of Credit Suisse AG's stand-alone
credit profile (SACP) of 'bbb+'.

The 'BB-' issue rating stands five notches below the operating
company's SACP, incorporating:

   -- The deduction of two notches, which is the minimum downward
      notching from the SACP under S&P's criteria for bank hybrid
      capital instruments;

   -- The deduction of one additional notch to reflect that the
      notes are issued by the holding company, and not the
      operating company;

   -- S&P's view that the notes have a going-concern loss
      absorption in the form of mandatory nonpayment of coupons,
      resulting in an additional notch; and

   -- The deduction of a fifth notch to reflect that the notes
      feature a nonviability contingency clause leading to
      mandatory write-down.

   -- According to this clause, a mandatory write-down would
      occur if Credit Suisse AG's common equity Tier 1 ratio fell
      below 5.125%.

S&P will assign "intermediate" equity content to the notes when
they are formally approved by the regulator for inclusion as
regulatory Tier 1 capital.  The instruments meet the conditions
for "intermediate" equity content under S&P's criteria as:

   -- They are perpetual,

   -- They do not contain a step-up clause, and

   -- They have loss-absorption features on a "going-concern"
      basis as the bank has the flexibility to suspend the coupon
      at any time.

U N I T E D   K I N G D O M

ALBEMARLE & BOND: Opts to Put Business Up for Sale
Ashley Armstrong at The Daily Telegraph reports that Albemarle &
Bond has put itself up for sale.

According to The Daily Telegraph, the cash-strapped company,
which last week said that it had been forced to smelt its own
gold to avoid breaching covenants, has said that it believes it
is in the best interest of shareholders "to sell the business by
means of a formal sale process."

The company said that the process includes the possibility of a
takeover offer for the company although there could be no
certainty that the offer will be made, The Daily Telegraph

Unusually, the company has sought dispensation from the UK
Takeover Panel so that bidders will not be required to be
publicly identified and it will not be subjected to the typical
28-day takeover offer deadline during the sale process, The Daily
Telegraph discloses.

The company has hired Canaccord Genuity to advise on the process
and any interested bidder will be required to enter into a non-
disclosure agreement before being allowed to take part in the
sale, The Daily Telegraph relays.

The company has pushed back its covenant testing date until
February 3, 2014, The Daily Telegraph notes.  The group's
financial position is considerably squeezed as it has nears the
limit of its GBP53.3 million debt facilities with debts of
GBP50.1 million, as of November 27, The Daily Telegraph states.

Albemarle & Bond Holdings PLC provides pawnbrokering services.
The Company, through its subsidiaries, provide pawnbroking, check
cashing services, retail jewelry sales and unsecured lending.
Albemarle operates in the United Kingdom.

DEVILFISH CREATIVE: Performers Left Out of Pocket
Matthew Hemley at reports that performers who
appeared in idents for a new television channel have been left
thousands of pounds out-of-pocket after Devilfish Creative, the
production company that hired them, became insolvent.

According to, the performers were employed to
appear in idents for new channel Lifetime. However, it has since
emerged that Devilfish has become insolvent and has applied for a
company voluntary arrangement, which is a system that would allow
it to pay its creditors smaller amounts than are owed to secure
the company's "survival and success.", citing a report drawn up by insolvency firm
David Rubin and Partners, says Devilfish's CVA proposal -- which
creditors will vote on in December -- would see unsecured
creditors paid 31 pence of every pound owed.

The report states creditors are owed a total of almost GBP900,000
by the company, with unsecured creditors accounting for
GBP394,299 of this, notes.

The CVA proposal "appears to be feasible," according to David
Rubin and Partners' report cited by  The report
adds that HM Revenue and Customs, a creditor, had issued a
winding up petition against the company, adds.

HEARTS OF MIDLOTHIAN: Bob Jamieson's Actions May Ruin Rescue Bid
Herald Scotland reports that the Foundation of Hearts has branded
Bob Jamieson a "Walter Mitty" attention-seeker after it emerged
that his actions could ruin their bid to save the Hearts of
Midlothian Football Club.

The Peebles-based businessman has confirmed he is behind a rival
offer for UBIG's 50% shareholding in the Club, which the
Foundation hope to get for nothing after Friday's Company
Voluntary Arrangement was agreed, Herald Scotland relates.

