TCREUR_Public/140221.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

                           E U R O P E

           Friday, February 21, 2014, Vol. 15, No. 37

                            Headlines

F R A N C E

PEUGEOT SA: Fitch Affirms 'B+' IDR & Revises Outlook to Stable


G E R M A N Y

KIRCH MEDIA: Deutsche Bank Nears EUR1 Billion Settlement
SOLARWORLD AG: Expects Higher Sales This Year


I T A L Y

BANCO POPOLARE: S&P Cuts Counterparty Credit Ratings to 'BB-'


L U X E M B O U R G

HARVEST CLO II: Moody's Raises Ratings on 2 Class Notes to Ba3


N E T H E R L A N D S

ARENA 2007-I BV: S&P Affirms 'B' Rating on Junior E Notes
HARBOURMASTER CLO: Fitch Affirms 'B-sf' Rating on Class E Notes
LEO MESDAG: Fitch Affirms 'Bsf' Ratings on 2 Note Classes
STORM 2014-I: Fitch Assigns 'BBsf(EXP)' Ratings to 2 Note Classes
TP VISION: Carlo Vichi Loses EUR200MM Lawsuit Over Loan


R U S S I A

EUROPEAN TRUST: Moody's Lowers National Scale Rating to C.ru
EUROPEAN TRUST: Moody's Cuts Long-Term Deposit Ratings to C
MOSCOW MORTGAGE: Moody's Affirms Ba2 Deposit & Unsec. Debt Rating


U N I T E D   K I N G D O M

CASTLE HUME: Unsecured Creditors May Not Get Payment
STEMCOR HOLDINGS: Creditors Back Debt Restructuring Plan


U Z B E K I S T A N

IPAK YULI BANK: Fitch Affirms 'B-' LT Foreign Currency IDR


X X X X X X X X

* BOOK REVIEW: Land Use Policy in the United States


                            *********



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F R A N C E
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PEUGEOT SA: Fitch Affirms 'B+' IDR & Revises Outlook to Stable
--------------------------------------------------------------
Fitch Ratings has revised the Outlook on Peugeot SA's (PSA) Long-
term Issuer Default Rating (IDR) to Stable from Negative and
affirmed the IDR at 'B+'.  Fitch has also affirmed the senior
unsecured rating at 'BB-' with a Recovery Rating (RR) of 'RR3'.

"The Outlook revision is underpinned by the EUR3 billion capital
increase announced on February 19 and the gradual improvement in
profitability and underlying cash generation that we expect from
2014 onwards.  In particular, the cash inflow will reduce
leverage and strengthen key credit ratios.  It will also enable
the group to enhance investments and boost its product pipeline
without impairing further its liquidity," Fitch said.

The ratings continue to reflect the group's relatively weak
business profile, poor profitability and negative free cash flow
(FCF) from its core automotive operations and still stretched
credit metrics.  The group posted a negative 0.3% operating
margin in 2013, including a negative 2.9% operating margin at the
automotive division.  "We calculate that FFO adjusted gross and
net leverage will be 4.0x and 1.7x, respectively, at end-2014,
pro-forma including the announced capital increase, down from
6.7x and 3.6x at end-2012.  Cash from operations (CFO) on gross
adjusted debt should be approximately 20% at end-2014, up from 5%
at end-2012 and 14% at end-2013.  Therefore, expected ratios at
end-2014 will not yet be fully commensurate with the 'BB' rating
category," Fitch said.

However, the group is well on track with its restructuring and
its financial profile is gradually recovering.  Profitability
improved in 2013 and FCF absorption reduced to negative EUR1.1bn
from minus EUR3.1 billion in 2012.

Key Rating Drivers

Capital Increase
PSA will increase its capital by EUR3 billion in 2014, including
EUR800 million each from the French state and Dongfeng Motor.  As
a result, they will become the majority shareholders, in line
with the Peugeot family, with a respective stake of 14% each.
Corporate governance could become more difficult to manage with
the three shareholders' interests not necessarily aligned.
However, the new board is expected to include 50% of independent
members.

Expected Sales Recovery
"We expect revenue growth in 2014 to be supported by the
combination of a strengthening product portfolio, thanks to the
renewal of key models in 2013 and 2014, and the gradual recovery
of the European market.  Our expectations for further growth in
China together with PSA's increasing market shares in this market
should provide further positive sales momentum.  This should
offset weakening market conditions in other markets including
Latin America and Russia," Fitch said.

Progress in Restructuring

"We expect PSA's cash-preservation and cost-reduction measures
including plant closures, workforce reduction and renegotiated
labor conditions, to streamline the cost base and hence bolster
profitability in 2014, although it will likely remain low.  We
project PSA's automotive operating margins will improve to
negative 1.3% in 2014 under current market assumptions and be
about breakeven in 2015," Fitch said.

Weak Competitive Position

Despite continuous recent improvement, the group's sales remain
strongly biased to the European market and the mass-market small
and medium segments, where competition and price pressure are
fiercest.  Competition is also intensifying in foreign markets
where PSA has diversified, including Latin America, Russia and
China.  PSA's strategy to expand its higher-end product range and
reposition its brands is gradual and will take time.

Still Weak Profitability and FCF

Group operating margin improved to negative 0.3% in 2013 from
negative 1% in 2012, including a negative 2.9% operating margin
at the automotive division, up from negative 3.9%.  "While we
expect profitability to benefit from the improved cost base and
recovering sales in 2014, it will be burdened by further FX
volatility and continuously challenging market conditions.  FCF
absorption reduced to EUR1.1 billion in 2013 from negative
EUR3.1bn in 2012 but FCF was still negative.  In addition, part
of the cash inflow from the announced capital increase is likely
to be absorbed by higher capex and hence limit deleveraging by
2016," Fitch said.

Solid Liquidity

Immediate liquidity issues are not a concern. PSA reported EUR7.8
billion in cash at end-2013, including EUR6.2 billion at
industrial operations, further bolstered by EUR3.6 billion of
total undrawn credit facilities.  The current French state
guarantee for up to EUR7 billion and the projected partnership
with Santander Consumer Finance in Europe help secure the
refinancing of BPF, which is critical to support the group's
sales.

Rating Sensitivities

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

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

-- Further negative FCF in 2016.

-- Deteriorating liquidity.

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

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

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



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G E R M A N Y
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KIRCH MEDIA: Deutsche Bank Nears EUR1 Billion Settlement
--------------------------------------------------------
Alice Ross at The Financial Times reports that Deutsche Bank is
close to resolving a decade-long legal battle with the heirs of
German media magnate Leo Kirch, with plans for an out-of-court
settlement that could see the lender pay out almost EUR1 billion.

According to the FT, executives at the bank are in advanced talks
with representatives of the Kirch family to settle claims that
the lender's former chief executive, Rolf Breuer, was responsible
for the bankruptcy of Mr. Kirch's media empire in 2002.

One person close to the talks said that a settlement package of
about EUR900 million was being discussed, the FT relates.

Representatives for Mr. Kirch, who died in 2011, claimed that a
television interview given by Mr. Breuer in 2002, in which the
then-Deutsche chief executive suggested the media group was
having trouble accessing funding, triggered the bankruptcy of the
Kirch group, the FT discloses.

Deutsche has always denied the allegations by Mr. Kirch and,
after the media tycoon's death in 2011, his estate, the FT notes.
The talks follow a decision by a civil court in December 2012
that found Deutsche partly liable for the collapse of the Kirch
group, a decision that the bank had appealed, the FT relays.

