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        T R O U B L E D   C O M P A N Y   R E P O R T E R

                           E U R O P E

            Thursday, May 8, 2014, Vol. 15, No. 90

                            Headlines

F R A N C E

AUTODISTRIBUTION GROUP: Moody's Assigns B2 Corp. Family Rating


G E R M A N Y

ALEO SOLAR: In Liquidation; Purchase Agreement Expected on May 16
ALBA GROUP: S&P Lowers CCR to 'B' on Weak Operating Performance
DEUTSCHE BANK: Moody's Rates New Undated Tier 1 Notes 'Ba3(hyb)'
SCHAEFFLER AG: S&P Assigns 'BB-' Rating to EUR1.5-Bil. Term Loan


G R E E C E

GREECE: Banks Must Let Weak Companies Fail, Central Bank Says


I R E L A N D

AERCAP IRELAND: Fitch Assigns BB+(EXP) Sr. Unsecured Debt Rating
AERCAP IRELAND: S&P Assigns 'BB+' Rating to Senior Notes
ALLIED IRISH: Obtains EU Approval for Restructuring Plan
EATON VANCE X: Moody's Affirms 'B1' Ratings on 2 Note Classes
EUROCREDIT CDO VIII: S&P Lowers Rating on Class D Notes to 'BB+'


L U X E M B O U R G

BRAAS MONIER: Moody's Assign 'B2' Corporate Family Rating


N E T H E R L A N D S

AERCAP HOLDINGS: Moody's Assigns 'Ba2' CFR; Outlook Stable
SCHAEFFLER FINANCE: Moody's Assigns 'B1' Rating to New Sr. Notes


R U S S I A

AEROFLOT JSC: Fitch Affirms 'BB-' IDR; Outlook Stable
MOSCOW INTEGRATED: S&P Affirms 'BB-/B' CCRs; Outlook Stable


S P A I N

BANCO POPULAR EMPRESAS 1: Fitch Affirms CC Rating on Cl. E Notes
SANTANDER EMPRESAS 2: Fitch Affirms 'Csf' Rating on Class F Notes


U N I T E D   K I N G D O M

CO-OPERATIVE BANK: Flowers Gets GBP525 Fine Over Meth Possession
CO-OPERATIVE GROUP: Must Take Radical Reforms or Face Breakup
FIRST QUANTUM: Moody's Affirms 'Ba3' CFR; Outlook Negative
IDH FINANCE: DD Acquisition No Impact on Fitch 'BB-' Notes Rating
MIZZEN BONDCO: Fitch Assigns 'B-' Rating to GBP200MM Sr. Notes

R&R ICE CREAM: Moody's Rates GBP315MM Sr. Secured Notes '(P)B1'
TURNSTONE BIDCO 1: S&P Affirms 'B' Corp. Credit Rating


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F R A N C E
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AUTODISTRIBUTION GROUP: Moody's Assigns B2 Corp. Family Rating
--------------------------------------------------------------
Moody's Investors Service has assigned a corporate family rating
(CFR) of B2 and probability of default rating (PDR) of B1-PD to
Parts Holdings (France) S.A.S., a holding company of the
Autodistribution group. Concurrently, Moody's has assigned a B3
rating to the EUR240 million senior secured notes due 2019 issued
by Autodis S.A. The outlook on all ratings is stable.

The definitive ratings are in line with the provisional ratings
assigned January 21, 2014 and reflect the successful execution of
the refinancing, the acquisition of ACR Holdings S.A.S. ("ACR")
and Moody's view that the final terms and conditions of the
facilities are in line with expectations.

Ratings Rationale

The B2 CFR reflects: (1) Autodistribution's exposure to the
economy of France representing about 90% of LTM October 2013
sales; (2) the company's modest size compared to some of its
suppliers, potentially limiting its bargaining power; (3) intense
competition in the sector leading to price pressure; (4) high
leverage proforma for the transaction; (5) sensitivity of the
automotive aftermarket to macroeconomic conditions and oil price;
and (6) risks relating to potential M&A activity.

Positively, the ratings are supported by: (1) an established
presence in the fragmented aftermarket, characterized by higher
customer loyalty and less cyclicality compared to the automotive
sector; (2) the company's relative size compared to other
independent players, manifesting itself in a dense distribution
network and leading to economies of scale; (3) a fragmented
customer base, consisting of local distributors and garages; and
(4) Autodistribution's track record showing improving operational
performance in the most recent years.

The capital structure includes EUR240 million five year fixed-
rate senior secured notes due 2019, and a EUR 20 million super-
senior RCF maturing in 2018. Both the notes and RCF are secured
by shares of Parts Holdings (France) S.A.S., a pledge over its
bank accounts and its intragroup receivables, shares of the
Issuer Autodis S.A., substantially all of its assets, including a
pledge over shares of certain subsidiaries held by Autodis S.A.,
its bank accounts as well as the rights over intragroup
receivables. The B3 rating on the notes reflects the limited
amount of guarantees from operational entities for the notes and
the liabilities ranking ahead of the notes.

What Could Change The Rating Up/Down

Positive pressure on the ratings could arise if Moody's adjusted
gross Debt/EBITDA ratio decreases below 5.0x and (EBITDA-Capex)
Interest ratio raises above 2.0x.

Negative pressure could arise if due to underperformance Moody's
adjusted gross Debt/EBITDA ratio rises towards 6.0x or (EBITDA -
Capex) / Interest ratio falls towards 1.5x. Any substantial debt-
financed acquisitions could also have a negative impact on the
ratings.

The principal methodology used in these ratings was the Global
Distribution & Supply Chain Services published in November 2011.
Other methodologies used include Loss Given Default for
Speculative-Grade Non-Financial Companies in the U.S., Canada and
EMEA published in June 2009.

Autodistribution is the leading independent distributor of
aftermarket parts for light vehicles and trucks in France. The
company generated revenue of EUR1,129 million in the twelve
months ended October 31, 2013.



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G E R M A N Y
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ALEO SOLAR: In Liquidation; Purchase Agreement Expected on May 16
-----------------------------------------------------------------
aleo solar AG was dissolved with effect from the end of April 30,
2014 according to the resolution of the Extraordinary General
Meeting of shareholders on April 15, 2014.  From May 1, 2014, the
company operates under the name of "aleo solar AG i.L." (aleo
solar AG in liquidation) until the company name change into "AS
Abwicklung und Solar-Service AG" resolved by the Extraordinary
General Meeting of shareholders becomes effective.

aleo solar AG expects that the company purchase agreement between
aleo solar AG and SCP Solar GmbH on the sale of significant parts
of aleo solar Group's business operations, including the
production site in Prenzlau and the "aleo" brand can be executed
on May 16, 2014.


ALBA GROUP: S&P Lowers CCR to 'B' on Weak Operating Performance
---------------------------------------------------------------
Standard & Poor's Ratings Services said that it lowered its long-
term corporate credit rating on Germany-based waste management
operator ALBA Group plc & Co. KG (ALBA Group) to 'B' from 'B+'.
The outlook is negative.

At the same time, S&P lowered its issue rating on ALBA Group's
EUR203 million unsecured notes due 2018 to 'CCC+' from 'B-'.  The
recovery rating on the unsecured notes is unchanged at '6',
reflecting S&P's expectation of negligible (0%-10%) recovery in
the event of a payment default.

The downgrade reflects that sustained competition and weak scrap
metal prices weakened ALBA Group's operating performance more
than we anticipated in 2013, although S&P notes that ALBA Group's
Standard & Poor's-adjusted debt to EBITDA has not fallen below
5x, the level S&P previously indicated as being commensurate with
the 'B+' rating.  Moreover, the prevailing tough operating
conditions have led S&P to revise its base-case forecast for ALBA
Group in the financial year ending Dec. 31, 2014 (financial
2014).  S&P now estimates that ALBA Group's EBITDA on a reported
basis will stabilize at about EUR120 million in financial 2014,
compared to S&P's previous forecast of EBITDA generation of about
EUR140 million.

