TCREUR_Public/140404.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

                           E U R O P E

             Friday, April 4, 2014, Vol. 15, No. 67



KIDS RETAIL: Hamleys Closes Four Locations Following Bankruptcy


KLOECKNER & CO: S&P Revises Outlook to Stable & Affirms 'B+' CCR


FREESEAS INC: RBSM LLP Raises Going Concern Doubt
GREECE: EU Ministers Approve EUR8.3-Bil. Bailout Tranche


* Diverging Trends in Business Insolvencies Continued in 2013


UNICREDIT: Fitch Assigns 'BB-' Rating to USD1.25BB Tier 1 Notes


BRAAS MONIER: Moody's Assigns '(P)B2' Corp. Family Rating
ORCO PROPERTY: Creditor Demands US$83-Mil. Loan Repayment


AKIBANK: Moody's Affirms 'B3' Long-Term Deposit Ratings
RUSSNEFT OJSC: S&P Revises Outlook to Positive & Affirms 'B' CCR


BANKINTER SA: Moody's Affirms 'D+' Bank Financial Strength Rating
IM PASTOR 3: S&P Lowers Rating on Class D Notes to 'D(sf)'
PESCANOVA SA: Lenders Draw Up Alternative Restructuring Proposal
* Moody's Takes Actions on 2 Spanish RMBS Transactions


MUNTERS TOPHOLDING: S&P Assigns Prelim. 'B' CCR; Outlook Stable

U N I T E D   K I N G D O M

PRESTON TRAVEL: Grant Miller Buys Business Out of Liquidation
SOLAR ENERGY: Director Disqualified after GBP13M Solar Panel Scam
TULLOW OIL: Moody's Assigns '(P)B1' Rating to New Senior Notes
TULLOW OIL: S&P Revises Outlook to Negative & Affirms 'BB' CCR
VEDANTA RESOURCES: Moody's Alters Ratings Outlook to Stable


* Computershare Acquires SG Vestia Systems
* BOOK REVIEW: A Legal History of Money in the United States



KIDS RETAIL: Hamleys Closes Four Locations Following Bankruptcy
Xinhua News Agency reports that the Hamleys Denmark toy chain
have closed all four of its Danish locations following Tuesday's
announcement by its Nordic parent company, Kids Retails of
Denmark, the owner of the Hamlets Scandinavian franchise, to file
for bankruptcy.

Hamleys Denmark had four outlets in the Copenhagen area, namely
at Field's shopping center, Copenhagen Airport and the Illum
department store, and on Vesterbrogade, Xinhua discloses.

The Illum outlet had been closed since the beginning of the year,
but was supposed to reopen in August, Xinhua notes.

The company's employees had been paid their salaries for March
and told not to return to work, Xinhua relays.

Kids Retails of Denmark, which have also closed its outlets in
two other Scandinavian countries Norway and Sweden, declined to
comment on the closedown, Xinhua relates.

Hamleys is the oldest and largest toy shop in the world and one
of the world's best-known retailers of toys.


KLOECKNER & CO: S&P Revises Outlook to Stable & Affirms 'B+' CCR
Standard & Poor's Ratings Services revised its outlook on
Germany-based steel distributor Kloeckner & Co. S.E. to stable
from negative.  At the same time, S&P affirmed its 'B+' long-term
corporate credit rating on the company.

S&P also affirmed its 'B+' issue rating on the senior unsecured
convertible bonds issued or guaranteed by Kloeckner, but revised
their recovery rating to '3' from '4', indicating S&P's
expectation of meaningful (50%-70%) recovery in the event of a
payment default.

The outlook revision reflects S&P's view that Kloeckner's
profitability and credit metrics will improve in 2014 to levels
S&P considers commensurate with the current ratings.  This
includes a Standard & Poor's adjusted ratio of funds from
operations (FFO) to debt in the 10% to 15% range in 2014, against
a ratio well below 10% in 2013.  S&P also expects continued
modest positive free operating cash flow (FOCF) before
acquisitions.  S&P has therefore revised its assessment of
Kloeckner's financial risk profile upward to "aggressive" from
"highly leveraged."

"Our anticipation of improved credit metrics is based on our
expectation of improved profitability in 2014, with unadjusted
EBITDA of about EUR160 million to EUR190 million, on the back of
company's restructuring program, which was largely completed in
2012 and 2013.  This compares with EBITDA before restructuring
costs and gains of EUR150 million in 2013 (EUR124 million after
restructuring). Our forecast of improved EBITDA in 2014 also
factors in modestly stronger results from operations in the U.S.,
where we expect GDP growth of about 3%.  Improvements in the
European market environment remain highly uncertain, given our
forecast that 2014 GDP will only improve by 0.9% in the eurozone
(European Economic and Monetary Union).  We expect the company
will post further gradual profitability improvement in 2015," S&P

S&P continues to assess Kloeckner's business risk profile as
"weak," incorporating particularly its assessment of Kloeckner's
competitive position as "weak."

S&P views Kloeckner's financial risk profile as "aggressive,"
based on an adjusted FFO-to-debt ratio of 10%-15%, a somewhat
stronger ratio of operating cash flow to debt of about 15% in
2014, and S&P's expectation of continued positive FOCF due to
limited capital expenditures.

The stable outlook reflects S&P's expectation that unadjusted
EBITDA will recover to about EUR160 million-EUR190 million in
2014, on the back of restructuring efforts and some market
improvement.  S&P also factors into its forecasts that Kloeckner
will act cautiously when considering further acquisitions, as it
did during the last downturn.  S&P currently sees an adjusted
ratio of FFO to debt of about 15% through the cycle as
commensurate with the rating, while factoring in continued strong
liquidity and material cash balances.


FREESEAS INC: RBSM LLP Raises Going Concern Doubt
FreeSeas Inc. filed with the U.S. Securities and Exchange
Commission on March 24, 2014, its annual report on Form 20-F for
the year ended Dec. 31, 2013.

RBSM LLP expressed substantial doubt about the Company's ability
to continue as a going concern, citing that the Company has
incurred recurring operating losses and has a working capital
deficiency.  In addition, the Company has failed to meet
scheduled payment obligations under its loan facilities and has
not complied with certain covenants included in its loan
agreements.  Furthermore, the vast majority of the Company's
assets are considered to be highly illiquid and if the Company
were forced to liquidate, the amount realized by the Company
could be substantially lower that the carrying value of these

The Company reported a net loss of US$48.7 million on US$6.07
million of operating revenues in 2013, compared with a net loss
of US$30.89 million on US$14.26 million of operating revenues in

The Company's balance sheet at Dec. 31, 2013, showed total assets
of US$87.63 million, total liabilities US$74.84 million, and
total shareholders' equity of US$12.79 million.

A copy of the Form 20-F is available at:


                        About FreeSeas Inc.

Headquartered in Athens, Greece, FreeSeas Inc., formerly known as
Adventure Holdings S.A., was incorporated in the Marshall Islands
on April 23, 2004, for the purpose of being the ultimate holding
company of ship-owning companies.  The management of FreeSeas'
vessels is performed by Free Bulkers S.A., a Marshall Islands
company that is controlled by Ion G. Varouxakis, the Company's
Chairman, President and CEO, and one of the Company's principal

The Company's fleet consists of six Handysize vessels and one
Handymax vessel that carry a variety of drybulk commodities,
including iron ore, grain and coal, which are referred to as
"major bulks," as well as bauxite, phosphate, fertilizers, steel
products, cement, sugar and rice, or "minor bulks."  As of
Oct. 12, 2012, the aggregate dwt of the Company's operational
fleet is approximately 197,200 dwt and the average age of its
fleet is 15 years.

Freeseas disclosed a net loss of US$30.88 million in 2012, a
net loss of US$88.19 million in 2011, and a net loss of US$21.82
million in 2010.  As of Sept. 30, 2013, the Company had US$107.35
million in total assets, US$106.63 million in total liabilities,
all current, and US$711,000 in total shareholders' equity.

RBSM LLP, in New York, issued a "going concern" qualification on
the consolidated financial statements for the year ended Dec. 31,
2012.  The independent auditors noted that the Company has
incurred recurring operating losses and has a working capital
deficiency.  In addition, the Company has failed to meet
scheduled payment obligations under its loan facilities and has
not complied with certain covenants included in its loan
agreements.  It has also failed to make required payments to
Deutsche Bank Nederland as agreed to in its Sept. 7, 2012,
amended and restated facility agreement and received notices of
default from First Business Bank.  Furthermore, the vast majority
of the Company's assets are considered to be highly illiquid and
if the Company were forced to liquidate, the amount realized by
the Company could be substantially lower that the carrying value
of these assets.  These conditions, among others, raise
substantial doubt about the Company's ability to continue as a
going concern.

