TCREUR_Public/140306.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

                           E U R O P E

            Thursday, March 6, 2014, Vol. 15, No. 46

                            Headlines

C Y P R U S

BANK OF CYPRUS: Fitch Keeps 'B' Covered Bonds Rating on Watch Neg
CYPRUS: Parliament Approves Amended Privatization Bill


F I N L A N D

METSA BOARD: Moody's Assigns (P)B2 Rating to EUR200MM Sr. Bonds
NOKIA CORPORATION: Fitch Maintains 'BB-' IDR on Watch Positive


F R A N C E

LABEYRIE FINE: Fitch Assigns 'B' IDR & Rates EUR275MM Notes 'B+'
LABEYRIE FINE: S&P Assigns 'B' CCR; Outlook Positive


G E R M A N Y

IHLE GROUP: Files For Bankruptcy in Germany


I R E L A N D

BACCHUS 2006-2: Moody's Upgrades Rating on EUR12.3MM Notes to B3
HARVEST CLO VIII: S&P Assigns Prelim. B Rating to Class E Notes


I T A L Y

BANCA POPOLARE: S&P Affirms & Withdraws 'BB/B' Credit Ratings
SEAT PAGINE: Shareholders Support Restructuring Plan


N E T H E R L A N D S

FIAT CHRYSLER: Withdraws Request for Canadian Subsidies
SYBIL INVESTMENTS: Moody's Assigns B1 Corporate Family Rating
SYBIL INVESTMENTS: S&P Assigns Prelim. 'B+' CCR; Outlook Stable
TELECONNECT INC: Incurs US$875K Net Loss in Dec. 31 Quarter
* Fitch Sees Dutch Banks 2013 Earnings Hit by Domestic Recession


R O M A N I A

LIBRARIILE ALEXANDRIA: Posts RON148,000 Profit in 2013


R U S S I A

AGROPROMCREDIT LLC: Moody's Affirms B2 Long Term Deposit Ratings


S P A I N

BANCO SANTANDER: Moody's Assigns Ba2(hyp) Rating to Tier 1 Secs.
GRIFOLS SA: Moody's Affirms 'Ba2' Corporate Family Rating
PESCANOVA SA: Asks Lenders to Take Losses of Up to 97.5%


U N I T E D   K I N G D O M

AEI CABLES: Ducab Buys Business; Around 200 Jobs Saved
CHIMNEYS HOSPITALITY: Faces Closure After Director Dies
DEMOCON: 19 Jobs Saved in Pre-Pack Deal
JOHNSTON PRESS: Mulls Equity Fundraising, Debt Refinancing
PREMIER FOODS: Moody's Assigns (P)B2 Corporate Family Rating

PREMIER FOODS: Fitch Assigns 'B(EXP)' IDR; Outlook Positive
PREMIER FOODS: S&P Assigns Preliminary 'B' CCR; Outlook Stable


                            *********


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C Y P R U S
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BANK OF CYPRUS: Fitch Keeps 'B' Covered Bonds Rating on Watch Neg
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Fitch Ratings has maintained Bank of Cyprus Public Company Ltd's
(BoC; Issuer Default Rating (IDR) of 'Restricted Default')
covered bonds' B' rating on Rating Watch Negative (RWN).

The covered bonds, secured by Cypriot assets, were originally
placed on RWN on March 28, 2013.

Key Rating Drivers

Fitch is continuing to monitor the impact of the current economic
environment on the performance of the residential mortgage
portfolio, as well as the evolution of the bank's IDR

Rating Sensitivities

By way of exception to the agency's covered bond rating criteria,
Fitch does not use BoC's IDR as a starting point for its credit
risk assessment of the covered bonds.  However, once BoC's IDR is
no longer 'RD', the covered bonds' rating could potentially be
affected by movements in BoC's IDR.

The covered bonds' rating remains vulnerable to a deterioration
of the performance of the residential mortgage portfolio.
Additionally, should Cyprus's Country Ceiling be downgraded below
'B', the covered bonds rating could be downgraded.

Fitch expects to resolve the RWN once it completes its assessment
on the performance of the residential mortgage portfolio and
there is more visibility on the evolution of BOC's IDR.


CYPRUS: Parliament Approves Amended Privatization Bill
------------------------------------------------------
Nektaria Stamouli and Michalis Persianis at The Wall Street
Journal report that the Cyprus parliament on Tuesday approved a
slightly amended privatization bill, meeting a condition set by
international creditors for the disbursement of fresh aid to the
island.

The bill was brought back under emergency procedures, after the
title was changed and minor amendments were made, the Journal
relays.  The vote was 30-26, the Journal notes.

According to the Journal, the privatization of the state-owned
telecommunications, electricity and ports authorities is expected
to raise some EUR1.4 billion (US$1.9 billion) and is seen as a
condition for the disbursement of the next EUR156 million aid
tranche of the country's EUR10 billion bailout package.

Inspectors from the European Commission, the International
Monetary Fund and the European Central Bank had reiterated that
the next tranche payment for Cyprus would be off the agenda of
the next meeting of euro-zone finance ministers unless the
privatization bill was passed, the Journal discloses.  It is now
expected that the payment will be approved, the Journal says.



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METSA BOARD: Moody's Assigns (P)B2 Rating to EUR200MM Sr. Bonds
---------------------------------------------------------------
Moody's Investors Service has assigned a provisional (P)B2 (LGD4,
57%) unsecured instrument rating to the proposed 5-year non-call
EUR200 million senior unsecured fixed rate Nordic bond issued by
Metsa Board Corporation. Concurrently, Moody's has affirmed Metsa
Board Corporation's Corporate Family Rating B2 (CFR) and the
Probability of Default Rating B2-PD. The outlook remains
positive.

The issuance of a minimum 5-year EUR200 million unsecured bond is
condition precedent to the funding of the new loan facility.
Metsa Board will use the net proceeds from the combined debt
issuance to repay the existing EUR350 million term loan maturing
on 31 March 2016 and to replace a currently undrawn EUR100
million revolving credit facility due on May 2, 2015.

The assignment of a definitive rating to the bonds is subject to
the successful closing of the refinancing and placement of the
EUR200 million senior unsecured notes. Moody's issues provisional
instrument ratings in advance of the final sale of securities and
these reflect the rating agency's credit opinion regarding the
transaction only. Upon a conclusive review of the final
documentation, Moody's will endeavor to assign a definitive
rating to the notes. A definitive rating may differ from a
provisional rating.

Ratings Rationale

The positive outlook is supported (1) by the company's recently
completed and envisaged refinancing exercises aimed to term out
the debt maturity profile, and (2) the reduced financial leverage
with gross leverage as adjusted by Moody's expected to decline
towards 4x Debt/EBITDA by 2015. Moody's also takes comfort from
the improved company's profitability following significant
restructuring measures implemented over the past years. While
extensive maintenance shutdowns at the Husum and Kemi mills
impacted the profitability of the paper and pulp division during
2013, continued strong performance in its packaging business area
provide further support to profit and cash generation. Based on
full year 2013 results, Metsa Board's credit metrics are fully
commensurate with a B2 rating including Debt/EBITDA at 4.3 times
and EBITDA margins of around 9.5% (all as adjusted by Moody's).
Higher profitability and lower restructuring payouts should also
allow Metsa Board to return to sustained positive free cash flow
generation in 2014 (EUR2 million of free cash flow generated in
2013), albeit at a relatively low level, to some extent driven by
increased dividend payments.

Moody's expect the group's packaging operations to continue to
perform solidly in 2014 despite the subdued economic environment
in Europe, with further gradual improvements to come from ongoing
efficiencies, the replacement of unprofitable paper capacities
with profitable packaging capacities, and growing demand.
However, Moody's caution that profitability of Metsa's paper and
pulp business area may experience further pressure as
overcapacity for paper is significant, resulting in weak pricing
power of producers, and therefore diluting the group's overall
margin. In addition, new pulp capacities scheduled to come on
stream in South America may result in declining pulp prices in H1
2014, which could also put further pressure on already weak paper
pricing levels.

More fundamentally, the B2 rating is supported by (1) Metsa
Board's strong market position, being among the leading producers
of paperboard in Europe, (2) its good vertical integration into
pulp, reducing dependency on the volatile pulp prices, and (3)
positive industry fundamentals with structural growth for paper-
based packaging products, which will be the major profit
contributor going forward. At the same time, Moody's note that
Metsa Board still needs to prove the ability to generate
resilient returns through the cycle under the restructured setup.

Following the proposed refinancing, Moody's view Metsa Board's
liquidity profile as good including EUR98 million of cash, EUR100
million undrawn bank revolving credit facility and EUR150 million
short-term liquidity provided by Metsa Group Treasury. Following
the refinancing, annual debt maturities are viewed as manageable
until larger bullet maturities fall due in 2018 and 2019. Moody's
understands that Metsa's bank financing arrangements contain
financial covenants and that the group currently is expected to
retain good headroom.

The (P)B2 rating assigned to the proposed EUR200 million senior
unsecured notes are at the level of the group's CFR, considering
that Metsa Board's mostly unsecured existing debt arrangements
will effectively rank pari passu with the proposed new unsecured
debt. Given only marginal asset security of Metsa's priority
ranking amortizing pension loans in amount of EUR217 million, due
between 2014-2020, additional notching of the unsecured debt is
not justified in our view. Moody's note that the new bond and
loan documentations' negative pledge clause is subject to certain
exceptions including permitted secured pension loans of up to
EUR250 million and permitted non-recourse trade receivable
securitizations of up to EUR50 million.

A rating upgrade would require Metsa Board to continue its track
record of gradually improving operating profitability and cash
flow generation despite the challenging macroeconomic conditions
in its European markets. Quantitatively, Moody's would consider a
rating upgrade if Metsa Board was able to sustain EBITDA margins
of at least low double digit percentages, with Moody's adjusted
leverage of Debt/EBITDA consistently at or below 4x (per
preliminary results 2013: 4.3), and RCF/Debt of around 10% (per
preliminary results 2013: 9.5%).

The rating could come under negative pressure if the company's
Debt/EBITDA as adjusted by Moody's were to move towards 6x or if
material negative free cash flow generation further weakens the
group's liquidity position.

The principal methodology used in these ratings was the Global
Paper and Forest Products Industry published in October 2013.
Other methodologies used include Loss Given Default for
Speculative-Grade Non-Financial Companies in the U.S., Canada and
EMEA published in June 2009.

Metsa Board, headquartered in Espoo, Finland, is a leading
European primary fibre paperboard producer. Metsa Board also
produces office paper and coated papers as well as market pulp.
Sales during FY ended December 2013 amounted to EUR2.0 billion.


NOKIA CORPORATION: Fitch Maintains 'BB-' IDR on Watch Positive
--------------------------------------------------------------
Fitch Ratings has maintained Nokia Corporation's 'BB-' Issuer
Default Rating (IDR) and senior unsecured ratings on Rating Watch
Positive (RWP), pending the closing of the disposal of Nokia's
Devices & Services (D&S) activities to Microsoft Corporation
(AA+/Stable).

Fitch placed Nokia on RWP at the time of the disposal
announcement in September 2013. Nokia continues to guide to a
transaction close in 1Q14 and that it intends to announce the
results of its strategic evaluation shortly afterwards.
Resolution of the RWP will include a formal review of the
underlying continuing operations as well as an understanding of
management's intentions with respect to the disposal proceeds and
objectives for the long-term capitalization of the business.

KEY RATING DRIVERS

Removing Handsets Weakness

The sale of the D&S business will bring to a close a period of
extreme stress in the credit profile of the handset industry's
former leading manufacturer, which at one time accounted for
close to 40% handset unit volumes on a consistent basis.  The
pace of industry change, the accelerated advent of the smartphone
and dominance of Apple's iOS and Google's Android as the
industry's leading operating systems have seen Nokia's handsets
business increasingly marginalized.  The business has recorded
significant losses and driven material weakness in the company's
cash flows. Non-IFRS losses from discounted operations were
EUR667 million in 2013 (EUR1.1 billion in 2012) while net cash
flow was negative EUR1.2 billion (2012: negative EUR2.4 billion).

NSN, Advanced Technologies Underpin Profile

Following the disposal, Nokia Solutions & Networks (NSN) and the
newly created Advanced Technologies (the division housing Nokia's
technology licensing activities) will form the most significant
underlying business drivers of the group.  NSN, which accounted
for 89% of 2013 ongoing revenues, has reported increasingly solid
results, although top-line performance continues to reflect
decisions to exit low margin or unprofitable markets and customer
relationships.  Non-IFRS operating income of EUR1.1 billion and a
margin of 9.7% at NSN in 2013 underlines the increasing
resilience of this business.  Advanced Technologies is expected
to increase its annualized net revenue run-rate to EUR600 million
following the D&S disposal, while the division reported a non-
IFRS operating profit of EUR329 million and margin of 62.2% in
FY13.  Nokia's location/mapping division (HERE) provides a
smaller (FY13 sales of EUR914 million/non-IFRS margin 5.2%) but
nonetheless important revenue stream.