In 2013, ALBA Group's revenues declined by 10% and its reported
EBITDA declined by 30%.  This was due, among other factors, to a
continued decline in European steel production; weak scrap metal
prices, and consequently low availability of scrap; adverse
weather conditions; and a reduction in scrap demand in Turkey.
The introduction of tighter regulation on waste imports in China
has also had negative repercussions for global waste exporters,
including ALBA Group.  S&P also considers that ALBA Group's
operating landscape in the Waste Operations and Services segments
has become more competitive over the past 12 months because
reduced waste generation has led to overcapacity among industry
operators.

The 'B' corporate credit rating on ALBA Group is derived from:

   -- S&P's anchor of 'b', based on its "weak" business risk and
      "aggressive" financial risk profile assessments for the
      group; and

   -- A downward adjustment to the anchor of one notch for S&P's
      "comparable rating analysis," whereby S&P reviews an
      issuer's credit characteristics in aggregate.  S&P's
      downward adjustment reflects its view that ALBA Group's
      credit metrics are at the lower end of the "aggressive"
      financial risk profile category.

Management has already started to manage its cost base by
reorganizing its corporate structure and broadening its
geographical coverage.  In 2013, ALBA Group disposed of two loss-
making waste operations in Germany, and S&P believes that the
group will continue to undertake opportunistic asset disposals as
part of its strategy to reduce its exposure to Germany.  At the
same time, management's strategy is to increase its exposure to
markets such as Turkey and China.

"In financial 2013, we calculate that ALBA Group's debt to EBITDA
deteriorated to 4.6x from 3.9x, and its funds from operations
(FFO) to debt deteriorated to 12% from 17%.  In our base case, we
forecast that ALBA Group's credit metrics will be stable in
financial 2014, as the benefits of the cost-restructuring
measures and loss-making asset disposals will more than offset
competitive challenges.  We believe that ALBA Group's free
operating cash flow (FOCF; cash flow after interest payments,
working capital changes, and capital expenditure [capex]) will be
negative in the current financial year, and therefore the group
will repay amortizing term debt of EUR30 million by drawing on
its revolving credit facility (RCF). Evolution of FOCF is a key
rating factor for ALBA Group, since sustained negative FOCF will
weaken the group's liquidity," S&P said.

S&P's base-case scenario for ALBA Group assumes:

   -- A modest improvement in revenues;

   -- An improvement in reported EBITDA to EUR120 million in
      financial 2014, from EUR113 million in financial 2013; and

   -- A working capital investment of about EUR40 million as
      scrap trading volumes pick up.

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

   -- Standard & Poor's-adjusted debt to EBITDA of 4.5x-4.6x; and

   -- Adjusted FFO to debt of about 12%.

The negative outlook reflects S&P's view that there is a one-in-
three chance of a downgrade if ALBA Group's operating environment
continues to deteriorate, resulting in a further decline in
EBITDA, as opposed to our base-case forecast of modest EBITDA
growth in financial 2014.  The negative outlook also incorporates
S&P's view that the group's FOCF will be negative in the current
financial year.

Downside scenario

Downward rating pressure could also arise if the group's
operating profit declines further, pressuring liquidity.  This
could arise on account of factors including a continued decline
in scrap metal volumes; sustained margin pressure due to
competition for the Waste Operations and Service business; or the
benefits of cost restructuring not being fully realized.  In
addition, a downgrade could occur if the tight headroom under
ALBA Group's covenants persists, leading to the risk of a
covenant breach.

Upside scenario

An outlook revision to stable depends on an improvement in ALBA
Group's operating environment, including a recovery in steel
production in Europe, an improvement in the availability of scrap
metal, and a stabilization of margins in the Waste Operations and
Services segments.


DEUTSCHE BANK: Moody's Rates New Undated Tier 1 Notes 'Ba3(hyb)'
----------------------------------------------------------------
Moody's Investors Service has assigned a Ba3(hyb) rating to the
proposed Undated Non-cumulative Additional Tier 1 Notes to be
issued by Deutsche Bank AG (rated A2 for deposits, under review
for possible downgrade).

The Ba3(hyb) rating assigned to the notes is based on Deutsche
Bank's creditworthiness and is rated four-notches below the
bank's baa2 BCA, in line with Moody's Guidelines for Rating
Junior Debt Obligations.

Ratings Rationale

The Undated Non-cumulative Additional Tier 1 Notes are
contractual non-viability securities. The notes are perpetual and
senior only to ordinary shares. Coupons are skipped on a non-
cumulative basis at the issuer's option, and on a mandatory basis
subject to availability of distributable items and regulatory
discretion.

The principal of the notes will be written down if the group's
common equity Tier 1 capital ratio drops below 5.125%. The
principal write-down is either partial or full, depending on the
capital shortfall, and the issuer has the option to write the
notes back up if an annual profit is recorded in the future.
There is no substitution or variation provision.

The Ba3(hyb) rating is four notches below Deutsche Bank's baa2
BCA: three notches for deeply subordinated claim in liquidation
and one additional notch for contractual loss absorption feature.

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

Moody's noted that on 1 May 2014 it released a request for
comment in which the rating agency has requested market feedback
on potential changes to its Credit Rating Methodology for non-
viability contingent capital securities. If the revised Credit
Rating Methodology is implemented as proposed, the Credit Rating
on Deutsche Bank AG's Undated Non-cumulative Additional Tier1
Notes may be positively affected. Please refer to Moody's Request
for Comment, titled "Moody's Proposed Approach for Rating Bank
'High Trigger' Contingent Capital Securities and Revisions to
Framework for Rating Non-viability Contingent Capital Securities:
A Proposed Update to Moody's Global Banks Rating Methodology,"
for further details regarding implications of the proposed Credit
Rating Methodology changes on Moody's Credit Ratings.

The Ba3(hyb) rating is subject to a conclusive review of the
final transaction and associated documentation.

Deutsche Bank is one of the largest European banks, headquartered
in Frankfurt with total assets of EUR 1,637 billion at end-March
2013.


SCHAEFFLER AG: S&P Assigns 'BB-' Rating to EUR1.5-Bil. Term Loan
----------------------------------------------------------------
Standard & Poor's Ratings Services said that it assigned a 'BB-'
issue rating to the proposed EUR1,500 million term loan E due
2020 to be borrowed by INA Beteiligungsgesellschaft GmbH, a
subsidiary of German manufacturing group Schaeffler AG
(BB-/Stable/--).  The recovery rating on this instrument is '3',
indicating S&P's expectation of meaningful (50%-70%) recovery in
the event of a payment default.

At the same time, S&P assigned a 'BB-' issue rating to Schaeffler
Finance B.V.'s proposed senior secured notes (also to be split
into euro and U.S. dollar tranches) due 2019-2022.  The recovery
rating on these instruments is '3', indicating S&P's expectation
of meaningful (50%-70%) recovery in the event of a payment
default.

S&P also assigned a 'B' issue rating to Schaeffler Finance B.V.'s
proposed senior unsecured fixed-rate notes due 2019.  S&P has
assumed the amount of these notes at EUR500 million.  The issue
rating is two notches below the corporate credit rating, and the
recovery rating is '6', indicating S&P's expectation of
negligible (0%-10%) recovery in the event of a payment default.

S&P affirmed the 'BB-' issue ratings on Schaeffler Finance's
existing senior secured notes, and the senior term loans borrowed
by INA Beteiligungsgesellschaft.  The recovery ratings are
unchanged at '3'.

Schaeffler's proposed senior secured debt instruments will share
the same security and guarantee package as the group's existing
senior secured loans and notes, and the rating on these
instruments is the same as the corporate credit rating on
Schaeffler.  S&P rates the proposed senior unsecured notes two
notches below the corporate credit rating due to their unsecured
status and the significant amount of prior-ranking senior secured
liabilities.  S&P has assumed that the senior unsecured notes
will amount to EUR500 million.