GREECE: EU Ministers Approve EUR8.3-Bil. Bailout Tranche
BBC News reports that eurozone ministers have signed off the next
EUR8.3 billion (GBP6.8 billion; US$11.4 billion) installment of
Greece's bailout.

According to BBC, Eurogroup chairman Jeroen Dijsselbloem said at
a meeting of finance ministers in Athens that a first tranche of
EUR6.3 billion will be paid at the end of April.

Mr. Dijsselbloem said that two more payments of EUR1 billion will
be made in June and July, BBC relates.

The latest bailout is one of the last Greece will get from the
eurozone, BBC notes.  The International Monetary Fund will
continue to pay its installments for some months, BBC discloses.


* Diverging Trends in Business Insolvencies Continued in 2013
Finfacts reports that the divergence between the trends in the
number of business insolvencies in France and Germany continued
in 2013.  Last year, a total of 62,698 French firms (+2.5% vs.
2012) and 19,488 German companies (-8.6%) filed for insolvency.
In the period 2002 and 2006, the number of new insolvency
proceedings followed a similar pattern in both countries. Since
then the figures have moved in different directions.

According to Finfacts, Deutsche Bank research shows that a key
determinant of business insolvencies is the economic situation.
In Germany, the number of insolvencies, however, initially rose
in line with GDP around the turn of the millennium, the report
says. Although insolvencies are in any case a lagging economic
indicator, this development was probably linked to the reform of
insolvency legislation in 1999. As a consequence of this reform
as well as some additional amendments in 2001, Germany's
insolvency legislation was recast in the image of the United
States' Chapter 11. The objective was to provide a larger number
of insolvent companies with the option of orderly recovery and
restructuring as an alternative to liquidation. In the years that
immediately followed the reform, the number of filings for
insolvency thus increased despite the growth in GDP. Between 2002
and 2010 then came a pronounced anti-cyclical trend in German
company bankruptcies.

In France, too, a comprehensive reform of insolvency law modelled
on the US Chapter 11 ("loi de sauvegarde") came into effect in
2006, with the result that insolvencies rose despite the good
economic situation. In general, however, the figures for France
also tend to indicate an anti-cyclical pattern of business
insolvencies, Finfacts reports.

Finfacts relates that Dr. Stefan Vetter and Jennifer Kohler,
economists at DB said that the number of insolvencies seems to
have become less dependent on the business cycle in both
countries since 2008.  The report says this seems to apply to
Germany in particular in the years since 2010: despite faltering
growth, the number of business insolvencies dropped
significantly, as shown in Chart 1. According to calculations by
Euler Hermes, GDP growth of more than 2% was required to keep
insolvencies steady in Germany and France between 2000 and 2008,
Finfacts notes. Between 2008 and 2013, by contrast, the GDP
growth requirement was just 1% in France, and a mere 0.5% in
Germany, the report notes.

According to Finfacts, one reason for the growing disconnect from
the business cycle could be the tendency towards more
professional liquidity management especially at smaller firms,
which helps to maintain payment flows even when cyclical
conditions are weak. In addition, improved capital ratios are
making companies more resistant to cyclical shocks. The differing
development in the reliance on the cycle is likely to widen the
gap between the French and German insolvency trends, Finfacts


UNICREDIT: Fitch Assigns 'BB-' Rating to USD1.25BB Tier 1 Notes
Fitch Ratings has assigned UniCredit's (BBB+/Negative/F2/bbb+)
USD1.25 billion 8% Tier 1 capital notes a 'BB-' final rating.
The rating is in line with the expected rating assigned on March
26, 2014.


The notes are CRD IV-compliant, deeply subordinated additional
Tier 1 fixed-rate resettable debt securities, with a call option
after 10 years.  The notes are subject to write-down if
UniCredit's consolidated or unconsolidated Common Equity Tier 1
(CET1) ratio falls below 5.125%, and any coupon payments may be
cancelled at the full discretion of the issuer.  At end-2013 its
consolidated CET1 ratio was 9.36% on a fully-loaded basis and the
parent-only Core Tier 1 Basel 2.5 ratio was 26.6% at the same

In accordance with Fitch's criteria for 'Assessing and Rating
Bank Subordinated and Hybrid Securities', the rating assigned to
the notes is notched off UniCredit's standalone creditworthiness
as represented by its Viability Rating (VR), currently at 'bbb+'.
The notching reflects the notes' higher expected loss severity
relative to senior unsecured creditors (two notches) and higher
non-performance risk (three notches).

The 5.125% trigger only refers to a write-down of the notes and
Fitch believes that the Italian regulator would demand coupon
deferral well before UniCredit hits the 5.125% threshold.
However, Fitch believes that UniCredit's current fully-loaded
CET1 ratio, combined with its plans to return to profitability in
the next three years, provide a sufficient CET1 capital buffer to
limit the notching for non-performance risk to three notches.
Fitch views the targeted profitability plans as viable,
particularly given significant loan impairment charges expensed
in 2013 to reduce the underlying credit risk of its impaired
exposure and which are likely to be a one-off.

Fitch has assigned 50% equity credit to the securities,
reflecting the agency's view that the 5.125% trigger is not so
distant to non-viability, which limits the instrument's "going
concern" characteristics.  It also reflects the notes' full
coupon flexibility, their permanent nature and the subordination
to all senior creditors.


As the notes are notched down from UniCredit's VR, the rating
assigned to the notes is broadly sensitive to the same factors as
those that would affect UniCredit's VR.  The notes' rating is
also sensitive to any change in notching that could arise if
Fitch changes its assessment of the probability of the notes'
non-performance risk relative to the risk captured in UniCredit's


BRAAS MONIER: Moody's Assigns '(P)B2' Corp. Family Rating
Moody's Investors Service has assigned a provisional corporate
family rating (CFR) of (P)B2 to Braas Monier Building Group S.A.
("Braas Monier", or the company). Concurrently, Moody's has
assigned a provisional (P)B1 rating to senior secured facilities,
consisting of (1) a EUR100 million revolving credit facility due
2020 borrowed by Braas Monier Building Group Holding S.a r.l. ;
(2) to EUR150 million senior secured term loan B facility due
2020 borrowed by Monier Finance S.a r.l.; (3) EUR415 million
senior secured fixed and floating rate notes due 2020 issued by
BMBG Bond Finance S.C.A. The outlook on all ratings is stable.

Proceeds from the senior secured facilities will be used,
together with cash on Braas Monier's balance sheet, to refinance
existing indebtedness.

Moody's issues provisional ratings in advance of the final sale
of debt instruments 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 debt. A definitive
rating may differ from a provisional rating.


Braas Monier's CFR reflects its significant reliance on the
cyclical building industry and to specific markets with
structurally weak growth expectations such as France, Italy and
the Netherlands. However, Braas Monier benefits from leading
market positions in concrete roof tiles in many markets,
protected by high barriers to entry, with geographical
diversification and limited exposure to the euro periphery. Braas
Monier also benefits from exposure to the more stable renovation
markets, which partly offsets its reliance on new built markets.
The company has also recently significantly reduced its fixed
cost base, resulting in improving profitability.

Leverage remains high for the rating category, with Moody's
adjusted leverage forecast to be 5.2x by year end 2014. The
company rolled out an accelerated restructuring program in 2013
in order to rightsize its headcount and optimized productivity,
and improve working capital and capex management. This broad set
of measures has significantly lowered the group's fixed cost
basis, resulting in a strong improvement of its EBITDA margins
during 2013. Moody's expects the management of Braas Monier to
continue focusing on sustaining the cost efficiency and closely
monitoring liquidity through active working capital and capex
management over the next 12 to 18 months. Moody's also expects
additional operational efficiencies to reduce cost and increase
efficiencies identified by management to mitigate potential cost
pressure arising from fluctuations in energy and concrete prices
and adverse currency effects.

Moody's considers Braas Monier's near-term liquidity position,
pro forma for the transaction, to be adequate but tight. Opening
cash balance is about EUR97 million, with the company reliant on
its EUR100 million RCF -- which will be partially drawn at
closing - and EUR28 million factoring facility for seasonal
working capital requirements, project capital expenditure and
carry-over restructuring costs which form an integral part of the
business plan. The capital structure will benefit from two
financial maintenance covenants, testing net leverage and
interest cover quarterly from September 2014.