Improved Earnings Visibility

Revenue pressures at NSN (both market driven and a function of
ongoing strategic contract exits) continue to be expected in
2014. Fitch assumes high single/low double digit declines in its
rating case.  Revenue and margin visibility at NSN and Advanced
Technologies is nonetheless expected to be far better than under
a reporting perimeter that previously included the volatility and
weakness in the D&S division.  The sustainability of revenues and
margins at NSN will be an important driver in determining any
potential ratings upside for Nokia, while a separately reported
division housing the company's licensing activity increases
visibility of this high margin revenue stream.

Ratings Upside

Fitch continues to guide that closing of the transaction is
likely to result at a minimum in the affirmation of the current
rating and assignment of a Stable Outlook, but that potential
exists for a one-notch upgrade.

The D&S disposal will remove the weakest and most challenging
part of the business, a business that was burning cash at a run-
rate of around EUR300 million per quarter in 2013.  Continuing
operations generate healthy underlying cash flow and Nokia is
expected to continue to manage the balance sheet conservatively,
ie on a net cash basis.  Fitch's confidence in the sustainability
of cash flows in the underlying business, although this was
materially down on the previous year, is the key driver to
ratings upside from the current level.  Fitch similarly view a
commitment to conservative financial policies and a net cash
position as important for the rating.

RATING SENSITIVITIES

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

-- Closure of the D&S disposal along with signs the margin and
    cash flow profile currently presented by Nokia on a pro-forma
    basis are sustainable.

-- Any positive rating action would be predicated on clarity
    over management's expectations for the company's long-term
    capital structure. Fitch would expect this to continue to
    include a net cash position.

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

-- Failure of the proposed disposal to complete on a timely
    basis would be likely to lead at a minimum to the assignment
    of a Negative Outlook on the current ratings, subject to
    ongoing performance at both NSN and the D&S division.



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LABEYRIE FINE: Fitch Assigns 'B' IDR & Rates EUR275MM Notes 'B+'
----------------------------------------------------------------
Fitch Ratings has assigned French packaged food company Labeyrie
Fine Foods SAS (LFF) an expected Long-term issuer Default Rating
(IDR) of 'B(EXP)' with Stable Outlook.  Fitch has assigned LFF's
proposed EUR275 million senior secured notes a 'B+(EXP)'/'RR3'
expected rating.

The final ratings are contingent on the proposed refinancing of
LFF taking place and the final terms conforming with those
already received.  Failure to conduct the refinancing according
to plan would result in the withdrawal of the ratings.

The expected ratings reflect LFF's high business risk profile,
somewhat compensated by a relatively conservative leverage
structure and good free cash flow (FCF) generation capacity.
While Fitch positively factors in the proven resilience of its
sales and profitability as well as its leading brands positions,
it also takes into account LFF's small scale, high seasonality of
sales and relatively low customer, products and geographic
diversification.  Fitch believes these characteristics would
exacerbate the effect of an external shock on revenues and
profit. This risk is partially compensated by low leverage
relative to Fitch-rated packaged food leveraged peers and its
healthy, albeit low cash flow generation capacity, underpinned by
steady profit generation and limited working capital and capex
needs.

In Fitch's view, an upgrade to 'B+' would only be possible if
leverage was lower, to further increase financial flexibility in
view of the high business risk, or there was greater scale and
diversification of sales, leading to enhanced profit margins and
higher FCF generation.

KEY RATING DRIVERS

Resilient Business Model

LFF's sales resilience reflects its niche positioning in the
premium pleasure food market, which has proven highly stable
through economic cycles.  The group also benefits from the
leading position of its core brands in the French market,
underpinned by its high-quality image.  The stability in profit
margins through economic and commodity price cycles is
essentially ensured by management's adequate raw materials
purchase strategy and its proven ability to pass cost increases
on to its food retail customers, albeit with some delays.  Fitch
expects LFF's EBITDA margin to remain at or be slightly above the
FY13 level of 8.2% over the next few years despite prospects of
increasing raw material prices and higher marketing investments.

Highly Seasonal Sales and Profit

High seasonality represents a significant business and financial
risk, especially if coupled with an external shock.  As LFF
generates on average 41% and 66% of its sales and EBITDA
respectively between October and December, if the company
suffered a shock during the Christmas season it would leave
limited margin for maneuver to catch up sales and profit shortage
over the rest of the year.  Therefore LFF could struggle to repay
its short-term facilities due to inventories and account
receivables piling up in consequence.

Limited Scale and Diversification

Compared with most of Fitch's non-investment grade rated packaged
food peers, LFF exhibits a small scale. Limited geographic
(mostly mature France and UK), product categories (foie gras and
smoked salmon made 59% of FY13 sales), and customer (top ten
clients represented 74% of FY13 sales) diversification leads to
high business risk.  Diversification is all the more critical for
protein producers, like LFF, as they can be exposed to food
scares.  For LFF this is only partially mitigated by the group's
high-quality image, presence across various food counters, and
the fact its business units are run separately.  LFF's positive
efforts at diversifying its geographies, customer base and
products will only generate meaningful benefits in the long term
as they are financially limited by its relatively low, albeit
positive, cash generation capacity.

Conservative Leverage

Compared with entities rated 'B' by Fitch it also positively
factor the moderate leverage implied by the refinancing, with
lease-adjusted FFO gross leverage expected at 5.0x at FYE14
against 5.2x at FYE13.  Fitch views a moderately leveraged
structure as necessary to compensate for LFF's high business risk
profile.  From a cash generation perspective the higher interest
payments implied by the bond issuance, in comparison with bank
term loans, are compensated by the absence of amortizing debt.

Good FCF Generation Capacity

LFF's FCF generation will be reduced due to higher interest
payments.  However, it should remain positive at between 1% and
2% of sales per annum over the next four years thanks to low
single-digit top-line growth and the EBITDA margin remaining
resilient, limited working capital outflow due to continued tight
management, and relatively low capex needs.  This leaves a degree
of financial flexibility for bolt-on acquisitions.  With limited
M&A activity, FCF generation should allow the company to
deleverage below 4.0x by FY16 on a lease-adjusted net FFO basis,
from 4.4x in FY13.

Senior Secured Notes' Rating

The 'B+(EXP)'/'RR3' senior secured notes' rating indicates above
average expected recoveries in the range of 51%-70%.  The
instrument rating takes into account a EUR35 million revolving
credit facility (RCF) ranking senior to the bonds in the payment
waterfall and half of maximum amount available under a factoring
line of EUR80 million as average annual draw-down.  Despite being
non-recourse Fitch estimates the factoring line is of strategic
interest, and therefore includes it as a super-senior claim.
Driving the recovery expectations is a post-restructuring EBITDA
approximately 25% below the group's adjusted LTM June 213 EBITDA
of EUR61.8 million.  This level reflects a hypothetical adverse
scenario of a significant shock to the issuer's profitability.
Combined with an estimated going concern multiple of 6x
enterprise value/EBITDA, this results in a more favorable
valuation than Fitch's alternative estimation of a liquidation
scenario.

RATING SENSITIVITIES

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

   -- EBITDAR margin above 10% on a sustained basis.
   -- FCF margin sustained above 5%.
   -- FFO adjusted gross leverage below 4.0x.
   -- FFO fixed charge coverage above 3.5x.

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

   -- EBITDAR margin below 7.5% on a sustained basis.
   -- Negative FCF margin.
   -- FFO adjusted gross leverage above 6.0x.
   -- FFO fixed charge coverage below 2.0x.

LIQUIDITY AND DEBT STRUCTURE

Streamlined Debt Structure

LFF's refinancing exercise, which includes the reimbursement of
LFF's bank facilities as well as expensive convertible bonds,
would lead to a simpler capital structure as the EUR275m high-
yield bond would become the bulk of the debt.

Adequate Liquidity

Following the debt refinancing, Fitch expects LFF to benefit from
comfortable liquidity.  It would be underpinned by an adequate
amount of short-term facilities to fund working capital needs,
which include a EUR35m RCF and a EUR80m factoring line allowing
cheap receivables financing.  Liquidity would be further
supported by positive FCF generation and the absence of scheduled
debt repayments.


LABEYRIE FINE: S&P Assigns 'B' CCR; Outlook Positive
----------------------------------------------------
Standard & Poor's Ratings Services said that it had assigned its
'B' long-term corporate credit rating to French food processing
group Labeyrie Fine Foods SAS.  The outlook is positive.

At the same time, S&P assigned its 'B' issue rating to Labeyrie's
proposed EUR275 million senior secured notes.  The recovery
rating on this instrument is '4', indicating S&P's expectation of
average (30%-50%) recovery in the event of payment default.

The rating on Labeyrie reflects S&P's assessment of the group's
"weak" business risk profile and "highly leveraged" financial
risk profile.  Together, S&P's assessments lead it to apply an
anchor of 'b' to Labeyrie.  The anchor is S&P's starting point
for assigning an issuer credit rating under its corporate
criteria.  S&P's 'B' rating on the group is the same as the
anchor score, as it do not apply a modifier.

S&P's assessment of Labeyrie's business risk profile incorporates
its views of the branded food industry's "low" risk and of the
group's "low" country risk because Labeyrie operates mainly in
France and the U.K.

The positive outlook reflects S&P's anticipation that the group's
financial metrics should improve, in line with its financial
policy and ability to generate positive discretionary cash flows.

S&P expects that Labeyrie will continue to report resilient
earnings and positive discretionary cash flows, while maintaining
adequate headroom on covenants and passing on raw material price
hikes to its customers.

S&P could consider a positive rating action if Labeyrie's
2013-2014 financial statements indicated that debt to EBITDA had
fallen below 5x and S&P had evidence that debt to EBITDA would
sustainably remain below 5x thereafter.  This would imply, among
other factors, a marked and sustainable improvement in EBITDA, in
line with the group's improved performance over the 12 months
ended Dec. 31, 2013.  Whereas S&P has good visibility on the
current fiscal year's results because the month of December
usually accounts for about 40% of annual earnings, it still don't
know whether a persistently inflationary environment for fish and
prawns could dent fiscal 2014-2015 EBITDA.

S&P could revise the outlook to stable if Labeyrie faced
operating setbacks that substantially eroded profitability.  This
could occur if the inflationary environment for raw materials
persists and continues to affect the group's cost of sales.
Also, an unexpected return to shareholders or a change in the
financial structure suggesting that equity sponsors would have
control could weigh negatively on the ratings. Similarly, a
deterioration of the group's liquidity and tight headroom on
covenants would jeopardize the ratings.



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IHLE GROUP: Files For Bankruptcy in Germany
-------------------------------------------
tyrepress reports that the Ihle Group filed for bankruptcy at the
local court in Neu-Ulm on Feb. 26.

Managing director Jurgen Eigenbrodt has since confirmed this with
Tyres & Accessories' German sister publication Neue Reifenzeitung
(www.reifenpresse.de), adding that applications for all four
companies in the group have been submitted to the court in Neu-
Ulm, which has in turn placed the business in provisional
insolvency administration, the report relates.

Ihle Group is a retreader headquartered in Gunzburg (Bavaria),
Germany.



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BACCHUS 2006-2: Moody's Upgrades Rating on EUR12.3MM Notes to B3
----------------------------------------------------------------
Moody's Investors Service has upgraded the ratings on the
following notes issued by Bacchus 2006-2 Plc:

-- EUR152M Class A-1 Senior Secured Floating Rate Notes due 2022
    (currently EUR 37.8M outstanding), Upgraded to Aaa (sf);
     previously on Nov 15, 2011 Upgraded to Aa2 (sf)

-- EUR12.9M Class A-2B Senior Secured Floating Rate Notes due
    2022, Upgraded to Aaa (sf); previously on Nov 15, 2011
    Upgraded to A1 (sf)

-- EUR39.9M Class B Senior Secured Deferrable Floating Rate
    Notes due 2022, Upgraded to Aa1 (sf); previously on Nov 15,
    2011 Upgraded to Baa2 (sf)

-- EUR18.5M Class C Senior Secured Deferrable Floating Rate
    Notes due 2022, Upgraded to A2 (sf); previously on Nov 15,
    2011 Upgraded to Ba2 (sf)

-- EUR18.4M Class D Senior Secured Deferrable Floating Rate
    Notes due 2022, Upgraded to Ba2 (sf); previously on Nov 15,
    2011 Upgraded to B3 (sf)

-- EUR12.3M Class E Senior Secured Deferrable Floating Rate
    Notes due 2022, Upgraded to B3 (sf); previously on Nov 15,
    2011 Upgraded to Caa3 (sf)

-- EUR28.5M Class X Combination Notes due 2022 (currently EUR
    20.0M outstanding), Upgraded to Ba3 (sf); previously on Nov
    15, 2011 Upgraded to B1 (sf)

-- EUR33.95M Class Y Combination Notes due 2022 (currently EUR
    23.3M outstanding), Upgraded to Ba3 (sf); previously on Nov
    15, 2011 Upgraded to B2 (sf)

Moody's has also affirmed the rating on the following note:

-- EUR115M Class A-2A Senior Secured Floating Rate Notes due
    2022 (currently EUR 18.9M outstanding), Affirmed Aaa (sf);
    previously on Nov 15, 2011 Upgraded to Aaa (sf)

Bacchus 2006-2 Plc, issued in August 2006, is a single currency
Collateralised Loan Obligation ("CLO") backed by a portfolio of
mostly high yield European loans. The portfolio is managed by IKB
Deutsche Industriebank AG and is predominantly composed of senior
secured loans. This transaction exited its reinvestment period in
August 2012.