Analysts have long predicted that a settlement in the Kirch case
was likely to be in the region of EUR1 billion, after a judge
found in 2012 that Kirch had suffered damages of between EUR120
million and EUR1.5 billion, the FT states.

                        About KirchMedia

Headquartered in Ismaning, Germany, KirchMedia GmbH --
http://www.kirchmedia.de/-- was the country's second largest
media company prior to its insolvency filing in June 2002.  The
firm's collapse, caused by a US$5.7 billion debt incurred during
an expansion drive, was Germany's biggest since World War II.
Taurus Holding is the former holding company for the Kirch
group.  The case is docketed under Case No. 14 HK O 1877/07 at
the Regional Court of Munich.


SOLARWORLD AG: Expects Higher Sales This Year
---------------------------------------------
Richard Read at The Oregonian reports that Germany's SolarWorld
Group, which flirted with insolvency last summer, expects higher
sales this year and a return to operating profit in 2015.

According to The Oregenian, the company with a factory in
Hillsboro issued a statement in Bonn Wednesday predicting that
shipments of solar panels and kits would increase by at least 40%
this year from last year's 548 megawatts.

The company expects 2014 sales of EUR680 million, or US$934
million, with a loss before interest and taxes of between EUR20
million and EUR35 million -- or US$27 million to US$48 million in
losses, The Oregonian discloses.

SolarWorld forecasts a return to operating profit in 2015,
assuming successful financial restructuring, which is expected to
be completed by the end of this month, The Oregonian relays.  The
Oregonian relates that a company statement said sales should
increase in 2016 to exceed EUR1 billion, or US$1.37 billion.

                        Restructuring Plan

As reported by the Troubled Company Reporter-Europe on Aug. 7,
2013, Bloomberg News related that Solarworld creditors backed
proposals to try to save Germany's biggest solar-panel maker.
According to Bloomberg, Solarworld said in a statement that a
total of 99.96% of noteholders representing 35.78% of the
company's EUR150 million (US$198.9 million) of bonds due
July 2016 backed the restructuring plan.  A group representing at
least 25% of the notes was required, Bloomberg disclosed.
Solarworld reported net debt of EUR806.4 million in the first
quarter, up from EUR757.6 million the year before, Bloomberg
said, citing a company filing.  The company has a EUR250 million
revolving credit facility maturing in 2016, according to data
compiled by Bloomberg.

SolarWorld AG is Germany's biggest solar-panel maker.  The
company is based in Bonn.


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I T A L Y
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BANCO POPOLARE: S&P Cuts Counterparty Credit Ratings to 'BB-'
-------------------------------------------------------------
Standard & Poor's Ratings Services lowered to 'BB-' from 'BB' its
long-term counterparty credit ratings on Banco Popolare Societa
Cooperativa SCRL and its core subsidiaries Credito Bergamasco and
Banca Aletti & C. SpA and removed them from CreditWatch, where
they were placed with negative implications on Feb. 3, 2014.  The
outlook is negative.

At the same time, S&P affirmed its 'B' short-term counterparty
credit ratings on Banco Popolare and its subsidiaries.

The lowering of the long-term ratings on Banco Popolare reflects
S&P's view that its weaker financial profile than that of many of
its peers -- due mainly to the ongoing deterioration of the
credit quality of its assets -- makes it unlikely that Banco
Popolare's business position will strengthen in line with S&P's
previous expectations.

Banco Popolare's asset quality -- which is already weaker than
the Italian system average -- deteriorated further in the fourth
quarter of 2013.  In S&P's view, this deterioration is likely to
continue and asset quality will likely remain weaker than S&P had
previously expected.  In particular, S&P anticipates that Banco
Popolare's ratio of nonperforming assets (NPA) to gross loans,
which was an already-high 20.1% as of September 2013, will likely
increase further over the next two years, to a very high level
both in absolute terms and relative to peers.  Therefore, the
likelihood of a smooth workout of Banco Popolare's sizable stock
of NPAs is, in S&P's opinion, lower than it had previously
expected.  S&P also views the continuing deterioration of Banco
Popolare's asset quality as a factor that could negatively affect
its capacity to consolidate its franchise, and that could
ultimately constrain the bank's business and financial profile to
a greater extent than for those banks whose business position we
assess as "strong."  For these reasons, S&P now considers a
strengthening of Banco Popolare's business position as less
likely than it had previously expected, and have therefore
removed the one-notch uplift it had previously incorporated into
its long-term rating on Banco Popolare.

S&P's rating action also incorporates its view that, despite the
announced EUR1.5 billion capital increase, Banco Popolare's
capital position remains exposed to potential risks related
primarily to further credit losses.  S&P anticipates that Banco
Popolare's high, and growing, stock of NPAs combined with what it
views as a low loan-loss coverage are likely to lead to further
sizable provisions during the next two years.  Banco Popolare's
coverage of NPAs through provisions of 27% as of September 2013
was low, in S&P's view, particularly by international standards.
S&P also expects Banco Popolare's stock of net NPAs (after
deducting loan-loss reserves) to remain well in excess of S&P's
measure of total adjusted capital, even after the capital
increase.  Net NPAs represented a high 180% of S&P's measure of
Banco Popolare's total adjusted capital at June 2013.  S&P
anticipates that its risk-adjusted capital (RAC) ratio for Banco
Popolare is unlikely to remain sustainably above 5.0% for the
next two years.  S&P's assessment of Banco Popolare's capital and
earnings therefore remains "weak" as defined in its criteria.

S&P has maintained its assessment of Banco Popolare's "adequate"
business position, "weak" risk position, "average" funding, and
"moderate" liquidity.  These factors lead S&P to assess Banco
Popolare's stand-alone credit profile (SACP) at 'b'.

S&P's ratings on Banco Popolare continue to incorporate a one-
notch uplift for short-term support to reflect its belief that
the ECB's long-term refinancing operations (LTRO) should give
Banco Popolare time to address its liquidity imbalances and
achieve what S&P views as adequate funding and liquidity.  S&P
also maintains a one-notch uplift over the SACP for potential
extraordinary government support, based on S&P's view of Banco
Popolare's high systemic importance and Italy's supportive stance
toward its banking system.

The negative outlook mainly reflects the possibility that S&P
could lower its ratings on Banco Popolare if it believes that it
is no longer able to improve its funding profile and liquidity
position by the time the European Central Bank's LTRO expires in
January 2015, and this were to coincide with a lowering of the
sovereign credit rating on Italy, thus limiting the uplift for
potential extraordinary government support in our ratings.  S&P
may come to consider that Banco Popolare is unlikely to improve
its funding and liquidity position if there is no meaningful
improvement in funding and liquidity indicators, or if these
indicators worsen.

Although S&P thinks it is unlikely at present, in the event that
Banco Popolare's asset quality should deteriorate more than it
currently expects over the next two years, it would also evaluate
the effect of associated credit losses on the bank's capital
position.

S&P could revise the outlook to stable if it was to also revise
the outlook on the long-term sovereign rating on Italy to stable,
and if S&P was to anticipate that the downside risks to the
economic and operating environment in Italy, and to S&P's
assessment of Banco Popolare's liquidity profile, have abated.