Schaeffler will use the proceeds from the new debt issuance to
refinance existing senior secured debt facilities, improving the
group's debt maturity profile and lowering interest costs.  The
group will use approximately EUR370 million of the proceeds from
the refinancing to pay an anti-trust fine.

If the refinancing completes as expected, S&P will withdraw its
issue and recovery ratings on the EUR299 million E+3.75% term
loan C due January 2017, the US$1,700 million L+3.25% term loan C
due January 2017, the EUR326 million 6.75% notes due July 2017,
the EUR400 million 8.75% notes due February 2019, and the
EUR385 million 8.5% notes due February 2019.

The '3' recovery ratings on the senior secured notes issued by
Schaeffler Finance and senior term loans borrowed by INA
Beteiligungsgesellschaft are supported by the pari passu ranking
of the notes and the credit facilities but constrained by the
company's high debt, the lack of tangible asset security, and the
complex capital structure.  In S&P's view, the senior credit
facilities benefit from stronger protection due to the existence
of maintenance financial covenants in the loan agreement.

The recovery rating of '6' and the issue rating of 'B' on the
junior notes due 2018 issued by Schaeffler Holding Finance B.V.
remain unchanged.  The recovery rating is constrained by the
notes' structural subordination to the significant senior debt
issued under Schaeffler AG.

S&P do not include in its analysis Schaeffler's 46% equity
interest in its larger rival Continental, which, from an
accounting standpoint, is consolidated by the equity method in
Schaeffler's accounts.  This is because S&P regards the value of
this investment as volatile, and note that, under this
documentation, there is a possibility that these shares could
become unencumbered and sold.

S&P's default scenario assumes that Schaeffler could default if
its operating performance deteriorated markedly and free cash
flow generation declined due to the company's inability to
refinance its senior revolving credit facility maturing in 2016.

S&P values the group on a going-concern basis, given Schaeffler's
strong brand name and leading positions in certain automotive-
component and industrial bearing segments.

Simulated default and valuation assumptions:
   -- Year of default: 2016
   -- EBITDA at emergence: EUR755 million
   -- Implied enterprise value multiple: 6.0x
   -- Jurisdiction: Germany

Simplified waterfall:

   -- Gross enterprise value at default: EUR4.5 billion
   -- Administrative costs: EUR315 million
   -- Net value available to creditors: EUR4.2 billion
   -- Priority claims: EUR740 million
   -- Senior secured debt claims: EUR6.9 billion*
   -- Recovery expectation: 50%-70%
   -- Senior unsecured debt claims: EUR510 million*
   -- Recovery expectation: 0%-10%
   -- Subordinated debt claims: EUR4 billion*
   -- Recovery expectation: 0%-10%

* All debt amounts include six months' prepetition interest and
  assume accrued interest on the payment-in-kind toggle notes.



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G R E E C E
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GREECE: Banks Must Let Weak Companies Fail, Central Bank Says
-------------------------------------------------------------
Kerin Hope at The Financial Times reports that Greece's central
bank governor has said Greek banks must let weak companies fail
and encourage consolidation across the economy if the country is
to return to sustainable growth.

The warning comes after the central bank pressed Greece's four
largest lenders to set up "bad bank" divisions to tackle non-
performing loans, which amount to 33% of total lending of about
EUR220 billion, the FT relays.  However, the banks have so far
been reluctant to pull the plug on corporate borrowers unable to
meet payments on their debt, the FT notes.

From 18 commercial banks in 2009, Greece now has only four
systemic lenders -- recapitalized from its EUR172 billion second
rescue program -- one small private bank and a handful of
regional co-operative banks, the FT discloses.



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AERCAP IRELAND: Fitch Assigns BB+(EXP) Sr. Unsecured Debt Rating
----------------------------------------------------------------
Fitch Ratings expects to assign a rating of 'BB+' to the senior
unsecured notes to be issued by subsidiaries of AerCap Holdings
NV (AerCap; 'BBB-'/Rating Watch Negative).  The proposed debt
would be issued by AerCap Ireland Capital Limited (Irish Issuer)
and AerCap Global Aviation Trust (Delaware Issuer), both wholly
owned subsidiaries of AerCap, and will benefit from a full and
unconditional, joint and several guaranty of the parent company
and various other subsidiaries.

The proceeds will be used to fund a part of the cash payment to
American International Group (AIG) in connection with AerCap's
acquisition of International Lease Finance Corp. (ILFC;
'BB'/Rating Watch Positive).

KEY RATING DRIVERS

The expected note issuance is part of the acquisition financing
strategy that was articulated by the company in December 2013.
The proceeds will replace the $2.75 billion committed bridge
financing previously obtained by AerCap. Given the various
guarantees, Fitch believes the proposed notes would rank pari
passu with both AerCap's and ILFC's existing unsecured
obligations.

Upon consummation of the acquisition, AerCap's balance sheet
leverage will increase materially, primarily as a result of
acquisition-related purchase accounting.  Therefore, AerCap's
credit profile will initially become riskier, but Fitch expects
it to improve over time as the acquisition is integrated and
equity is built up through retained earnings.  The 'BB+' rating
would be supported by the company's plans to maintain a
conservative capital policy with no dividends or share
repurchases until reported debt-to-equity is reduced to
approximately 3.0x.  Fitch believes the combined business offers
fairly good visibility into future earnings and operating cash
flows, which underpins the company's de-leveraging plan.

Fitch believes that the best measure of financial leverage for
the combined company is tangible debt-to-tangible equity.  This
measure adjusts for certain accounting assets and liabilities
that will be created as a result of purchase accounting, and is
more reflective of the economic value of the balance sheet than
the reported debt-to-equity ratio.  Some of the adjustments
include the fair value (FV) adjustment to ILFC's debt, the FV of
the order book and the lease premium.  According to Fitch's
estimates, the initial tangible debt-to-tangible equity ratio
will be 5.1x, higher than the reported pro forma leverage figure
of 4.5x. However, the two measures are expected to converge as
the purchase accounting adjustments get accreted over time.

The acquisition will significantly expand AerCap's access to
unsecured funding, which is expected to represent approximately
60% of total debt on a pro forma basis.  Furthermore, AerCap will
acquire a large pool of unencumbered aircraft, which will provide
support to unsecured creditors.  Upon closing of the acquisition,
Fitch expects to equalize the company's unsecured debt with its
long-term Issuer Default Rating (IDR) because it will represent a
significant part of the capital structure.

Rating Sensitivities

Fitch believes positive rating momentum is possible over the
longer term if AerCap executes on the plan it has outlined.  More
specifically, successful integration of ILFC's fleet and staff, a
reduction of balance sheet leverage as outlined by the company,
maintenance of robust liquidity and improvement in the fleet
profile are viewed as positive rating drivers.  Positive rating
momentum could stall if AerCap runs into any meaningful
integration issues, if dividends or share repurchase activity are
reinstituted before deleveraging plans are completed, or if there
is a material downturn in the aviation sector, which negatively
impacts its business.

Downside risks to AerCap's ratings will be elevated until the
acquisition is integrated and leverage is reduced.  Negative
rating actions could result from significant integration issues,
loss of key airline relationships, deterioration in financial
performance and/or operating cash flows, higher than expected
repossession activity and/or difficulty re-leasing aircraft at
economical rates.  Longer term, aggressive capital management, a
reduction in available liquidity or inability to maintain or
improve the fleet profile could also lead to negative rating
pressure.

Upon its acquisition of ILFC, AerCap will become one of the
largest global aircraft lessors, with a fleet of over 1,300
aircraft and $43 billion in total assets.

Fitch expects to assign the following ratings:

AerCap Ireland Capital Limited

AerCap Global Aviation Trust

-- Senior unsecured debt at 'BB+(EXP)'.

Fitch currently rates AerCap and its related subsidiaries as
follows:

AerCap Holdings N.V.