The (P)B1 rating on the senior secured facilities -- one notch
above the CFR - reflects the position of these facilities ranking
ahead of sizeable non-financial liabilities (mainly pensions) at
the operating companies.

Moody's notes that all debt facilities are initially pari passu.
However, full prepayment of the term loan B will result in the
RCF becoming supersenior to the senior secured notes, which could
have notching implications at that time.


The stable outlook reflects Moody's view that the company's
operating performance will continue to improve following the
material restructuring program undertaken in 2013 and benefit
from the recovering European building sector.


Moody's would consider upgrading Braas Monier if Debt/EBITDA
trends towards 4.0x and FCF/Debt is trends towards 5%.

Negative pressure on the rating would build in the event of
deteriorating liquidity position or if Debt/EBITDA approaches
6.0x or FCF moves towards zero.

Headquartered in Luxembourg, Braas Monier ((P)B2, Stable) is a
leading global supplier of building materials for pitched roofs
with operations in 27 countries. The company offers a wide range
of products including roof, chimney and energy systems. Braas
Monier mainly competes with Wienerberger AG (Ba3, Negative), Etex
(unrated), Imerys S.A. (Baa2, Stable) and Terreal (unrated). The
group reported consolidated revenues of EUR1.2 billion and an
operating EBITDA of EUR160 million in 2013.

ORCO PROPERTY: Creditor Demands US$83-Mil. Loan Repayment
Krystof Chamonikolas at Bloomberg News reports that a creditor
demanded a loan repayment from Orco Property Group SA.

According to Bloomberg, Luxembourg-registered Orco said in a
statement late on Tuesday that a financing bank terminated a
facility for Orco's Zlota residential project in Warsaw and
demanded loan repayments of US$83 million be made within 30 days.
The company said it will sell "liquid assets" to help honor the
obligation, Bloomberg relates.

Orco's net loss rose to EUR227 million, almost triple its current
market value, from EUR42 million in 2012 as the company booked
EUR193 million of writedowns, Bloomberg says, citing the
company's March 28 earnings statement.

Bloomberg notes that the company said asset sales are needed to
stem "critical liquidity risks" while a loss of majority control
in its profitable Orco Germany SA unit earlier in March will
weigh on future earnings.

"I believe Orco is heading for liquidation," Bloomberg quotes
Miroslav Frayer, an analyst at Komercni Banka AS in Prague, as
saying by e-mail on Wednesday.  "A delisting will probably happen
fairly soon."

                     About Orco Property Group

Orco Property Group SA -- is a
Luxembourg-based real estate company, specializing in the
development, rental and management of properties in Central and
Eastern Europe.  Through its fully consolidated subsidiaries,
Orco Property Group SA operates in several countries, including
the Czech Republic, Slovakia, Germany, Hungary, Poland, Croatia
and Russia.  The Company rents and manages real estate and hotels
properties composed of office buildings, apartments with
services, luxury hotels and hotel residences; it also develops
real estate projects as promoter.

                        Going Concern Doubt

As reported by the Troubled Company Reporter-Europe on April 15,
2013, Bloomberg News related that Deloitte commented on its audit
of Orco Property Group's 2012 financial statements.  According to
Bloomberg, Deloitte cited "existence of material uncertainties
that may cast significant doubt on the Group's ability to
continue as a going concern."


AKIBANK: Moody's Affirms 'B3' Long-Term Deposit Ratings
Moody's Investors Service has affirmed the B3 long-term local and
foreign-currency deposit ratings of Akibank. Its standalone E+
bank financial strength rating (BFSR) -- equivalent to a baseline
credit assessment (BCA) of b3 -- and Not Prime short-term bank
deposit ratings were also affirmed. The outlook on the bank's
standalone BFSR and its long-term ratings is stable.

Moody's assessment of the ratings is largely based on Akibank's
audited IFRS financial statements for 2012, its unaudited IFRS
financial statements for H1 2013, as well as the bank's unaudited
financial statements for 2013 prepared in accordance with local
GAAP, and information received from the bank.

Ratings Rationale

The affirmation of Akibank's ratings takes into account good
asset quality and adequate capitalization. At the same time, the
ratings reflect the bank's narrow franchise which is concentrated
in its home region, significant concentration in its loan
portfolio and funding base, modest profitability, the bank's
appetite for related-party lending as well as its potentially
vulnerable liquidity profile.

Akibank's asset quality remains adequate compared to its
similarly rated domestic peers and the system average. According
to information provided by the bank, non-performing loans (NPLs,
overdue by more than 90 days) amounted to 3.4% of gross loans as
at year-end 2013. The banks NPLs were adequately covered by
provisions. Moody's does not expect the bank's retail loan book
growth to erode its asset quality, as the bank is not targeting
the mass retail segment. Akibank's capital adequacy metrics are
adequate to date, with a regulatory total capital adequacy ratio
(N1) of 13.4% as at year-end 2013. Historically, the shareholders
have been supportive to the bank and, during 2013, shareholders
increased the bank's capital by RUB300 million. However, Moody's
notes that the bank has investments in property on its balance
sheet (including foreclosed property, investment property and
mutual funds), which represented 20% of its shareholder's equity
as at year-end 2013 and reduces the bank's capital's loss-
absorption capacity.

The key challenges for Akibank's franchise are (1) its limited
geographical coverage through its branches which are largely
concentrated in Central Russia (its home region); (2) its modest
size and limited product offering; and (3) intense competitive
pressure from larger Russian players operating in the Tatarstan,
as they mirror the bank's interest in smaller and mid-sized
corporates and retail clients. In recent years, the bank's
strategy has been focused on growth of the retail loan book
(retail customers are mainly represented by employees of the
bank's corporate clients) which increased by 56% as at year-end
2013 compared to year-end 2012, albeit from a low base (retail
loans accounted for 18% of the total loan book at year-end 2013).
Moody's expects this trend to result in greater diversification
of the loan portfolio and improved earnings.

Akibank's ratings remain constrained by the high concentration in
its loan portfolio and funding base (e.g., top 20 borrowers
represented 281% of the bank's shareholder equity, and top 20
customers accounted for 43% of the bank's customer funding as at
year-end 2013). Moody's notes that the existing single-name
concentrations render the bank's franchise and business
significantly exposed to the performance of the largest

Historically, Akibank's profitability has been modest because of
the largely corporate profile of its loan book and its elevated
operating expenses. The bank's annualized return on average
assets (RoAA) and return on equity (RoE) amounted 0.3% and 2.2%,
respectively, according to IFRS as at H1 2013 (year-end 2012:
0.6% and 4.3%). The rating agency expects a slight improvement in
profitability given the increasing volume of retail lending.

According to Akibank's IFRS statement, related-party loans
accounted for 4.2% of total loans and 22.5% of Tier 1 capital as
at H1 2013. Moody's believes that these figures might be
underestimated, as some customers may have personal links to the
bank's shareholders.

Moody's also notes that Akibank's liquidity profile is vulnerable
to stress because a significant proportion of assets is in the
form of long-term loans (over one year) while the funding base is
predominantly short term. According to the rating agency's
estimates, the bank would have to significantly reduce its new
lending in order to meet significant withdrawal of customer


Upwards pressure could be exerted on Akibank's ratings as a
result of a significant decline in its borrower and depositor
concentrations, and sustainable improvement of its profitability
and efficiency. The bank's overall financial strength could be
adversely affected by any deterioration in asset quality or any
tightening of its liquidity profile, and this scenario could
prompt a downgrade of its ratings.

Headquartered in Naberezhnye Chelny, Republic of Tatarstan,
Russia, Akibank reported total assets of RUB26 billion (US$801
million) under IFRS (unaudited) as at H1 2013. As at year-end
2013, the bank reported total assets of RUB25.6 billion (US$783
million) according to local accounting standards. The bank's net
profit totalled RUB41 million (US$1.25 million) under IFRS
(audited) as at H1 2013.

RUSSNEFT OJSC: S&P Revises Outlook to Positive & Affirms 'B' CCR
Standard & Poor's Ratings Services revised its outlook on Russia-
based Oil and Gas Company Russneft OJSC to positive from stable.

At the same time, S&P affirmed the 'B' long-term corporate credit
rating and raised the Russia national scale rating to 'ruA' from

The outlook revision reflects that S&P could raise the rating if
Russneft successfully implements its plan to swap US$0.9 billion
of its debt with commodities trader Glencore Xstrata Plc for an
equity stake so that Glencore becomes Russneft's shareholder, and
to merge with its sister oil company Neftisa.