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L U X E M B O U R G
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HARVEST CLO II: Moody's Raises Ratings on 2 Class Notes to Ba3
--------------------------------------------------------------
Moody's Investors Service has upgraded the ratings of the
following notes issued by Harvest CLO II S. A.:

   EUR66.15M Class B Senior Floating Rate Notes, Upgraded to
   Aaa(sf); previously on Nov 14, 2013 Upgraded to Aa1 (sf) and
   Placed Under Review for Possible Upgrade

   EUR32.1M Class C-1 Senior Subordinated Deferrable Floating
   Rate Notes, Upgraded to A1 (sf); previously on Nov 14, 2013
   Baa1 (sf) Placed Under Review for Possible Upgrade

   EUR3M Class C-2 Senior Subordinated Deferrable Fixed Rate
   Notes, Upgraded to A1 (sf); previously on Nov 14, 2013
   Baa1(sf) Placed Under Review for Possible Upgrade

   EUR17.25M Class D-1 Senior Subordinated Deferrable Floating
   Rate Notes, Upgraded to Baa1 (sf); previously on Nov 19, 2012
   Upgraded to Ba1 (sf)

   EUR3M Class D-2 Senior Subordinated Deferrable Fixed Rate
   Notes, Upgraded to Baa1 (sf); previously on Nov 19, 2012
   Upgraded to Ba1 (sf)

   EUR11.5M Class E-1 Senior Subordinated Deferrable Floating
   Rate Notes, Upgraded to Ba3 (sf); previously on Nov 19, 2012
   Confirmed at B1 (sf)

   EUR2M Class E-2 Senior Subordinated Deferrable Fixed Rate
   Notes, Upgraded to Ba3 (sf); previously on Nov 19, 2012
   Confirmed at B1 (sf)

   EUR6M (current outstanding balance of EUR1,805,636.81) Class S
   Combination Notes, Upgraded to A3 (sf); previously on Nov 19,
   2012 Upgraded to Baa3 (sf)

   EUR5M (current outstanding balance of EUR2,775,614.94) Class V
   Combination Notes, Upgraded to Aa3 (sf); previously on Nov 19,
   2012 Upgraded to A3 (sf)

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

   EUR100M Class A-1A Senior Floating Rate Notes, Affirmed
   Aaa(sf); previously on May 3, 2005 Definitive Rating Assigned
   Aaa(sf)

   EUR249.45M Class A-2 Senior Floating Rate Notes, Affirmed Aaa
   (sf); previously on Oct 7, 2011 Upgraded to Aaa (sf)

Moody's also withdrew the rating on the following Combination
Notes:

   EUR2.6M Class R Combination Notes, Withdrawn (sf); previously
   on Nov 19, 2012 Upgraded to Ba1 (sf)

Harvest CLO II S.A., issued in April 2005, is a Collateralised
Loan Obligation ("CLO") backed by a portfolio of mostly high
yield European loans. The portfolio is managed by 3i Debt
Management Investments Limited. This transaction's reinvestment
period ended in May 2012. It is predominantly composed of senior
secured loans.

Ratings Rationale

The actions on the notes Class B, C-1, C-2, D-1, D-2, E-1 and E-2
notes are primarily a result of the improvement in
overcollateralization ("OC") ratios. On November 14, 2013,
Moody's put Class B, Class C-1 and Class C-2 on review for
upgrade due to significant loan prepayments. The actions conclude
the rating review of the transaction. Additionally Class R
Combination notes rating is being withdrawn given it was
decoupled in June 2013.

Moody's notes that the Class A notes has been paid down by
approximately, EUR148.3 million (42%) since January 2013 and EUR
178.2 million (51%) since closing. As a result of the
deleveraging the overcollateralization ratios have increased. As
of the latest trustee report dated December 2013, the Class A/B,
Class C, Class D and Class E overcollateralization ratios are
reported at 134.40%, 117.09%, 108.99% and 104.19% respectively,
as compared to 122.84%, 113.17%, 108.10 % and 104.97 %,
respectively, on January 2013. All of the notes are passing their
over-collateralization tests.

The ratings on the combination notes address the repayment of the
rated balance on or before the legal final maturity. For Classes
S and V, the 'Rated Balance' is equal to, at any time to the
principal amount of the Combination Note on the Issue Date
increased by the Rated Coupon of 2% and Euribor+1.5% per annum
respectively, accrued on the rated balance on the preceding
payment date minus the sum of all payments made from the issue
date to such date of either interest or principal. The rated
balance may not necessarily correspond to the outstanding
notional amount reported by the trustee.

The key model inputs Moody's uses in its analysis, such as par,
weighted average rating factor, diversity score, and weighted
average recovery rate, are based on its published methodology and
may be different from the trustee's reported numbers. In its base
case, Moody's analyzed the underlying collateral pool to have a
performing par and principal proceeds balance of EUR309.2
million, defaulted par of EUR10.52 million, a weighted average
default probability of 21.8% (consistent with a WARF of 3225), a
weighted average recovery rate upon default of 46.8% for a Aaa
liability target rating, a diversity score of 31 and a weighted
average spread of 4.1%.

In its base case, Moody's addresses the exposure to obligors
domiciled in countries with local currency country risk bond
ceilings (LCCs) of A1 or lower. Given that the portfolio has
exposures to 10.8% of obligors in Spain whose LCC is A3 and 1.62%
in Italy, whose LCC is A2, Moody's ran the model with different
par amounts depending on the target rating of each class of
notes, in accordance with Section 4.2.11 and Appendix 14 of the
methodology. The portfolio haircuts are a function of the
exposure to peripheral countries and the target ratings of the
rated notes, and amount to 0.97% for the Class A and B notes and
0.61% for the Class C notes.

The default probability is derived from the credit quality of the
collateral pool and Moody's expectation of the remaining life of
the collateral pool. The average recovery rate to be realised on
future defaults is based primarily on the seniority of the assets
in the collateral pool. For a Aaa liability target rating,
Moody's assumed that 90.8% of the portfolio exposed to first lien
senior secured corporate assets would recover 50% upon default,
while the remainder non first-lien loan corporate assets would
recover 15%. In each case, historical and market performance
trends and collateral manager latitude for trading the collateral
are also relevant factors. Moody's incorporates these default and
recovery characteristics of the collateral pool into its cash
flow model analysis, subjecting them to stresses as a function of
the target rating of each CLO liability it is analyzing.

Methodology Underlying the Rating Action:

The principal methodology used in this rating was "Moody's Global
Approach to Rating Collateralized Loan Obligations" published in
November 2013.

Factors that would lead to an upgrade or downgrade of the rating:

In addition to the base-case analysis, Moody's conducted
sensitivity analyses on the key parameters for the rated notes,
for which it assumed lower credit quality in the portfolio to
address refinancing risk. Loans to European corporates rated B3
or lower and maturing between 2014 and 2015 make up approximately
4.66% of the portfolio, which could make refinancing difficult.
Moody's ran a model in which it raised the base case WARF to 3256
by forcing ratings on 25% of the refinancing exposures to Ca; the
model generated outputs that were within one notch of the base-
case results.

This transaction is subject to a high level of macroeconomic
uncertainty, which could negatively affect the ratings on the
note, in light of the uncertainty about credit conditions in the
general economy. CLO notes' performance may also be impacted
either positively or negatively by 1) the manager's investment
strategy and behavior and 2) divergence in the legal
interpretation of CDO documentation by different transactional
parties due to embedded ambiguities.