-- Long-term IDR 'BBB-', Rating Watch Negative.

Various operating subsidiaries of AerCap

-- Senior secured debt 'BBB', Rating Watch Negative.

AerCap Aviation Solutions B.V.

-- Senior unsecured debt rating 'BB+'.


AERCAP IRELAND: S&P Assigns 'BB+' Rating to Senior Notes
--------------------------------------------------------
Standard & Poor's Ratings Services said its corporate credit
rating on Amsterdam-based aircraft lessor AerCap Holdings N.V.
remains on CreditWatch with negative implications.

At the same time, S&P is assigning AerCap Ireland Capital Ltd.'s
and AerCap Global Aviation Trust's (both wholly owned
subsidiaries of and guaranteed by AerCap Holdings N.V.) senior
notes its 'BB+' issue-level rating, with a recovery rating of
'3', indicating S&P's expectation that lenders would receive
meaningful (50%-70%) recovery of principal in the event of a
payment default.  The company will use proceeds for a portion of
the proposed acquisition of ILFC.

In addition, S&P is affirming its 'BB+' rating on AerCap Aviation
Solutions B.V.'s notes and removing the rating from CreditWatch.
AerCap Aviation Solutions' notes are also guaranteed by AerCap
Holdings.

S&P's 'BB+' issue-level rating and '3' recovery rating on the new
senior unsecured notes is based on its analysis of recovery
prospects in a hypothetical bankruptcy scenario, assuming S&P
lower thes corporate credit rating on AerCap to 'BB+'.  S&P
currently do not use recovery analysis to assign issue-level
ratings for AerCap, because the current 'BBB-' corporate credit
rating is investment grade.  Accordingly, S&P's analysis focuses
on the company's expected post-acquisition rating.  S&P affirmed
ratings on AerCap Aviation Solutions' existing senior unsecured
notes and removed them from CreditWatch, because it concluded
that we would rate these notes at the same 'BB+' level with or
without conclusion of the acquisition.

The merger of AerCap and ILFC should strengthen the resulting
company's competitive position somewhat and provide opportunities
for overhead cost savings.  The combined fleet will total over
1,300 owned and managed aircraft.  ILFC is currently the second
largest aircraft lessor, behind General Electric Capital Aviation
Services (GECAS), and the combined entity will maintain that
position.  The combined entity will also have an order book of
379 new aircraft (as of Dec. 31, 2013), comprising a large number
of in-demand new-technology Airbus A350's and A320 neos (new
engine option), and Boeing 787's.

Under the merger agreement, ILFC would become a wholly owned
subsidiary of AerCap, and AerCap would assume ILFC's outstanding
debt.  With the incremental debt to fund the acquisition, S&P
expects the combined entity's debt to capital to increase to over
80% from the current low-70% area for each company.  This would
place it among the highest of the eight aircraft lessors rated by
Standard & Poor's.  Pro forma funds from operations (FFO) to debt
(about 10% currently for AerCap) would decrease modestly,
reflecting the added debt and interest expense.  S&P expects that
the consolidated AerCap would generate solid cash flow and
gradually deleverage following the merger, but would likely not
restore its balance sheet over the next 18-24 months.  As a
result, S&P expects to lower the corporate credit rating on
AerCap to 'BB+' from 'BBB-' upon closing of the transaction.  S&P
expects the merger, which has already received all necessary
regulatory approvals, to occur in mid-May 2014.

S&P will assess the combined entity's business and financial risk
profiles to resolve the CreditWatch listing.  Upon completion of
the acquisition, S&P expects to lower the corporate credit rating
on AerCap one notch to 'BB+'.


ALLIED IRISH: Obtains EU Approval for Restructuring Plan
---------------------------------------------------------
Aoife White and Joe Brennan at Bloomberg News report that Allied
Irish Banks Plc, Ireland's second largest lender by assets, won
European Union approval for its EUR21 billion (US$29 billion)
taxpayer rescue after agreeing a restructuring plan to return to
profitability.

Bloomberg relates that the European Commission said in an
e-mailed statement yesterday after it granted final approval for
the aid AIB will set targets for cost reductions and abstain from
acquisitions until the end of 2017.

AIB Chief Executive Officer David Duffy said in March the lender
may start repaying state support after European Central Bank
stress tests later this year, Bloomberg recounts.  Ireland owns
99.8% of the bank after a taxpayer bailout in the wake of the
worst real estate crash in Western Europe, Bloomberg discloses.

                    About Allied Irish Banks

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

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

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

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

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


EATON VANCE X: Moody's Affirms 'B1' Ratings on 2 Note Classes
-------------------------------------------------------------
Moody's Investors Service announced that it has taken the
following rating actions on the following classes of notes issued
by Eaton Vance CDO X plc:

Issuer: Eaton Vance CDO X plc

  EUR18,000,000 Class B-1 Second Priority Secured Floating Rate
  Notes due 2027, Upgraded to Aaa (sf); previously on Jul 1, 2011
  Upgraded to Aa1 (sf)

  USD23,400,000 Class B-2 Second Priority Secured Floating Rate
  Notes due 2027, Upgraded to Aaa (sf); previously on Jul 1, 2011
  Upgraded to Aa1 (sf)

  EUR14,750,000 Class C-1 Third Priority Deferrable Secured
  Floating Rate Notes due 2027, Upgraded to Aa3 (sf); previously
  on Jul 1, 2011 Upgraded to A1 (sf)

  USD19,175,000 Class C-2 Third Priority Deferrable Secured
  Floating Rate Notes due 2027, Upgraded to Aa3 (sf); previously
  on Jul 1, 2011 Upgraded to A1 (sf)

  EUR150,000,000 (current balance EUR 137,212,305) First Priority
  Senior Secured Floating Rate Variable Funding Note due 2027,
  Affirmed Aaa (sf); previously on Mar 30, 2007 Assigned Aaa (sf)

  EUR92,500,000 (current balance EUR 91,109,415) Class A-1 First
  Priority Senior Secured Floating Rate Notes due 2027, Affirmed
  Aaa (sf); previously on Mar 30, 2007 Assigned Aaa (sf)

  USD120,250,000 (current balance USD 118,442,239) Class A-2
  First Priority Senior Secured Floating Rate Notes due 2027,
  Affirmed Aaa (sf); previously on Mar 30, 2007 Assigned Aaa (sf)

  EUR17,750,000 Class D-1 Fourth Priority Deferrable Secured
  Floating Rate Notes due 2027, Affirmed Ba1 (sf); previously on
  Jul 1, 2011 Upgraded to Ba1 (sf)

  USD23,075,000 Class D-2 Fourth Priority Deferrable Secured
  Floating Rate Notes due 2027, Affirmed Ba1 (sf); previously on
  Jul 1, 2011 Upgraded to Ba1 (sf)

  EUR10,000,000 Class E-1 Fifth Priority Deferrable Secured
  Floating Rate Notes due 2027, Affirmed B1 (sf); previously on
  Jul 1, 2011 Upgraded to B1 (sf)

  USD13,000,000 Class E-2 Fifth Priority Deferrable Secured
  Floating Rate Notes due 2027, Affirmed B1 (sf); previously on
  Jul 1, 2011 Upgraded to B1 (sf)

Eaton Vance CDO X plc, issued in March 2007, is a multi currency
Collateralised Loan Obligation ("CLO") backed by a portfolio of
mostly high yield US and European loans. It is predominantly
composed of senior secured loans (96%), as well as second lien
loans (1%) and CLO securities (3%). The portfolio is managed by
Eaton Vance Management, and this transaction ended its
reinvestment period in February 2014.

The issued liabilities are denominated in EUR, USD and GBP and
naturally hedged by assets denominated in EUR, USD and GBP
respectively. As per the February 2014 report, rated EUR
liabilities exceed EUR assets by about 10%, while USD and GBP
assets exceed rated USD and GBP liabilities by similar amounts
respectively.