The rating on Russneft reflects S&P's assessment of the company's
business risk profile as "weak" and financial risk profile as
"aggressive." Russneft is much smaller than most other rated
Russian oil companies, particularly after the sale of its Urals-
based assets in 2013, and has a somewhat higher cost per unit.

Russneft's "aggressive" financial risk profile reflects S&P's
estimation that at year-end 2013, Russneft's debt was just below
US$3 billion.  Furthermore, S&P understands from management that
the acquisition of a controlling stake in Russneft from Sistema
(JSFC) for US$1.2 billion in 2013 was financed with medium-term
debt, which is nonrecourse for the company.  S&P understands that
the company's president, Mr. Gutseriev, is considering
transferring his Azerbaijan-based oil assets to Russneft, which
in S&P's view could increase the company's mid- or long-term debt
but should not create any pressure on liquidity.

S&P sees uncertainties related to Russneft's financial risk
management, leverage, dividend requirements, and related-party
transactions, which may trigger an increase in the company's
leverage.  This is reflected in S&P's negative financial policy

The positive outlook reflects that S&P could raise the rating on
Russneft if and when the company successfully implements its plan
to merge with Neftisa or swap about US$0.9 billion in debt for


BANKINTER SA: Moody's Affirms 'D+' Bank Financial Strength Rating
Moody's Investors Service has upgraded the senior debt and
deposits ratings of Bankinter, S.A. to Baa3/Prime-3 from Ba1/Not-
Prime. Concurrently, Moody's has affirmed the bank's standalone
bank financial strength rating (BFSR) at D+, equivalent to a
baseline credit assessment (BCA) of ba1, and subordinated debt
ratings at Ba2. The outlook on all ratings is now stable.

The upgrade of Bankinter's senior debt and deposit ratings
reflects the incorporation of one notch of systemic support,
following the upgrade of Spain's sovereign rating on
February 21, 2014. The affirmation of the standalone rating and
the stabilization of the outlook reflects Bankinter's resilient
credit performance throughout the crisis, as well as Moody's view
that the downside risks to the bank's credit profile have
substantially declined, sustained by the gradual recovery of the
Spanish economy.



The upgrade of Bankinter's senior debt and deposit ratings
follows the upgrade of Spain's government bond rating to Baa2
from Baa3 on February 21, 2014. The systemic support uplift for
Bankinter was previously constrained by the Spanish government
rating; however, at the current Baa2 rating level of the Spanish
government, Moody's assessment that there is a moderate
probability of systemic support for Bankinter in the event of a
stress situation warrants a one notch uplift from the standalone
BCA, in line with similarly rated peers.


The affirmation of Bankinter's standalone rating and the outlook
change to stable from negative has been driven by the bank's
ability to maintain an adequate loss-absorption capacity despite
the still weak operating environment. This is largely explained
by its solid asset-quality indicators that outperform the system
average. The bank has so far demonstrated a relatively resilient
asset quality performance, both on an absolute level (the bank's
non-performing loan (NPL) ratio -- at 5.3% at end 2013 --
compares very favorably with the system average of 13.6%) and in
terms of a more moderate increasing trend (NPLs only increased by
0.9% in 2013 compared to 3.2% for the system). In addition,
Bankinter has been able to increase its core capital ratio by
more than 200 basis points in 2013, following different capital
strengthening initiatives.

While Moody's still expects further asset-quality deterioration
as the Spanish economy stabilizes, the rating agency also expects
that Bankinter will be able to maintain its favorable performance
track record relative to the system, which underpins Bankinter's
standalone rating as one of the highest among Spanish banks.

Moody's also notes that Bankinter's recurrent earnings-generation
capacity remains a key factor constraining the standalone BCA,
and where the achievement of recurrent-profitability gains is
being challenged by the low interest-rate environment and subdued
business levels. While reported profits in recent years have
remained at an adequate level, they have been to some extent
sustained by non-core activities like the carry trade of
government bond holdings or the realisation of trading capital
gains. A demonstration of Bankinter's ability to improve its
recurrent earnings in a sustainable manner could translate into
upward rating pressure.


In line with the affirmation of the bank's standalone ratings,
Moody's has also affirmed at Ba2 the subordinated debt rating of
Bankinter and at B2(hyb) the ratings of its preference shares,
issued by its subsidiary Bankinter Emisiones, S.A. Unipersonal,
which are notched off the standalone BCA.


The stable outlook reflects (1) Bankinter's resilient credit
performance throughout the crisis, with solid asset-quality
indicators that compare favorably with the system average; and
(2) Moody's view that the downside risks to the bank's credit
profile have substantially declined, sustained by the gradual
recovery of the Spanish economy.


Bankinter's BCA could come under upward pressure from a continued
improvement of its financial performance, primarily (1) a
sustainable turnaround in asset-quality trends towards
stabilization or improvement; and (2) a sustainable improvement
in its capacity to generate recurrent earnings. An upgrade of the
senior debt and deposit rating could result from an upgrade of
the BCA and/or an improvement of Spain's sovereign

Downward pressure on Bankinter's BCA could ultimately result from
(1) lower-than-expected growth in the Spanish economy (i.e.,
economic growth below Moody's current GDP forecasts of 0.8% for
2014); (2) failure to maintain its positive asset-quality
indicators; and/or (3) inadequate risk-absorption capacity
compared with Moody's estimated credit losses.

Moody's could downgrade Bankinter's senior debt and deposit
ratings as a result of the evolution of systemic support
prospects in Spain and in the EU, in light of developments
associated with resolution mechanisms and burden sharing for
European banks. In addition, a lowering of the BCA and/or a
downgrade of Spain's sovereign rating could prompt a downgrade of
Bankinter's senior ratings.

IM PASTOR 3: S&P Lowers Rating on Class D Notes to 'D(sf)'
Standard & Poor's Ratings Services lowered to 'D(sf)' from
'CCC(sf)' its credit rating on IM PASTOR 3, Fondo de Titulizacion
Hipotecaria' class D notes.

The level of defaults over the outstanding portfolio balance
increased to 19.06% in February 2014, from 14.10% a year before.
Under the transaction documents, the interest deferral trigger
for the class D notes is based on the amortization deficit on any
payment date being greater than 4.75x the class D notes'
outstanding balance.  Due to the considerable increase in the
level of defaults over the past year, the class D notes breached
their interest deferral trigger on the March 2014 payment date.
Consequently, interest on the class D notes was not paid.

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

IM PASTOR 3 closed in June 2005 and securitizes residential
mortgage loans granted to individuals to purchase a property.
Banco Pastor, which merged with Banco Popular Espanol S.A., is
the transaction's originator.

PESCANOVA SA: Lenders Draw Up Alternative Restructuring Proposal
Charles Penty at Bloomberg News reports that five lenders to
Pescanova SA, which is trying to avoid liquidation, made an
alternative restructuring proposal to the firm's administrator in
case a shareholder plan doesn't get backing.

Bloomberg relates that three people familiar with the information
said Banco Sabadell SA, Banco Popular Espanol SA, CaixaBank SA,
NCG Banco SA and Banco Bilbao Vizcaya Argentaria SA passed their
proposal to Pescanova's court-appointed administrator Deloitte

According to Bloomberg, the people said that under the proposal,
the banks would inject EUR115 million (US$158 million) into the
company and guarantee EUR1 billion of debt.

A bankruptcy court has given creditors until April 15 to approve
proposals from shareholders Damm SA, a Spanish brewer, and
Luxempart that includes granting an increased equity stake to
lenders in exchange for more capital, Bloomberg discloses.

                        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

* Moody's Takes Actions on 2 Spanish RMBS Transactions
Moody's Investors Service has upgraded the ratings of six notes
and confirmed two notes' ratings in two Spanish residential
mortgage-backed securities (RMBS) transactions, IM Pastor 2, FTH
and TDA Pastor 1, FTA.

The actions follow Moody's increase to A1 from A3 of the local-
currency country ceiling, the maximum achievable rating in Spain.
The increase in the country ceiling reflects the improvements in
institutional strength in Spain and the reduced susceptibility to
event risks associated with lower government liquidity and the
banking sector. The increase in the country ceiling follows
Moody's upgrade of Spain's government bond rating to Baa2 from
Baa3 on February 21, 2014.

