TCREUR_Public/140425.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 25, 2014, Vol. 15, No. 81



SOLOCAL GROUP: Moody's Keeps Caa1 CFR Under Review for Downgrade


ALEO SOLAR: Bosch Providing EUR50 Million in Liquidation
LUEBECK: Files for Insolvency; Prelim. Administrator Appointed


GEORGIAN OIL: Fitch Affirms 'BB-' Issuer Default Rating


IRISH BANK: Seeks Approval to Sell More Than US$19-Bil. in Loans
MUCKROSS PARK: Revenue Doubles in Its First Year in Receivership
SPENCER DOCK: Receivership Fees Total EUR1.59 Million


BANCO ANGOLANO: Fitch Assigns 'B+' LT Issuer Default Rating


CB KEDR: Fitch Assigns 'B' LT Issuer Default Rating; Outlook Neg.
PIONEER GROUP: S&P Affirms 'B-' Long-Term CCR; Outlook Stable


TDA 26-MIXTO: Fitch Affirms 'CCC' Ratings on 2 Note Classes
VERTICE 360: Files For Insolvency
* Spanish Mortgage Loan Defaults Continue to Rise, Fitch Says


UKRAINE: IMF to Consider US$17-Bil. Bailout on April 30

U N I T E D   K I N G D O M

ASTRACAST: Creditors to Lose GBP100 Million in Pre-pack Sale
BRADFORD BULLS: Appeal Against Points Deduction to be Heard Soon
CO-OPERATIVE BANK: Labour Party Set to Break Ties
CO-OP BANK: Moody's Cuts Unsecured Debt Rating to 'Caa2'
DALTON & DALTON: High Court Enters Wind Up Order

EMERALD 2: S&P Assigns Prelim 'B' Corp. Credit Rating
HIGHLAND GROUP: S&P Puts 'B' CCR on CreditWatch Developing


* BOOK REVIEW: From Industry to Alchemy



SOLOCAL GROUP: Moody's Keeps Caa1 CFR Under Review for Downgrade
Moody's Investors Service affirmed Solocal Group S.A.'s
Probability of Default Rating (PDR) at Ca-PD and assigned the /LD
indicator. Solocal's other ratings remain under review for
downgrade, including the company's Corporate Family Rating (CFR)
of Caa1 and rating of Caa1 on PagesJaunes Finance & Co. S.C.A.'s
EUR350 million 8.875% senior secured notes due 2018.

Ratings Rationale

The rating action and the assignment of the /LD to the PDR
(leading to PDR of Ca-PD/LD) follows the payment default on the
scheduled amortization of the company's A3, A5 and B3 credit
facilities that was due on April 15, 2014 and the end of the
three business days grace period.

On April 9, 2014 Solocal entered an Accelerated Sauvegarde
Process (Sauvegarde Financiere Acceleree or "SFA"), which is
expected to last circa one month. As part of the SFA process, the
company obtained over 90% majority from its voting creditors,
which makes the company's refinancing proposal binding on all
Facility A3, A5 and B3 lenders subject to the homologation of the
plan by the Commercial Court of Nanterre.

Moody's understands that the missed payment of the scheduled
amortization will be carried out within 15 days from closing of
the SFA process. Moody's expects to conclude its review upon
finalization of the restructuring, including closing of the SFA
and approval of the planned share capital increase.

Solocal is the leading provider of local media advertising and
local website and digital marketing services, with the majority
of its operations (approximately 97% of 2013 total revenue) in
France and the remainder of operations in Spain mainly. The
company reported approximately EUR1 billion revenues in the
twelve-month period ended 31 December 2013. Solocal is listed on
the Paris stock exchange.


ALEO SOLAR: Bosch Providing EUR50 Million in Liquidation
PV Tech reports that plans have been agreed at the aleo solar EGM
for the company to be wound down through a liquidation, with as
much as EUR50 million (US$69.1 million) of support provided by
parent company Robert Bosch in order to avoid bankruptcy

The decision clears the way for SCP Solar, the JV company
established by Sunrise Global Solar Energy and Japanese
manufacturing machinery producer, CHOSHU Industry to own and
operate aleo solar's module manufacturing plant in Germany,
saving around 200 jobs, according to PV Tech.

The report notes that the aleo brand will be used by the JV,
which will operate the plant under the name, AS Abwicklung und
Solar-Service AG.

Aleo solar board member, York zu Putlitz, and in addition, Dr.
Randolf Muller, Matthias Beck und Volker Voss were said to have
been appointed as liquidators, substituting the aleo solar
management board during the liquidation process, the report

LUEBECK: Files for Insolvency; Prelim. Administrator Appointed
According to Reuters' Jonathan Gould and Victoria Bryan, German
media reported on Wednesday that the small German airport of
Luebeck, near Hamburg, has filed for insolvency and a local court
has appointed a preliminary administrator.

Reuters relates that a statement on the website for the airport,
which is served by low-cost carriers such as Ryanair, said around
100 people employed had not received their pay for April.


GEORGIAN OIL: Fitch Affirms 'BB-' Issuer Default Rating
Fitch Ratings has affirmed JSC Georgian Oil and Gas Corporation's
(GOGC) Long-term foreign currency Issuer Default Rating (IDR) at
'BB-' with a Stable Outlook and senior unsecured rating on its
USD250 million bond maturing in 2017 at 'BB-'.

The ratings for wholly state-owned GOGC are aligned with the
sovereign's ratings as the government of Georgia (BB-/Stable)
considers the company critical to national energy policy.  In
aligning the ratings, Fitch considers the 100% indirect state
ownership and strong management and governance linkages between
GOGC and the state.  Fitch views GOGC's standalone profile as
commensurate with a 'B+' rating due to the company's small size
and limited operations.


Ratings Aligned with Sovereign's Ratings

GOGC is one of several corporations in Georgia viewed by the
government as critical to the national policy.  GOGC's rating
alignment is supported by 100% indirect state ownership via the
JSC Partnership Fund (PF, BB-/Stable) and by strong management
and governance linkages with the sovereign.  Fitch do not
anticipate the Georgian government's announced reorganization of
the PF to have any impact on this relationship, but will assess
the legal and practical impact of any change once final details
of the reorganization are released.

Deteriorating 'B+' Standalone Profile

Fitch assess GOGC's standalone profile as commensurate with a
'B+' rating.  The principal rating constraints are the company's
small size and high leverage until at least end-2014 due to the
construction of the Gardabani Combined Cycle Power Plant (GCCPP).
GOGC continues to receive stable income from regulated gas
transit operations with SOCAR Gas Export and Import, a subsidiary
of the State Oil Company of the Azerbaijan Republic (SOCAR, BBB-
/Stable). Fitch views certain recent government decisions, e.g.,
continuation of the gas price discount for households and a
reduction of GOGC's ownership of Gardabani as weakening GOGC's
standalone profile.