According to Herald Scotland, persuading UBIG to part with their
stake remains the only major hurdle for the club's administrators
BDO after secured creditor Ukio Bankas accepted GBP2.5 million
for debts of GBP15.5 million on their 29.9% stake in the Club.
But now collapsed Lithuanian investment company UBIG, who are
owed GBP8.2 million, must consider Mr. Jamieson's offer, the
report notes.

Mr. Jamieson went up against the Foundation, who have nearly
8,000 fans making monthly pledges, in his failed attempt to gain
preferred bidder status and is still refusing to back down,
Herald Scotland discloses.  Hearts administrator Bryan Jackson
said at the weekend that such actions could derail his bid to
lead the club out of administration and the Foundation have
criticized his disruptive behavior, Herald Scotland relays.

Amid a complex administration process, it is thought that
Mr. Jamieson -- should his bid be successful -- would effectively
be left with a 50% stake in a club which would be liquidated,
Herald Scotland says.  The Foundation's offer is subject to being
handed UBIG's shareholding, Herald Scotland states.

                   About Hearts of Midlothian

Hearts of Midlothian Football Club, more commonly known as
Hearts, is a Scottish professional football club based in Gorgie,
in the west of Edinburgh.

Hearts went into administration after the Scottish FA opened
disciplinary proceedings against the club.  BDO was appointed
administrators on June 19.

IFA BERKELEY: Placed in Compulsory Liquidation
Michael Trudeau  at reports that London-based
Equity release specialist and IFA Berkeley Consultants UK Limited
has had its permissions stripped by the Financial Conduct
Authority after it was placed in compulsory liquidation by HM
Revenue and Customs.

On September 16, the company was wound up and placed in
compulsory liquidation following a petition from HM Revenue and
Customs, the report discloses. says the FCA, on Nov. 11, issued a decision notice
stating its intention to strip the company of its permissions. relates that a final notice from the regulator
stated that the company failed to ensure its affairs were
conducted in a sound and prudent manner and in compliance with
proper standards.

According to the report, Berkeley failed repeatedly to submit its
retail mediation activities review promptly and failed altogether
to submit them for the periods ended Nov. 30, 2012 and May 31,

The firm also failed to adequately respond to correspondence from
the regulator, the report adds.

ILFORD IMAGING: Declares Insolvency as Investor Backs Out
Chris Cheesman at Amateur Photographer reports that Ilford
Imaging Switzerland, which makes Galerie-branded photographic
inkjet paper, has declared itself insolvent after the 'last
potential investor pulled out'.

According to the report, the cash-strapped company has failed to
find an investor despite interest from more than 20 parties since
a UK backer pulled out earlier this year.

Ilford Imaging Switzerland said the last potential investor
withdrew their interest earlier this week, the report relays.

The company said it 'is again facing liquidity issues and is no
longer able to honour its full financial obligations'.

The firm has sent a letter to a court in Fribourg 'declaring
insolvency,' according to Amateur Photographer.

The company is totally separate from Ilford Photo which is based
in the UK and is unaffected (Ilford Photo is the trading name of
Cheshire-based Harman Technology which makes traditional b&w
photographic papers and film), the report notes.

ROYAL BANK: Forced SMEs to Default, Report Says
Margot Patrick at The Wall Street Journal reports that Royal Bank
of Scotland PLC was accused of pushing small businesses into
default to boost its profit, putting the bank back in the firing
line with government officials who only earlier this month
decided the partly state-owned bank didn't need to be broken up
to help boost Britain's economic recovery.

The Journal relates that a report by Lawrence Tomlinson, an
adviser to Business Secretary Vince Cable, alleges that in some
cases, RBS forced business customers to default on loans so that
the bank could charge higher fees or seize their properties and
sell them.

According to the Journal, Mr. Tomlinson said he found evidence
that RBS had revalued or changed the terms of loans owed by "good
and viable" businesses, with the apparent aim of moving them into
its turnaround division, Global Restructuring Group, and putting
them on a "journey to insolvency." His report was based mainly on
information provided to him by existing and former RBS business
customers, the Journal relays.

The Journal notes that similar allegations against the RBS unit
have previously been made publicly by a number of its borrowers,
and in investigative reports by U.K. media, but the bank has
always denied that it sought to force companies out of business.

According to the Journal, Chancellor George Osborne said the
findings are "shocking" and will be investigated.  The report
relates that Mr. Cable said he turned the report over to the U.K.
financial regulators, the Financial Conduct Authority and the
Prudential Regulation Authority for review.  A PRA spokesman said
it will consider the findings of the Tomlinson report and work
closely with the FCA on the matter, the Journal adds.