Ratings Rationale

According to Moody's, the rating actions taken on the notes
result primarily from the benefit of modelling actual credit
metrics following the expiry of the reinvestment period in
February 2014.

In consideration of the reinvestment restrictions applicable
during the amortization period, and therefore the limited ability
to effect significant changes to the current collateral pool,
Moody's analyzed the deal assuming a higher likelihood that the
collateral pool characteristics will continue to maintain a
positive buffer relative to certain covenant requirements. In
particular, the deal is assumed to benefit from a shorter
amortization profile and higher spread levels compared to the
levels assumed prior to the end of the reinvestment period in
February 2014.

The credit quality of the collateral pool has marginally improved
as reflected in the average credit rating of the portfolio
(measured by the weighted average rating factor, or WARF). As of
the trustee's February 2014 report, the WARF was 2114, compared
with 2222 in February 2013. The reported diversity score
increased to 85.3 in February 2014 from 81.3 a year ago. The
overcollateralization ratios for various classes of notes have
largely remained stable over the past twelve months.

The key model inputs Moody's uses in its analysis, such as par,
weighted average rating factor, diversity score and the weighted
average recovery rate, are based on its published methodology and
could differ from the trustee's reported numbers. In its base
case, Moody's analyzed the underlying collateral pool as having a
(a) an EUR pool with performing par and principal proceeds
balance of EUR134.5 million, and defaulted par of EUR6.5 million
and (b) a USD pool with performing par and principal proceeds of
USD428.8 million , and defaulted par of USD1.4 million, a
weighted average default probability of 18.4% (consistent with a
WARF of 2514 with a weighted average life of 4.85 years), a
weighted average recovery rate upon default of 48.3% for a Aaa
liability target rating, a diversity score of 77 and a weighted
average spread of 3.5%. The default probability derives from the
credit quality of the collateral pool and Moody's expectation of
the remaining life of the collateral pool. The estimated average
recovery rate on future defaults is based primarily on the
seniority of the assets in the collateral pool. For a Aaa
liability target rating, Moody's assumed that 96.1% of the
portfolio exposed to senior secured corporate assets would
recover 50% upon default, while the non first-lien loan corporate
assets would recover 15%. In each case, historical and market
performance and a collateral manager's latitude to trade
collateral are also relevant factors. Moody's incorporates these
default and recovery characteristics of the collateral pool into
its cash flow model analysis, subjecting them to stresses as a
function of the target rating of each CLO liability it is
analyzing.

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

In addition to the base-case analysis, Moody's conducted
sensitivity analyses on the key parameters for the rated notes,
for which it assumed a lower weighted average spread in the
portfolio. Moody's ran a model in which it lowered the weighted
average spread by 30bp; the model generated outputs that were
within one notch of the base-case results.

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

Additional uncertainty about performance is due to the following:

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

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

3) The deal has a fair degree of exposure to non-EUR denominated
assets, given the shortfall in EUR denominated assets relative to
EUR denominated liabilities. Volatilities in foreign exchange
rates will have a direct impact on interest and principal
proceeds available to the transaction, which may affect the
expected loss of rated tranches, particularly the junior ones.

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


EUROCREDIT CDO VIII: S&P Lowers Rating on Class D Notes to 'BB+'
----------------------------------------------------------------
Standard & Poor's Ratings Services took various credit rating
actions in Eurocredit CDO VIII Ltd.  Specifically, S&P has:

   -- Raised its ratings on the class A, B, and C notes;

   -- Lowered to 'BB+ (sf)' from 'BBB- (sf)' its rating on the
      class D notes; and

   -- Affirmed its 'B- (sf)' rating on the class E notes.

The rating actions follow S&P's review of the transaction's
performance.  S&P performed a credit and cash flow analysis and
assessed the support that each participant provides to the
transaction by applying our current counterparty criteria.  In
S&P's analysis, it used data from the latest available trustee
report, dated Feb. 28, 2014.

Eurocredit CDO VIII has been amortizing since the end of its
reinvestment period in January 2011.  Since S&P's previous review
on April 12, 2012, the aggregate collateral balance has decreased
by 44.92% to EUR273.75 million from EUR496.97 million.

S&P has subjected the capital structure to a cash flow analysis
to determine the break-even default rates for each rated class of
notes at each rating level.  In S&P's analysis, it used the
reported portfolio balance that it considered to be performing
(EUR273,750,492), the current weighted-average spread (3.774%),
the covenanted weighted-average spread (2.80%), and the weighted-
average recovery rates calculated in line with S&P's 2009
criteria for corporate collateralized debt obligations (CDOs).
S&P applied various cash flow stress scenarios, using four
different default patterns, in conjunction with different
interest rate and currency stress scenarios.

From S&P's analysis, it has observed EUR204.19 million of the
class A notes and EUR11.19 million of the class E notes have paid
down since S&P's previous review.  In S&P's view, this has
increased the available credit enhancement for the class A, B,
and C notes.  S&P has also observed that the
overcollateralization test results, the weighted-average recovery
rates, and the weighted-average spread have increased since S&P's
previous review.

Non-euro-denominated assets currently make up 20.55% of the total
performing assets in S&P's analysis.  The issuer has entered into
portfolio currency swap and currency options agreements to
mitigate the risk of foreign-exchange-related losses.

In S&P's opinion, the downgrade remedies for these currency
options and for the portfolio currency swap are not fully in line
with our current counterparty criteria.  Consequently, S&P's cash
flow analysis includes scenarios where the portfolio currency
swap and the currency option counterparty (Credit Suisse
International) does not perform, exposing the transaction to
changes in currency rates.

"In our analysis, we have also applied our nonsovereign ratings
criteria.  We have considered the transaction's exposure to
sovereign risk because some of the portfolio's assets -- equal to
12.02% of the transaction's total collateral balance -- are based
in Spain and Italy.  When applying stresses at the 'AAA' and
'AA+' rating levels, we have given credit to 10% of the
transaction's collateral balance, corresponding to assets based
in these countries, in our calculation of the aggregate
collateral balance," S&P said.

S&P's credit and cash flow analysis indicates that the available
credit enhancement for the class A and B notes is commensurate
with higher ratings than previously assigned, despite their
exposure to counterparty and sovereign risk.  S&P has therefore
raised its ratings on the class A and B notes.

S&P's credit and cash flow analysis of the class C notes
indicates that the available credit enhancement is also
commensurate with a higher rating.  S&P has therefore raised its
rating on the class C notes.  The current long-term issuer credit
ratings on the counterparties are sufficient to support a 'A+
(sf)' rating on the class C notes.

The application of the largest obligor default test constrains
S&P's ratings on the class D and E notes.  This test is a
supplemental stress test that S&P introduced in its 2009
corporate CDO criteria.  S&P took into account the available
credit enhancement after applying the largest obligor test
(assuming 5% recoveries on defaulted assets).  In line with the
results of these tests, S&P has affirmed its rating on the class
E notes and lowered our rating on the class D notes.

Eurocredit CDO VIII is a managed cash flow collateralized loan
obligation (CLO) transaction that securitizes loans to primarily
European speculative-grade corporate firms.  The transaction
closed in December 2007 and is managed by Intermediate Capital
Group PLC.

RATINGS LIST

Eurocredit CDO VIII Ltd.
EUR636 Million Senior and Secured Deferrable Floating-Rate Notes

Class                Rating
               To                  From

Ratings Raised

A              AAA (sf)            AA- (sf)
B              AA+ (sf)            AA- (sf)
C              A+ (sf)             A (sf)

Rating Lowered

D              BB+ (sf)            BBB- (sf)

Rating Affirmed

E              B- (sf)



===================
L U X E M B O U R G
===================


BRAAS MONIER: Moody's Assign 'B2' Corporate Family Rating
---------------------------------------------------------
Moody's Investors Service has assigned a corporate family rating
(CFR) of B2 and probability of default rating (PDR) of B2-PD to
Braas Monier Building Group S.A. Concurrently, Moody's has
assigned a 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., Monier Finance
S.a r.l and other borrowers; (2) to EUR250 million senior secured
term loan B facility due 2020 borrowed by Monier Finance S.a
r.l.; (3) EUR315 million senior secured 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 are used, together
with cash on Braas Monier's balance sheet, to refinance existing
indebtedness.