High Leverage until End-2014

In 2013, GOGC's gross EBITDA leverage exceeded Fitch's 4x
guidance for its standalone profile.  Fitch expects that in 2014
the company's gross EBITDA leverage will again exceed 4x before
improving to about 3x by end-2015 and to 2x by end-2016, subject
to phasing out of the gas price discount for households and
keeping the Gardabani construction costs within the approved

Gardabani Construction on Track

GOGC and the PF are constructing the USD220 million 230 Megawatt
(MW) capacity gas-fired GCCPP, with expected completion in
October 2015 and latest reported progress being ahead of
schedule.  Even though GOGC is financing 100% of Gardabani
through equity contributions and loans to the PF and the project
SPV, GOGC will only own 51% in it while retaining managerial
control of the plant, and the PF will own the remaining 49%.  In
Fitch's forecasts for GOCG, it incorporates 100% of future cash
flows from Gardabani, but exclude interest and principal
repayments from the project SPV and the PF, due to the related-
party character of those loans and the fact that PF's loan
repayments would likely be supported by cashflows from Gardabani

Gardabani, Consumption Drive Profits

GOGC expects to generate USD40m of annual EBITDA from Gardabani,
provided that Georgia's older, less efficient gas-fired power
plants are shut down after 2015, resulting in no change in
Georgia's overall gas consumption.  Higher gas consumption by
subsidized households and power plants could lower GOGC's
profitability in 2016-2017 unless the regulator increases end-
user gas prices correspondingly in this period.


Positive: Future developments that may result in positive rating
action include:

  -- A positive rating action for Georgia within the 'BB'
     category would be replicated for GOGC

Negative: Future developments that may result in negative rating
action include:

  -- A negative rating action for Georgia would be replicated for

  -- Weakening state support and/or an aggressive investment
     program resulting in a significant deterioration of
     standalone credit metrics, e.g., EBITDA leverage above 4x on
     a sustained basis

  -- Unanticipated changes in the contractual frameworks
     supporting GOGC's midstream position, or liquidity problems
     associated with the concentration of cash deposits.


Ample Liquidity, Long-Term Maturities

At end-2013, GOGC's short-term debt amounted to GEL6.2 million
and was fully covered by cash and short-term deposits of GEL295.5
million.  GOGC's sizable maturities come in 2017 when the USD250
million bond is due.  At end-2013, GOGC deposited bond proceeds
with several local banks, i.e., USD145m was held by, among
others, TBC Bank (BB-/Stable) and the Bank of Georgia (BB-
/Stable).  In addition, GOGC lent on USD50m to the PF and USD28.5
million to the State Service Bureau LLC, the latter balance
repayment extended to 2017 from 2013.

The rating actions are as follows:

  Long-term foreign and local currency IDRs: affirmed at 'BB-';
  Outlooks Stable

  Short-term foreign and local currency IDRs: affirmed at 'B'

  Foreign currency senior unsecured rating: affirmed at 'BB-'


IRISH BANK: Seeks Approval to Sell More Than US$19-Bil. in Loans
Edvard Pettersson at Bloomberg News reports that Irish Bank
Resolution Corp., formed to complete the liquidation of Anglo
Irish Bank Corp., asked a U.S. bankruptcy judge to approve the
sale of loans with nominal balances totaling more than US$19

The proposed purchasers of the U.S. assets include affiliates of
Goldman Sachs Group Inc., Deutsche Bank AG (DBK) and Lone Star
Funds, Bloomberg says, citing an April 22 filing by the
liquidator of the nationalized lender in U.S. Bankruptcy Court in
Wilmington, Delaware.

Ireland's government seized the Dublin-based bank in January 2009
as its bad loans soared following the collapse of the nation's
real-estate market, Bloomberg relates.  IBRC filed for creditor
protection in Delaware in August to protect its U.S. holdings
during the wind-down, Bloomberg recounts.

The liquidator, Kieran Wallace, asked the judge to consider
approving the loan sales at a May 13 hearing, Bloomberg

                    About Irish Bank Resolution

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

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

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

IBRC was granted protection under Chapter 15 of the U.S.
Bankruptcy Code in December 2013.

MUCKROSS PARK: Revenue Doubles in Its First Year in Receivership
Gordon Deegan at reports that Bill Cullen and Jackie
Lavin's former hotel Muckross Park has hit revenues of EUR5.4
million in its first year in receivership.

According to the report, the five star Co Kerry hotel saw
revenues more than double from the EUR2.77 million it recorded in
2011 -- which was the last period in which the Bill Cullen
company that operated the hotel filed accounts.

The turnaround in the hotel's fortunes however, according to the
report, has come too late for Mr. Cullen and his partner, Jackie
Lavin, who lost control of the hotel in a court battle with ACC
last year.

Arising from the court battle win, ACC installed Declan Taite -- -- of Farrell Grants Sparks RSM as
receiver, reports.

The latest receiver extract lodged by Mr. Taite with the
Companies Office shows that the hotel recorded revenues of
EUR2.56 million from September last year to March of this year,
the report discloses.

This followed the hotel recording revenues of EUR2.8 million
during the prior six months that covered the summer period, the
report says.

The report relays that the sharp increase in revenues at the
hotel over the past 12 months has come against the background of
the number of tourist nights in Ireland last year increasing by
7.2pc, generating a spend of EUR4.12 billion.

In an RTE radio interview in February, Ms. Lavin said that staff
at the hotel "are not allowed to speak to us, they're not allowed
to communicate with us in any way", the report adds.

SPENCER DOCK: Receivership Fees Total EUR1.59 Million
Gordon Deegan at Irish Examiner reports that professional and
receivers' fees from the receivership of Treasury Holdings' main
Spencer Dock company total EUR1.59 million to date, according to
new figures have revealed.

David Hughes and Luke Charleton -- --
Ernst & Young were appointed as receivers to various retail
units, undeveloped sites and partially developed sites owned by
Spencer Dock Development Co Ltd on January 25, 2012, by National
Asset Management Agency (NAMA), according to Irish Examiner.

Now, the report relates that documents filed with the Companies
Office show that the receivers have received EUR277,857 to date
in fees.

The report notes that Finance Minister Michael Noonan recently
revealed that NAMA has paid fees totaling EUR59.6 million to
receivers concerning 258 separate receiver appointments since the
agency was established.

In relation to the Spencer Dock receivership, the documentation
shows that a total of EUR1.314 million has been paid out in
"professional fees" over the two years from January 2012 to
January this year, though no detail is provided on what the
professional fees were spent on, relays the Irish Examiner.

The report discloses that the extract relating to the six-month
period from July 25 last year to January 24 of this year confirms
that professional fees of EUR317,486 and receivers' fees of
EUR277,857 were paid out during the period.

The Revenue Commissioners was also paid EUR337,166 during the
most recent six month period covered, The Irish Examiner adds.

The receivership was unsuccessfully challenged in the High Court
by Treasury Holdings and the professional fees may include legal
fees as no entry for legal fees is recorded in the various
documents lodged by the receivers with the Companies Office, the
report discloses.

Spencer Dock Development Co Ltd was placed in receivership with
net liabilities totaling over EUR401 million, the report notes.

Nine months after the main Spencer Dock firm was placed in
receivership, the parent entity, Johnny Ronan and Richard
Barrett's Treasury Holdings, was wound up in October 2012, the
report says.

The report discloses that the four separate receiver extracts
lodged by Mr. Hughes and Mr. Charleton show that the aggregate
rental income from the firm's properties total EUR9.69 million,
with the proceeds from sales totaling EUR7.69 million.

The firm had cash reserves of EUR4.87 million on the appointment
of Mr. Hughes and Mr. Charleton, the report relates.

The figures show at the end of two years in receivership, the
company had receipts totaling EUR23.489 million, that included
the EUR4.87 million in cash -- and the firm's payments in the two
years to January of this year topped EUR20.15 million, the report

The documents show that EUR7.25 million has been distributed to
the charge holders to company debentures dating back to 2004, the
report relates.

In his recent Dail response on the issue of receiverships,
Minister Noonan said receivers appointed by NAMA in Ireland
control 770 residential properties and 701 commercial properties,
the report says.