Additional uncertainty about performance is due to the following:

* Portfolio amortization: The main source of uncertainty in this
transaction is the pace of amortization of the underlying
portfolio, which can vary significantly depending on market
conditions and have a significant impact on the notes' ratings.
Amortization could accelerate as a consequence of high loan
prepayment levels or collateral sales by the collateral manager
or be delayed by an increase in loan amend-and-extend
restructurings. Fast amortization would usually benefit the
ratings of the notes beginning with the notes having the highest
prepayment priority.

* Around 42.2% of the collateral pool consists of debt
obligations whose credit quality Moody's has assessed by using
credit estimates.

* Recovery of defaulted assets: Market value fluctuations in
trustee-reported defaulted assets and those Moody's assumes have
defaulted can result in volatility in the deal's over-
collateralization levels. Further, the timing of recoveries and
the manager's decision whether to work out or sell defaulted
assets can also result in additional uncertainty. Moody's
analyzed defaulted recoveries assuming the lower of the market
price or the recovery rate to account for potential volatility in
market prices. Recoveries higher than Moody's expectations would
have a positive impact on the notes' ratings.

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



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N E T H E R L A N D S
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ARENA 2007-I BV: S&P Affirms 'B' Rating on Junior E Notes
---------------------------------------------------------
Standard & Poor's Ratings Services affirmed and removed from
CreditWatch negative its 'AAA (sf)' credit ratings on Arena 2007-
I B.V.'s class A-NHG and Snr A notes, and its 'AA- (sf)' rating
on the class Mezz B notes.  At the same time, S&P has affirmed
its 'A- (sf)', 'BB- (sf)', and 'B (sf)' ratings on the class Mezz
C, Mezz D, and Jnr E notes, respectively.

On Dec. 10, 2013, S&P placed on CreditWatch negative, for
counterparty reasons, S&P's ratings on the class A-NHG, Snr A,
and Mezz B notes, after it lowered its long- and short-term
issuer credit ratings on The Royal Bank of Scotland PLC (RBS).
RBS was the account bank and liquidity facility provider in this
transaction.

The rating actions resolve S&P's CreditWatch placements and
follow the replacement of RBS, as the bank account and liquidity
facility provider in Arena 2007-I, with Bank Nederlandse
Gemeenten N.V. (AA+/Stable/A-1+).

Since S&P's December 2013 review, the transaction's performance
has been stable.  Total arrears are unchanged and, due to
principal redemption, there has been a small increase in the
available credit enhancement for each class of notes.

The margin payable by the issuer under the new liquidity facility
agreement has increased and there have been amendments to the
bank account agreement, both of which may decrease the cash flows
available to the issuer.

Based on the results of S&P's cash flow and counterparty risk
analysis, it has affirmed and removed from CreditWatch negative
its ratings on the class A-NHG, Snr A, and Mezz B notes.  At the
same time, S&P has affirmed its ratings on the class Mezz C, Mezz
D, and Jnr E notes.

Arena 2007-I securitizes a pool of prime Dutch residential
mortgages that Amstelhuys N.V. (a wholly owned subsidiary of
Delta Lloyd N.V.) originated.

RATINGS LIST

Class            Rating
            To                From

Arena 2007-I B.V.
EUR1.015 Billion Mortgage-Backed Floating-Rate Notes And
Floating-Rate
Subordinated Excess Spread Notes

Ratings Affirmed And Removed From CreditWatch Negative

A-NHG       AAA (sf)          AAA (sf)/Watch Neg
Snr A       AAA (sf)          AAA (sf)/Watch Neg
Mezz B      AA- (sf)          AA- (sf)/Watch Neg

Ratings Affirmed

Mezz C      A- (sf)
Mezz D      BB- (sf)
Jnr E       B (sf)


HARBOURMASTER CLO: Fitch Affirms 'B-sf' Rating on Class E Notes
---------------------------------------------------------------
Fitch Ratings has affirmed Harbourmaster CLO 9 B.V.'s notes, as
follows:

  EUR254.10 million Class A1-T (ISIN XS0296310856): affirmed at
  'AAAsf'; Outlook Stable

  EUR269.50 million Class A1-VF (no ISIN): affirmed at 'AAAsf';
  Outlook Stable

  EUR46.20 million Class A2 (ISIN XS0296311581): affirmed at
  'AAsf'; Outlook Stable

  EUR50.05 million Class B (ISIN XS0296312126): affirmed at
  'A-sf'; Outlook revised to Stable from Negative

  EUR30.80 million Class C (ISIN XS0296312639): affirmed at
  'BBB-sf'; Outlook revised to Stable from Negative

  EUR40.04 million Class D (ISIN XS0296313017): affirmed at
  'BB-sf'; Outlook Negative

  EUR18.26 million Class E (ISIN XS0296313108): affirmed at
  'B-sf'; Outlook Negative

Harbourmaster CLO 9 B.V. is a securitization of mainly European
senior secured loans, senior unsecured loans, second-lien loans,
mezzanine obligations and high-yield bonds.  At closing a total
note issuance of EUR770 million was used to invest in a target
portfolio of EUR750.75 million.  The portfolio is actively
managed by GSO / Blackstone Debt Funds Europe Limited.

Key Rating Drivers

The affirmations reflect the transaction's stable performance
over the past 12 months.  The reported Fitch weighted-average
rating factor deteriorated marginally, increasing to 27.8 from
27.3 during this period.  Assets rated 'CCC' or below by Fitch
account for 3.5% of the current portfolio.  However, overall
'CCC' rated assets reported by the trustee increased to 5.9% from
3.9% since the last review as issuers were downgraded by other
Nationally Recognised Statistical Rating Organisations (NRSROs).
There are currently three defaulted assets by one obligor in the
portfolio.

The portfolio's weighted average life has increased to 4.48 years
from 4.18 years in February 2013, due in part to maturity
extensions on existing collateral.  The weighted average spread
has continued to rise, driven by amend and extend activity, and
is currently 4.35%, up from 3.68% in February 2013.  Fitch
considers this neutral to the ratings as the extension of the
risk horizon is compensated by increased portfolio yield.

The overcollateralization (OC) tests have continued to be met
over the past year.  OC test buffers remained largely stable
except for a dip in November 2013 caused by the default of one
issuer.  The relevant assets underwent a maturity extension and
were no longer considered defaulted the following month,
restoring the OC test buffers.  There is no haircut on the value
of 'CCC' rated assets in the calculation of the OC tests, with
the exception of the most senior OC test.  Fitch therefore
considers a breach of the OC tests in the absence of further
defaults unlikely. The interest coverage test has not been
breached to date.

Fitch revised the Outlook on the class B and C notes to Stable to
reflect the notes' increased resilience against possible near-
term maturity extensions in the portfolio.  This is because
assets scheduled to mature in the next two years account for only
3.4% of the portfolio.

Fitch expects the transaction to begin deleveraging over the next
12 months.  Following the end of the reinvestment period in April
2014, the manager has the option to continue reinvesting
unscheduled principal proceeds and proceeds from the sale of
credit-impaired assets until April 2016, subject to certain
conditions.  However, the manager would currently be unable to
use this option because of a downgrade of the notes by another
NRSRO.

The agency expects the pace of deleveraging to be slow in the
near term because few assets are scheduled to mature in the next
two years. Furthermore, a lack of a haircut on the carrying value
of 'CCC' assets in the non-senior OC tests makes excess spread
diversion unlikely in the absence of defaults in the portfolio.