Ratings Rationale

The rating actions on the notes are primarily a result of
significant deleveraging arising from both prepayments and
amortizations since the last two payment dates in August 2013 and
February 2014 and the benefit from Moody's modelling assumptions
for transactions in the amortization period

Since August 2013, classes A1 and A-2A notes have paid down
EUR73.5 million (48% of initial balance) and EUR61.8 million (54%
of initial balance) respectively resulting in significant
increases to over-collateralization levels. As of the
February 2014 trustee report, Class A/B, C, D and E observed
over-collateralization levels of 133.85%, 120.5%, 109.7% and
104.9% respectively, compared with 122.0%, 113.4%, 106.0% and
102.0%, respectively in August 2013. The February trustee report
however does not factor in the large deleveraging that occurred
during the recent payment date in February 2014 where the class
A/B OC increased by approximately an additional 19% in a single
month. This deleveraging has been taken into account in our
analysis.

The reported weighted average rating factor ("WARF") has remained
stable since August 2013 whilst weighted average spread ("WAS"),
has increased from 3.85% to 3.95% and diversity score has
decreased from 27 to 22.

In consideration of the reinvestment restrictions applicable
during the amortization period, and therefore the limited ability
to make significant changes to the current collateral pool,
Moody's analyzed the deal assuming a higher likelihood that the
collateral pool characteristics will continue to maintain a
positive buffer relative to certain covenant requirements. In
particular, the deal is assumed to benefit from higher modeled
spread and shorter modeled weighted average life compared to the
last rating action in November 2011.

The ratings of the Combination Notes address the repayment of the
Rated Balance on or before the legal final maturity. For Classes
X and Y, the 'Rated Balance' is equal at any time to the
principal amount of the Combination Note on the Issue Date
increased by a Rated Coupon of 0.125% per annum respectively,
accrued on the Rated Balance on the preceding payment date minus
the aggregate of all payments made from the Issue Date to such
date, either through interest or principal payments. Class V has
been withdrawn due to being split back into its components.

The key model inputs Moody's uses in its analysis, such as par,
WARF, diversity score and the weighted average recovery rate, are
based on its published methodology and could differ from the
trustee's reported numbers. In its base case, Moody's analyzed
the underlying collateral pool as having a performing par and
principal proceeds balance of EUR174.0 million, defaulted par of
EUR7.1 million, a weighted average default probability of 22.6%
(consistent with a WARF of 3483), a weighted average recovery
rate upon default of 49.6% for a Aaa liability target rating, a
diversity score of 19 and a WAS of 3.95%.

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 8.6% of obligors in Italy and Ireland whose LCC is
A2 and 5.3% in Spain, whose LCC is A1, 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 1.57% for the class A1, class A-2A and
class A-2B notes, 0.98% for the class B note, 0.39% for the class
C notes and 0% for the class D and class E notes.

The default probability derives from the credit quality of the
collateral pool and Moody's expectation of the remaining life of
the collateral pool. The estimated average recovery rate 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 a recovery of 50% of the 99% of the
portfolio exposed to first-lien senior secured corporate assets
upon default and of 15% of the remaining non-first-lien loan
corporate assets upon default. In each case, historical and
market performance and a collateral manager's latitude to trade
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
February 2014.

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
7% of the portfolio, which could make refinancing difficult.
Moody's ran a model in which it raised the base case WARF to 3662
by forcing ratings on 50% 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 1) uncertainty about credit conditions in the
general economy and 2) the concentration of lowly- rated debt
maturing between 2014 and 2015, which may create challenges for
issuers to refinance. CLO notes' performance may also be impacted
either positively or negatively by 1) the manager's investment
strategy and behavior and 2) divergence in the legal
interpretation of CDO documentation by different transactional
parties due to because of embedded ambiguities.

Additional uncertainty about performance is due to the following:

1. 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.

2. Around 49% of the collateral pool consists of debt obligations
whose credit quality Moody's has assessed by using credit
estimates.

3. 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
modelled, 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.


HARVEST CLO VIII: S&P Assigns Prelim. B Rating to Class E Notes
---------------------------------------------------------------
Standard & Poor's Ratings Services assigned its preliminary
credit ratings to Harvest CLO VIII Ltd.'s class A, B, C, D, E,
and F senior secured floating-rate notes.  At closing, Harvest
CLO VIII will also issue unrated subordinated notes.

Under the transaction documents, the rated notes will pay
quarterly interest up to the earlier of the liquidity facility's
expiry or termination date.  Following this, the notes will
switch to semi-annual payment.  S&P expects the liquidity
facility to expire at the end of the reinvestment period, subject
to renewal of one or two additional years.

At the end of the ramp-up period, S&P understands that the
portfolio will represent a well-diversified pool of corporate
credits, with a fairly uniform exposure to all of the credits.
Therefore, S&P has conducted its credit and cash flow analysis by
applying its 2009 corporate cash flow collateralized debt
obligation criteria.

In S&P's cash flow analysis, it used a portfolio target par
amount of EUR412.0, assuming that 10% of the portfolio will
comprise fixed-rate assets, using the covenanted weighted-average
spread and weighted-average coupon (4.2% and 5.0%, respectively),
and the covenanted weighted-average recovery rates at each rating
level.

The portfolio's replenishment period will end 4.1 years after
closing, and the portfolio's maximum average maturity date will
be 7.6 years.

Deutsche Bank AG (London Branch) (A/Stable/A-1) will be the bank
account provider, custodian, and liquidity facility provider.  At
closing, S&P anticipates that the participants' downgrade
remedies will be in line with its current counterparty criteria.

At closing, S&P understands that the issuer will be in line with
its bankruptcy-remoteness criteria under its European legal
criteria.

Following S&P's analysis of the credit, cash flow, counterparty,
operational, and legal risks, S&P believes its preliminary
ratings are commensurate with the available credit enhancement
for each class of notes.

Harvest CLO VIII is a cash flow collateralized loan obligation
(CLO) transaction securitizing a portfolio of primarily senior
secured loans made to speculative-grade European corporates. 3i
Debt Management Investments Ltd. will manage the transaction.

RATINGS LIST

Preliminary Ratings Assigned

Harvest CLO VIII Ltd.
EUR412.0 Million Senior Secured Floating-Rate
and Subordinated Notes

Class               Rating             Amount
                                     (mil. EUR)
A                   AAA (sf)            243.0
B                   AA (sf)              47.0
C                   A (sf)               27.0
D                   BBB (sf)             21.0
E                   BB (sf)              31.0
F                   B (sf)               10.0
Subordinated        NR                   46.0

NR-Not rated.



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


BANCA POPOLARE: S&P Affirms & Withdraws 'BB/B' Credit Ratings
-------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'BB/B' long- and
short-term counterparty credit ratings on Banca Popolare di
Vicenza ScpA (BPVi).  S&P then withdrew the ratings at BPVi's
request.

The affirmation reflects S&P's opinion that the capital increase
BPVi has announced would be partly used to cushion to absorb the
high credit losses S&P expects from BPVi's large and increasing
stock of nonperforming assets (NPAs), taking into account the
impact of a prolonged domestic recession.  S&P anticipates the
capital increase might be needed to withstand the impact of the
upcoming asset quality review, which will be conducted from next
March by the Bank of Italy and the European Central Bank (ECB).
In this context, S&P anticipates that the capital increase BPVi
has announced would be unlikely to provide significant excess
cushion to finance future growth after absorbing the sizable
credit losses S&P expects to see in its loan portfolio over the
next 12-18 months.

On Feb. 18th, BPVi announced its plan to raise up to EUR1 billion
in capital, of which EUR700 million is to come from existing
shareholders and EUR300 million from new shareholders.  BPVi has
publicly announced that it aims to strengthen its regulatory
capital ratios with this capital increase and take advantage of
any opportunity for growth.

At the time of the rating withdrawal, S&P assumed that BPVi would
successfully complete the EUR1 billion capital within the
timeframe considered for its RAC estimates.  S&P's expectation
took into account BPVi's strong track record of shareholders'
support.  S&P anticipated that the capital injection would be
sufficient to mitigate what it expected to be significant credit
losses and maintain BPVi's risk-projected, risk-adjusted capital
sustainably above 5% through to 2015.  As such, S&P maintained
its assessment of BPVi's capital and earning position as
"moderate." S&P estimated that risk-adjusted capital was close to
5% at the end of 2013.

In S&P's view, BPVi's large and increasing stock of NPAs and
modest reserve coverage makes it vulnerable to the weak Italian
economy.  BPVi, like some of its Italian peers, is highly exposed
to corporate and small-and-midsize enterprises, which are
particularly affected by Italy's prolonged recession.  As a
result, S&P expects inflows of NPAs to have remained high in the
second half of 2013 and to be substantial in 2014.

Not only do S&P expects BPVi's underlying asset quality to
deteriorate, it also sees a risk that the Bank of Italy and the
ECB may apply more conservative criteria than BPVi in their
reviews of BPVi's asset quality.  As a result, a material number
of the loans BPVi currently classifies as "performing" may be
reclassified by the Bank of Italy and the ECB as "nonperforming."
S&P expects BPVi's stock of NPAs will exceed EUR6 billion in 2014
(over 19% of customer loans), up from EUR4.7 billion in June 2013
and EUR2 billion in 2009.

In addition, S&P views BPVi's provisioning for its NPAs as
modest. At just 27% in June 2013, BPVi's provisioning was lower
than coverage levels at its main peers.  S&P calculates that
BPVi's net NPA on total adjusted capital (including the EUR353
million capital increase completed in 2013) stood at a high 124%
in June. As such, S&P assess BPVi's risk position as "moderate"
(as such term is used in S&P's criteria).

At the time of the withdrawal, the rating on BPVi reflected S&P's
view that it had an "adequate" business position, supported by
its franchise in the wealthy Veneto region.  S&P's ratings also
take into account its assessment of BPVi's "average" funding,
underpinned by its deep retail funding base and limited reliance
on wholesale funding.  S&P views BPVi's liquidity as "moderate"
as it relies on substantial funding from the ECB's Long-Term
Refinancing Operations (LTRO).  As the maturity date for the LTRO
is approaching, S&P considers this funding to be short term.  S&P
incorporates one notch of "uplift" for short-term support into
its ratings on BPVi to reflect its view that its ongoing access
to the ECB's LTRO gives it time to implement plans that will help
it to reduce its reliance on short-term wholesale sources, such
as LTRO.

At the time of the withdrawal, the outlook on BPVi was negative.
This reflected the possibility that, all else being equal, S&P
would have lowered the long-term rating if at least two of
following conditions had occurred:

   -- S&P lowered the long-term sovereign credit rating on Italy.

   -- The economic and operating conditions in which Italian
      banks operate deteriorate materially further.

   -- The economic or operating conditions in which Italian banks
      operate deteriorated further and BPVi's capital position
      weakened--either because of higher economic risk or because
      the announced capital increase was not expected to
      materialize as expected;

   -- S&P anticipated that BPVi's asset quality would deteriorate
      by far more than its current forecast, affecting its view
      of its risk position; and

   -- S&P no longer anticipated that BPVi's liquidity position
      would improve as expected, and S&P thought BPVi was likely
      to continue to rely on short-term wholesale funding,
      including ECB liquidity facilities.

S&P would also likely have lowered the rating if it considered
that BPVi's future growth strategy materially affected its view
of its business and financial profile.

Ratings Score Snapshot

Issuer Credit Rating               BB/Negative/B

SACP                               bb-
Anchor                             bbb-

Business Position                  Adequate (0)
Capital and Earnings               Moderate (-1)
Risk Position                      Moderate (-1)
Funding and Liquidity              Average
                                   Moderate (-1)

Support                            +1
GRE Support                       0
Short-Term Government Support     +1
Sovereign Extraordinary Support   0


SEAT PAGINE: Shareholders Support Restructuring Plan
----------------------------------------------------
Reuters reports that shareholders in Seat Pagine Gialle gave the
go ahead on Tuesday for a plan aimed at relaunching the heavily
indebted Italian yellow pages publisher, allowing creditors to
take control of the struggling company.