Previously, classes A and B in IM Pastor 2, FTH and classes A1
and A2 in TDA Pastor 1, FTA were placed on review for upgrade on
the 17 March 2014 following the upgrade of the Spanish sovereign
rating to Baa2 from Baa3. At the same time, the ratings on
classes C and D in IM Pastor 2, FTH, and classes B and C in TDA
Pastor 1, FTA were changed to on review direction uncertain from
on review for downgrade.


-- IM Pastor 2, FTH

Moody's upgrades of the ratings on classes A and B stem from
reduced country risk, as reflected through the increase of the
country ceiling. In terms of operational risks, the transaction's
linkage to operational counterparties, such as the servicer,
account banks, and/or the cash manager does not affect the A1(sf)
rating on class A. Additionally, they are not exposed to risks
linked to the swap counterparty, because of the sufficient
available credit enhancement (CE) level, at 18.44% and 11%
respectively, which includes 2.1% of the reserve fund. CECABANK
S.A. (deposits Ba3 negative, standalone bank financial strength
rating E+/b1 baseline credit assessment) is the swap

The rating confirmations of classes C and D reflect a combination
of the exposure to the swap counterparty and reduced country
risk. Both classes face negative rating pressure from swap
counterparty risk exposure, which is offset by the reduced
country risk.

-- TDA Pastor 1, FTA

TDA Pastor 1 benefits from over-collateralization (OC) because
the loan portfolio amount is larger than the notes balance.
Moody's corrected an input to the cash flow model to more
correctly assess and reflect this OC, during its review of the
notes initiated on 17 March.

The upgrades for this transaction stem from reduced country risk.
In terms of operational risks, the transaction's linkage to the
servicer, account banks, and/or the cash manager does not affect
the A1(sf) ratings on classes A1 and A2. The swap counterparty
risk exposure to all outstanding notes is mitigated through
sufficient CE, at 80.2%, 21.95%, 8.95%, and 5.27% respectively,
which includes a 3.03% reserve fund and 2.24% OC.


Better-than-expected performance of the underlying assets and a
decline in counterparty risk or country risk could lead to an
upgrade of the ratings affected by today's actions

Worse-than-expected performance of the underlying collateral and
deterioration in the counterparties' credit quality or country
risk could lead to a downgrade of the ratings affected by today's

List of Affected Ratings:

Issuer: IM PASTOR 2, FTH

  EUR962M A Notes, Upgraded to A1 (sf); previously on Mar 17,
  2014 A3 (sf) Placed Under Review for Possible Upgrade

  EUR17.3M B Notes, Upgraded to Baa2 (sf); previously on Mar 17,
  2014 Baa3 (sf) Placed Under Review for Possible Upgrade

  EUR14.2M C Notes, Confirmed at Ba3 (sf); previously on Mar 17,
  2014 Ba3 (sf) Placed Under Review Direction Uncertain

  EUR6.5M D Notes, Confirmed at B3 (sf); previously on Mar 17,
  2014 B3 (sf) Placed Under Review Direction Uncertain


  EUR429.8M A1 Notes, Upgraded to A1 (sf); previously on Mar 17,
  2014 A3 (sf) Placed Under Review for Possible Upgrade

  EUR47.5M A2 Notes, Upgraded to A1 (sf); previously on Mar 17,
  2014 A3 (sf) Placed Under Review for Possible Upgrade

  EUR10.6M B Notes, Upgraded to Baa2 (sf); previously on Mar 17,
  2014 Ba1 (sf) Placed Under Review Direction Uncertain

  EUR3M C Notes, Upgraded to Ba3 (sf); previously on Mar 17, 2014
  B2 (sf) Placed Under Review Direction Uncertain


MUNTERS TOPHOLDING: S&P Assigns Prelim. 'B' CCR; Outlook Stable
Standard & Poor's Ratings Services assigned its preliminary 'B'
long-term corporate credit rating to Sweden-based air-treatment
solutions provider Munters Topholding AB.  The outlook is stable.

At the same time, S&P assigned its preliminary 'B' issue rating
to Munters' US$280 million senior secured term loan and a
US$45 million revolving credit facility (RCF).  The preliminary
recovery rating on these instruments is '3', indicating S&P's
expectation of meaningful (50%-70%) recovery in the event of a
payment default.

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

S&P's preliminary ratings on Munters are derived from, in part,
its assessment of Munters' "highly leveraged" financial risk
profile and "weak" business risk profile, as defined in S&P's

The ratings on Munters are primarily constrained by S&P's view of
the company's financial risk profile and its assessment of the
company's financial policy as "financial sponsor-6" ("FS-6"),
based on Munters' private equity ownership.  S&P expects that its
credit metrics will likely remain in line with a "highly
leveraged" financial risk profile, including debt to EBITDA of
more than 13x.  The capital structure, however, includes a
sizable Swedish krona (SEK) 2.7 billion (US$400 million)
shareholder loan that financed part of the acquisition of Munters
in 2010. Excluding the shareholder loan, S&P calculates debt to
EBITDA near 5x, including other Standard & Poor's adjustments for
operating leases and pensions, which is close to S&P's
"aggressive" financial risk profile, as defined in its criteria.

Despite S&P's view that the shareholder loans have certain equity
characteristics, are noncash paying, and subordinated, S&P treats
these instruments as debt-like, as per its methodology.  In S&P's
opinion, Munters should be able to generate positive free
operating cash flow in the coming 12-18 months.  S&P forecasts
approximately SEK40 million in 2014, and more than SEK100 million
in 2015 and thereafter.  However, S&P believes that there is
little room for reducing debt, as interest from the payment-in-
kind securities on the shareholder loan is accruing at an 8%
interest rate.  Due to the sizable portion of total debt made up
by the shareholder loan, S&P views the cash interest cover ratios
as more meaningful when assessing the company's financial risk
profile.  For example, free operating cash flow (FOCF) to debt
stood at 2.3x at year-end 2013.

"We assess Munters' business risk profile as "weak," primarily
constrained by the company's limited scale and scope of
operations, as well as lower-than-average profitability in a
global comparison.  We note that management has engaged in
initiatives to improve margins that we will factor fully into our
credit assessment only once a track record of visible improvement
has been built," S&P said.

"In our opinion, these weaknesses are mitigated by Munters' solid
market positions in its key niche markets, alongside a good end
market and geographic diversification.  Also, we note the
company's long-standing customer relationships, which we consider
alleviate some of the company's exposure to cyclicality.
Furthermore, we think the company has sound potential for
developments in several of the business units, which could lead
to higher-than-expected growth, versus our current our base case,
if management is successful with ongoing strategic initiatives
and the company benefits from tighter regulation supporting sales
of air-treatment equipment in several industrial or agricultural
applications.  Moreover, we acknowledge the technological aspect
of Munters' products.  In our view, this supports our opinion
that the company will be able to retain or improve its foothold
in its main niche markets," S&P added.

Under S&P's base case, it assumes:

   -- About 5% revenue growth, predominantly driven by increased
      service revenue, new product offerings, and price and
      volume increases.

   -- EBITDA margin moving toward 9.0%-9.5%, marginally better
      than 2013 on the basis of much smaller one-off costs.

   -- About SEK80 million-SEK100 million of capital expenditures.

   -- No acquisitions beyond its current commitments.

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

   -- Fully-adjusted debt-to-EBITDA ratio of 13x-14x, or 5x
      excluding the shareholder loan.

   -- Adjusted EBITDA of approximately SEK360 million-SEK390

   -- FOCF of SEK40 million-SEK60 million in 2014, improving to
      SEK100 million-SEK150 million in 2015.

The stable outlook reflects S&P's opinion that Munters should
continue to generate FOCF over 2014-2015, based on S&P's
assumption that the company will gradually improve its operating
performance and control expansionary investments in capital
expenditures and working capital.

S&P could consider a positive rating action if Munters' debt to
EBITDA moves below 5x, which could be consistent with a higher
rating, if the company simultaneously continues to generate FOCF
while liquidity remains at least "adequate."  Furthermore, if
management successfully manages revenue growth above S&P's
current base case and at the same time improves profitability so
that EBITDA margins remain above 12%, this could gradually lead
to rating upside, assuming the resulting higher cash flow is used
to reduce debt.

S&P could lower the ratings if unexpected adverse operating
developments were to occur, such as a sharp economic downturn in
the global economy that affects Munters' end markets.  This could
push the company's reported EBITDA margin below 7% and spark a
contraction in operating cash flow generation.  The ratings could
also come under pressure if the group's FOCF turns negative as a
result of operating shortfalls, adverse working capital swings,
or if the non-cash-paying shareholder loan was replaced by a
cash-paying instrument.