The Negative Outlook on the class D and E notes reflects their
vulnerability to a clustering of defaults and negative rating
migration in the European leveraged loan market as leveraged
loans approach a refinancing wall.

The issuer may invest up to 40% of the portfolio notional into
non-euro obligations.  These assets will either be asset swapped,
or naturally hedged if denominated in sterling or US dollars by a
corresponding drawing in the same currency on the multi-currency
class A1-VF notes.  However, in certain situations, this natural
hedge will not fully cover the FX risk and the residual currency
risk will be absorbed by the structure.

Rating Sensitivities

-- A 25% increase in the obligor default probability would lead
    to a downgrade of between one and three notches for the rated
    notes.

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


LEO MESDAG: Fitch Affirms 'Bsf' Ratings on 2 Note Classes
---------------------------------------------------------
Fitch Ratings has affirmed Leo Mesdag B.V.'s notes, as follows:

  EUR642.5 million class A (XS0266637171) affirmed at 'Asf';
  Outlook revised to Negative from Stable

  EUR20.5 million class B (XS0266638146) affirmed at 'Asf';
  Outlook revised to Negative from Stable

  EUR112.5 million class C (XS0266642171) affirmed at 'BBsf';
  Outlook Stable

  EUR142.5 million class D (XS0266642767) affirmed at 'Bsf';
  Outlook Stable

  EUR82 million class E (XS0266644383) affirmed at 'Bsf'; Outlook
  Stable

Key Rating Drivers

The affirmations reflect the stability of the sole underlying
loan that is secured on a portfolio of 71 department stores and
three car parks located throughout the Netherlands and
predominantly let to three major Dutch retailers: Hema, Bijenkorf
and V&D on moderate to long leases.  The Outlook revision to
Negative, from Stable, for classes A and B, reflects the
continued downturn in the Dutch retail market as well as the
large balloon balance at loan maturity in 2016.

Prior to the impending maturity, a full cash sweep on the loan
will be triggered on the August 2014 interest payment date (IPD).
Although the current interest coverage of 1.68x would allow for a
significant level of cash to amortize the debt, the loan (and
notes) are subject to a step-up in margin, also in August 2014,
and this is expected to reduce the interest cover ratio (ICR)
closer to 1.5x, reducing the cash available for amortization.
Nevertheless, Fitch expects that over EUR40 million will be
available for debt repayment prior to maturity.

The property portfolio is predominantly strong; however, it does
exhibit some differentiation, consisting of trophy assets, such
as the Amsterdam and The Hague De Bijenkorf department stores, as
well as smaller Hema and V&D stores that are secondary in nature
and/or in peripheral locations.  Given the lease structure, net
operating income (NOI, EUR73.2 million), ICR and vacancy (0.8%)
have all remained broadly stable since the previous rating action
in 2013, and while the reported market value of EUR1,458 million
results in a loan to value ratio (LTV) of 68.5%, Fitch's estimate
of sustainable value produces an LTV nearer to 100%.

While the Dutch retail sector continues to suffer considerable
stress, likely having a deleterious effect on retailers' trading
figures, those stores in established retail markets are expected
to fare better than those in marginal locations; however, as the
three main retailers in this transaction are privately held,
there is little information available regarding the sales
performance of the stores.

Due to long leases of over 12 years on a weighted average basis
combined with tenant concentration, the main risk in this
transaction is tenant quality.  While a tenant default could
precipitate a material fall in NOI, of greater relevance (given
only two years remain on the loan) is the risk premium demanded
by potential investors in the portfolio, since this is sensitive
to economic confidence, particular in the retail sector and Dutch
households.  With house prices down by around 20% since 2008,
weakened consumer demand suggests refinancing will prove
challenging.

Rating Sensitivities

Fitch estimates the 'Bsf' recoveries to be EUR1,000 million
(based on sustainable long term value).  As current property
yields are generally some way below longer term averages in the
relevant markets, ratings are not greatly sensitive to modest
widening in yields. However, if market rents fall or other signs
emerge of deterioration in the Dutch retail sector - including,
in extremis, tenant default - there would be proportionate
downwards pressure on ratings.


STORM 2014-I: Fitch Assigns 'BBsf(EXP)' Ratings to 2 Note Classes
-----------------------------------------------------------------
Fitch Ratings has assigned Storm 2014-I B.V.'s EUR1,064 million
notes expected ratings, as follows:

  EUR1,000 million Class A floating-rate notes: 'AAAsf(EXP)';
  Outlook Stable

  EUR24.5 million Class B floating-rate notes: 'AAsf(EXP)';
  Outlook Stable

  EUR18.8 million Class C floating-rate notes: 'A-sf(EXP)';
  Outlook Stable

  EUR20.7 million Class D floating-rate notes: 'BBsf(EXP);
  Outlook Stable

  EUR10.7 million Class E floating-rate notes: 'BBsf(EXP)';
  Outlook Stable

The RMBS notes are backed by Dutch prime mortgages originated by
Obvion N.V. (not rated)

Key Rating Drivers

Concentrated Counterparty Exposure
This transaction relies strongly on the creditworthiness of
Rabobank Group (AA-/Negative/F1+) which fulfils a number of
roles, including collection account provider, issuer account
provider, cash advance facility provider and commingling
guarantor. In addition, it acts as back-up swap counterparty.

NHG Loans
The portfolio includes 32.8% of loans that benefit from the
national mortgage guarantee scheme (Nationale Hypotheek Garantie
or NHG).  The ratings incorporate benefit given to the NHG
feature although no credit was given to the foreclosure
frequency, as the performance was not better than the non-NHG
loans.

Standard Portfolio Characteristics
The 65-month seasoned portfolio consists of prime residential
mortgage loans with a weighted-average (WA) original loan-to-
market-value ratio of 87.8% and a WA debt-to-income ratio of
29.3%, both of which are typical for Fitch-rated Dutch RMBS
transactions.  Credit enhancement for the class A notes is 7% and
is provided by subordination (6%) and a non-amortizing reserve
fund of 1%, which will be fully funded at closing.

Robust Performance
Both the Storm series as well as Obvion's loan book have shown
stable performance in terms of arrears and losses.  The 90+ days
arrears of the previous Fitch-rated Storm transactions have
mostly been lower than the Dutch Index throughout the life of the
deals.

Rating Sensitivities

Material increases in the frequency of defaults and loss severity
on defaulted receivables could produce loss levels higher than
Fitch's expectations, which in turn may result in potential
rating actions on the notes.  Stressing our 'AAA' assumptions by
30% for both weighted average foreclosure frequency and recovery
rate, could result in a downgrade of the class A notes to
'Asf(EXP)'.

For its ratings analysis, Fitch received a data template with all
fields fully completed.

Fitch reviewed the results of an agreed-upon procedures report
(AUP) conducted on the portfolio.  The AUP contained no material
errors which would affect Fitch's ratings analysis.


TP VISION: Carlo Vichi Loses EUR200MM Lawsuit Over Loan
-------------------------------------------------------
Phil Milford and Jef Feeley at Bloomberg News report that
Royal Philips Electronics NV defeated a lawsuit in which the
company was accused of defrauding Mivar di Carlo Vichi SpA out of
at least EUR200 million (US$275 million) in a dispute over a
loan.

Delaware Chancery Court Judge Donald Parsons Jr. rejected claims
by Carlo Vichi, founder of Mivar di Carlo Vichi SpA, who argued
he was duped into investing in a Philips venture to make cathode-
ray-tube televisions just as flat-panel TVs were becoming
popular, Bloomberg relates.  He lost his investment when the
Philips affiliate sought bankruptcy protection in 2006, Bloomberg
says, citing court filings.