BANCO ANGOLANO: Fitch Assigns 'B+' LT Issuer Default Rating
Fitch Ratings has assigned Banco Angolano de Investimentos (BAI)
a Long-term Issuer Default Rating (IDR) of 'B+' and a Viability
Rating (VR) of 'b'.  The Outlook on the Long-term IDR is Stable.
A Support Rating (SR) and Support Rating Floor (SRF),
respectively of '4' and 'B+' have also been assigned.


The bank's IDRs, SR and SRF reflect a limited probability of
support from the Angolan authorities (BB-/Stable), if required.
Fitch believes that propensity to support the bank is high, given
BAI's market position as one of the country's leading banks.
However, the authorities' ability to support BAI is constrained
by the sovereign rating.

The Stable Outlook on the Long-term IDR reflects that on Angola's
sovereign rating.


The bank's IDRs, SR and SRF are sensitive to a change in Fitch's
view of the willingness or ability of the Angolan authorities to
provide support for BAI.  The ratings could be upgraded if the
Angolan sovereign rating is upgraded.  However, this is not
Fitch's current base case given the recent revision to Stable
from Positive of the Outlook on Angola's ratings.  A downgrade is
also unlikely at the present time.


The bank's VR reflects the evolving operating environment in
Angola, where the financial markets and regulatory framework are
in a development phase.  The VR is also driven by certain
limitations inherent to the banking sector, notably high
concentrations in lending, funding and liquidity profiles.  BAI's
balance sheet contains a high proportion of cash and government
securities, but markets for Angolan securities are not deep.  In
addition, the bank's deposit base is concentrated and volatile,
particularly in foreign exchange, exposing BAI's funding base to
event risk.

The VR also considers BAI's loan book.  Although the loan book
represents a relatively small proportion of the bank's balance
sheet, loan quality displays some weaknesses.  The weak
performance of the real estate sector (real estate and
construction represented 36% of lending at end-2013) is a source
of risk and single obligor concentration is high, although within
prudential limits.  Related-party lending is significant, but not
uncommon within the Angolan banking sector. Loan impairment
charges as a proportion of pre-impairment operating profits were
high at (71%) in 1H13, limiting the bank's capacity for internal
capital generation.

BAI's earnings are predominantly generated through interest on
corporate loans and government securities.  Following several
years of consistently strong returns, BAI's return on average
equity declined to 8.7% in 1H13, marginally above inflation.
BAI's capital ratios are calculated under the Basel I framework,
which has been adapted by local regulators, requiring additional
capital charges for FX exposure.  The bank's Fitch Core
Capital/Weighted risks ratio at end-1H13 was 15.1%, considered
adequate by Fitch given the bank's asset profile.


The bank's VR is sensitive to developments in its operating
environment.  In addition, the VR is sensitive to event risk
given concentrations on both sides of the balance sheet.  While
Fitch believes the authorities would be supportive of the bank,
BAI is sensitive to a liquidity shock, given deposit
concentrations, should it not be able to access central bank
liquidity for any reason.

Founded in 1996, BAI is the largest bank in Angola by total
assets and total deposits.  BAI is predominantly a corporate
bank, supplemented by retail and private banking activities.  The
bank is supported by its treasury function which manages BAI's

The bank owns subsidiaries in Portugal and Cape Verde and also
has domestic subsidiaries operating in microfinance and
insurance.  The domestic banking operation, however, contributes
the majority of operating income to the group.

BAI's shares are widely owned. The largest shareholder is the
state oil company Sonangol, which owns 8.5% of the bank.  The
remaining shares are owned by investment companies, directors of
the bank and local investors.

The rating actions are as follows:

Banco Angolano de Investimentos

Long-term IDR assigned at 'B+'; Outlook Stable
Short-term IDR assigned at 'B'
Viability Rating assigned at 'b'
Support Rating assigned at '4'
Support Rating Floor assigned at 'B+'


CB KEDR: Fitch Assigns 'B' LT Issuer Default Rating; Outlook Neg.
Fitch Ratings has assigned Russian bank JSC CB Kedr (Kedr) Long-
term Issuer Default Ratings (IDRs) of 'B'.  The Outlook is


Kedr's IDRs are based on its VR of 'b', which reflects the bank's
small franchise, weaknesses in asset quality, moderate
capitalization and poor profitability.  The ratings also take
into account the bank's highly granular customer deposit base and
limited wholesale debt.

The Negative Outlook reflects potential risks related to Kedr's
former exposure to a bank, whose license was withdrawn by the
Central Bank of Russia in March 2014.  Kedr had a total exposure
of 0.4x end-9M13 Fitch core capital (FCC) to the bank, which it
was able to recover shortly before the license withdrawal.  In
Fitch's view, there is a risk that the transactions which led to
the recovery of Kedr's exposure could be challenged by the State
Depositary Insurance Agency (DIA), which is overseeing the
resolution of the mentioned bank, potentially leading to their
reversal and thus moderate recovery prospects through bankruptcy.
This in turn may undermine Kedr's capitalization unless it is
promptly rectified by the shareholders.  However, the management
is confident that the transactions were legitimate and the DIA so
far has not appealed them.

Kedr has sizable exposures to the real estate and construction
sectors.  At end-9M13, Kedr's investments in non-core assets
amounted to a high 0.6x FCC, mostly represented by a large plot
of land in the Moscow region, albeit reasonably valued and
attractively located.  In addition, Kedr's reported loan exposure
to the construction and real estate sectors amounted to a
significant 0.9x FCC at end-9M13.

Positively, Kedr's reported non-performing loans (NPLs; loans 90
days overdue) were a moderate 4.1% of end-9M13 total loans, 108%
covered by reserves, while its corporate loan book concentration
was reasonable (the 20 largest exposures comprised 47% of
corporate book, or 1.2x FCC at end-9M13).  Most of the largest
exposures are either short-term working capital facilities,
provided to large Krasnoyarsk companies from different
industries, or longer-term real estate and construction
exposures.  However, they are reasonably secured with typically
low loan-to-value ratios.  Retail loan book (42% of end-9M13
total loans) is represented mostly by unsecured consumer loans,
albeit of moderate risk, as they are lent predominantly under
salary schemes.

Kedr's FCC ratio was a reasonable 13% at end-9M13, although this
should be considered together with its asset quality weaknesses.
The total regulatory capital ratio was a low 11% at end-2013,
meaning that the bank had capacity to withstand additional credit
losses equal to only 1.5% of gross loans.  Fitch considers Kedr's
capital position as tight in light of weak internal capital
generation (ROAE of 5.7% in 9M13) and the significant exposure to
high risk non-core assets and development loans.

Liquidity is supported by highly granular retail funding (73% of
total liabilities at end-9M13) and the comfortable buffer of
liquid assets, sufficient to withstand a 19% outflow of customer
accounts at end-2013.  The 1Q14 regulatory accounts also show
that customer funding has been stable so far, which is positive
in light of overall outflow of customer funds from the Russian
banking sector.


The ratings will be downgraded if transactions with the defaulted
bank become reversed, potentially requiring recapitalization of
Kedr and if the shareholders are hesitant to provide new equity.
Significant deterioration of the liquidity position or asset
quality could also put downward pressure on the ratings.

The Outlook could be revised to Stable if contingent risks
related to the bank subside and no significant deterioration of
the credit risk profile occurs.  Disposal of non-core assets, a
strengthening of capitalization and a significant improvement of
performance would also be credit positive.