Measures voted by shareholders include a near EUR20 million cash
call reserved for creditors that will see current investors
diluted to just 0.25% of capital, Reuters notes.

Royal Bank of Scotland and bondholders will forego debt of around
EUR650 million (US$893 million) and EUR837 million respectively
to become the new owners of the company, Reuters says.

Cash-strapped Seat, which has a market value of EUR26 million, is
caught up in a long drawn-out Italian-led court restructuring,
similar to Chapter 11 bankruptcy, that has already caused losses
for lenders, Reuters discloses.

The company, once the darling of the dot.com era, has struggled
to manage its debt pile following a EUR5.7 billion buyout in 2003
by private equity companies CVC, Permira and Investitori
Associati, Reuters relays.

Shareholders on Tuesday also voted to file a legal action against
17 former board members at the group, accusing them of causing
damage of around EUR2.4 billion in the period 2003-2012, Reuters
relates.

At the end of October, Seat had debt of more than EUR1.4 billion,
according to Reuters.

                        About SEAT Pagine

SEAT Pagine Gialle SpA (PG IM) -- http://www.seat.it/-- is an
Italy-based company that operates multimedia platform for
assisting in the development of business contacts between users
and advertisers.  It is active in the sector of multimedia
profiled advertising, offering print-voice-online directories,
products for the Internet and for satellite and ortophotometric
navigation, and communication services such as one-to-one
marketing.  Its products include EuroPages, PgineBianche,
Tuttocitta and EuroCompass, among others.  Its activity is
divided into four divisions: Directories Italia, operating
through, Seat Pagine Gialle; Directories UK, through TDL
Infomedia Ltd. and its subsidiary Thomson Directories Ltd.;
Directory Assistance, through Telegate AG, Telegate Italia Srl,
11881 Nueva Informacion Telefonica SAU, Telegate 118 000 Sarl,
Telegate Media AG and Prontoseat Srl, and Other Activitites
division, through Consodata SpA, Cipi SpA, Europages SA, Wer
liefert was GmbH and Katalog Yayin ve Tanitim Hizmetleri AS.

                          *     *     *

As reported by the Troubled Company Reporter-Europe on Feb. 26,
2014, Standard & Poor's Ratings Services said that it affirmed
its long-term corporate credit rating on Italy-based classified
directories publisher SEAT PagineGialle SpA at 'D' (default).  At
the same time, S&P affirmed its 'D' issue ratings on SEAT's
EUR661 million senior secured facilities, EUR750 million senior
secured notes, and EUR65 million senior secured notes.  In
addition, S&P revised downward its recovery rating on these debt
instruments to '5' from '3', indicating its expectation of modest
(10%-30%) recovery prospects in the event of a payment default.
Finally, S&P withdrew all the aforementioned ratings at SEAT's
request.



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


FIAT CHRYSLER: Withdraws Request for Canadian Subsidies
-------------------------------------------------------
Christina Rogers in Detroit and Paul Vieira in Ottawa, reported
that Fiat Chrysler Automobiles NV said it would drop a
controversial request that Canada's government subsidize
retooling of a minivan factory in Windsor, Ont., and upgrades for
another Canadian plant, and instead will finance the projects on
its own.

According to the report, the issue had become a "political
football," the company said on March 4.  The escalating
controversy over its request, "apart from being unnecessary and
ill-advised, will ultimately not be to the benefit of Chrysler."

Chief Executive Sergio Marchionne in January publicly raised the
possibility that the company could move production of its next-
generation Chrysler minivan out of Windsor if the Canadian
government didn't help make the operation more competitive, the
report related.  But with the new minivan's release expected in
2016, the company had to make a decision soon to ensure that a
plant would be ready in time. Mr. Marchionne has said the Windsor
plant required an investment of more than US$2 billion.

Fiat Chrysler said it would forgo government aid for now and
proceed with plans to build the minivan at the Windsor factory,
which employs about 4,600 workers, the report further related.
The company also said it would go forward with upgrades to its
factory in Brampton, Ontario, where Chrysler makes several large-
car models.

The auto maker said it would continue to monitor Canada's
competitiveness against other regions, however, and that the
outcome of union-contract talks in 2016 will be a factor in the
company's decisions, the report added.

                       About Chrysler Group

Chrysler Group LLC, formed in 2009 from a global strategic
alliance with Fiat Group, produces Chrysler, Jeep(R), Dodge, Ram
Truck, Mopar(R) and Global Electric Motorcars (GEM) brand
vehicles and products.  Headquartered in Auburn Hills, Michigan,
Chrysler Group LLC's product lineup features some of the world's
most recognizable vehicles, including the Chrysler 300, Jeep
Wrangler and Ram Truck.  Fiat will contribute world-class
technology, platforms and powertrains for small- and medium-sized
cars, allowing Chrysler Group to offer an expanded product line
including environmentally friendly vehicles.

Chrysler LLC and 24 affiliates on April 30, 2009, sought Chapter
11 protection from creditors (Bankr. S.D.N.Y (Mega-case), Lead
Case No. 09-50002).  The U.S. and Canadian governments provided
Chrysler LLC with US$4.5 billion to finance its bankruptcy case.

In connection with the bankruptcy filing, Chrysler reached an
agreement to sell all assets to an alliance between Chrysler and
Italian automobile manufacturer Fiat.  Under the terms approved
by the Bankruptcy Court, the company formerly known as Chrysler
LLC in June 2009, formally sold substantially all of its assets
to the new company, named Chrysler Group LLC.

In January 2014, the American car manufacturer officially became
100% Italian when Fiat Spa completed its deal to purchase the 40%
it did not already own of Chrysler.  Fiat has shared ownership of
Chrysler with the health care fund of the United Automobile
Workers unions since Chrysler emerged from bankruptcy in 2009.
Fiat Chrysler Automobiles NV is the new holding company that will
control the operations of Fiat and Chrysler.  The holding company
will be based in the Netherlands, with a U.K. tax domicile and a
New York stock listing.

                           *     *     *

Standard & Poor's Ratings Services raised its ratings on U.S.-
based auto manufacturer Chrysler Group LLC, including the
corporate credit rating to 'BB-' from 'B+' in mid-January 2014.
The outlook is stable.


SYBIL INVESTMENTS: Moody's Assigns B1 Corporate Family Rating
-------------------------------------------------------------
Moody's Investors Service has assigned a corporate family rating
(CFR) of B1 and a probability of default rating (PDR) of B1-PD to
Sybil Investments B.V. (Avast, the company).

Concurrently, Moody's has assigned a (P)B1 rating to the $420
million term loan B and USD40 million revolving credit facility
(RCF) issued by Sybil Finance B.V. (as the lead borrower). The
outlook on all ratings is stable.

Together with the cash equity investment from CVC, the term loan
proceeds will be used to fund the share purchase from existing
shareholders, transaction costs and overfund USD15 million of
additional cash on balance sheet at closing. The RCF will be used
for working capital needs and general corporate purposes.

Moody's issues provisional ratings in advance of the final sale
of securities and these ratings reflect Moody's preliminary
credit opinion regarding the transaction only. Upon a conclusive
review of the final documentation, Moody's will endeavor to
assign a definitive rating to the facilities. A definitive rating
may differ from a provisional rating.

Ratings Rationale

The B1 CFR incorporates (1) the company's small scale, (2) the
intense industry competition and inherent technology risks in
security software markets, (3) low customer switching costs and
(4) small share of the endpoint security market.

The CFR more positively reflects (1) the company's strong
position with regard to its large user base, (2) high
profitability, (3) strong free cash flow generation which Moody's
expect to lead to rapid deleveraging, and (4) the positive
underlying growth fundamentals of the security software market.

Avast operates in three broad geographies including the Americas
(40% of 2013 bookings), EMEA (53%) and APAC (7%). Avast provides
its software in 43 languages, which has resulted in strong
adoption of the product within these geographies. Additionally,
utilizing a freemium business model has helped Avast grow a very
large user base. Under the freemium business model, Avast
distributes a version of its anti-virus (AV) software for free
through its own website and online distribution channels such as
CNET's download.com. Consequently, Avast has grown its user base
to 211 million protected devices (as at the end of February 2014)
from 100 million in 2009. The company then seeks to monetize
these users either directly by upselling them to a premium
subscription, or indirectly through third party partnerships.
Although Avast continues to successfully grow its user base, the
conversion from free-to-paid remains very low. The company had
5.0 million premium users at the end of February 2014 (2.4% of
total protected devices). The freemium approach has proven highly
disruptive in the consumer AV market, resulting in significant
market share gains from the key players using this strategy
including Avast, however, when measured in terms of revenue,
Avast's market share remains very low.

Broadly, the security software market is benefiting from solid
underlying fundamentals that will support growth in the sector:
(1) the growth in security threat volumes and complexity, and (2)
a growing number of user devices (particularly mobile devices).
International Data Corporation (IDC) expects the consumer AV
market (Avast's core market) to grow at a 6% CAGR between 2013 to
2017. Although the installed base of PCs is expected to slowly
decline over this period, rapid growth in other devices such as
smartphones and tablets will offer new opportunities to grow
users and generate revenue. IDC forecasts smartphone growth from
2013 to 2017 at around 18% CAGR. Avast has achieved good traction
with its free mobile AV software, however, the market has yet to
identify a clear strategy of how best to monetize these users.

Avast's freemium model is highly scalable, with incremental users
representing little additional costs. The company distributes its
software online, largely relying on viral marketing to build
brand awareness. This has resulted in very low distribution costs
and customer acquisition costs. Avast has historically achieved
gross margin of greater than 90%. Focusing on online distribution
and attracting users via its free product means that the company
is able to function with a significantly reduced sales force,
keeping fixed costs low. Profitability therefore remains high,
with Moody's adjusted EBITDA margin historically above 50%.

Despite this, the company's scale remains small when compared
against rated peers operating in the same markets. Out of the
approximately 211 million devices protected by Avast, only 5.0
million (2.4%) are paying premium subscriptions. Additionally,
the majority of subscriptions are under one year licenses and
with no attached hardware, switching costs are negligible. With
the PC installed base expected to decline, much anticipation is
placed on the growth in mobile AV. However, Moody's note that
monetization in the segment remains at a very early stage.
Furthermore, Moody's recognize that approximately 30% of Avast's
2013 EBITDA was generated through its third party distribution
agreement with Google Inc., representing significant EBITDA
concentration. This agreement is due to expire in November 2014,
however, Moody's expect it to be successfully renewed.

Avast's subscription model results in high cash conversion from
EBITDA (typically greater than 100%) as license fees are paid
upfront and then recognized over the term of the license. Working
capital is therefore structurally negative due to the recognition
of deferred revenue. Additionally, the high levels of automation
in Avast's operations result in very low maintenance capital
expenditure of around 1-2% of sales annually. Due to these low
levels, free cash flow generation is strong. Avast's senior
facilities include an excess cash sweep which requires the
company to apply excess free cash flow toward debt repayment.

Avast's financial metrics positively support the rating. As the
company grows, Moody's expect to see the benefits of operating
leverage support EBITDA growth, resulting in deleveraging on a
gross basis. The amortizing term loan B and cash sweep will
further support this. While the high profitability, good interest
coverage and strong free cash flow generation provide positive
support, the small scale of the business constrains the rating.

Avast's liquidity profile is very good. The company's strong
internal cash flow generation is supported by a USD40 million
RCF, which Moody's expect to remain undrawn post-closing. The
company has low internal cash needs, with maintenance capital
expenditure representing around 2% of sales. Due to the
subscription-based model, working capital flows generate positive
cash flow further supporting cash from operating activities.

Sybil Investments B.V. is the top entity within the restricted
group and the reporting entity for the consolidated group. The
senior secured facilities will share the same security package
and guarantees. Operating entities representing at least 80% of
consolidated EBITDA will provide upstream guarantees. The (P)B1
rating on the bank facilities and the B1-PD PDR -- both at the
same level as the CFR -- reflect the fact that the facilities are
the only financial debt in the capital structure, and the
covenant-light nature of the senior secured facilities. The RCF
has a springing covenant when it is drawn by more than USD25
million.

The stable outlook reflects Moody's expectation that Avast will
achieve strong deleveraging in the short term and stable
performance in the subscription business. While the rating is
constrained by the limited size of the business, positive ratings
pressure could materialize if Avast maintains its high levels of
profitability, leverage is sustainably below 2.5x and a
conservative financial policy is observed. Negative pressure
could develop if the liquidity profile weakens, free cash flow to
debt falls below 20% or the user base significantly declines.

The principal methodology used in these ratings was the Global
Software Industry published in October 2012. Other methodologies
used include Loss Given Default for Speculative-Grade Non-
Financial Companies in the U.S., Canada and EMEA published in
June 2009.