The definitive ratings are in line with the provisional ratings
assigned April 2, 2014 and reflect the successful execution of
the refinancing and Moody's view that the final terms and
conditions of the facilities are in line with expectations.

Ratings Rationale

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 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.

Outlook

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.

What Could Change The Ratings Up/Down

Moody's would consider upgrading Braas Monier if Debt/EBITDA
trends towards 4.0x and FCF/Debt is trending 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 (B2, Stable) is a
leading global supplier of building materials for pitched roofs
with operations in 36 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 EUR 1.2 billion and an
operating EBITDA of EUR160 million in 2013.



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


AERCAP HOLDINGS: Moody's Assigns 'Ba2' CFR; Outlook Stable
----------------------------------------------------------
Moody's Investors Service assigned a Ba2 corporate family rating
to AerCap Holdings N.V. (AerCap) and a Ba2 rating to the $2.6
billion senior unsecured notes to be jointly issued by its
subsidiaries AerCap Ireland Capital Limited and AerCap Global
Aviation Trust. In addition, Moody's upgraded to Ba2 from Ba3 the
corporate family and senior unsecured ratings of International
Lease Finance Corporation (ILFC), upgraded to Ba1 from Ba2 the
senior secured ratings of ILFC, Flying Fortress Inc. and Delos
Finance S.a.r.l., and upgraded to B1(hyb) from B2(hyb) the
preferred stock ratings of ILFC, ILFC E-Capital Trust I and ILFC
E-Capital Trust II. The outlook for the AerCap and ILFC ratings
is stable.

The rating actions reflect AerCap's pending acquisition of ILFC
from American International Group (AIG) for US$3 billion of cash
and 97.6 million AerCap common shares, for a total estimated
transaction value of US$6.9 billion based on AerCap's closing
share price on April 21, 2014. Proceeds of the new US$2.6 billion
senior notes will partially fund the cash consideration. The
ratings and outlook of AIG are unaffected by the AerCap and ILFC
rating actions.

Ratings Rationale

The AerCap rating assignments and ILFC rating upgrades are based
on the strength of AerCap's franchise after acquiring ILFC;
AerCap's strong prospects for realizing meaningful savings from
tax, operating, and funding efficiencies that will improve
financial performance; and the combined entity's acceptable
capital position after the elimination of ILFC's deferred tax
liabilities. The rating also considers AerCap's significant
progress to-date integrating ILFC's fleet, personnel and
operations in a way that preserves important strengths from both
companies. Credit concerns include the transaction's size and
execution risks and the combined company's high reliance on
confidence-sensitive capital markets funding. The stable outlook
reflects Moody's expectation that AerCap will capably manage the
integration of the two companies, resulting in operating
performance that improves on Moody's prior expectations for
pre-acquisition ILFC.

The Ba2 rating assigned to the new notes also reflects their
senior position in AerCap's capital structure. Co-issued on a
joint and several basis by AerCap Ireland Capital Limited and
AerCap Global Aviation Trust, the notes are guaranteed
unconditionally on a senior unsecured basis by ultimate parent
AerCap and by certain AerCap subsidiaries, including ILFC.

After acquiring ILFC, AerCap will become a market leader in
commercial aircraft leasing with a US$37 billion fleet of nearly
1,200 owned aircraft leased to over 200 airlines globally. It
will also have an order book of 363 new aircraft that will renew
and grow the company's fleet, strengthen its position in the
newest technology aircraft and improve the combined firm's
average portfolio lease yields, profits and cash flows.

AerCap will seek to further strengthen performance of the
combined entity by reducing operating redundancies and realizing
tax efficiencies. Under a section 338(h)(10) election of the
Internal Revenue Code, AIG will assume ILFC's deferred tax
liabilities and AerCap will step up the tax basis in ILFC's
aircraft, resulting in tax savings that aid cash flow. AerCap
will achieve additional tax savings by relocating a large
majority of ILFC's US domiciled aircraft to Ireland, which has a
lower corporate tax-rate.

AerCap will have modestly higher post-closing pro-forma leverage
(Debt/Equity) as of March 31, 2014 of 2.9x, after adjusting for
purchase accounting effects, compared to actual leverage of 2.5x
at March 31, 2014. Though issuance of the senior notes increases
the combined entity's debt outstanding, the firm's capital
position benefits from the 338(h)(10) election that eliminates
ILFC's deferred tax liabilities. Moody's estimates that combined
earnings and cash flow can sustain AerCap's adjusted leverage at
this level over the intermediate term. With a large order book
and industry demand conditions conducive to growth, Moody's
believes that AerCap is likely to operate with leverage close to
its target of 3x (Debt/Equity). Leverage higher than this would
negatively pressure the firm's ratings.

AerCap has made significant progress on critical integration
initiatives already with respect to retention of key personnel,
transfer of ILFC aircraft into the Irish tax jurisdiction, and
information technology system choices. Moody's expects that
AerCap will ably execute remaining transitions in a way that
builds upon its own fleet management expertise and ILFC's strong
marketing capabilities.

A primary credit constraint concerns the size of the transaction,
particularly given that AerCap is approximately one-quarter of
ILFC's operational scale. The transaction exposes creditors to
execution risks associated with AerCap's integration roadmap,
increased funding requirements, and management of a larger
aircraft portfolio and order book. AerCap has prior experience
acquiring and integrating aircraft fleets and management systems,
but on a far smaller scale.

Concerns with respect to AerCap's market access and liquidity
relate to the financing requirements of the combined firm's $25
billion of new aircraft and other equipment on order, deliveries
of which ramp up significantly by 2016, as well as to ongoing
refinancing needs. The magnitude of AerCap's market funding
requirements highlights both its dependence and potential
vulnerability during market contractions that reduce overall
appetite for aircraft and aviation finance. Given large recurring
funding needs, evolution of AerCap's funding and liquidity
profiles will be key rating considerations going forward.

Moody's could improve the AerCap and ILFC ratings and/or outlook
if AerCap's integration of ILFC progresses favorably, the
company's financial performance benefits from anticipated
operating synergies, the company maintains strong liquidity and
leverage (D/E, adjusted for purchase accounting) of less than 3x.

Moody's could downgrade the ratings if AerCap's operating
prospects weaken, it loses key personnel, liquidity weakens, or
if adjusted leverage of the combined entity increases to more
than 3x.

AerCap is a major commercial aircraft leasing company with
headquarters in the Netherlands and listed on the New York Stock
Exchange (AER). AerCap is acquiring ILFC, headquartered in Los
Angeles, California, and the second-largest owner-lessor of
commercial aircraft globally.

Rating actions:

AerCap Holdings N.V.

Corporate Family Rating: Ba2

Outlook: stable

AerCap Ireland Capital Limited / AerCap Global Aviation Trust

Senior Unsecured Debt: Ba2

Outlook: stable

International Lease Finance Corporation

Corporate Family Rating: to Ba2 from Ba3

Senior Unsecured: to Ba2 from Ba3

Senior Secured: to Ba1 from Ba2

Preferred Stock: to B1(hyb) from B2(hyb)

Outlook: to stable from negative

Flying Fortress Inc.

Senior Secured: to Ba1 from Ba2

Outlook: to stable from negative

Delos Finance S.a.r.l.

Senior Secured: to Ba1 from Ba2

Outlook: to stable from negative

ILFC E-Capital Trust I

Preferred Stock: to B1(hyb) from B2(hyb)

Outlook: to stable from negative

ILFC E-Capital Trust II

Preferred Stock: to B1(hyb) from B2(hyb)

Outlook: to stable from negative

The principal methodology used in this rating was Finance Company
Global Rating Methodology published in March 2012.