U N I T E D   K I N G D O M

PRESTON TRAVEL: Grant Miller Buys Business Out of Liquidation
Jersey Evening Post reports that Grant Miller, the managing
director and chief executive of online newspaper Daily Sport, has
purchased Preston Travel (CI) Ltd., which went into liquidation
in February.

Mr. Miller has bought the assets of Preston Travel (CI) Ltd.,
which encompasses Preston Holidays, Jersey Travel Service and
Guernsey Travel Service.

Preston Travel (CI) Ltd. is a travel agent.

SOLAR ENERGY: Director Disqualified after GBP13M Solar Panel Scam
Stephen-Rievaulx Wilson, the director of a company that duped
customers into purchasing solar panels by offering a bogus cash
back scheme, has been disqualified for 13 years following an
investigation by the Insolvency Service.

Mr. Wilson has given an undertaking to the Secretary of State for
Business, Innovation and Skills (BIS) not to promote, manage or
be a director of a limited company until December 2026.

Solar Energy Savings Ltd was wound up by the Court in the Public
Interest on July 26, 2012, owing creditors and shareholders

Commenting on the disqualification, Ken Beasley, Official
Receiver of the Insolvency Service's Public Interest Unit, said:

"Many unsuspecting members of the public were misled by Solar and
decisions to purchase costly solar panels were based on money
back guarantees. Mr. Wilson provided these customers with
literature and glossy brochures falsely representing the cash
back scheme to induce them to enter into contracts.

"Mr. Wilson's disqualification demonstrates that the Insolvency
Service investigates serious director misconduct and exercises
its enforcement powers to remove dishonest and unscrupulous
directors from the market place."

The investigation found that as an inducement to install solar
panels, customers were offered a "cash back guarantee" that they
would be repaid 100% of the cost in five to seven years. Solar
misled customers by issuing certificates falsely claiming that
the guarantee was backed by a large financial institution. In
fact Solar had no scheme in place to enable it to make the
promised payments to customers and contract was in place with any
institution to safe guard the monies owed.

Claims totaling GBP11,847,589 have been received from 1,014
customers who had entered the cash back scheme.

TULLOW OIL: Moody's Assigns '(P)B1' Rating to New Senior Notes
Moody's Investors Service has assigned a (P)B1 rating with a loss
given default assessment of LGD5 (87%) to the senior notes
maturing in 2022 (the Notes) to be issued by Tullow Oil plc
(Tullow or the company) and guaranteed on a senior subordinated
basis by certain of its subsidiaries. Concurrently, Moody's has
affirmed Tullow's corporate family rating (CFR) of Ba2 and
probability of default rating (PDR) of Ba2-PD, and the B1 rating
of its USD650 million senior notes maturing in 2020. The outlook
on the ratings is stable.

The proceeds from the Notes will be used to partially repay
(without cancelling) Tullow's reserves-based lending (RBL)

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 Notes. A definitive rating may
differ from a provisional rating.

Ratings Rationale

The Ba2 CFR acknowledges the positive effect that the growth
strategy pursued by Tullow in the past few years has had on its
resource portfolio and financial performance in the context of
conservative financial management practices, while reflecting the
higher risk characteristics inherent to its focus on exploration
activity, limited producing asset base and country risk exposure.

The rating reflects Tullow's sizeable oil and gas resource base,
which has been enhanced in recent years by a successful
exploration and appraisal program leading to the opening of new
hydrocarbon basins and significant oil discoveries in West and
East Africa, and in the Barents Sea in Norway. The rating also
reflects the significant fillip to the company's revenue and cash
flow generating capacity that has resulted from the step-up in
production of the past three years largely driven by the
continuing ramp-up of the Jubilee field in Ghana, and the strong
oil price environment.

The exploration-led growth strategy pursued by Tullow
complemented by various bolt-on acquisitions has resulted in
sustained levels of investment close to USD2.1 billion p.a. on
average in the past three years. However, the use of a balanced
mix of debt and equity funding including the USD2.9bn farm-down
of two thirds of its interest in Uganda to CNOOC Limited and
Total S.A. completed in February 2012, has enabled Tullow to
strengthen its balance sheet and keep in line with its relatively
conservative financial guidelines, which include the prudent use
of debt financing to maintain relatively moderate leverage

The rating also reflects the relatively small scale of Tullow's
proved reserves and cash flow producing assets. Despite the
ongoing management of its price risk exposure through a hedging
program, where Tullow hedges around 60% of the front year
entitlement volumes declining to 40% and 20% for years 2 and 3
respectively, the company's profitability and cash flow
generation are inherently exposed to oil price fluctuations. With
around 87% of both its commercial reserves and contingent
resources located in Africa at the end of 2013, the company is
also exposed to a certain degree of country risk, even though
this is partly mitigated by most of its production being
offshore, the terms of its production sharing contracts (PSCs)
and its long-standing relationships with host countries.

The rating also takes into account the large investments and high
execution risks associated with the company's ambitious
exploration and development program that is primarily focused on
Africa. "We expect that under our current oil price assumptions
and despite the planned farm-down of the TEN development in
Ghana, sustained capital expenditure will result in substantial
negative free cash flow and rising debt leverage until the TEN
project comes on stream in mid-2016 and ramps up to an expected
gross production capacity of 80,000 barrels of oil per day. In
this context, we will be looking in particular towards the timely
development of the TEN project, as well as further divestments
(including the disposal of the group's Southern North Sea gas
assets) to help Tullow maintain its credit metrics in line with
our current guidance for the Ba2 CFR, including net debt to
EBITDA of below 2.0 times. However, we take some comfort from
Tullow's policy of actively managing its portfolio with a view to
monetizing assets at different stages in their life cycle,"
Moody's said.

In addition, Tullow's liquidity position remains supported by (i)
its USD3.5 billion reserves based lending facility amortizing
from October 2016 and maturing in December 2019, and (ii) its
secured revolving credit facility (RCF), the size and maturity of
which are expected to be increased to USD750 million and extended
to 2017 respectively ahead of the planned Notes issuance. As of
31 December 2013, pro-forma the refinancing of the RCF and
issuance of USD500 million of new notes, Tullow would have had
total availabilities of USD3.15 billion under its facilities.

The (P)B1 assigned to the Notes reflects the fact that the
guarantees supporting these notes are senior subordinated
obligations of the respective guarantors, which are subordinated
in right of payment to all existing and future senior obligations
of those guarantors, including their obligations under the RBL
and secured revolving credit facilities.

"The stable outlook reflects our expectations that Tullow will
continue to successfully execute its key development projects in
order to support its proved reserve base and production profile.
This, in turn, should underpin operating cash flow generation and
allow Tullow to fund in full its exploration and appraisal capex
out of retained cash flow. The stable outlook is also predicated
on the maintenance of conservative financial policies, including
a stable dividend payout following the 100% increase initiated in
2011, following a step-up in production resulting from the
delivery of the Jubilee field in late 2010. While the Ba2 rating
does not incorporate any material acquisitions, we expect that
Tullow would finance any bolt-on asset deal with a balanced
funding mix of debt and equity in line with its historical track-
record," Moody's said.


The ratings could come under pressure should (i) Tullow suffer
significant delays and/or cost overruns in progressing its major
growth projects and/or (ii) experience a significant and
sustained deterioration in production levels and/or oil price
realisations, which would put pressure on its internal cash flow
generation and result in more pronounced and sustained balance
sheet re-leveraging than currently expected, with net debt to
EBITDA remaining above 2 times and debt to average daily
production exceeding USD40,000 per barrel following the
completion of the TEN project.

"While we do not see any near-term upgrade pressures, the
continuing expansion and geographical diversification of the
company's reserve base and production profile that would also
result in further improvement in operating cash flow generation
and allow some material and sustainable debt de-leveraging (with
debt to average daily production falling below USD20,000 per
barrel) could lead to a rating upgrade," Moody's said.

Tullow Oil is a leading independent oil and gas exploration and
production company with a large and diversified portfolio of
interests focused on Africa and the Atlantic margins. In 2013,
the company reported an average production (on a working interest
basis) of 84,200 barrels of oil equivalent per day and sales
revenue of USD2.65 billion.