Kedr's SRF of 'No Floor' and '5' Support Rating reflect its
limited systemic importance, as a result of which extraordinary
support from the Russian authorities cannot be relied upon, in
Fitch's view.  The potential for support from private
shareholders is also not factored into the ratings, as it cannot
be reliably assessed.  Fitch does not expect any revision of the
bank's SRF or Support Rating in the foreseeable future.

The rating actions are as follows:

  Long-term foreign and local currency IDRs: assigned at 'B',
  Outlook Negative

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

  Long-term National rating: assigned at 'BBB-(rus)'; Outlook

  Viability Rating: assigned at 'b'

  Support Rating: assigned at '5'

  Support Rating Floor: assigned at No Floor

PIONEER GROUP: S&P Affirms 'B-' Long-Term CCR; Outlook Stable
Standard & Poor's Ratings Services said that it affirmed its 'B-'
long-term corporate credit rating on Russia-based residential
real estate developer CJSC Pioneer Group.  The outlook is stable.

S&P also affirmed its 'ruBBB-' Russia national scale rating on
the company.

At the same time, S&P assigned an issue rating of 'B-' and a
recovery rating of '4' to the company's senior unsecured notes.
The recovery rating indicates S&P's expectation of average (30%-
50%) recovery in the event of a payment default.

The rating actions follow the lowering of our anchor for Pioneer
to 'b-', from 'b+', reflecting S&P's view that Pioneer's
financial risk profile has deteriorated to "highly leveraged"
from "significant."  This is because the company's large Russian
ruble (RUB) 3.6 billion (about EUR40.6 million) acquisition of
Botanichesky's land has been fully funded with debt (a mixture of
public and bank debt).

Moreover, S&P views the company's cash flow generation as highly
volatile, as shown by changes in free operating cash flow of more
than 50% over the past five years and negative EBITDA in 2010.
S&P also expects strongly negative free operating cash flow in
2014, due to the high working capital needs generated by the
company's large investment pipeline.

On other hand, S&P has removed the two negative modifiers related
to the company's capital structure and financial policy.  S&P
believes there is now limited refinancing risk in Pioneer's
capital structure since it has repaid all its short-term debt and
increased its cash position.  This improvement indicates that
Pioneer is currently less reliant on presales and market
conditions to meet its financial commitments.  S&P also views
positively, in terms of financial policy, Pioneer's decision to
suspend dividend distributions and its strong commitment to
increase its equity base, which S&P still views as thin, as
highlighted by a ratio of debt to debt plus equity higher than

The stable outlook reflects S&P's view that Pioneer's operating
performance over the next 12 months should benefit from steady
demand for affordable apartments in its primary markets and from
stable prices in the residential segment.  In S&P's opinion, the
company should meet its short-term liquidity requirements as long
as apartment sales and prices, as well as operating costs, do not
suffer from heightened competition in the increasingly crowded
Moscow residential property market.  In addition, S&P anticipates
that Pioneer will maintain a ratio of debt to EBITDA of about 3x.
This level of leverage indicates that there is potential for high
volatility in the company's cash flows.

Upside scenario:

S&P could take a positive rating action if Pioneer makes further
progress toward lengthening its debt maturities and demonstrates
sustainable internal liquidity.  This would involve sales of
units at margins sufficient to fund the equity component of
remaining project costs, service and repay debt, and cover
ongoing selling, general, and administrative expenses.  A
positive rating action would also hinge on a stronger equity

Downside scenario

S&P could take a negative rating action if it saw evidence of
deteriorating liquidity, which could arise due to lower sales or
prices than S&P forecasts, cost overruns, or delays in project
completions.  S&P could also take a negative rating action if the
debt-to-EBITDA ratio exceeded 4x over the next 12 months.


TDA 26-MIXTO: Fitch Affirms 'CCC' Ratings on 2 Note Classes
Fitch Ratings has taken various rating actions on seven prime
Spanish RMBS transactions by affirming 8 tranches, upgrading two
tranches and downgrading one tranche.

Additionally, the Outlook on three tranches was revised to Stable
and on one tranche to Positive.  The Rating Watch Positive (RWP)
on five tranches was maintained and another tranche was placed on
Rating Watch Negative (RWN).

AyT Goya Hipotecario III and V comprise loans originated and
serviced by Barclays Bank S.A., a Spanish subsidiary of Barclays
Bank Plc (A/Stable). Caja Ingenieros AyT 2 and Caja Ingenieros
TDA 1 are collateralised by mortgages originated by Caja
Ingenieros, while Caixa Penedes 1 TDA comprises collateral
originated by Banco Mare Nostrum S.A. (BB+/Negative/B).

The mortgages in TDA 26-Mixto Series 1 and 2 are originated by
Banca March and Banco de Sabadell.  The transaction comprises two
groups of notes: Series 1 notes are backed by mortgage loans with
loan-to-value ratios (LTV) below 80%, whereas Series 2 notes are
backed by mortgage loans with LTVs above 80%.


Varied Asset Performance

A combination of sufficient credit enhancement and the robust
performance of the assets have contributed to the affirmation on
all notes and a revision of the Outlook to Stable from Negative
for the junior notes in Caja Ingenieros 2 Ayt, Caixa Penedes 1
TDA, Ayt Goya Hipotecario III and V.

The underlying assets have performed better than the average for
prime Spanish RMBS transactions.  As of the latest reported
period, three-months plus arrears (excluding defaults) were at
1.7%, 1.1%, 0.9%, and 1% in Caixa Penedes 1 TDA, AyT Goya
Hipotecario III, AyT Goya Hipotecario V and Caja Ingenieros 2 AyT
respectively.  They are well below Fitch's Spanish RMBS index of
three-months plus arrears (2.4%).  Cumulative gross defaults
ranged from 0% (Caja Ingenieros 2 AyT) to 2.3% (Caixa Penedes 1

Caja Ingenieros TDA 1 has shown stable three-months plus arrears
and gross cumulative defaults at both 0.2% of the current pool.
The overall strong asset performance is reflected in the
affirmation on the class A2 notes.  Additionally, the analysis
showed that the credit enhancement available for class B and C
notes is sufficient to withstand higher rating stresses,
resulting in the upgrades to 'AA-sf' and 'Asf' and a revision of
the Outlook on class B notes to Positive from Stable.

For TDA 26-Mixto Series 1, the affirmation reflects the
relatively stable performance of the transaction and the
sufficient credit enhancement available to the notes.  As of end-
December 2013, three-months plus arrears stood at 1.1% of the
current asset balance.  The increasing volume of defaults
continues to exceed the excess spread generated by the
transaction, resulting in reserve fund draws.

For TDA 26-Mixto Series 2, the levels of three-months plus
arrears and gross cumulative defaults have increased marginally
over the last 12 months.  Despite the modest deterioration in
asset performance, the credit enhancement of class B is no longer
sufficient to withstand 'BBBsf' rating stresses and Fitch has
therefore downgraded the notes to 'BBsf'.

Reserve Fund Drawings

The excess spread in TDA 26-Mixto Series 2 was insufficient to
fully provision for defaulted loans on the last payment date,
resulting in a draw of the reserve fund.  At present, the reserve
fund stands at 95% of its target amount.  Even though the
pipeline of loans in arrears is limited, Fitch expects further
reserve fund draws, which is reflected in today's downgrade of
the mezzanine tranche.

High Mortgage Prepayments

The principal prepayment rates in Ayt Goya Hipotecario III, AyT
Goya Hipotecario V, Caja Ingenieros 2 AyT and Caja Ingenieros TDA
1 have increased to approximately 10% over the last months.  As
these rates are significantly above the market average (3.9%),
Fitch cannot rule out the possibility that some prepayments are
the result of originator support for troubled borrowers by means
of refinancing.