SCHAEFFLER FINANCE: Moody's Assigns 'B1' Rating to New Sr. Notes
----------------------------------------------------------------
Moody's Investors Service has assigned a B1 rating to
Schaeffler's proposed Senior Unsecured Notes to be issued by
Schaeffler Finance B.V. due in 2019 and a Ba2 rating to
Schaeffler's proposed new Senior Secured Notes to be issued by
Schaeffler Finance B.V. due between 2019-2022. Schaeffler's Ba3
corporate family rating (CFR), Ba3-PD probability of default
rating (PDR), as well as the B1 rating of secured debt at
Schaeffler Verwaltungs level issued by Schaeffler Holding Finance
B.V. are not affected. The outlook on all ratings remains stable.

Ratings Rationale

Proceeds from Schaeffler's announced debt issuance will be used
to refinance existing indebtedness as well as to finance the
payment of the antitrust fine of around EUR370 million. Since the
impact of this increase in indebtedness on leverage is not
material, the CFR remains unchanged, although estimated leverage
of above 4x per end of 2013 now positions Schaeffler relatively
weakly in the rating category. Moody's however notes that
Schaeffler's interest coverage will improve over time, since the
new debt will carry lower interest.

The new Senior Secured Notes are secured by pledges over
Continental shares held by Schaeffler AG, shares of material
group companies, cash pool accounts and receivables. These notes
will rank pari passu with existing secured debt issued by
Schaeffler Finance B.V.. These instruments, together with trade
payables at Schaeffler AG level, rank ahead of all other
instruments in Moody's loss given default (LGD) waterfall and
benefit from a one notch uplift from the CFR assigned. Given the
absence of a security package, the new Senior Unsecured Notes are
structurually subordinated to the secured debt issued by
Schaeffler Finance B.V. They however are structurally preferred
to the debt at Schaeffler Verwaltungs level issued by Schaeffler
Holding Finance B.V, despite the fact that those instruments
benefit from a pledge over shares in Continental AG, which are
held by Schaeffler Verwaltungs GmbH. This pledge to some extent
mitigates the junior position of the notes, leading to only a one
notch downgrade for the notes compared to the CFR, in line with
the rating of the new Senior Unsecured Notes issued by Schaeffler
Finance B.V.

Schaeffler's Ba3 CFR is supported by the group's solid business
profile evidenced by (i) leading market positions in the bearings
and automotive component and systems market with number one to
three positions across the wide ranging product portfolio in a
relatively consolidated industry; (ii) its leading mechanical
engineering technology platform supporting a competitive cost
structure and the development of innovative products; (iii) a
well diversified customer base, especially in the Industrial
division but also to the extent possible in the consolidated
automotive industry and a sizable aftermarket business accounting
for around one quarter of revenues.

The rating also benefits from (iv) Schaeffler's proven business
model with a good track record of operating performance and
margin levels well above the automotive supplier industry average
as well as (v) a good innovative power evidenced by a high number
of patents, founded on a notable amount of R&D expenses of above
5% of revenues per year.

However, the rating is constrained by (i) the combined high
indebtedness and leverage of the operating level ("Schaeffler
Group" or "Schaeffler AG") and the holding level, the latter of
which also includes the junior debt incurred by parent companies
of Schaeffler AG; (ii) the organizational and legal complexity
and evolving structure of Schaeffler in its current state as well
as (iii) our expectation that debt levels will not be materially
reduced over the short to medium term as (iv) free cash flow
generation will be challenged by high interest expense,
increasing capital expenditure and dividend payments to the
holding level -- despite strong operating performance.

The stable outlook incorporates Moody's expectation that
Schaeffler will (i) be able to maintain its solid operating
performance with further improvements of the absolute amount of
EBITDA over the next two to three years even though Moody's
believe that margins might have reached their peak in 2011; (ii)
be able to generate at least slightly positive free cash flows
over the next two to three years and (iii) apply these to debt
reduction.

The ratings could be upgraded should Schaeffler be able to (i)
generate sustainably positive free cash flows which would be
applied to a further debt reduction that would also contribute to
(ii) a sustainable reduction of its high leverage (Debt/EBITDA)
to below 3.5x. These performance achievements should go along
with unchanged or improved market positions and technological
leadership positions.

The ratings could come under pressure in case of (i) a
significant weakening in Schaeffler's operating performance and
cash flow generation evidenced by adjusted EBIT margins below 15%
and material negative free cash flow; (ii) inability to sustain
its current leverage of below 4.25x over the coming years as well
as (iii) weakening of its liquidity profile including the
possible failure to perform within the currently comfortable
headroom under its financial covenants.

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



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


AEROFLOT JSC: Fitch Affirms 'BB-' IDR; Outlook Stable
-----------------------------------------------------
Fitch Ratings has affirmed JSC Aeroflot's Long-term foreign and
local currency Issuer Default Ratings (IDR) at 'BB-'.  The
Outlook is Stable.

Aeroflot's strong domestic market and hub position, exposure to a
growth market, fairly diversified route structure and competitive
cost base support its solid business profile, which we assess as
being commensurate with the mid-BB rating category.  However,
this is mitigated by a weak financial profile, resulting in a
standalone 'B+' rating.  Despite forecast deterioration of the
group's credit metrics in 2014, primarily due to a slowdown of
the Russian economy, Fitch expects a gradual recovery of
financial performance over the medium-term. The ratings benefit
from a single-notch uplift from Aeroflot's standalone rating for
state support.

KEY RATING DRIVERS

Improved 2013 Financials; Short-term Headwinds

Aeroflot reported stronger 2013 financial results than Fitch had
forecast, due to successful integration of Rostechnologii assets,
which achieved an operating profit on an aggregate basis, and
slower fuel price inflation.  Reduced costs per available seat-
kilometer (CASK) and a modest increase in passenger revenue per
available seat-kilometer (PRASK) and yields also contributed to
the firmer 2013 performance.  While Aeroflot's yield and PRASK
are lower than those of European legacy carriers, its fairly low
CASK enables it to maintain healthy margins.

However, Fitch expects some deterioration of the group's credit
metrics in 2014, driven by Russia's slower GDP growth (Fitch
forecast: 0.9%) and currency devaluation, which is likely to
adversely affect the yield and passenger traffic growth as well
as partly offset the positive impact of the winter Olympic games.
The impact of flights interruptions to Ukraine is likely to be
limited.  Fitch forecasts funds from operations (FFO) gross
adjusted leverage to exceed 5x and FFO fixed charge cover to
decline to below 2x in 2014, from 4.9x and 2.2x, respectively, in
2013.

Medium-term Improvement in Credit Metrics

Fitch believes Aeroflot is well-placed to capitalize on longer-
term growth trends in Russian air travel.  Fitch therefore
expects a gradual improvement of its financial profile in the
medium-term, driven by capacity expansion and moderate yield
growth.  Fitch forecasts that leverage, following deterioration
in 2014, will improve to below 5x by 2016 while FFO fixed charge
cover will rise above 2x over 2015-2017.  Although the company
will continue its investments in fleet expansion and renewal over
the forecast period, Fitch expect it to generate positive free
cash flow only in the medium term even after accounting for
finance leases.

Strong Market and Hub Position

Aeroflot's share of passengers carried in the Russian aviation
market was 30% in 2013 (including foreign carriers) and is
considered by Fitch to be strong in a fragmented but
consolidating market.  In contrast to European legacy carriers
that are facing fierce competition on the domestic market and are
therefore targeting long haul routes as well as transit traffic,
Aeroflot leverages against its reasonably well-positioned hub and
strong domestic market position and has lower dependence on
transit traffic.  It is also implementing more conservative,
targeted international expansion.  The diversity of the group's
route network is reflected in its EBITDA generation, which is
largely equally split between North America/ Europe, the domestic
market and Asia/Middle East & Africa/CIS outside Russia.