TULLOW OIL: S&P Revises Outlook to Negative & Affirms 'BB' CCR
Standard & Poor's Ratings Services revised to negative from
stable its outlook on U.K.-based oil and gas exploration and
production company Tullow Oil PLC.  At the same time, S&P
affirmed its 'BB' long-term corporate credit rating on Tullow.

S&P also assigned its 'BB-' issue rating to Tullow's proposed
issuance of US$500 million unsecured notes due 2022.

S&P affirmed its 'BB-' issue rating on Tullow's existing
US$650 million unsecured notes due 2020, and 'BB' issue ratings
on the company's senior secured US$3.5 billion reserves-based
lending (RBL) facility and US$500 million revolving credit
facility (RCF).

The rating on the proposed notes is subject to S&P's review of
the final documentation.

The outlook revision reflects S&P's view that Tullow may not
restore its credit metrics to levels we consider more comfortably
commensurate with the rating.  Tullow's credit metrics remain at
the low end of S&P's guidelines for the rating.  The ratio of
Standard & Poor's-adjusted funds from operations (FFO) to debt
was about 32% on Dec. 31, 2013. In S&P's base-case credit
scenario, it forecasts Tullow's credit metrics will weaken
further because the company is increasing its debt levels to fund
its large capital expenditure (capex) program.  Tullow's business
model incorporates substantial exploration and development

"We forecast that Tullow's adjusted FFO to debt will remain
approximately at current levels during 2014, but will weaken to
below 25% as of Dec. 31, 2015.  This is in the range we would
expect from a financial risk profile assessed as "significant,"
rather than "intermediate," as we previously forecast.  We
continue to modify our assessment of Tullow's financial risk
profile further to reflect our forecast of negative free
operating cash flow (FOCF) generation during both 2014 and 2015,"
S&P said.  As such, S&P has revised its view of Tullow's overall
financial risk profile to "aggressive" from "significant."

Tullow's "aggressive" financial risk profile also reflects its
aggressive capital spending--management estimates US$2.2 billion
in 2014 -- and dividends, which S&P forecasts will continue to
exceed operating cash flow materially.  That said, the company
has historically operated a moderate financial policy.  It has a
consistent hedging policy of locking in prices for up to 60% of
its production in any year on a three-year rolling basis.

The ratings continue to reflect S&P's view of Tullow's business
risk profile as "fair."  They also reflect Tullow's oil-weighted
reserves and production base.  It has midsize commercial reserves
(2P; proven and probable reserves) of 383 million barrels of oil
equivalent and moderate production of 84,200 barrels of oil
equivalent per day (boepd) in 2013.  It also has future
production growth potential, given its reserves under development
and large resource base.

In S&P's view, a key rating factor for Tullow's business risk
profile is the company's high exposure to African countries,
where about 80% of production is concentrated.  The company has a
large asset concentration in Ghana (B/Negative/B), which S&P
forecasts will account for over 40% of production and about 36%
of total capex in 2014.

S&P anticipates that Tullow could maintain sufficient liquidity
to cover its commitments, even if Ghana were to come under
extreme stress, as the company exports all of its production
outside of Ghana.  Therefore, under S&P's criteria, it can rate
Tullow up to four notches above Ghana, as S&P assess Tullow's
country risk sensitivity as "moderate."  S&P also anticipates
that Tullow could still service debt under our transfer &
convertibility (T&C) stress test, given Ghana's current T&C
assessment of 'B+'. However, if production in Ghana increases to
between 50%-70% of Tullow's total production, as will likely be
the case in 2015, then S&P could only rate Tullow two notches
above Ghana's T&C assessment under our criteria, even if it
continued to pass the stress test.

S&P's base-case forecast assumes:

   -- A Brent oil price of $100 per barrel (/bbl) in 2014 and
      US$95/bbl in 2015;

   -- Production of about 81,000 boepd in 2014 and over 90,000
      boepd in 2015, including pre-production sharing
      entitlements and factoring in hedging;

   -- Capex of about US$2.2 billion in 2014 and below
      US$2 billion in 2015, including up to $1 billion for
      exploration as per management's public guidance;

   -- A sale of interest in the Ghana-based Tweneboa-Enyenra-
      Ntomme (TEN) oilfield development, although timing and
      potential cash inflow remain uncertain (no other asset
      sales are included, but S&P has used a "positive" financial
      policy modifier to account for additional asset sales);

   -- No material increase in dividend payouts; and

   -- Tax pay-outs in line with management assumptions.

Based on these assumptions, S&P arrives at the following credit
measures as of Dec. 31, 2014, and Dec. 31, 2015, respectively:

   -- Adjusted funds from operations (FFO) to debt of about 30%
      in 2014 and below 25% in 2015;

   -- Adjusted debt to EBITDA of about 2.2x in 2014 and 2.7x in
      2015; and

   -- Negative free operating cash flow (FOCF) in both 2014 and
      2015 as a result of high capex.

The negative outlook reflects S&P's view that Tullow may be
unable to restore its credit metrics to levels consistently
commensurate with S&P's rating guidelines over the medium term;
specifically, adjusted FFO to debt of above 20%.  S&P forecasts
that free operating cash flow generation will continue to be
negative due to Tullow's heavy capital intensity, common to its

S&P could lower the rating if FFO to debt deteriorates below 20%.
This could reflect insufficient action by Tullow to moderate cash
outflows within its control or limit debt increases, such as via
asset sales or by cutting its exploration budget.  Alternatively,
it could follow adverse operating developments resulting in
weaker-than-forecast operating cash flows.

S&P could also lower the rating if it lowers its sovereign rating
on Ghana by more than one notch, or if Tullow's exposure to Ghana
increases to 50%-70% of total production and Ghana's T&C
assessment is lowered by one notch or more.

S&P could consider revising the outlook to stable if Tullow were
to deleverage and improve its credit metrics in line with those
it consider commensurate with a 'BB' rating.  This could occur if
leverage is decreased, for example through material asset sales.

VEDANTA RESOURCES: Moody's Alters Ratings Outlook to Stable
Moody's Investors Service has changed Vedanta Resources plc's
outlook to stable from negative and affirmed Vedanta's corporate
family rating at Ba1 and its senior unsecured ratings at Ba3.

Ratings Rationale

Since August 2010, Vedanta's rating outlook has carried a
negative bias in terms of its outlook or being under review for
potential downgrade. The latter condition arose when Vedanta
embarked on the debt-funded acquisition of Cairn India (unrated)
and again when the company was slow to prearrange funds for the
repayment of a convertible bond in April 2013. Notwithstanding
these events, the underlying operations have continued to make
progress and the presence of Cairn India is a major factor in
stabilizing the overall business.

Vedanta has taken steps to reinforce its credit profile. It has
simplified its group structure through the formation of Sesa
Sterlite Limited (unrated) in August 2013, improved its liquidity
profile, including a more proactive approach to refinancing and
the establishment of a standby credit facility at the parent,
while facing an adverse commodity price environment and the
idling of key assets in its iron ore and aluminum businesses.

"While we expect Vedanta's performance and credit metrics for the
year just completed to be softer than for FY13, we nevertheless
take the view that a downgrade from the current Ba1 level is
increasingly unlikely and have therefore stabilized the rating,"
says Alan Greene, a Moody's Vice President - Senior Credit

Through all of the recent operational difficulties, in particular
the ban on iron ore mining and the difficulties in procuring
bauxite in India, Vedanta has kept its debt/EBITDA in the range
of 3.0x to 3.5x, due in large part to the success of Cairn India
in growing its output and to the increased production from
Hindustan Zinc Limited (HZL, unrated); the oil and Indian zinc
businesses between them account for almost 80% of reported

"With some of Vedanta's idled iron ore, copper and aluminium
assets now operating, we believe that the worst is past for
Vedanta even as commodity prices remain broadly flat. Absent risk
from opportunistic M&A, we expect Vedanta on the back of steady
operational improvement to stay free cash flow positive and to
make inroads into reducing its $17 billion of gross debt," adds
Greene, who is the Lead Analyst for Vedanta.

"Furthermore, the stable outlook assumes that holders of the
US$1.25 billion of Vedanta's exchangeable bonds will exercise
their put option in July and that Vedanta will have prepared
funding should the need arise. Thereafter, Vedanta's annual debt
refinancing requirement falls to a more manageable US$1.5 billion
to US$2.0 billion per annum," continues Mr. Greene.