Absence of Swap

In the absence of a hedge between the 3m Euribor-linked notes and
the 12m Euribor-linked mortgages in Caja Ingenieros 2 AyT and
Caja Ingenieros TDA1, Fitch has assumed reduced levels of excess
spread in its analysis.

Exposure to Payment Interruption Risk

Given the increased reserve fund draws in TDA 26-Mixto Series 1
in the last 12 months, there is currently insufficient liquidity
to cover for payment interruption risk.  Therefore the class A2
is placed on RWN.  Fitch will maintain contact with the issuer on
the progress of potential remedial actions, if any, and will take
rating actions accordingly in the next six months.

Maintenance of Rating Watch Positive

The Rating Watch Positive on Caixa Penedes 1 TDA, Caja Ingenieros
TDA 1, Caja Ingenieros 2 AyT, AyT Goya Hipotecario III and V has
been maintained pending further review of the criteria
assumptions for rating scenarios beyond 'AA-sf'.


A further deterioration of the asset performance entailing a
larger volume of late stage arrears as well as defaults and
drawings on the reserve fund beyond Fitch's expectations could
trigger negative rating actions.

The rating actions are as follows:

AyT Goya Hipotecario III, FTA

  Class A (ISIN ES0312274006) 'AA-sf'; remains on Rating Watch

  Class B (ISIN ES0312274014) affirmed at 'BBB+sf'; Outlook
  revised to Stable from Negative

AyT Goya Hipotecario V, FTA

  Class A (ISIN ES0312276001) 'AA-sf'; remains on Rating Watch

Caja Ingenieros 2 AyT, FTA

  Class A (ISIN ES0312092002) 'AA-sf'; remains on Rating Watch

Caja Ingenieros TDA 1, FTA

  Class A2 (ISIN ES0364376014) 'AA-sf'; remains on Rating Watch

  Class B (ISIN ES0364376022) upgraded to 'AA-sf' from 'A+sf';
  Outlook revised to Positive from Stable

  Class C (ISIN ES0364376030) upgraded to 'Asf' from 'BBB-sf';
  Outlook Stable

Caixa Penedes 1TDA, FTA

  Class A (ISIN ES0313252001) 'AA-sf'; remains on Rating Watch

  Class B (ISIN ES0313252019) affirmed at 'A+sf'; Outlook revised
  to Stable from Negative

  Class C (ISIN ES0313252027) affirmed at 'BBsf'; Outlook revised
  to Stable from Negative

TDA 26-Mixto, FTA - Series 1

  Class A2 (ISIN ES0377953015) 'AA-sf'; put on Rating Watch

  Class B (ISIN ES0377953023) affirmed at 'BBBsf'; Outlook

  Class C (ISIN ES0377953031) affirmed at 'BB+sf'; Outlook

  Class D (ISIN ES0377953049) affirmed at 'CCCsf'; RE 0%

TDA 26-Mixto, FTA - Series 2

  Class A (ISIN ES0377953056) affirmed at 'Asf'; Outlook Negative

  Class B (ISIN ES0377953064) downgraded to'BBsf' from 'BBBsf';
  Outlook Negative

  Class C (ISIN ES0377953072) affirmed at 'CCCsf'; RE 0%

VERTICE 360: Files For Insolvency
Pamela Rolfe at reports that Vertice 360
has declared insolvency and filed for a suspension of payments,
which paves the way for a court-appointed administrator to
prioritize debt and mediate payments with creditors.

The report says the move comes after Vertice failed to reach an
agreement on its own with its creditors. The film and television
group has been seeking to increase capital through various
methods since December 2013, after posting a financial debt of
$19.9 million (EUR14.4 million), with $93.7 million (EUR67.8
million) in losses, notes.

In addition to the Spanish treasury, which agreed to delay
payment for $17.1 million (EUR12.4 million), creditors include
Banco Espiritu Santo, Santander Bank, Deloitte, KPMG and others,
the report discloses.

According to, the group had been in talks
with U.S. fund Red Apple, but negotiations reportedly failed due
to the reluctance of Vertice's main shareholder Ezentis, which
holds 27.8 percent of the company. Ezentis is a company
responsible for the "last mile" of telecommunication companies'
access to the end consumer.

Vertice sold off its audiovisual services subsidiary VSA las
summer, but at the end of the first quarter of this year, the
group announced it was negotiating the debt of 10 of its
subsidiaries, including its film and TV holdings, the report

Vertice 360 is a Spanish media conglomerate.

* Spanish Mortgage Loan Defaults Continue to Rise, Fitch Says
Fitch Ratings says in a new report that Spanish mortgage loans in
arrears by one to two months remained broadly stable at 1.5% in
1Q14, reflecting the stabilization of the broader economy and
employment prospects.

However, RMBS issuers reported a pick-up in the pace of loans
entering default.  Coupled with the slow recovery process, this
has resulted in a further increase in the outstanding balance of
defaulted loans to 4.1% in 1Q14.  Fitch believes that this
increase would be higher were it not for the support of certain
originators, which have been refinancing distressed borrowers.
This also explains the higher-than-average prepayment rates
across some deals.

A lack of liquidity on the housing market and a further decline
in prices in 4Q13 (-1.3% quarter-on-quarter) mean recoveries
remain low across most deals.  Fitch maintains its view that
house prices will see a further gradual decline until 2015, when
they are expected to bottom out at 40% below peak values.

Fitch's 'Mortgage Market Index -- Spain' is part of the agency's
quarterly series of index reports.  It includes information on
the performance of residential mortgages, predominantly from RMBS
transactions, but also those held on bank balance sheets.  The
report sets the housing market against the macroeconomic
background and provides commentary on the emerging trends.


UKRAINE: IMF to Consider US$17-Bil. Bailout on April 30
Ian Talley at The Wall Street Journal reports that the
International Monetary Fund's executive board is tentatively
scheduled to consider a US$17 billion bailout for Ukraine on
April 30.

According to the Journal, IMF staff are currently verifying
Kiev's interim government has met the fund's preconditions for
the emergency loan.  The expected IMF approval next week would
unlock another USS$10 billion in aid promised by the U.S. and
Europe for the beleaguered country, the Journal notes.  IMF
Managing Director Christine Lagarde said earlier in April that
wide support within the IMF board meant the bailout likely would
be granted by early May, the Journal recounts.

The IMF reached an interim deal in late March with Ukraine's pro-
Western government to provide up to US$18 billion in emergency
loans to help the Eastern European nation avert a financial
collapse, the Journal relates.

Western leaders want the IMF deal done as soon as possible to
help shore up the new government's power, but at the same time
are trying to ensure Ukraine doesn't repeat the economic and
political missteps of the past that helped lead to the current
economic turmoil, the Journal says.

U N I T E D   K I N G D O M

ASTRACAST: Creditors to Lose GBP100 Million in Pre-pack Sale
Insolvency News reports that creditors of bathroom fittings
company Astracast are unlikely to recover their full liabilities
as owners HLD Group has put the company into administration over
a GBP90 million black hole in its pension fund.

According to the report, the looming pension liability deterred
any interest from trade buyers or private equity firms so
insolvency experts recommended that a pre-pack sale would provide
the best option for creditors of the business and employees.

Insolvency News notes that secured creditor Aldermore is expected
to recover its GBP6.9 million lending, but Astracast's pension
scheme, which has an estimated buyout liability of GBP90 million
and trade creditors totaling GBP13.4 million are unlikely to
receive a realisation which recovers their full liabilities.