The decision in the Vichi case comes almost a month after Philips
executives agreed to transfer the company's remaining stake in
television-joint venture TP Vision as it sells some consumer-
electronics lines to focus on more profitable products, Bloomberg
relays.

Mr. Vichi sued Philips in 2006 over the loan he made to the
manufacturing joint venture between the Dutch company and Korea's
LG Electronics Inc., Bloomberg recounts.  The venture focused on
making tubes used in televisions and computer monitors, Bloomberg
discloses.

LG Philips Displays suffered as cathode-ray-tube TVs were
supplanted by flat-screen rivals by 2006, Bloomberg recounts.
The more than US$2 billion joint venture defaulted on its debt in
2006 and sought bankruptcy protection from creditors in the
Netherlands, Bloomberg says, citing court filings.

The Italian executive alleged he was defrauded by Philips'
representatives, who assured him the loan to the joint venture
was backed by the conglomerate and the investment was "as safe as
the Bank of Italy," Bloomberg says, citing court filings.



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


EUROPEAN TRUST: Moody's Lowers National Scale Rating to C.ru
------------------------------------------------------------
Moody's Interfax Rating Agency had downgraded European Trust
Bank's National Scale Rating (NSR) to C.ru from Caa3.ru.

Moody's will withdraw the bank's NSR following the withdrawal of
its banking license by the Central Bank of Russia.

Ratings Rationale

The rating action and subsequent rating withdrawal follow the
Central Bank of Russia's announcement on February 11, 2014 that
it had revoked European Trust Bank's banking license in
connection with the entity's violation of the state laws on
banking activity, resulting in compulsory liquidation. The
downgrade of European Trust Bank's NSR reflects Moody's
expectations of heavy losses that the bank's creditor are likely
to incur as a result of liquidation, given (1) the bank's poor
liquidity profile; (2) weak capital position, pressurized by
substantial investments in non-core assets; and (3) historical
data for similar cases in Russia, when banks' licenses have been
withdrawn.

According to Moody's, European Trust Bank had no rated debt
outstanding at the time of the rating withdrawal, and customer
deposits represented the main source of the bank's non-equity
funding.

Principal Methodology

The principal methodology used in this rating was Global Banks
published in May 2013.

Headquartered in Moscow, Russia, European Trust Bank reported --
according to unaudited financial statements prepared under local
GAAP -- total assets of $520 million and total equity of $47
million as at year-end 2013. The bank's net income for 2013 stood
at around $4,000.

Moody's Interfax Rating Agency's National Scale Ratings (NSRs)
are intended as relative measures of creditworthiness among debt
issues and issuers within a country, enabling market participants
to better differentiate relative risks. NSRs differ from Moody's
global scale ratings in that they are not globally comparable
with the full universe of Moody's rated entities, but only with
NSRs for other rated debt issues and issuers within the same
country. NSRs are designated by a ".nn" country modifier
signifying the relevant country, as in ".ru" for Russia. For
further information on Moody's approach to national scale
ratings, please refer to Moody's Rating Methodology published in
October 2012 entitled "Mapping Moody's National Scale Ratings to
Global Scale Ratings".

About Moody's And Moody's Interfax

Moody's Interfax Rating Agency (MIRA) specializes in credit risk
analysis in Russia. MIRA is a joint-venture between Moody's
Investors Service, a leading provider of credit ratings, research
and analysis covering debt instruments and securities in the
global capital markets, and the Interfax Information Services
Group. Moody's Investors Service is a subsidiary of Moody's
Corporation (NYSE: MCO).


EUROPEAN TRUST: Moody's Cuts Long-Term Deposit Ratings to C
-----------------------------------------------------------
Moody's Investors Service has downgraded European Trust Bank's
long-term local- and foreign-currency deposit ratings to C from
Caa3, and affirmed the bank's standalone E bank financial
strength rating (BFSR), which is equivalent to a standalone
baseline credit assessment (BCA) of c, as well as its Not Prime
short-term local- and foreign-currency deposit ratings. The
outlook on the long-term ratings is stable.

Moody's will withdraw all the bank's ratings following the
withdrawal of its banking license by the Central Bank of Russia.

Ratings Rationale

The rating action and subsequent ratings withdrawal follow the
Central Bank of Russia's announcement on 11 February 2014 that it
had revoked European Trust Bank's banking license in connection
with the entity's violation of the state laws on banking
activity, resulting in compulsory liquidation. The downgrade of
European Trust Bank's ratings reflects Moody's expectations of
heavy losses that the bank's creditor are likely to incur as a
result of liquidation, given (1) the bank's poor liquidity
profile; (2) weak capital position, pressurized by substantial
investments in non-core assets; and (3) historical data for
similar cases in Russia, when banks' licenses have been
withdrawn.

According to Moody's, European Trust Bank had no rated debt
outstanding at the time of the rating withdrawal, and customer
deposits represented the main source of the bank's non-equity
funding.

Principal Methodology

The principal methodology used in this rating was Global Banks
published in May 2013.

Headquartered in Moscow, Russia, European Trust Bank reported --
according to unaudited financial statements prepared under local
GAAP -- total assets of US$520 million and total equity of US$47
million as at year-end 2013. The bank's net income for 2013 stood
at around US$4,000.


MOSCOW MORTGAGE: Moody's Affirms Ba2 Deposit & Unsec. Debt Rating
-----------------------------------------------------------------
Moody's Investors Service has affirmed the Ba2 long-term local-
and foreign-currency deposit ratings of Moscow Mortgage Agency
(Russia), as well as the bank's Ba2 local-currency senior
unsecured debt rating. Simultaneously, Moody's affirmed Moscow
Mortgage Agency's E+ standalone bank financial strength rating
(BFSR) and the bank's Not Prime short-term local- and foreign-
currency deposit ratings. The BFSR is now equivalent to baseline
credit assessment (BCA) of b2, as opposed to b3 previously. All
of the bank's long-term ratings carry a stable outlook.

Moody's rating action is primarily based on Moscow Mortgage
Agency's audited financial statements for 2012 prepared under
IFRS, as well as the bank's unaudited financial statements for
2013 prepared in accordance with local GAAP.

Ratings Rationale

Moscow Mortgage Agency's Ba2 deposit ratings incorporate Moody's
assessment of a high probability of external support from the
bank's 100% owner -- the City of Moscow (rated Baa1 with stable
outlook), in the event of need. The likelihood of this support is
confirmed by (1) Moscow Mortgage Agency's policy mandate as a
provider -- on behalf of the Moscow government -- of social
mortgage loans to eligible Moscow citizens; (2) the presence of
high-ranking Moscow government officials on the bank's
supervisory board; and (3) substantial capital injections
provided by the City of Moscow to Moscow Mortgage Agency in the
past. As a result, the long-term deposit ratings assigned to
Moscow Mortgage Agency incorporate three notches of uplift from
the bank's BCA of b2.