However, the restructuring of the group still has some way to go.
Moody's expects the acquisition of the Government of India's 29%
stake in Hindustan Zinc and its 49% stake in BALCO (unrated) to
be back on the agenda after the Indian elections conclude in May.
The rating and outlook accommodates a brief period of incremental
indebtedness of up to US$4.0 billion on the basis that the GoI's
stake in HZL is acquired, the minority shareholders are duly
considered and the net assets of HZL are fully controlled by Sesa
Sterlite. Failure to achieve direct access to the cash and cash
equivalents of US$3.9 billion sitting in HZL in a timely manner
would have negative consequences for the rating.

While the rating anticipates the swift repayment of the bridging
finance needed to acquire the HZL minority, the purchase of HZL
will add US$3.5 billion to US$4.0 billion of net debt to the
group without providing incremental EBITDA. However, with access
to HZL's cash flow, the structural subordination within the
Vedanta group would improve assuming debt in Sesa Sterlite and
its subsidiaries was reduced. This could lead to a re-evaluation
of the two notch difference between Vedanta's CFR and its senior
unsecured rating.

Nevertheless, Vedanta's standalone position will remain weak due
to the cross-border financing constraints imposed by the Reserve
Bank of India and the presence of minority shareholders in its
Indian businesses. The debt at the parent is largely the result
of past acquisitions using offshore vehicles, and Vedanta's
reluctance to upstream substantial dividends from group
subsidiaries. This approach limits cash leakage to withholding
taxes and to minority shareholders but the debt at the parent
will take some time to dissipate. The day to day liquidity of the
parent however, is supported by a $100 million short-term

Vedanta's financial profile remains somewhat stretched for the
Ba1 rating level. In particular, EBIT/interest cover is poor and
dipped below 2x in the last twelve months to September 30, 2013.

Upward pressure on the rating is not currently visible: the high
levels of debt, the operating environment in India and the
restricted movement of cash around the group due to both external
and internal factors are major impediments to achieving a higher
rating. In addition, credit metrics that would be need to be met
on a sustained basis to achieve a higher rating include: 1)
Adjusted debt/EBITDA falling consistently below 3.0x; 2) its cash
flow from operations less dividends (CFO-DIV) to debt exceeds
25%; 3) EBIT/interest moves above 5.0x and 4) free cash flow/debt
of 6% to 8% is achieved.

The ratings could come under downwards pressure if 1) earnings
from its oil and base metal businesses weaken as a result of
depressed commodity prices or material obstructions to
production; 2) the acquisition (if undertaken) of the Government
of India's stake in HZL fails to result in timely direct access
to HZL's liquid assets; and 3) Vedanta undertakes further
acquisitions, investments or shareholder remuneration policies
that include incremental debt that is not readily self-

Moody's could downgrade Vedanta's ratings if the following credit
metrics are reached on a sustained basis; 1) Adjusted debt/EBITDA
is above 3.5-4.0x, 2) Its (CFO-DIV) / debt ratio falls below 15%;
3) EBIT/interest declines below 3.5x; or 4) if Vedanta
consistently generates negative free cash flow.

Headquartered in London, UK, Vedanta Resources plc ("Vedanta") is
a diversified resources company with interests mainly in India.
Its main operations are held by Sesa Sterlite Limited, a 58.3%-
owned subsidiary which produces zinc, lead, silver, aluminium,
iron ore and power. In December, 2011, Vedanta acquired control,
via a 58.8% stake, of Cairn India Limited ("CIL"), an independent
oil exploration and production company in India. Listed on the
London Stock Exchange, Vedanta is 69.6% owned by Volcan
Investments Ltd. For the year ended March 2013, Vedanta reported
revenues of US$15.0 billion and EBITDA of US$4.9 billion.


* Computershare Acquires SG Vestia Systems
Computershare Limited has acquired SG Vestia Systems Inc. ('SG
Vestia') from Societe Generale S.A.  SG Vestia provides employee
equity plan administration services to North American and
European clients.

"We are pleased to build upon our significant presence in Canada
and look forward to welcoming SG Vestia clients to
Computershare," said David Nugent, Senior Vice President of
Computershare Plan Managers Canada.  "SG Vestia clients will
benefit from our focus on exceptional client servicing,
technology, and full suite of equity plan administration

Computershare has extensive integration experience from
acquisitions over the past decade, and continues to apply best
practices to offer clients industry-leading services and

Richard Roger, Head of Societe Generale Securities Services
(SGSS) Corporate Segment said, "In line with the SGSS strategy of
focusing on its core EMEA geographies, we are pleased to have
found a specialized partner that will continue to offer Societe
Generale and its clients high quality share registry and
shareholder administration services in North America.  In
Computershare, we have found a committed partner that will also
execute the transition sensitively and continue to invest in the
acquired business."

"This acquisition provides a wonderful opportunity to expand our
global equity compensation business," said Wayne Newling,
President of Computershare Canada.  "With our extensive
experience integrating similar businesses around the globe, SG
Vestia clients and their stakeholders can count on Computershare
to successfully meet their needs."

               About Computershare Limited (CPU)

Computershare (asx:CPU) -- is a
global market leader in transfer agency and share registration,
employee equity plans, proxy solicitation and stakeholder
communications.  It is also specializes in corporate trust,
mortgage, bankruptcy, class action, utility and tax voucher
administration, and a range of other diversified financial and
governance services.

Founded in 1978, Computershare is renowned for its expertise in
high integrity data management, high volume transaction
processing and reconciliations, payments and stakeholder
engagement.  Many of the world's leading organizations use the
company to streamline and maximize the value of relationships
with their investors, employees, creditors and customers.

Computershare is represented in all major financial markets and
has over 14,000 employees worldwide.

* BOOK REVIEW: A Legal History of Money in the United States
Author: James Willard Hurst
Publisher: Beard Books
Paperback: US$34.95
Review by Gail Owens Hoelscher
Order your personal copy today and one for a colleague at

This book chronicles the legal elements of the history of the
system of money in the United States from 1774 to 1970. It
originated as a series of lectures given by James Hurst at the
University of Nebraska in 1973. Mr. Hurst is quick to say that
he , as a historian of the law, took care in this book not to
make his own judgments on matters outside the law. Rather, he
conducted an exhaustive literature review of economics, economic
history, and banking to recount the development of law over the
operations of money. He attempted to "borrow the opinions of
qualified specialists outside the law in order to provide a
meaningful context in which to appraise what the law has done or
162failed to do."

Mr. Hurst define money, for the purposes of this books, as "a
distinct institutional instrument employed primarily in
allocating scarce economic resources, mainly through government
and market processes," and not shorthand for economic, social,
or political power held through command of economic assets."
From the beginning, public and legal policy in the U.S. centered
on the definition of legitimate uses of both law affecting
money, and allocation of power over money among official
agencies, both federal and state. The foundations of monetary
policy were laid between 1774 and 1788. Initially, individual
state legislatures and the Continental Congress issued paper
currency in the form of bills of credit. The Constitutional
Convention later determined that ultimate control of the money
supply should be at the federal level. Other issues were not
clearly defined and were left to be determined by events.

The author describes how law was used to create and maintain a
system of money capable of servicing the flow of resource
allocations in an economy of broadly dispersed public and
private decision making. Law defined standard money units and
made those units acceptable for use in conducting transactions.
Over time, adjustment of the money supply was recognized as a
legitimate concern of law. Private banks were delegated
expansive monetary action powers throughout the 1900s and
private markets for gold and silver were allowed to affect the
money supply until 1933-34. Although the Federal Reserve Act
was not aimed clearly at managing money for goals of major
economic adjustment, it set precedents by devaluing the dollar
and restricting the use of gold.

Mr. Hurst devotes a large part of his book to key issues of
monetary policy involving the distribution of power over money
between the nation and the states, between legal and market
processes, and among major agencies of the government. Until
about 1860, all major branches of government shared in making
monetary policy, with states playing a large role. Between 1908
and 1970, monetary policy became firmly centralized at the
national level, and separation of powers questions arose between
the Federal Reserve Board, the White House (The Council of
Economic Advisors), and the Treasury.

The book was an enormous undertaking and its research
exhaustive. It includes 18 pages of sources cited and 90 pages
of footnotes. Each era of American legal history is treated
comprehensively. The book makes fascinating reading for those
interested in the cause and effect relationship between legal
processes and economic processes and t hose concerned with
public administration and the separation of powers.

James Willard Hurst (1910-1997) is widely regarded as the
grandfather of American legal history. He graduated from
Harvard Law School in 1935 and taught at the University of
Wisconsin-Madison for 44 years.


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

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

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

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


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

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

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

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

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

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

                 * * * End of Transmission * * *