Astracast was part of a cluster of companies owned by HLD known
as Spring Ram, trading primarily in the bathroom fittings sector.
Formerly known as Jacuzzi UK Group plc, prior to its acquisition
by the HLD Group in December 2012, Astracast had been burdened by
a huge pension deficit, Insolvency News discloses.

"The principal liability for the scheme remained with Astracast,
with the company providing a guarantee. The scheme had a
significant deficit, estimated by Astracast's directors at circa
GBP90m. The company was not in a position to honour this
guarantee," Insolvency News relays citing a creditors' report for
Spring Ram -- renamed CRS Old -- administrators at Leonard Curtis
in Manchester.

Insolvency News notes that the Astracast pension is now being
transferred to the Pension Protection Fund which will maintain
payments to existing pensioners and pay future pensioners around
90% of what they would expect to receive.

Astracast was put through a pre-packaged administration with HLD
acquiring the assets through Ashworth Global Pipe Systems, which
has now changed its name to Astracast and the company is
continuing to trade.

According to the Leonard Curtis document, CRS Old also owes
related companies GBP103m and has total liabilities of GBP193m.

BRADFORD BULLS: Appeal Against Points Deduction to be Heard Soon
Daily Star reports that the Bradford Bulls has formally announced
their intention to contest the RFL's decision to dock them six
points for going into administration.

Bradford will argue in front of a specially-convened independent
sporting sanctions panel that they had no option but to breach
the game's insolvency regulations as they faced the threat of a
winding-up petition, according to the report.

Daily Star relates that a statement from the governing body said:
"The RFL can confirm that Bradford Bulls have submitted an appeal
against the points deduction handed down by the RFL board of
directors as a penalty for entering into administration in
January 2014.

"The appeal has been lodged on the grounds that the insolvency
event arose solely as a result of force majeure, in that the
club's administration occurred in circumstances that were
unforeseeable and unavoidable.

"The appeal will be heard by a specially-convened independent
sporting sanctions appeal panel chaired by a qualified solicitor
or barrister.

"The panel will also feature at least two other members, one of
whom must be a fully-qualified insolvency practitioner.

"The panel has the discretionary power to instruct an independent
firm of accountants or alternative expert to provide evidence to
assist them in deciding whether or not the insolvency event arose
as a result of force majeure.

"The panel will hear Bradford's appeal as soon as possible, with
details of the time and date to be confirmed in due course."

Acccording to the report, the RFL said it will be bound by the
decision of the panel, which could confirm the deduction of six
points, reduce the severity of the penalty or overthrow it.

Bradford Bulls is a professional rugby league club in Bradford,
West Yorkshire, England, who plays in the Super League.

CO-OPERATIVE BANK: Labour Party Set to Break Ties
Matthew Holehouse at The Telegraph reports that the Labour Party
is poised to break its ties with the Co-operative Bank after more
than 90 years.

According to The Telegraph, Iain McNicoll, Labour's general
secretary, is looking to move loans worth more than GBP1 million
out of the Co-op, and place them with trade union-owned and
controlled Unity Trust bank.

The party has faced scrutiny over its relationship with the
troubled Co-op, which had to be rescued by US investors after its
disastrous failed bid to take over the Britannia Building
Society, The Telegraph relates.

A major report into the near-collapse by Sir Christopher Kelly
will blame poor governance, saying directors performed "extremely
cursory" checks before attempting the takeover, The Telegraph

David Cameron claimed Labour "knew" about the past of Rev
Flowers, who was chairman of the bank, and accused the party of
failing to alert financial regulators to concerns about him while
he had "trooped in and out of Downing Street under Labour", The
Telegraph relates.

Labour denied being aware of a string of long-standing
allegations about Rev Flowers' sexual conduct, The Telegraph

Co-op Bank -- part of the mutually owned food-to-funerals
conglomerate Co-operative Group -- traces its history back to
1872.  The bank gained prominence for specializing in ethical
investment.  It refuses to lend to companies that test their
products on animals, and its headquarters in Manchester is
powered by rapeseed oil grown on Co-operative Group farms.

Founded in 1863, the Co-op Group has more than six million
members, employs more than 100,000 people, and has turnover of
more than GBP13 billion.

                           *     *     *

The Troubled Company Reporter-Europe on Nov. 14 and 18, 2013 has
reported that Moody's Investors Service has affirmed The
Co-operative Bank's Caa1 senior unsecured debt and deposit
ratings, and changed the outlook on the rating to negative from
developing, and Fitch Ratings has downgraded the company's Issuer
Default Rating to 'B' from 'BB-' and placed it on Rating Watch

CO-OP BANK: Moody's Cuts Unsecured Debt Rating to 'Caa2'
Moody's Investors Service has downgraded by one notch to Caa2 the
Co-Operative Bank Plc's senior unsecured debt and deposit
ratings, and maintained the negative outlook on the ratings. The
bank's standalone bank financial strength rating (BFSR) has been
affirmed at E, which is equivalent to a baseline credit
assessment (BCA) of ca. The BFSR has a stable outlook. The bank's
short-term ratings are unaffected by the action.

The downgrade reflects Moody's opinion of a reduced likelihood of
systemic support coming from the UK authorities in the event that
additional capital is required for the Co-operative Bank; any
further capital needs would need to be raised from either
existing shareholders or in the market, but Moody's believes
there is a much reduced likelihood that the UK government would
commit taxpayer's money to inject capital into the bank if this
was required in the future, as the bank's ongoing deleveraging
process is leading to a smaller and less systemically important
financial institution.

At the same time, Moody's notes that the Caa2 senior debt and
deposit ratings benefit from two notches of uplift from the
bank's standalone BCA of ca to reflect the (1) the cushion for
senior creditors provided by the planned additional capital raise
and outstanding subordinated bonds; and (2) Moody's continued
expectation of regulatory forbearance, giving the bank several
years to ensure that it can again meet regulatory capital
requirements (the Prudential Regulation Authority's Individual
Capital Guidance - ICG).

Despite the envisaged imminent capital raise of GBP400 million
that the bank has announced in order to maintain its core equity
tier 1 ratio prudently above 7%, the standalone ratings at E/ca
continue to reflect the significant challenges faced by the bank
to re-establish a sustainable business.

Ratings Rationale

Downgrade Incorporates Moody's View Regarding Reduced Likelihood
Of Systemic Support From Uk Government In The Event Of Need

The downgrade of the Co-operative Bank's debt and deposit ratings
reflects Moody's view of the reduced likelihood of potential
support coming from the UK government, as the ongoing
deleveraging process is leading to a smaller and less
systemically important financial institution. The remaining two
notches of uplift incorporate the benefit to senior unsecured
creditors from the proposed GBP400 million capital increase and
the cushion generated by the outstanding GBP196 million of
subordinated debt. Moody's also notes that the bank continues to
benefit from regulatory forbearance from the Prudential
Regulation Authority (PRA) to meet its Individual Capital
Guidance (ICG).

Standalone Ratings Continue To Reflect Significant And Protracted
Downside Risk

Taking into consideration the planned imminent capital increase,
Moody's has maintained the bank's standalone credit assessment at
ca, reflecting the significant execution risks attached to
management's plan to re-establish a sustainable, viable and
sufficiently solvent business over the medium term. The bank's
weak capital position and the potential for additional unexpected
losses to arise from conduct remediation costs heighten the
shorter-term execution risks of this turnaround strategy and pose
significant risks for bondholders over the next several years.
While Moody's acknowledges management's efforts to review areas
of risk and maintain appropriate provisions, the extension and
wide range of additional conduct remediation costs reflect the
significant downside risk arising from its legacy conduct and
documentation issues.