Avast, headquartered in the Czech Republic, is a provider of
anti-virus and anti-malware software, predominantly to the
consumer market. The company operates across the Americas, EMEA
and APAC. For the year ending December 31, 2013, the company
reported sales of USD146 million and reported EBITDA of USD91
million. As part of the transaction funds advised by CVC Capital
Partners will become the single largest shareholder with c.41%
ownership, the two founders of the Company and Summit Partners
will retain c.43% and c.6% respectively, with management and
employees holding the balance.


SYBIL INVESTMENTS: S&P Assigns Prelim. 'B+' CCR; Outlook Stable
---------------------------------------------------------------
Standard & Poor's Ratings Services assigned its preliminary 'B+'
long-term corporate credit rating to Netherlands-based investment
holding company Sybil Investments B.V. (Avast).  The outlook is
stable.

At the same time, S&P assigned its preliminary 'B+' issue rating
to the $420 million proposed senior secured loan due 2020, to be
issued by Sybil Finance B.V.

The preliminary rating on Avast reflects S&P's assessment of its
financial risk profile as "aggressive" and its business risk
profile as "weak."  Avast is planning to raise $420 million of
senior secured loans to fund a recapitalization of security
software firm Avast Software B.V.  At the same time, private
equity company CVC Capital Partners is acquiring a 41% stake in
Avast.

"Our assessment of Avast's business risk profile as 'weak'
primarily reflects its very narrow product offering; the
company's premium PC antivirus product generates over 70% of
bookings. Despite Avast's solid niche market position as a
provider of PC security software to consumers and small and
midsize enterprises, we see the substitution of PCs with wireless
devices as a key medium-term risk.  Our view takes into account
the existing challenges we see in monetizing security software
for wireless devices and the uncertain evolution of competition
in this segment.  Avast's limited scale and operations in a
highly fragmented security software market, with strong
competition from significantly bigger companies, also contributes
to our assessment of Avast's 'weak' business risk profile.  Our
assessment is further underpinned by the meaningful degree of
operating leverage in Avast's operations," S&P said.  In
addition, Avast's significant presence in relatively highly
price-sensitive markets, primarily in Latin America, leads to
comparably low free-to-premium user conversion, which S&P also
incorporates into its assessment of Avast's business risk profile
as "weak."

S&P sees this as only partly offset by Avast's solid operating
efficiency, thanks to its online sales model, and the company's
highly automated detection process, which translates into higher-
than-average profitability.  Avast further benefits from a large
user base of more than 200 million, and continued user growth,
supporting potential additional monetization opportunities.

S&P's business risk assessment also incorporates its view of the
global software services industry's "intermediate" risk and "low"
country risk.  Avast generates over 50% of its revenues from
customers based in the U.S. and Western Europe.

"We assess Avast's financial risk profile as "aggressive"
primarily because of the 41% ownership stake that CVC Capital
Partners will hold once the transaction has completed.  In our
view, Avast is likely to apply shareholder-friendly financial
policies in the medium term, which could constrain deleveraging
on a sustainable basis.  Our financial risk profile assessment
also reflects our forecast of the company's Standard & Poor's-
adjusted debt-to-EBITDA ratio, pro forma the planned
recapitalization of its balance sheet, at 4.2x at year-end 2013.
We forecast that the company's adjusted debt-to-EBITDA ratio will
likely remain comfortably below 4.5x, in view of meaningful
organic deleveraging prospects through EBITDA growth and free
cash flow generation. This could accommodate moderate headroom
for potential shareholder distributions from internal cash flows,
despite the presence of meaningful shareholders with limited
leverage tolerance," S&P said.

Avast's financial risk profile is somewhat constrained by the
likely exposure to potential foreign-exchange volatility.  The
company plans to raise funding that is solely denominated in U.S.
dollars, while its sales mainly comprise a mixture of dollars and
euros.

S&P anticipates, however, that Avast's free cash flow conversion
will remain high over the medium term -- helped by deferred
revenues as the company continues growing its premium subscriber
base -- and very limited capital expenditure (capex)
requirements.  S&P views its forecast ratio of free operating
cash flow to debt of over 20% as a key strength for the company's
financial risk profile, more than offsetting its currency
exposure.

S&P's base-case operating scenario for Avast assumes:

   -- GDP growth of 0.9% in the eurozone and 2.75% in the U.S. in
      2014;

   -- A continued shift in demand for smartphones and tablets
      away from PCs over 2014-2015, leading to declining PC user
      growth rates;

   -- Subscription revenue growth of about 20% in 2014.  S&P
      anticipates that this will decline to high single-digits or
      low teens in 2015, reflecting the continued increase in the
      conversion of free-to-premium users, notably owing to
      automatic renewals in 2014, and modest growth in the
      average revenue per user rate, due to higher rates of
      renewals and the cross selling of new products.

   -- Continued, albeit slower growth from the platform division,
      as S&P assumes revenues from new products (notably
      advertising-based revenue shares) will be largely offset by
      declining revenues from Google Chrome.

   -- An increase in operating expenditure on account of
      investments in new products, leading to a decline in EBITDA
      margins to the low 60% area, from about 70% in 2013.

   -- A stable capex-to-sales ratio of 2%-3%.

Based on these assumptions, S&P arrives at the following credit
measures:

   -- Funds from operations (FFO) to debt of 14.5% at year-end
      2013 pro forma the transaction, increasing to about 17% in
      2014 and 18%-22% in 2015;

   -- Debt to EBITDA of 4.2x at year-end 2013 pro forma the
      transaction, declining to about 3.6x in 2014 and 3.0x-3.5x
      in 2015; and

   -- Adjusted EBITDA interest coverage of over 5.0x in 2014.

   -- Adjusted free operating cash flow (FOCF) to debt of about
      24% in 2014.

The stable outlook reflects S&P's view that growth in antivirus
licenses and revenues from cross selling products should support
continued near-term EBITDA growth, and maintenance of leverage
well below 4.5x.

S&P sees limited likelihood of an upgrade over the next 12
months. This is based on S&P's view that Avast's business risk
profile will likely remain in the "weak" category, due to the
company's narrow product focus.  Rating upside is also
constrained by the company's significant financial sponsor
ownership and potentially shareholder-friendly financial
policies, which will in S&P's view impede sustainable
deleveraging.

S&P sees limited chance of a downgrade in the near term, given
its expectations of continued organic revenue growth and
relatively solid credit ratios for the rating, including adjusted
leverage of around 4x and FOCF to debt in excess of 20%.

Although unlikely at this stage, S&P could lower the rating if
operating underperformance leads to an increase in adjusted
leverage to more than 4.5x and a decline in FOCF to debt to less
than 10%.


TELECONNECT INC: Incurs US$875K Net Loss in Dec. 31 Quarter
-----------------------------------------------------------
Teleconnect Inc. filed with the U.S. Securities and Exchange
Commission its quarterly report on Form 10-Q disclosing a net
loss of US$874,745 on US$30,677 of sales for the three months
ended Dec. 31, 2013, as compared with a net loss of US$1.09
million on US$205,336 of sales for the same period last year.

The Company's balance sheet at Dec. 31, 2013, showed US$5.18
million in total assets, US$2.88 million in total liabilities,
all current, and US$2.29 million in total stockholders' equity.

A copy of the Form 10-Q is available for free at:

                         http://is.gd/Au2sHK

                          About Teleconnect

Teleconnect Inc., headquartered in Breda, The Netherlands, was
incorporated under the laws of the State of Florida on Nov. 23,
1998.

With its ownership in Hollandsche Exploitatie Maatschappij BV
(HEM), a Dutch entity established in 2007, the Company's main
activities are the manufacturing, sales and lease of age
validation equipment and the performance of age validation.  The
Company also sells and maintains vending solutions (through
Mediawizz, The Netherlands), is involved in the broadcasting of
in-store commercial messages using the age validation equipment
between age checks (through HEM), and plans to develop market
survey activities in the future (through Giga Matrix, The
Netherlands).

Teleconnect incurred a net loss of US$3.47 million for the year
ended Sept. 30, 2013, as compared with a net loss of US$3.87
million for the year ended Sept. 30, 2012.

Coulter & Justus, P.C., in Knoxville, Tennessee, issued a "going
concern" qualification on the consolidated financial statements
for the year ended Sept. 30, 2013.  The independent auditors
noted that the Company has suffered recurring losses from
operations and has a net capital deficiency in addition to a
working capital deficiency, which raise substantial doubt about
its ability to continue as a going concern.


* Fitch Sees Dutch Banks 2013 Earnings Hit by Domestic Recession
----------------------------------------------------------------
Fitch Ratings says that despite the pressure on asset quality
resulting in high loan impairment charges (LICs) and ultimately
modest earnings reported for 2013, the main credit metrics of the
three largest Dutch banks have remained resilient to the economic
headwinds in the Netherlands.  These have somewhat eased since
3Q13, but the recovery is still nascent and most of the main
macroeconomic indicators have not yet returned to their long-term
average.

Fitch believes that any reduction in LICs throughout 2014 shall
be only gradual and modest, meaning that operating performance is
likely to remain subdued.  The agency forecasts that Dutch GDP
will stagnate in 2014 and the unemployment rate will be on
average 7.5% in 2014, up from an average of 6.7% during 2013.

The strains from the domestic recession on banks' asset quality
and earnings have proven more acute at ABN AMRO Bank NV and
Rabobank Group than at ING Bank NV, a result of greater
geographical diversification at the latter.  Rabobank's earnings
were affected by large 'one-off' items which overall contributed
positively to the bank's net income.

Overall, income generation has remained resilient thanks to wider
net interest margins backed by lending repricing and reduced
interest paid on retail savings.  The three banks have
implemented cost savings program to adapt their cost base to a
'new' environment with low economic growth and more expensive
regulatory requirements.  Similar to 2012, the banks paid the
Dutch 'bank tax' in 4Q13.  2014 will be hit by the 'SNS levy', a
sector-wide EUR1 billion contribution to the bail-out of SNS Bank
NV in February 2013; each bank's share in the EUR1 billion total
levy will be proportional to its respective share of deposits
protected by the national guarantee scheme (a fair reflection of
retail savings market shares).

Asset quality has been the main topic of the result announcements
given the prolonged recession, rise in unemployment, historically
high numbers of bankruptcies and further decrease in housing
prices during 2013 in the Netherlands.  This adverse environment
caused soaring LICs, particularly in the SME segment and, to a
lesser extent, domestic residential mortgages.  The performance
of Dutch mortgages has deteriorated but their quality remains
solid (90-day past due loans of around 1% at end-2013; arrears
should peak in 2014 in Fitch's view).  The ratio of impaired
loans to total customer loans at end-2013 remained moderate by
international standards (just below 3% for the three banks),
notably because of the banks' large portfolios of still healthy
residential mortgages.

The highly cyclical commercial real estate (CRE) sector is still
distressed in the Netherlands, and in 2013 the Dutch Central Bank
(DNB) conducted an in-depth review of the banks' CRE portfolio,
focusing on both qualitative and quantitative aspects.  Detailed
outcomes of the reviews have not been made public, but the three
banks commented that the DNB considers the level of provisioning
and risk-weighting as appropriate. LICs on CRE exposures remained
material but reduced at ABN AMRO and ING Bank while they soared
at Rabobank.

The three large Dutch banks continue to report solid
capitalization ('fully loaded' Basel III Common Equity Tier 1
ratio in the 10%-12% range) which support their ratings and
access to the debt capital markets.  The capital ratios benefited
somewhat from the deleveraging undertaken by households and
companies.  Contracting loan books, combined with more cautious
savings behavior, resulting in higher retail deposits,
contributed to improve the banks' loan-to-deposits ratios,
reducing wholesale funding needs.  The refinancing risk caused by
Dutch banks' structural funding reliance on confidence-sensitive
debt capital markets continues to be mitigated by cautious
liquidity management and Basel III Liquidity Coverage Ratio which
are now above 100% for the three banks.

The tax regime of the 'Additional Tier 1' instruments has not
been decided yet in the Netherlands; banks are not in the need to
raise such Basel III compliant hybrid instruments in the short-
term but by doing so, they would strengthen their 'fully-loaded'
leverage ratios.



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


LIBRARIILE ALEXANDRIA: Posts RON148,000 Profit in 2013
------------------------------------------------------
Romania-Insider.com reports that Romanian bookshop chain
Librariile Alexandria, which entered insolvency last year, ended
2013 with a net profit of RON148,000 (some EUR33,000) and a
turnover of some RON16 million (EUR3.6 million), according to a
statement of the judiciary administrator Casa de Insolventa
Transilvania.

In July 2013, when the bookshop chain operated by Sedcomlibris
entered insolvency, it had losses of RON150,000 (EUR34,000),
Romania-Insider.com relates.

"The financial recovery of Sedcomlibris SA was based of
management decisions that have relied on three categories of
products predominantly purchased by clients in Librariile
Alexandria: books (58 percent), office supplies (35 percent) and
multimedia (4 percent)," the administrator said, the report
relays.

Sedcomlibris currently has 180 employees and it hasn't laid off
anyone since the beginning of the insolvency procedures, the
report notes.