Moody's adds that Moscow Mortgage Agency's b2 BCA is underpinned
by the bank's good financial fundamentals that are stronger than
those maintained by banks in b3 BCA category. Moscow Mortgage
Agency reports robust asset quality metrics: at 1 January 2014,
mortgage loans overdue by more than 30 days and restructured
loans together represented less than 2% of the bank's gross
mortgage loan book, whereas legacy problem corporate loans were
fully covered by loan loss reserves. The rating agency also notes
Moscow Mortgage Agency's ample capital levels, with the statutory
capital adequacy (N1) ratio standing at 38% at 1 January 2014,
well above the regulatory minimum of 10%. This capital buffer
ensures sufficient loss absorption, should any credit losses
arise in the future, and also allows the bank to comfortably
increase its business volumes over the next two-three years
without resorting to new capital injections. Additionally,
Moody's notes Moscow Mortgage Agency's stable liquidity profile,
supported by a liquidity cushion that accounts for around 24% of
total assets (as reported at January 1, 2014 under local GAAP)
and predictable cash inflows from the bank's mortgage portfolio.

At the same time, Moscow Mortgage Agency's standalone ratings are
constrained by the bank's limited market franchise, as it holds
less than 0.5% of the Russian mortgage market. Furthermore,
according to the Moscow Mortgage Agency management data, during
2013 the bank's gross retail loan portfolio increased by just
over 15%, whereas the Russian mortgage market expanded by
approximately 30% over the same period, according to the Central
Bank of Russia.

What Could Move The Ratings Up/Down

Moscow Mortgage Agency's deposit ratings already incorporate
Moody's assessment of a high probability of support from the City
of Moscow, and the possibility of an upgrade is therefore
limited. The bank's standalone E+ BFSR currently has limited
upward potential. At the same time, an upward pressure could be
exerted on the BCA of b2 if the bank's growing market shares in
residential mortgage lending outside of the Moscow government's
social programs results in a sustained improvement in earnings
and a lower risk appetite to the pro-cyclical commercial real-
estate sector. Upward pressure could also be exerted on Moscow
Mortgage Agency's ratings if the bank diversifies its funding
base.

Significant franchise deterioration caused by curtailment of the
Moscow government programs could lead to negative pressure on
Moscow Mortgage Agency's standalone and supported ratings. A
material deterioration in the bank's asset quality and liquidity
profile could have negative implications for Moscow Mortgage
Agency's BFSR and BCA. Moreover, any evidence indicating a lower
probability of support from the City of Moscow could result in a
downgrade of the bank's long-term deposit ratings.

Principal Methodologies

The principal methodology used in this rating was Global Banks
published in May 2013.

Headquartered in Moscow, Russia, Moscow Mortgage Agency
reported -- according to unaudited financial statements prepared
under local GAAP -- total assets of US$498 million and total
equity of US$211 million as at year-end 2013. The bank's net
income for 2013 stood at around US$12.5 million.



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


CASTLE HUME: Unsecured Creditors May Not Get Payment
----------------------------------------------------
Gordon Deegan at The Irish Times reports that the joint
administrators of the five-star Lough Erne resort in Co Fermanagh
that last year staged a G8 summit believe unsecured creditors
owed GBP3.5 million in the hotel's administration will not be
paid.

KPMG was appointed as administrator to Castle Hume Leisure Ltd.,
which ran the resort, on foot of an application by Bank of
Scotland in May 2011, The Irish Times relays.  The bank was owed
GBP26.4 million at the time by the company, and the hotel is
still up for sale, The Irish Times discloses.

According to The Irish Times, in their latest report the
administrators say while they are unable to provide an estimate
of the likely proceeds of the sale "we do not anticipate that
sufficient monies will be realised to discharge all monies owing
to the secured creditor".

The Irish Times relates that the administrators, John Hansen and
Stuart Irwin of KPMG, also say they "do not believe that there
will be sufficient realisations to facilitate a distribution to
unsecured creditors".

The latest administrators' report, filed with Companies House in
the UK, covers the period May 12 to November 11 last year, The
Irish Times notes.

The administrators have employed management firm Tifco Hotels to
manage the resort, and Mr. Hansen said the G8 did have "a
positive impact" on the hotel's business for 2013, The Irish
Times recounts.

According to The Irish Times, Mr. Hansen confirmed that the
administrators remained in talks with a number of parties who
have expressed an interest in buying the property.

Castle Hume Leisure is a land developer in United Kingdom.


STEMCOR HOLDINGS: Creditors Back Debt Restructuring Plan
--------------------------------------------------------
Stephen Morris at Bloomberg News reports that Stemcor Holdings
Ltd. said its creditors voted to approve the U.K. steel trader's
plan to restructure its debt.

According to Bloomberg, Charles Armitstead, a spokesman for
Stemcor employed by Pendomer Communications LLP, said lenders
voted "overwhelmingly" in favor of the plan.  Bloomberg relates
that Mr. Armitstead said the debt deal, which includes converting
US$1.1 billion of credit facilities into term loans and borrowing
an additional US$1.15 billion, will be taken to a U.K. court for
approval this month.

Stemcor, Bloomberg says, is reorganizing its debt because it
failed to repay an US$850 million credit line last year after
reporting a loss in 2012 amid lower demand for steel.  It
replaced chairman Ralph Oppenheimer last year with restructuring
specialist John Soden and is seeking to raise funds by selling
assets in India, Bloomberg recounts.

Headquartered in London, Stemcor Holdings Limited trades steel
and steel-making raw materials worldwide.



===================
U Z B E K I S T A N
===================


IPAK YULI BANK: Fitch Affirms 'B-' LT Foreign Currency IDR
----------------------------------------------------------
Fitch Ratings has published Ipak Yuli Bank's (IY) Long-term
foreign currency Issuer Default Rating (IDR) of 'B-'.  Fitch has
also affirmed KDB Bank Uzbekistan (KDBUz) and POJSEB Trustbank's
(TB) Long-term foreign currency IDRs at 'B-' and Universalbank's
(UB) Long-term local currency IDR at 'CCC'.  At the same time,
the agency has withdrawn KDBUz's ratings, as the bank has chosen
to stop participating in the rating process.  Therefore, Fitch
will no longer have sufficient information to maintain the
ratings.

Accordingly, Fitch will no longer provide ratings or analytical
coverage for KDBUz.

Key Rating Drivers - All Banks' IDRs, Support Ratings And Support
Rating Floors (SRFS)

The affirmations reflect Fitch's assessment of persistent
weaknesses in the Uzbekistan operating environment, in particular
high transfer and convertibility risks presented in the economy
due to the country's tightly regulated FX market, and the banks'
generally limited franchises (more acute for UB, which is
consequently rated one notch lower than its peers).

IY's, TB's and UB's Long-term IDRs are driven by their intrinsic
creditworthiness, as reflected in their Viability Ratings (VR).

IY's, TB's and UB's SRFs of 'No Floor' and their '5' Support
Ratings reflect their relatively limited scale of operations
rendering extraordinary support from Uzbek authorities unlikely.
The ability of the banks' private shareholders to provide support
cannot be reliably assessed and, therefore this support is not
factored into the ratings.

Key Rating Drivers and Sensitivities - IY

IY's 'b-' VR reflects its reasonable asset quality metrics, solid
performance and currently sufficient liquidity and capital
buffers.  On the negative side, the VR also takes into account
the bank's quite narrow franchise and some weaknesses of the
operating environment.

IY reported impaired loans at moderate 3% of the end-2013 loan
book, which were fully covered by impairment reserves. Based on
the analysis of largest exposures, Fitch does not have concerns
about these.  Nevertheless, should asset quality deteriorate,
IY's capitalization (regulatory capital adequacy ratio (CAR) of
16% at end-2013) would allow it to increase loan provision up to
about 15% of gross loans before breaching minimum regulatory
capital requirements.  Credit risks are further mitigated by
solid profitability (local GAAP operating ROAE of 28% in 2013).
Liquidity is reasonable with available stock of liquid assets
covering about 39% of customer funding at end-2013.