The Co-operative Bank reported a GBP1.3 billion operating loss
prior to its liability-management exercise in 2013, and Moody's
believes that the bank will find it challenging to return to
profitability over the next two to three years. As a result,
capital ratios will decline over this period of time, unless the
bank is able to dispose of non-core assets in a capital-accretive
way. Moody's notes that the GBP400 million capital increase is
critical to enable the bank to realise its plan to remain as a
going concern entity, and eventually be able to return to
profitability. The capital raise will also be crucial to enabling
the bank to improve its leverage ratio from 2.4% as of December
2013 to 3.2%. This is just above the minimum PRA requirement and
compares poorly with peers able to generate capital organically
through earnings.

What Could Change the Rating -- UP

Upward pressure on the long-term debt and deposit ratings of the
Co-operative Bank could develop over the longer term as Moody's
sees evidence of the full recapitalization plan, together with
significant progress being made in the bank's restructuring,
deleveraging and cost-saving initiatives.

What Could Change the Rating -- DOWN

Negative pressure on the senior unsecured debt and deposit
ratings would stem from either (1) the bank's inability to raise
additional capital to increase its core equity tier 1 ratio; (2)
delays in the progress on the cost saving and restructuring
plans; (3) a significant deterioration of its liquidity; and/or
(4) higher than expected impairments or conduct-related costs.

DALTON & DALTON: High Court Enters Wind Up Order
Dalton & Dalton Tax Consultants Ltd, a Lancashire based company
which misrepresented its ability to obtain council tax rebates
for customers, has been wound up in the High Court on April 4,
following an investigation by the Insolvency Service.

The Court heard that the company made unsolicited calls to
arrange appointments for its sales agents to visit prospective
customers at home, where agents invariably told prospective
customers that they were likely to be successful with an
application for council tax re-banding and hence a rebate of
council tax paid in previous years.

An agreement was signed and the customer was required to pay an
upfront fee of GBP165 if they wished to instruct Dalton & Dalton
Tax Consultants Ltd. In the event that the company achieved a
council tax rebate for a customer, it was able to retain a
'success fee' of 25% of the rebated amount.

Commenting on the case, Colin Cronin, an Investigation Supervisor
with the Insolvency Service, said,

"Dalton & Dalton Tax Consultants Ltd grossly overstated its
ability to achieve council tax re-banding and rebates for its
customers, thereby inducing customers to pay an advance fee of
GBP165 for this service.

"It is telling that the company's income was derived almost
entirely from these advance fees and very little was from the
success fees to which it was entitled if it achieved financial
rebates for customers.

"These winding-up proceedings show that the Insolvency Service
will take firm action against companies which mislead the public
in this way."

The investigation established that the company had no meaningful
expertise or success in challenging council tax banding on behalf
of its customers.

Analysis of the company's income showed that it had banked
receipts totalling GBP1,085,946 of which GBP1,045,821 represented
the upfront fees paid by customers and just GBP17,688 of the
company's income was from success fees. Only 1% of the 2,750
concluded council tax banding challenges made by the company had
been successful.

The Court found that Dalton & Dalton Tax Consultants Ltd had
traded with a lack of commercial probity by making misleading and
unfounded statements and selling a service which provided no
commercial benefit to the overwhelming majority of its customers.

The petition to wind-up Dalton & Dalton Tax Consultants Ltd was
presented under s124A of the Insolvency Act 1986 on 5 February
2014. The company was wound-up on 4 April 2014.

EMERALD 2: S&P Assigns Prelim 'B' Corp. Credit Rating
Standard & Poor's Ratings Services said that it assigned its
preliminary 'B' long-term corporate credit rating to U.K.-based
Emerald 2 Limited (Emerald 2), an intermediate holding company of
ERM Worldwide Ltd.  The outlook is stable.

"At the same time, we assigned our preliminary 'B' issue ratings
to the US$680 million senior secured (first-lien) loans due 2021,
the US$50 million revolving credit facility (RCF) due in 2020,
and the US$70 million acquisition facility due in 2020, all
issued by Emerald 3 Limited and other subsidiaries.  The recovery
rating on these facilities is '4', indicating our expectation of
average (30%-50%) recovery prospects in the event of a payment
default," S&P said.

In addition, S&P assigned its preliminary 'CCC+' issue rating to
the US$150 million subordinated (second-lien) loans due 2022,
issued by Emerald 3 Limited and other subsidiaries.  The recovery
rating on this loan is '6', indicating S&P's expectation of
negligible (0%-10%) recovery prospects in the event of a payment

The 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 the
final ratings.  If Standard & Poor's does not receive the final
documentation within a reasonable time frame, or if the 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 loans, financial and other
covenants, security, and ranking.

The ratings on Emerald 2 reflect S&P's assessment of the
company's financial risk profile as "highly leveraged" and its
business risk profile as "fair," as its criteria define these
terms, and that Emerald 2's key credit metrics will remain in the
"highly leveraged" financial risk profile category throughout
2015 and 2016.

S&P takes into account shareholder loans in its adjusted debt
calculations, in line with its criteria.  Following Emerald 2's
refinancing, the shareholder instruments will have been partially
repaid, leaving approximately US$250 million remaining at the
close of the transaction.  S&P's fully adjusted debt figure of
US$1.1 billion for the year ending March 2015 includes the new
financing package totaling US$830 million, the remaining
shareholder instruments of about US$275 million (including
accrued interest at year end 2015), and S&P's estimate of about
US$32 million for operating leases.  S&P calculates the group's
leverage to be about 9.1x at the close of the transaction (7.1x
excluding the Charterhouse's shareholder instruments), which S&P
estimates will improve to about 8.6x (6.6x) by the end of
financial year ending March 31, 2015.  Cash flow protection, as
indicated by S&P's adjusted funds from operations (FFO)-to-debt
ratio, is expected to remain in the low single digits in the
medium term, and S&P forecasts that this ratio will stay
relatively stable.  S&P anticipates that free operating cash flow
will be relatively strong compared with similarly rated 'B'
peers, at about $40 million in financial year 2015.

S&P's assessment of Emerald 2's business risk profile as "fair"
reflects ERM's operations in the niche but fast growing
environmental consultancy market, exposure to cyclical natural
resources market to some degree, and weaker product
diversification than competitors such as URS Corp.  However,
these risks are partly offset by ERM's ability to retain clients
by closely integrating with them, (albeit running the risk of
losing a small number of staff to its clients), being well-
diversified across end markets and geographies, and being a
strong player within its niche addressable market.  That said,
S&P notes that the company's Standard & Poor's-adjusted EBITDA
margins of 13% (equivalent to 17.5% excluding discretionary
bonuses) are low when compared with typical professional service
providers and therefore, S&P assess it as "below average".
Management focuses on 27 key global clients, which results in
higher revenue growth but also results in higher concentration
risk (approximately 28% of sales).  Potential exposure to
litigation and problems relating to requirements not being met
pose a risk to the company's reputation.

S&P's business risk assessment incorporates its view of the
global professional service industry's "intermediate" risk, and a
"low" country risk.

The stable outlook reflects S&P's view that ERM will generate
steady revenue growth and cash flows, despite the moderate levels
of growth that S&P forecasts in its key markets of North America
and Europe in 2014.