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


AGROPROMCREDIT LLC: Moody's Affirms B2 Long Term Deposit Ratings
----------------------------------------------------------------
Moody's Investors Service has affirmed the B2 long-term deposit
ratings of Commercial Bank Agropromcredit (LLC). Moody's also
affirmed the standalone bank financial strength rating (BFSR) of
E+, which is equivalent to a baseline credit assessment (BCA) of
b2, and the Not-Prime short-term deposit ratings. The outlook on
long-term ratings is stable.

Moody's rating action on Agropromcredit is primarily based on the
bank's unaudited regulatory accounts for 2013 prepared under
local GAAP, and audited financial statements for 2012 prepared
under IFRS.

Ratings Rationale

The affirmation of Agropromcredit's ratings reflects the balance
between weak recurring pre-provision income, resulting in the
reduction of the bank's capital cushion, on the one hand, and
expected shareholders' capital increase and good quality of
borrowers, on the other hand.

Over the past four years, Agropromcredit has demonstrated poor
recurrent profitability, resulting in weak internal capital
generation. Its pre-provision income (excluding one-off gains)
has been close to zero, with core recurrent revenues (net
interest income and commissions) not fully covering operating
expenses. However, Moody's notes some positive trends in the
bank's net interest margin, which improved to 3.8% at year-end
2013 from 2.5% in 2011 on the back of retail loan growth. In
2014, Agropromcredit aims to further develop its retail banking
business with the focus on less risky segments: employees of
corporate clients and customers with good credit history. Moody's
believes that the bank's future profitability will be supported
by further growth of higher-yielding retail loans of good quality
and an increase in loan leverage resulting from the reduction of
the currently abundant liquidity cushion (40% of assets), subject
to the bank's ability to curb its operating expenses.

As a result of weak financial performance and recent rapid credit
growth, Agropromcredit's capitalization has been on a downward
trend, with the regulatory capital adequacy ratio falling to 11%
as at end-February 2014 (calculated under Basel III) from 19% as
at year-end 2010. At the same time, Agropromcredit's shareholders
appear to be supportive to the bank, with the planned RUB260
million subordinated debt and RUB500 million Tier 1 capital
injection to be finalized in March and May 2014, respectively,
which will increase the bank's regulatory total capital adequacy
ratio to around 13%, as estimated by Moody's.

Agropromcredit's ratings remain underpinned by relatively good
asset quality with a track record of loan loss provision charges
not exceeding 4% during the recent period of financial turmoil.
The quality of the bank's loan book is attributed to (1) the
focus on a niche segment -- creditworthy entities operating in
the energy sector, and individuals with either payroll accounts
in Agropromcredit or successful loan repayment history; (2)
primarily the small loan size in relation to the size of the
borrowing entity (or the major counterparty of the borrower which
is the source of cash flows for loan repayment); and (3) limited
exposure to long-term investment projects (largely the short-term
loan book for financing current activities). Moody's notes that
while the retail loan book accounts for 40% of total loans (60%
of which is unsecured loans), cost of risk in the retail
portfolio did not exceed 5% for 2013, which is notably lower
compared to market average of 14% for consumer lenders.

The rating agency believes that Agropromcredit's loan loss
reserves and the planned capital injection will provide a
sufficient cushion against potential credit losses in the course
of next 12-18 months.

What Could Change the Rating - UP

Moody's does not expect any upward pressure on Agropromcredit's
ratings in the next 12-18 months. However, further business
development with significant improvement of recurring
profitability, capital adequacy and maintenance of good asset
quality may have positive rating implications.

What Could Change the Rating - DOWN

Negative pressure could be exerted on the ratings if
Agropromcredit is unable to return to its profit-generating
business model or fails to complete planned capital increases,
thus further suppressing the bank's capital adequacy. Significant
asset quality and/or liquidity risks are also likely to exert
downward pressure on the ratings. The sustained loss of a
significant portion of the franchise, as a result of weaker
competitive power relative to larger banks, could also represent
a negative rating driver.

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

Domiciled in Moscow region, Russia, Agropromcredit reported -- as
of February 1, 2014 -- total assets of RUB32 billion (US$901
million), equity of RUB2.8 billion (US$81 million) under
unaudited Russian GAAP.



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


BANCO SANTANDER: Moody's Assigns Ba2(hyp) Rating to Tier 1 Secs.
----------------------------------------------------------------
Moody's Investors Service has assigned a Ba2 (hyb) rating with a
stable outlook to the Non-Step-Up Non-Cumulative Contingent
Convertible Perpetual Preferred Tier 1 securities of Banco
Santander (deposits Baa1 stable, standalone bank financial
strength rating (BFSR) C-, stable /baseline credit assessment
(BCA) baa1).

The Ba2 (hyb) rating assigned to the notes is based on Banco
Santander's creditworthiness and is rated four- notches below the
bank's baa1 adjusted BCA, in line with Moody's Guidelines for
Rating Junior Debt Obligations.

Ratings Rationale

The notes are perpetual and preferred and have a non-cumulative
optional and a mandatory coupon-suspension mechanism. There is
full and permanent conversion into common shares if the bank's
and/or the group's Common Equity Tier 1 (CET1) capital ratio
drops below 5.125%, which Moody's views as close to the point of
non viability. The issuer will calculate and publish the CET1
ratio at least on an annual basis, or as required by the
regulator. The issuer can make changes to the terms of the
securities that are not prejudicial to the interests of the
holders, as verified by an independent third party, in line with
Moody's guidelines on obligations with variable promises.

Principal Methodology

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


GRIFOLS SA: Moody's Affirms 'Ba2' Corporate Family Rating
---------------------------------------------------------
Moody's Investors Service has affirmed the Ba2 corporate family
rating (CFR), the Ba2-PD probability of default rating (PDR) of
Grifols S.A., and the B1 senior unsecured rating of Giant Funding
Corp. Concurrently, the rating agency has assigned a provisional
(P)Ba1 rating to the new USD4.5 billion senior secured bank loans
and a (P)B1 rating to the new unsecured USD1 billion notes due
2022, which are borrowed at Grifols World Wide Operations Ltd.
These new borrowings will be used to refinance the existing
senior secured loans and USD1.1 billion unsecured notes due 2018
that are being repaid, and whose ratings will be withdrawn upon
refinancing. The outlook on all ratings remains negative. This
rating action follows the company's announcement that it is
refinancing its entire debt capital structure in order to lower
the overall cost of funding.

Moody's issues provisional ratings in advance of the final sale
of securities and these ratings reflect the rating agency's
preliminary credit opinion regarding the transaction only. Upon a
conclusive review of the final documentation, Moody's will
endeavor to assign a definitive rating to the notes. A definitive
rating may differ from a provisional rating.

Ratings Rationale

The affirmation of Grifols' Ba2 CFR reflects the fact that the
company's performance in FY2013 was in line with Moody's
expectations, with adjusted gross leverage falling to about 3.3x
from 3.6x in FY2012 following an 11.5% increase in reported
operating profits at EUR736.1 million. However, the negative
outlook continues to reflect the expected negative effect on
metrics from the recent acquisition of the Novartis Diagnostics
division that was completed on January 9, 2014 for EUR1.24
billion. As this was funded using an USD1.5 billion bridge loan
that was drawn on January 4, 2014, this transaction is not
reflected in the 2013 metrics. On a pro forma basis for this
transaction, Moody's estimates gross leverage to be about 3.9x,
which is moderately above Moody's target range for the rating of
3.5x. Moody's acknowledges the positive impact of the purchase on
Grifols' business diversification by reducing its dependence on
the blood plasma business, from almost 90% of total turnover to
about 70% on a pro forma basis. Nevertheless the pro forma
leverage calculation could understate the future leverage impact
considering the potential for low growth and a decline in the
target's EBITDA due to the expiration of intellectual royalties
in the medium term.

The company is refinancing its existing term loans of about
USD4.1 billion, including the unsecured bridge facility of USD1.5
billion used to fund the diagnostics division, with new term
loans of USD4.5 billion. The new term loans will all be secured
by guarantors representing at least 80% of group assets and
EBITDA; and secured on all material assets of the group. The
company has also announced its intention to refinance its
existing USD1.1 billion notes due 2018 with new unsecured notes
amounting to USD1 billion due 2022. With these transactions the
new debt maturity profile will be lengthened which is a positive
factor for the rating. The new term loans will amortize until
2020 and 2021, albeit at a very slow pace in the early years,
while the new Revolving Credit Facility (RCF) of USD300 million
will mature in 2019. The new senior secured instrument ratings
are rated (P)Ba1, one notch higher than the corporate family
rating, and the unsecured notes are rated (P)B1, to reflect their
subordination to the term loans. However, Moody's notes that
there will be a higher level of secured debt in the overall
capital structure, and hence a lower cushion from subordinated
debt for the secured loans in case of a default. In this regard,
a further increase the level of secured debt could result in a
loss of the current uplift to the secured instrument rating.

Post refinancing, the company is expected to retain a solid
liquidity position, including EUR855 million in cash and an
undrawn USD300 million RCF. The RCF will contain one financial
covenant for leverage for which Moody's expects headroom to
remain strong. The company's only medium-term debt maturities
will include fairly negligible amortization payments on the term
loans; while Moody's notes the fairly strong free cash flow
generation in recent years before acquisitions.

Grifols' Ba2 CFR incorporates (1) the company's narrow, though
improving, diversification, with a high dependence on plasma-
derived products and vulnerability to market imbalances and
negative pricing movements; (2) Moody's view of the potential
high impact -- albeit low probability -- of safety risks relating
to product contamination; and finally (3) Grifols' pro forma
metrics which Moody's expects will remain weak for the rating at
least for several quarters.

These negative rating drivers are balanced by (1) the company's
scale, with a high degree of vertical integration and the solid
market position of the combined group; (2) the numerous barriers
to entry to the plasma derivatives market including, but not
limited to, a high degree of capital-intensiveness and regulatory
constraints in combination with a highly consolidated market that
is dominated by three players (Grifols, Carlisle Companies
Incorporated and Baxter International Inc.); (3) favorable market
dynamics, with attractive volume growth supported by earlier and
enhanced diagnosis of patients; and (4) the generally good
capacity to generate free cash flow.

Rationale For Negative Outlook

The negative outlook reflects Moody's view that pro forma metrics
for the Novartis diagnostics division acquisition will be
somewhat outside the target range for the rating, and that the
pace of deleveraging following the acquisition will be slow. It
may take Grifols longer to restore its pre-transaction levels of
leverage, partly as a result of the lack of immediate cost
synergies.

What Could Change The Rating Up/Down

Given the fully debt-financed character of the acquisition of
Novartis' diagnostics business, an upgrade of Grifols' ratings is
currently unlikely. However, an upgrade of the corporate family
rating to Ba1 could be considered if Grifols' adjusted gross
leverage were to trend toward or below 2.5x, with CFO/debt
improving sustainably above 25%. Downward pressure could arise if
the company's leverage remains sustainably over 3.5x and/or
CFO/debt falls towards 15%; or if the liquidity profile were to
deteriorate significantly, although this is not expected with the
current refinancing.

Principal Methodology

The principal methodology used in these ratings was the Global
Medical Product and Device Industry published in October 2012.
Other methodologies used include Loss Given Default for
Speculative-Grade Non-Financial Companies in the U.S., Canada and
EMEA published in June 2009.

Based in Barcelona, Spain, Grifols is a global healthcare
company; in 2013 it reported revenues and operating profits of
EUR2.7 billion and EUR736.1 million respectively. The company
operates through four divisions: Bioscience, Diagnostics,
Hospital as well as Raw Materials and Others (mainly
engineering). Bioscience, which accounts for approximately 89% of
current revenues, focuses on the development, manufacturing,
marketing and distribution of a broad range of blood plasma-
derived products. These products are used for the treatment of
chronic and acute conditions, such as immune system deficiencies,
neurological diseases, bleeding diseases, burns and major
surgery. The company is listed on the Madrid Stock Exchange and
is in the IBEX 35 Index and NASDAQ via ADRs.


PESCANOVA SA: Asks Lenders to Take Losses of Up to 97.5%
--------------------------------------------------------
Katie Linsell at Bloomberg News reports that Pescanova SA, whose
former board hid more than EUR2 billion (US$2.7 billion) of debt,
is asking lenders to take nominal losses of as much as 97.5% as
part of restructuring proposals.

Shareholders will get 4.99% of a new company and Damm SA, the
Spanish brewer, and Luxempart SA will become Pescanova's
industrial partner, Bloomberg says, citing a regulatory filing,
Bloomberg says.  The company will get as much as EUR150 million
in capital and long-term financing under the plans presented to a
Spanish court on Monday, Bloomberg discloses.

The company must win agreement from more than 50% of creditors by
April 1 to carry out the restructuring plan and avoid
liquidation, Bloomberg notes.