In 2Q13, Asian Development Bank (ADB; AAA/Stable) acquired a
13.6% stake in IY.  Fitch believes this may be moderately
positive for the bank's corporate governance, but does not factor
support from ADB into the bank's ratings.

Key Rating Drivers and Sensitivites: TB

TB's ratings are pressured by a risky operating environment, as
well as high reliance on cheap funding from its related party,
the Uzbek Commodities Exchange (UCE) and its affiliates, which
accounted for about half of the bank's total liabilities at end-
11M13.  At the same date, TB's liquid assets (net of potential
debt repayments) covered around 33% of its customer accounts,
mitigating withdrawal risk to an extent.

TB's ratings also account for its rapid loan growth (by 1.8x in
2013), which means current solid reported asset quality (zero
reported NPLs) may deteriorate somewhat as the loans season.
TB's profitability metrics have historically been strong, with
ROAA and ROAE for 2013 of 3.4% and 29.2%, respectively.
Capitalization is healthy (regulatory CAR was 17.7% at end-2013)
allowing the bank to reserve up to 21% of its gross loans without
breaching the regulatory minimum of 10%.

Key Rating Drivers and Sensitivites: UB

UB's ratings are mainly constrained by its small franchise (total
assets of only USD32 million at end-2013) resulting in high
concentrations on both sides of the balance sheet and low
operating efficiency (cost/income ratio of 77% for 2013).  The
ratings also account for the bank's potential asset quality
relapses (UB reported 22% impaired loans in its 2012 IFRS FS;
2013 local GAAP accounts show a positive trend but the
sustainability is questionable), relatively short track record of
operations and past regulatory problems (UB's license on foreign
currency operations was revoked in July 2012) limiting its fee
generation.

Positively, UB's credit profile benefits from the bank's
currently sufficient liquidity (covering around 32% of the bank's
customer accounts at end-2013) and high regulatory CAR of 31.3%
at end-2013, which is sufficient to reserve up to 50% of gross
loans.

Rating Sensitivities: IY, TB, UB

An upgrade of IY and TB's Long-term foreign currency IDRs and VRs
would require a general improvement in the operating environment.
An upgrade of UB would require significant growth of its
franchise, greater diversification and profitability improvement,
while maintaining adequate asset quality, liquidity and
capitalization.

A downgrade could occur in case of deterioration of operating
environment, significantly increased pressure on capital as a
result of marked deterioration of the credit quality and/or major
liquidity shortfalls (eg. in case of withdrawals by key
customers).

Fitch does not anticipate changes to the Support Ratings and SRFs
of these banks given their moderate systemic importance.

The rating actions are as follows:

IY

Long-term foreign currency IDR: published at 'B-', Outlook
  Stable
Short-term foreign currency IDR: published at 'B'
Long-term local currency IDR: published at 'B-', Outlook Stable
Short-term local currency IDR: published at 'B'
Viability Rating: published at 'b-'
Support Rating: published at '5'
Support Rating Floor: published at 'NF'

TB

Long-term foreign currency IDR: affirmed at 'B-', Outlook Stable
Short-term foreign currency IDR: affirmed at 'B'
Long-term local currency IDR: affirmed at 'B-', Outlook Stable
Short-term local currency IDR: affirmed at 'B'
Viability Rating: affirmed at 'b-'
Support Rating: affirmed at '5'
Support Rating Floor: affirmed at 'NF'

UB

Long-Term local currency IDR: affirmed at 'CCC'
Short-Term local currency IDR: affirmed at 'C'
Viability Rating: affirmed at 'ccc'
Support Rating: Affirmed at '5'
Support Rating Floor: affirmed at 'No Floor'

KDBUz

Long-term foreign currency IDR: affirmed at 'B-'; Outlook
  Stable; and withdrawn
Short-term foreign currency IDR: affirmed at 'B'; and withdrawn
Long-term local currency IDR: affirmed at 'B'; Outlook Stable;
  and withdrawn
Short-term local currency IDR: affirmed at 'B'; and withdrawn
Viability Rating: affirmed at 'b'; and withdrawn
Support Rating: affirmed at '5'; and withdrawn



===============
X X X X X X X X
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* BOOK REVIEW: Land Use Policy in the United States
---------------------------------------------------
Author: Howard W. Ottoson
Publisher: Beard Books
Paperback: US$34.95
Review by Gail Owens Hoelscher
Order your personal copy today and one for a colleague at
http://is.gd/tiz2N3

In 1962, marking the 100th anniversary of the signing of the
Homestead Act by President Lincoln, 20 nationally recognized
economists, historians, a political scientist, and a geographer
presented papers at the Homestead Centennial Symposium at the
University of Nebraska. Their task was to appraise the course
that United States land policy had taken since independence. The
resulting papers are presented in this book, grouped into five
major areas: historical background; social factors influencing
U.S. land policy; past, present and future demands for lands in
the U.S.; control of land resources; and implications for future
land policy.

This book begins with a summary of the Homestead Act, its
antecedents, the arguments of its supporters and detractors, and
its intent versus implementation. The Act offered a quarter
section (160 acres) of public land in the West to citizens and
intended citizens for a $14 filing fee and an agreement to live
on the land for five years. The program ended in 1935.

Advocates claimed that frontier lad had no value to the
government until it was developed and began generating tax
revenue. Opponents feared the Act would lower land valued in the
East and pushed for government sale of the land. In practice,
states, territories, railroads and investors were able to set
aside more land than was eventually handed over to the
homesteaders.

One paper deals with land policy before 1862. From the start,
the U.S. required that "all grants of land by the federal
government should embody a description of the land not merely in
quality, but in place as defined by relation to an actual
survey." This policy avoided countless boundary disputes so
vexing to other countries.

Perhaps most interesting are the social history chapters:
Czechoslovakians pushing wheelbarrows across Nebraska,
"Daughters and Sons of the Revolution.(living) next
to.Mennonites," and "an illiterate.neighborly with a Greek and a
Hebrew scholar from a colony of Russian Jews." Mail-order
brides, "defectors from civilization," the importance of the
Mason jar, the Jeffersonian dream of a nation of agrarian
freeholders, and Santayana's observation that the typical
American skitters between visionary idealism and crass
materialism, all make for fascinating reading.

The land-use policy problems discussed certainly haven't been
solved today. And, although land use conflicts in the U.S.
haven't always been resolved equitably, "the big step forward
taken by the United States during the last one hundred and fifty
years in the age-long struggle of man towards the ideals of
mutuality and equity has been the working out of a system
wherein the sovereign superior who prescribes the working-rules
for land use and decision making have become, himself, a
collective of the citizenry."

A chapter is devoted to the arguments between the family farm ad
the "sentiment against concentration of wealth in the hands of a
few." The discussion of the Land Grant college system and its
contribution to international development closes with a quote
from Chester Bowles:

"Can we, now the richest people on earth, become creative
participants in the unprecedented revolutionary changes of our
era, changes that the most privileged people will oppose tooth
and nail, but which for the bulk of mankind offer the hopeful
prospect of a little more food, a little more opportunity, a
doctor for their sick child, and sense of personal dignity?"


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