Downward pressure could arise if the company undertakes a more
aggressive financial policy -- in terms of shareholder returns
and acquisitions -- than S&P currently envisage.  A reduction in
cash flow generation caused by a decline in margins or lower cash
conversion, including FFO interest coverage of less than 2x,
could trigger a negative rating action.

S&P sees limited rating upside given that forecast credit metrics
are firmly placed in the "highly leveraged" financial risk
category.  Furthermore, the impact of the substantially larger
interest paying debt (totaling $830 million) as part of the
proposed partial replacement of the capital structure will place
additional pressure on cash interest coverage.  However, if S&P
sees sustained deleveraging and improving credit metrics it could
consider raising the ratings.

HIGHLAND GROUP: S&P Puts 'B' CCR on CreditWatch Developing
Standard & Poor's Ratings Services said that it has placed its
'B' long-term corporate credit rating on U.K.-based premium
department store group Highland Group Holdings Ltd. (House of
Fraser) on CreditWatch with developing implications.

At the same time, S&P placed its 'B' issue rating on the GBP250
million senior secured notes due 2018, issued by House of Fraser
(Funding) PLC, on CreditWatch with developing implications.

The recovery rating on these notes remains unchanged at '4'.

The CreditWatch placements reflect the uncertainties surrounding
House of Fraser's future capital structure, governance, financial
policies, and business strategy following the April 14, 2014,
announcement that Nanjing Xinjiekou Department Store Co. Ltd.
(Nanjing Xinbai) has signed a definitive agreement to acquire an
approximately 89% shareholding of House of Fraser.  The proposed
transaction is due to close within the next four months and
values House of Fraser at GBP480 million. Nanjing Xinbai is a
publicly listed company on the Shanghai Stock Exchange.

"We believe that the effects of the proposed takeover on House of
Fraser's business and financial risk profiles remain uncertain,"
said Standard & Poor's credit analyst Tim Wells.  "The developing
CreditWatch status indicates that we could raise, affirm, or
lower the ratings. It is possible that Nanjing Xinbai will look
to expand the House of Fraser business into new markets such as
China and the Middle East.  It is unclear what the new
shareholder's intention is for House of Fraser's capital
structure and we do not yet have sufficient visibility on the
relative financial strength of the new parent company Nanjing
Xinbai or its largest shareholder Sanpower Group, a holding with
investments in the industries of retail, supply chain,
information technology, media, real estate and financial
services.  We understand that the documentation of the
outstanding GBP250 million senior secured notes includes a
change-of-control clause, and that House of Fraser will seek
consent from noteholders to waive their rights on the change of
control.  It is also possible that some of these bonds will be
bought back by the new owner."

"House of Fraser's operating performance in 2013 was in line with
our forecasts, with positive same-store sales growth and strong
growth in its online business.  For the financial year to Jan.
25, 2014, House of Fraser's revenues were up 5% to GBP732
million, with reported EBITDA of about GBP60 million.  Under its
existing capital structure, we forecast that House of Fraser will
maintain Standard & Poor's-adjusted debt to EBITDA in the 8.0x-
8.5x range and EBITDA interest coverage of about 1.5x," S&P

S&P aims to resolve the CreditWatch placement once it has more
clarity on Nanjing Xinbai's future strategy for House of Fraser
and its possible effect on the company's business and financial
risk profiles.

"We would consider raising the ratings on House of Fraser should
Nanjing Xinbai fully disclose its business and financial strategy
for the company, and should this strategy support an improvement
in its credit profile for House of Fraser, leading to a sustained
adjusted debt-to-EBITDA ratio approaching 5.0x," Mr. Wells
continued.  "Any upside would also have to factor in a relatively
good credit standing for Nanjing Xinbai, the ultimate owner of
House of Fraser.  With the limited information we have at this
stage, we consider the likelihood of this scenario as modest,
given the financial leverage of House of Fraser and its acquirer.
That said, we still lack sufficient information regarding how
this transaction will be funded and what its credit metrics and
financial policy will be."

Conversely, S&P would consider lowering the ratings if it
considered that Nanjing Xinbai's future strategy for House of
Fraser would adversely affect the latter's business or financial
risk profiles or the relative financial strength of the new
parent company would negatively affect House of Fraser's credit


* BOOK REVIEW: From Industry to Alchemy
Author: Max Holland
Publisher: Beard Books
Softcover: 335 pages
List Price: $34.95
Review by Gail Owens Hoelscher
Order your personal copy today at
"From Industry to Alchemy" tells the story of people caught in
the middle of global competition, the institutional restraints
within which smaller companies had to operate after the Second
World War, the rise of Japanese industry, and the conglomeration
frenzy of the 1980s. The author's goal in writing this book was
to chronicle the decline in American manufacturing through the
story of that company.

Burgmaster was the culmination of the dream of a Czechoslovakian
immigrant, Fred Burg, who described himself as a "born
machinist." After coming to America in 1911, he learned the
tool-and- die trade, becoming so adept that he "could not only
drill the hole, but also make the drill." A life-long inventor,
he designed an electric automatic transmission that was turned
down by GM's Charles Kettering; GM came out with a hydraulic
version six years later. Forced by finances to work in
retailing, after World War II he retired, moved to California
and set up a machine-tool shop with his son and son-in-law to
manufacture the turret drill, his own design. With the help of
the Korean War, and a previous shortage of machine tools,
business took off. It was a hands-on operation from the start
and remained that way. Burg once fired an engineer who didn't
want to handle a machine part because his hands would get dirty.
Management spent time on the shop floor, listening to employee
ideas. Burg lived and breathed research and development,
constantly fiddling to devise new machines and make old ones
better. Between 1955 and 1962, sales grew 13-fold and employees
from 62 to 272. Burg Tool was featured on Richland Oil Company's
broadcast Success Stories.

By 1965, however, Fred Burg was getting old and the three
159partners knew that Burgmaster needed to fund another
expensive, risky expansion to fill back orders or lose market
share. Although companies had made offers before, Houdaille, a
company named for the Frenchman who invented recoilless artillery
during World War I, seemed a good match. The two had similar
origins, it seemed. Houdaille had begun an ambitious acquisition
program, and saw Burgmaster fitting into an unfilled niche. With
a merger, new capacity would be financed, and "Burgmaster would
continue to operate under present management, personnel and
policies but as a Houdaille division."

What comes next is management by numbers rather than hands-on
decisionmaking; alienation of skilled blue-collar workers;
pushing aside of management; squelching of innovation; foreign
and domestic competition; bitter trade disputes; leveraged
buyouts; the politics of U.S. trade policy; Japan-bashing; and
the inevitable liquidation of Burgmaster and loss of livelihood
of more than 400 employees.

This book was originally titled When the Machine Stopped: A
Cautionary Tale from Industrial America," published in 1989. It
was named by Business Week as one of the ten best business books
of 1989. The Chicago Tribune said that "anyone who wants to
understand American business must read When the Machine
Stopped.Holland has written the best business book in years."
The author explains trade regulations, the machine-tool
industry, and detailed corporate buyouts with equal clarity.

This down-to-earth book provides valuable insight into the
changes within an industry. It combines fascinating, creative
characters; number crunchers; growing corporate disdain for
manufacturing; and tangible consequences of Washington and Wall
Street gone crazy.

Max Hollandis a writer and research fellow at the Miller Center
of Public Affairs at the University of Virginia. His father
worked for 29 years as a tool-and-die maker, union steward, and
machine shop foreman for Burgmaster.


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
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Information contained herein is obtained from sources believed to
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members of the same firm for the term of the initial subscription
or balance thereof are US$25 each.  For subscription information,
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