Pescanova had EUR3.25 billion of net debt at the end of 2012,
Bloomberg says, citing a Dec. 10 statement by the company's
court-appointed administrator Deloitte LLP.  First-half results
from 2012 reported financial debt was EUR968 million at the end
of June, Bloomberg relates.

Debt, excluding international units, will be cut to EUR812.5
million after the restructuring, according to Bloomberg.

                       About Pescanova SA

Pescanova SA is a Galicia-based fishing company.  The company
catches, processes, and packages fish on factory ships.  It is
one of the world's largest fishing groups.

Pescanova filed for insolvency on April 15, 2013, on at least
EUR1.5 billion (US$2 billion) of debt run up to fuel expansion
before economic crisis hit its earnings.  The Pontevedra
mercantile court in northwestern Galicia accepted Pescanova's
insolvency petition on April 25.  The court ordered the board of
directors to step down and proposed Deloitte as the firm's
administrator.


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


AEI CABLES: Ducab Buys Business; Around 200 Jobs Saved
------------------------------------------------------
Chronicle Live reports that around 200 jobs have been saved at
AEI Cables after the business was bought by a major Middle East
company.

The firm had faced falling into administration in 2011, but
sacked 126 staff and kept itself afloat through a Company
Voluntary Arrangement (CVA), Chronicle Live relates.

Continued problems saw the firm ask creditors last August to
accept a more manageable debt repayment schedule, but the firm's
fortunes have since turned a corner, with annual accounts for the
business revealing the value of its order book jumped almost 60%
in the last financial year, Chronicle Live recounts.

Now the company -- one of the oldest of its kind in the world --
has been bought out by part of Ducab, which has six manufacturing
facilities in Dubai and Abu Dhabi and supplies a wide range of
power cables to customers in more than 40 countries worldwide,
Chronicle Live discloses.

Under the terms of the agreement, AEI Cables will become part of
the firm and will continue to manufacture cables from Birtley,
trading as AEI Cables Limited, Chronicle Live says.

The focus of the company will continue to be the manufacture of
cables for the defense, construction, rail and oil and gas
industries, Chronicle Live states.

AEI Cables is based in Birtley.


CHIMNEYS HOSPITALITY: Faces Closure After Director Dies
-------------------------------------------------------
eadt.co.uk reports that the insolvency firm acting on behalf of
Sudbury-based Chimneys Hospitality Limited, already the subject
of a winding-up petition, confirmed one of the directors of the
catering company died on February 20.  The director has not been
named, the report relates.

According to the report, business rescue and insolvency
specialists McTear Williams & Wood, which has been asked to
advise the company, said Chimneys will be unable to continue
trading.

eadt.co.uk relates that the insolvency firm said it will assist
in closing down the business and has called a meeting of
creditors on March 18, at which the company will be placed into
liquidation.

Chimneys provides outside catering services to weddings and
private functions and had been facing pressure from its
creditors, which culminated in a winding-up petition being
served.

"I am contacting all those who have pre-paid to see if we can put
them in touch with other caterers who may be able to step in,"
the report quotes David Wood -- davidwood@mw-w.com -- of McTear
Williams & Wood, as saying.

"The directors of Chimneys regret the position the company is in
and are working with the team at McTear Williams & Wood to ease
the situation for their customers."


DEMOCON: 19 Jobs Saved in Pre-Pack Deal
---------------------------------------
insidermedia.com reports that a rescue deal at Birmingham-based
demolition and ground works contractor Democon has been struck by
administrators from The P&A Partnership. It has saved 19 jobs at
the business, the report says.

Gareth Rusling and Chris White of the insolvency firm were
appointed as joint administrators on Feb. 13, 2014,
insidermedia.com discloses. The pair sold the company immediately
on appointment in a pre-pack agreement, the report notes.

Democon was founded in 2007 and continued to grow despite one of
the most challenging periods in construction sector history, with
turnover peaking at GBP2.75 million in 2013.

insidermedia.com says the company hit two major problems with a
number of contracts suspended indefinitely and a disputed bill
totalling GBP150,000.

"Democon has endured a torrid time during the recession, but this
deal has rescued the business and the jobs of all employees.

"The business and assets have now been sold to Democon UK Ltd and
they will be working to fulfil key contracts while also helping
to collect all money owing," the report quotes Mr. Rusling as
saying.

Democon worked across the Midlands with large property
developers, including Carillion, Interserve, Lovells and Wates
Construction.


JOHNSTON PRESS: Mulls Equity Fundraising, Debt Refinancing
----------------------------------------------------------
The Scotsman reports that Johnston Press on Monday confirmed it
was considering a potential equity fundraising as part of a
proposed refinancing of its debt.

According to The Scotsman, in a stock market statement, the
company said that it was considering a range of options but that
"the quantum of any equity fundraising has not yet been
determined".

Monday's statement also said there can be no certainty that a
refinancing of debt facilities will be concluded in 2014, or that
an equity fundraising will proceed, The Scotsman notes.

As reported by the Troubled Company Reporter-Europe on Dec. 30,
2013, The Financial Times related that Johnston Press and its
lenders agreed to reset the covenants on its GBP300 million of
debt after the struggling regional newspaper group hired
financial advisers for a full refinancing in 2014.  The company
announced that it had hired Rothschild to help it refinance its
debt in the new year, well ahead of the maturity of its debt
facilities in September 2015, the FT relayed.  Johnston Press
borrowed the money during the credit boom from banks including
Barclays and Royal Bank of Scotland, the FT recounted.  However
its business has since struggled because of falling newspaper
circulations and a downturn in the print classified advertising
market, the FT noted.

Johnston Press is the publisher of the Scotsman and the Yorkshire
Post.


PREMIER FOODS: Moody's Assigns (P)B2 Corporate Family Rating
------------------------------------------------------------
Moody's Investors Service has assigned a provisional (P)B2
corporate family rating to Premier Foods plc.  Concurrently,
Moody's has assigned a provisional (P)B2 rating to the proposed
GBP475 million dual tranche senior secured notes due 2020/21, to
be issued by Premier Foods Finance plc and subsequently on-lent
to Premier Investments Limited, a wholly owned subsidiary of
Premier Foods. The ratings outlook is stable. This is the first
time Moody's has assigned a rating to Premier Foods since the
withdrawal of its previous rating in March 2012.

The proceeds from the notes will be used, in combination with
equity funding of GBP350 million being raised by way of a fully
underwritten share placement and rights issue by Premier Foods,
to repay existing debt and pay fees and expenses. Initially, the
proceeds from the notes will be placed in an escrow account and
released upon completion of the placement and rights issue.

Moody's issues provisional ratings in advance of the final sale
of securities. Upon closing of the transaction, including release
of bond proceeds from escrow, and a conclusive review of the
final documentation, Moody's will endeavor to assign definitive
ratings. A definitive rating may differ from a provisional
rating.

Ratings Rationale

Pro-forma the transaction and rights issue, as well as the
proposed spin-off of Premier Foods' bread business into a joint
venture in which Premier Foods will retain a minority interest,
the company's Moody's-adjusted gross debt/EBITDA ratio was around
7.2x as at the financial year ended 2013. This ratio includes an
adjustment for the company's gross IAS 19 pension deficit of
GBP603 million at that date. The (P)B2 CFR assigned to Premier
Foods primarily reflects this high pro forma Moody's-adjusted
leverage as well as Premier Foods' exposure to the highly
competitive UK food manufacturing market, constrained UK consumer
spending, and concentrated customer base dominated by the UK
multiple retailers. The CFR is weakly positioned in the B2
category.

More positively, the ratings are supported by the company's (1)
position as a leading manufacturer of premium brands in the UK
ambient savory meal making and sweet foods segment, with a track
record of maintaining solid market share positions; (2) resilient
business model in its core branded segments, as demonstrated by
the stable recent operating performance and healthy, sector
leading margins; (3) re-focusing of its business over the past
two years and de-leveraging of its balance sheet by way of asset
disposals of non-core businesses and cost reduction measures; and
(4) agreement with the pension trustees to fix the annual level
of pension deficit contributions until the end of 2019.

The proposed spin-off of the bread business will remove the
division that has caused greatest volatility in the company's
financial results in recent years, together with the highest
underlying commodity exposure (to wheat). It will also allow
management to apply greater focus to its strategy around its core
brands, some of which also need some incremental promotion and
investment support. This stability is of particular importance
given the extent of top-level management turnover in recent
years.

The revised agreement with the pension trustees, which is
conditional upon achieving a minimum equity raise, has materially
reduced cash outflow through 2019. The payment in 2015 is
particularly low, recognizing the investment the company needs to
make in that year. However, cash flow generation after pension
deficit contributions is low, and leverage is likely to be
impacted primarily by variations in the overall pension deficit,
which currently comprises about half of adjusted debt.

Pro-forma the transaction, Premier Foods has an adequate
liquidity profile, with a committed revolving credit facility
(RCF) of GBP300 million. Whilst this RCF is expected to be
immediately utilized from the date of the transaction closing,
Moody's expects that a minimum level of GBP125 million
availability will be maintained and that covenants will be set
with at least 25% headroom for the foreseeable future.

Outlook

The stable outlook reflects Moody's expectation that Premier
Foods will maintain its current operating performance, that the
rights issue is successfully concluded raising GBP350 million of
gross proceeds, and that there is no material delay to the
completion of the spin-off of the bread business to the joint
venture on the terms previously announced by the company. Moody's
also expects that the company will adhere to its financial policy
of making no dividends or other shareholder distributions until
the business has significantly de-leveraged, and that there will
be no material debt-funded acquisitions.

What Could Change The Rating Up

In view of the relative weak positioning of the company in the B2
category, there is no near-term upward ratings pressure. However,
there could be positive pressure if Moody's-adjusted gross
debt/EBITDA ratio falls below 6.5x on a sustained basis and the
company maintains a Moody's-adjusted EBITDA margin approaching
20%, whilst generating positive free cash flow (after pension
contributions) and keeping a solid liquidity profile.

What Could Change The Rating Down

Moody's could downgrade the ratings if any of the conditions for
maintaining a stable outlook are not met, or if the company's
liquidity profile or debt protection ratios deteriorate as the
result of a weakening of its operational performance, recognizing
the significant impact of the pension adjustment. Quantitatively,
Moody's could downgrade the ratings if the company's Moody's
adjusted gross debt/EBITDA ratio rises above 7.5x, if Moody's-
adjusted EBITDA margin falls towards 15%, or if the company fails
to generate free cash flow. Further top-level management turnover
could also result in a downgrade.

Principal Methodology

The principal methodology used in these ratings was the Global
Packaged Goods published in June 2013. Other methodologies used
include Loss Given Default for Speculative-Grade Non-Financial
Companies in the U.S., Canada and EMEA published in June 2009.

Premier Foods plc, headquartered in St Albans, UK, is a branded
ambient foods producer to the UK retail market. For the financial
year ended December 31, 2013, Premier Foods reported pro forma
revenues of approximately GBP850 million.


PREMIER FOODS: Fitch Assigns 'B(EXP)' IDR; Outlook Positive
-----------------------------------------------------------
Fitch Ratings has assigned Premier Foods plc (PF) and Premier
Foods Finance plc the following expected ratings, upon completion
of the pending refinancing:

Premier Foods plc

Long-term Issuer Default Rating (IDR): 'B(EXP)', Outlook Positive
Premier Foods Finance plc

   -- GBP475m planned Senior Secured Fixed Rate Notes due 2021:
      'B(EXP)'/'RR4'

The 'B(EXP)' IDR reflects PF's market position as one of UK's
largest ambient food producers, with a diversified portfolio of
leading brands across five categories and with strong or leading
competitive positions in well-established categories ranging from
ambient cakes to flavorings and seasonings.  The combination of a
successful re-negotiated long-term pension reduction schedule,
rights offering, notes issue, completion of the capital structure
refinancing and sale of 51% of PF's bread division would provide
PF with operational and financial headroom, eliminating short-
term concerns and facilitate greater management focus on the
business.

The Positive Outlook reflects Fitch's expectation that PF's
financial and business profile should improve over time when the
major refinancing and equity placing and rights issue efforts and
the deconsolidation of its bread division are completed.  It also
factors confidence in the positive momentum that PF's grocery
only business enjoys thanks to management's category-led
strategy. Should credit metrics remain near Fitch's expectations
the ratings could be upgraded to 'B+'.

The expected ratings are assigned under the assumption that the
planned refinancing of PF's current senior secured credit
facility (GBP884 million) with a new senior secured revolving
credit facility (GBP300 million) and repayment from the proceeds
of a proposed senior secured notes (GBP475 million) and the
equity placing and rights issue (GBP350 million) go ahead as
planned.  As part of this restructuring plan, PF is to agree a
new pension deficit reduction schedule with its pension trustees
which will substantially reduce its annual cash contributions
with fixed contributions until 2019.  The pension deficit
reduction agreement is conditional upon a successful rights issue
of at least GBP250 million in gross proceeds at the latest on
June 30, 2014.  Final instrument ratings would be contingent upon
the receipt of final documentation conforming materially to
information already received.  Failure to conduct the refinancing
according to plan would result in the withdrawal of the ratings.