RBS's GRG unit, the operation at the center of the accusations,
manages RBS's relationships with business customers in financial
distress.  The Journal relates that an RBS spokeswoman said the
group "successfully turns around most of the businesses it works
with," but that "not all businesses that encounter serious
financial trouble can be saved."

RBS Chief Executive Ross McEwan said the bank would seek to
improve its approach to business lending, and had hired law firm
Clifford Chance to fully review the accusations raised by Mr.
Tomlinson, the Journal reports.

                       About Royal Bank

The Royal Bank of Scotland Group plc (NYSE:RBS) -- is a holding company of The Royal Bank of
Scotland plc (Royal Bank) and National Westminster Bank Plc
(NatWest), which are United Kingdom-based clearing banks.  The
company's activities are organized in six business divisions:
Corporate Markets (comprising Global Banking and Markets and
United Kingdom Corporate Banking), Retail Markets (comprising
Retail and Wealth Management), Ulster Bank, Citizens, RBS
Insurance and Manufacturing.  On October 17, 2007, RFS Holdings
B.V. (RFS Holdings), a company jointly owned by RBS, Fortis N.V.,
Fortis SA/NV and Banco Santander S.A. (the Consortium Banks) and
controlled by RBS, completed the acquisition of ABN AMRO Holding
N.V. (ABN AMRO).  In July 2008, the company disposed of its
entire interest in Global Voice Group Ltd.

UK: PRA Eases Tough Capital Demands for Bank-Specific Risks
Sam Fleming at The Financial Times reports that the Bank of
England's regulatory arm backed away from tough capital demands
for bank-specific risks on Friday as it set out the detailed
implementation of new EU rules.

Regulators tailor secret Pillar 2A requirements to cover each
bank's individual risks -- including those associated with
pension liabilities, the FT discloses.

The move comes after banks urged the PRA not to pile on
excessively onerous capital demands as it brings in EU-wide rules
aimed at improving the resilience of the banking sector by
implementing the new global Basel III standards, the FT relays.
The PRA's original proposals, published in August, prompted
ferocious lobbying from the banks and building societies, the FT

The PRA, as cited by the FT, said in a new paper that it would
impose the same mix of capital in Pillar 2A as for banks'
Pillar 1 requirements.  That means UK banks will have to hold at
least 56% of their supplementary requirements in top-quality
Common Equity Tier 1 (CET1) capital -- not all of it, the FT

"The PRA have recognized that some of the risks they cover in
Pillar 2A -- notably pension risk -- do not need to be covered by
CET1 capital.  This is helpful and makes sense, because this sort
of risk only needs to be covered by gone concern capital -- which
is used to cover a situation when a bank goes into resolution,"
the FT quotes Simon Hills, an executive director at the British
Bankers' Association, as saying.

The PRA dismissed calls from some lenders that they should not
have to hold any CET1 capital against pension risk, the FT

Analysts at Exane BNP Paribas said the PRA's announcement meant
banks could face an equity tier one requirement of between 12%
and 13% but that further information was still needed, the FT

The PRA has not yet finalized all the aspects of its rules, which
implement a European directive called CRDIV, the FT notes.


* European Union Threatens Action Against Big Three Ratings Firms
Tom Fairless, writing for The Wall Street Journal, reported that
the European Union's markets watchdog has warned that it may take
"enforcement action" against the big three credit ratings firms
after it found "deficiencies" in the way that they rank sovereign

According to the report, the three U.S.-based rating firms have
faced an onslaught of criticism and new regulation in Europe in
recent years after lawmakers criticized the timing of their
decisions to downgrade European sovereigns for aggravating the
region's financial crisis.

In a report published on Dec. 2, the Paris-based European
Securities and Markets Authority, or ESMA, warned of a series of
"actual failings or potential risks" that might compromise the
independence and accuracy of the agencies -- Fitch Ratings,
Moody's Investors Service and Standard & Poor's, the report

It also pointed to failings in the way the agencies handled
confidential information, including disclosure of upcoming rating
actions to third parties, and highlighted "significant and
frequent delays" in the publication of ratings, the report
further related.

"ESMA has not determined whether any of the report's findings
constitute a breach of the credit ratings agency Regulation," the
watchdog said in a statement, the report added.  Further
investigations "could lead to supervisory or enforcement
actions," it said.


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

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

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

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


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

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

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

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

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

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

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