Premier Foods Finance plc, the issuer of the planned notes, is a
financing vehicle 100% owned by PF.  The notes and the senior
secured revolving credit facility (RCF) of GBP300 million will be
secured substantially by all of the issuer's and guarantors'
assets representing 97% of the group's consolidated total assets
as of Dec. 31, 2013.  The notes, RCF and pension trustees will
maintain a security sharing mechanism.  The security offered to
the pension funds will rank pari passu with the notes and bank
debt, limited to a maximum amount of GBP450 million although, as
pension contributions reduce the deficit, security to the benefit
of the pension fund will not reduce below GBP350 million.

Key Rating Drivers

Leading UK Ambient Food Producer

PF is one of the UK's largest ambient food producers, with a 4.7%
market share in the fragmented and competitive GBP28 billion UK
ambient grocery market. PF manufactures, distributes and sells a
wide range of branded and non-branded foods, across five
categories with leading brands, some of which has been in
existence for more than 100 years.  The company therefore
benefits from its diversity and scale in terms of manufacturing,
logistics and procurement in the UK.

Reliant on the UK

PF operates mainly in the UK and a significant portion of its
turnover is from the 'big four retailers' in the UK - Tesco
(BBB+/Negative), Asda, J Sainsbury's and Morrisons.  However, it
is active in categories generally not core to multinational food
manufacturers, which therefore limits competitive threats.  In
addition, PF has a competitive position in many of its food
categories where it holds a number one or two market position.
PF is also expanding across geographies.  In October 2013, PF
signed a ten-year partnership agreement with Swire Foods Holdings
Ltd, to distribute Ambrosia rice pudding pot in China.  This
agreement may extend to PF's other brands in the portfolio.

Standalone JV for Bread Division

The deconsolidation of the bread business through a standalone JV
with the Gores Group will allow management to focus its full
attention and resources on continuing to grow its grocery
business. PF would be left with a higher margin business (EBITDA
margin of 18.7% in FY14E) compared with 11.9% in FY13 (before
deconsolidation).  Fitch understands that other than the GBP15.7
million (PF's share of the committed GBP32 million investment) to
be invested in the JV on completion in FY14 and the potential
GBP6.4 million (PF's share of the remaining GBP13 million
investment) in 2016, there will be no future cash requirements
from Premier Foods for the JV as future investments for the bread
division will be funded by internal cash flows of the JV and
external funding.  Fitch assumes PF will not guarantee any of
this potential external funding.

Strong Grocery Margins

Fitch projects that EBITDA margin will increase to around 20% in
FY16 from 18.7% in FY14 (Fitch's estimate post-disposal of bread
division).  Although this depends on the future level of
marketing investments, Fitch expectation of improved margins
relates to cost savings and efficiency initiatives that PF has
undertaken since 2012 as part of its ongoing effort to simplify
the business following its disposal activity during 2011-2013.
PF exceeded its 2012 GBP20 million target by delivering savings
of GBP48m and delivered a further GBP20 million savings in 2013.

Weak Credit Metrics

The business strengths are offset by PF's weak credit metrics.
Despite the new agreed pension deficit reduction schedule, Fitch
estimates that the pension deficit contribution has a 1.4x-1.9x
adverse impact on FFO adjusted net leverage over FY13- FY16.
Fitch projects FFO adjusted net leverage will be 5.9x in FY14
(post-refinancing) but should marginally reduce to 5.7x by 2016.
The agency expects FFO fixed charge coverage to be around 2x over
FY14-FY16.  In addition to high interest costs, PF's FFO is
compressed by recurring pension deficit contributions, which
Fitch includes in the calculation of FFO.  Higher than expected
pension deficit contributions or post-refinancing cost of funding
would, among other factors, have an adverse impact on projected
credit metrics and could in turn affect rating headroom.

Adequate Liquidity

Fitch anticipates that post-refinancing, PF's liquidity will be
adequately supported by a renegotiated GBP350 million RCF due in
2019 with appropriate covenant headroom and by the lack of
material short-term debt maturities in the next five years apart
from the negotiated pension deficit contributions (ranging from
GBP7 million p.a. in FY15 to GBP45m in FY17-FY19) and the GBP120
million securitization facility due December 2016 (expected to
reduce to GBP60 million post-deconsolidation of the bread
business).

Senior Secured Notes' Rating

The 'B(EXP)'/'RR4' senior secured rating reflects Fitch's
expectations that the enterprise value of the company and the
resulting recovery of its creditors (including the pension
trustees) would be maximized in a restructuring scenario (going
concern approach) rather than a liquidation due to the asset-
light nature of the business as well as the strength of its
brands. Furthermore, a default scenario would likely be triggered
by unsustainable financial leverage, possibly as a result of weak
consumer spending or unexpected higher pension deficit
contributions.  As such, Fitch applied a 30% discount to EBITDA
and believes a distressed multiple of 6.0x is appropriate.  This
results in average expected recoveries (31%-50%) for senior
secured noteholders in the event of default.

RATING SENSITIVITIES

Positive: Future developments that may, individually or
collectively, lead to positive rating action (an upgrade to
'B+'/Stable) include:

   -- PF's ability to maintain EBITDA margin above 18% after
      having sufficiently invested in A&P to protect its market
      position and drive growth with its category-led strategy.

   -- FFO adjusted net leverage demonstrating a path moving
      sustainably below the 5.5x-6.0x range (pension deficit
      contributions are included in the calculation of FFO).

   -- FFO fixed charge coverage above 2.0x on a sustained basis.

   -- Free cash flow margin above 4% after adequate capital
      investments.

Negative: Future developments that may, individually or
collectively, lead to negative rating action (revision of the
Outlook to Stable) include:

   -- Reduced free cash flow margin below 4% of sales as a result
      for instance of profitability erosion, higher capex or
      unexpected increases in pension contribution or funding
      costs.

   -- FFO adjusted net leverage remaining in the 5.5x to 6.0x
      range on a sustained basis (pension deficit contributions
      are included in the calculation of FFO).

   -- FFO fixed charge coverage below 1.8x on a sustained basis.


PREMIER FOODS: S&P Assigns Preliminary 'B' CCR; Outlook Stable
--------------------------------------------------------------
Standard & Poor's Ratings Services said that it assigned a
preliminary long-term corporate credit rating of 'B' to U.K.-
based packaged foods company Premier Foods PLC.  The outlook is
stable.

At the same time, S&P assigned a preliminary issue rating of 'B'
and recovery rating of '4' to Premier Foods' proposed
GBP475 million high-yield notes and its proposed GBP300 million
senior secured revolving credit facility (RCF).

The final ratings are subject to the successful closing of the
proposed GBP475 million high-yield notes issuance and
GBP350 million of equity issuance and will depend on S&P's
receipt and satisfactory review of all final transaction
documentation. Accordingly, the preliminary ratings should not be
construed as evidence of the final ratings.  If the final debt
amounts and the terms of the final documentation depart from the
materials S&P has already reviewed, or if S&P do not receive the
final documentation within what it considers to be a reasonable
timeframe, it reserves the right to withdraw or revise our
ratings.

The preliminary rating reflects S&P's assessment of the Premier
Foods group's business risk profile as "fair" and its financial
risk profile as "highly leveraged."  S&P combines these
assessments to derive a 'b' anchor, which is its starting point
for assigning a corporate credit rating.  Modifiers have no
effect on S&P's final rating outcome, which is 'B'.

"Our "fair" business risk profile assessment reflects Premier
Foods' leading position in certain U.K. grocery market segments,
specifically branded products, from which the company derives the
largest portion of sales.  Following the disposal of the bread
division, we anticipate under our base-case scenario that Premier
Foods' remaining grocery division will return Standard & Poor's-
adjusted EBITDA margins of about 13% for 2014, reflecting the
benefit of its cost optimization programs. In our view, the main
driver of sustainable growth for Premier Foods is likely to be
its branded product portfolio, particularly its seven core
brands. This portfolio contributed about 88% of sales for
financial-year 2013. Our overall assessment of the group's
competitive position is "fair." We consider industry risk to be
"low" and country risk to be "very low," reflecting the company's
presence in the U.K," S&P said.

"We anticipate that Premier Foods' absolute revenue and EBITDA
will be smaller than most of its peers' following the sale of 51%
of its bread division (although the EBITDA margins will still
remain in the range of 10%-20% that we consider "average" for the
nonalcoholic beverage and packaged food sector -- see "Key Credit
Factors For The Branded Nondurables Industry," published Nov. 19,
2013).  Premier Foods has high geographic concentration, with
almost all operations in the U.K.  The company also has high
customer concentration and limited pricing flexibility with
retail clients due to high private label penetration in the U.K.
market. These factors could potentially impair the company's
overall performance.  To sustain improving EBITDA margins,
despite the economic environment in the U.K. and in the packaged
foods market, we anticipate that the company will have to
maintain high expenditure on innovation and marketing," S&P
added.

S&P views the group's financial risk profile as "highly
leveraged," reflecting its expectation that its Standard &
Poor's-adjusted debt to EBITDA will be about 11.3x on Dec. 31,
2014.  Overall Standard & Poor's-adjusted debt is likely to be
about GBP1.26 billion, which includes an asset-backed facility of
about GBP60 million, GBP475 million of a proposed senior bond,
S&P's assumption of about 50% drawn of a GBP300 million RCF, and
a significantly higher pension deficit of about GBP603 million
before tax (GBP483 million after tax).

Premier Foods has been able to renegotiate its cash contributions
with its pension trustees, fixing deficit contributions to the
end of 2019.  However, the company has a relatively large pension
deficit of about GBP603 million before tax as of Dec. 31, 2013.

S&P assumes that funds from operations (FFO) cash interest
coverage will remain above 2.0x at the end of December 2014 and
beyond.  Under S&P's base case scenario, the group will be able
to maintain adjusted EBITDA margins at about 13% in 2014 and
about 12% for 2015.  The 1% reduction in margins reflects
increasing restructuring costs, including cost-cutting measures.
S&P also notes that the group's capital expenditure (capex) is
likely to be significantly higher for 2014 at about GBP42
million.  S&P expects this to reduce to about GBP30 million in
2015 and about GBP20 million thereafter.

S&P also notes that, from 2015 onward, Premier Foods should be
able to generate positive free operating cash flow.  Any
reduction in leverage is likely to result from improvements to
profitability rather than from the paying down of debt,
reflecting Premier Foods' long-dated debt maturity profile.

Standard & Poor's base-case assumptions include:

   -- Successful equity issuance of about GBP350 million and
      GBP475 million of proposed senior secured bonds.

   -- Revenue to remain the same or slightly contract in 2014 and
      in 2015, reflecting the tough macroeconomic environment and
      high competition in the savoury meal-making and sweet foods
      categories.

   -- Adjusted EBITDA margins to remain at about 13% for 2014 and
      about 12% in 2015, reflecting the benefits from the
      company's cost optimization program, which it intends to
      reinvest into the marketing of its core brands.

   -- Capex of GBP42 million in 2014 and GBP30 million in 2015,
      reflecting spending on maintenance, projects, and
      restructuring.

   -- About GBP65 million of refinancing fees and expenses for
      raising the high-yield bonds, the equity issue, and
      refinancing existing bank debt.

Based on S&P's assumptions, it arrives at the following Standard
& Poor's-adjusted credit measures:

   -- EBITDA margins of about 12.0% in 2015, slightly down from
      13.2% that S&P expects in 2014 for the grocery division.

   -- Debt to EBITDA of 11.3x expected in 2014 and 12.2x in 2015,
      compared with 10.3x expected in 2013.

   -- FFO cash interest coverage of 2.4x in 2014 and 2.3x in
      2015, compared with 2.7x expected in 2013.

The stable outlook reflects S&P's anticipation that Premier Foods
will successfully make the GBP350 million equity issue and raise
the GBP475 million high-yield bond.  S&P expects that, with its
remaining grocery division, the company will be able to maintain
EBITDA margins at about 13% for 2014.  S&P expects Premier Foods
to maintain FFO cash interest coverage above 2.0x and adequate
liquidity in 2014.

S&P is unlikely to raise the rating in the near term owing to
Premier Foods' high leverage and pension deficit, but it could
consider a positive rating action if the ratio of debt to EBITDA
declines below 5x on a sustainable basis or FFO cash interest
coverage remains well above 3x on a sustainable basis.

S&P could consider a negative rating action if the company's
liquidity worsens, which could happen following a combination of
a significant deterioration in the operating environment, causing
a loss of market share, and a drop in profitability leading to
FFO coverage falling significantly below 2.0x.


                            *********

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

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

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

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


                            *********


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

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

Copyright 2014.  All rights reserved.  ISSN 1529-2754.

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