Sound Medium-term Demand Fundamentals

Following a 14.3% increase in the number of passengers and in
revenue passenger-kilometers (RPK) in 2013, Fitch forecasts
Aeroflot to post slower RPK growth in 2014.  This will be driven
by expected slower economic growth in Russia partly offsetting
the one-off Olympic games effect and capacity expansion.  Fitch
expects longer-term RPK growth to settle in mid-single digits.

Underpinning this demand is increased air mobility of Russian
citizens, which at 0.7 trips per capita is currently well below
European and US levels, as well as growing disposable income.  A
modal shift from long-distance rail to air travel also supports
domestic demand and capacity additions.

LCC to Strengthen Market Position

The planned launch of a low-cost carrier (LCC) unit --
Dobrolet -- by Aeroflot in 1H14 is likely to support the group's
domestic market position by capturing additional price-sensitive
passenger traffic.  While the introduction of LCC may lead to
some cannibalization of Aeroflot's current passenger traffic,
Fitch expects it to be limited.  The LCC is likely to compete
primarily with rail transportation and also other Russian
airlines that compete with Aeroflot on price.  Fitch also
believes that Russia provides significant growth potential of the
LCC segment due to the vast territory of Russia, a large base of
price-sensitive customers as well as the lack of a meaningful
presence of LCCs in the domestic market so far.

In addition, Aeroflot's LCC unit is planned to be operated as a
separate airline with a different product offering.  The launch
of Dobrolet and its timing are reliant on a new law permitting
the sale of non-refundable tickets and foreign pilot hires being
passed.

Moderately Sound Fleet Strategy

Aeroflot's fleet (excluding subsidiary companies) is considered
young at around 5.2 years on average as at March 31, 2014,
typically indicative of a more modern and fuel-efficient fleet.
Its strategy to continually modernize its aircraft generated
further efficiencies in 2013 in fuel consumption per tonne-
kilometer, despite the acquisition of older aircraft with the
purchase of Rostechnologii airlines.  However, greater
rationalization of the fleet would further help lower operating
costs.  While further streamlining and renewal of Aeroflot's
fleet will enable the company to operate more efficient aircraft,
this will also result in a higher debt burden to fund the renewal
plan. Aircraft are leased on an operating (70% of the fleet in
2013) and finance lease (26%) basis.

Rating Uplift for State Support

Aeroflot's rating of 'BB-' continues to incorporate a single-
notch uplift from its standalone 'B+' rating for state support.
Fitch considers the strategic, operational and, to a lesser
extent, legal ties between Aeroflot and its parent, the Russian
Federation (51.2% direct ownership and 9.48% indirect ownership)
as fairly strong, in accordance with Fitch's Parent and
Subsidiary Rating Linkage methodology.

There are no tangible legal ties, such as guarantees or cross
default provisions, but Aeroflot remains on the government's list
of strategic enterprises.  Its operational and financial
strategies are overseen by the government and Aeroflot is viewed
by the state as a means of promoting and developing Russia's
aviation market.  Fitch would expect tangible financial support
to be forthcoming if the need arises.  Fitch incorporates into
its projections of the company's standalone financial profile
airline revenue agreements that consist primarily of bilateral
pool agreements with other airlines and also intergovernmental
agreements on the basis that they are unlikely to be removed.

RATING SENSITIVITIES

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

-- Evidence of stronger state support

-- Improvement of the financial profile (eg FFO gross adjusted
    leverage below 4.0x and FFO fixed charge cover above 2.0x on
    a sustained basis) due to, among other things, material
    increases in profitability, moderation of investments in the
    fleet and/or drop in fuel prices, which would be positive for
    the standalone rating.

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

-- A material deterioration of the credit metrics (eg FFO gross
    adjusted leverage above 5.0x and FFO fixed charge cover below
    1.5x on a sustained basis) due to, among other things, a
    weaker-than- expected Russian economy, acquisitions, overly
    ambitious fleet expansion and/or high fuel prices would be
    negative for the standalone rating.

-- Weakening of state support

LIQUIDITY AND DEBT STRUCTURE

Adequate Liquidity

Fitch views Aeroflot's liquidity position as adequate with cash
of USD570 million at end-2013 and undrawn credit lines of USD496
million, including committed credit lines of USD177 million, of
which, however, USD168 million expire in 2014 but we expect them
to be renewed.  Liquidity is sufficient to cover its short-term
obligations of USD419 million, which includes USD265 million of
finance leases denominated in USD and mainly RUB denominated
loans of USD154 million.  The debt repayment schedule is well-
balanced.  Fitch expects the company to generate negative free
cash flow in 2014 (including finance leases treated as capex) but
to turn free cash flow-positive from 2015, based on the current
fleet order book.

Manageable FX Risk

While Aeroflot is exposed to currency fluctuations risk, Fitch
expects the impact of the currency devaluation to be manageable
given the company's revenue stream is mainly in or linked to EUR
and USD (about two-thirds), its operating costs are mainly in RUB
(60%) and its hedging policy.  Most of the company's debt at end-
2013 (86%) was USD-denominated.  The company uses FX hedging to
match its revenue and cost structure.

Full List of Rating Actions

  Long-term foreign and local currency IDRs: affirmed at 'BB-',
  Outlook Stable

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

  National Long-term rating: affirmed at 'A+(rus)', Outlook
  Stable

  National Short-term rating: affirmed at 'F1(rus)'

  Foreign and local currency senior unsecured ratings: affirmed
  at 'BB-'

  National senior unsecured rating: affirmed at 'A+(rus)'


MOSCOW INTEGRATED: S&P Affirms 'BB-/B' CCRs; Outlook Stable
-----------------------------------------------------------
Standard & Poor's Ratings Services said that it had revised its
outlook on heating utility Moscow Integrated Power Co. JSC (MIPC)
to stable from negative.  The 'BB-' long-term and 'B' short-term
corporate credit ratings were affirmed.

At the same time, S&P has affirmed its 'ruAA-' Russia national
scale rating on the company.

The rating actions reflect the change in S&P's rating approach to
MIPC.  S&P no longer considers MIPC a government-related entity
but a member of a corporate group, following the City of Moscow's
sale of its 89.97% stake in MIPC to Gazprom Energoholding LLC,
which is fully owned by Gazprom.  S&P believes MIPC will likely
receive extraordinary financial support from the Gazprom group if
in financial distress.  S&P understands MIPC intends to refinance
its upcoming debt maturities with a loan from the group, which
has a track record of supporting its other electricity and heat-
generating assets.  This, in S&P's view, is evidence of a
tangible commitment by the new owner and underpins its
assessment.

The rating actions also reflect S&P's upward revision of MIPC's
stand-alone credit profile (SACP) to 'b+' from 'b', based on its
view that the company's management and governance has improved to
"fair" from "weak."  This is as a result of the company's new
management team, which has improved MIPC's strategic competence,
financial management, and internal financial controls.

"We assess MIPC as a strategic investment for the Gazprom group,
whose credit profile we assess at 'bbb-'. Gazprom owns other
electricity and heat utilities, such as Mosenergo, OGC-2, and
TGC-1, and we believe it is unlikely to sell MIPC in the near
term. Nevertheless, we think MIPC is less important for the
group's long-term strategy than the core gas and oil assets.
Consequently, we regard MIPC as a "moderately strategic" group
member, which under our group rating methodology results in a
one-notch uplift to MIPC's SACP," S&P said.

MIPC's SACP of 'b+' reflects S&P's view of the company's "weak"
business risk profile, "significant" financial risk profile, and
"negative" position under its comparable rating analysis.  The
latter reflects uncertainties regarding MIPC's profitability,
cash flow generation, and capital expenditures in the medium
term.

In S&P's view, MIPC's business risk profile is constrained by
Russia's regulatory system, which in our view lacks long-term
certainty, predictability, and independence from political
influence, and does not guarantee operators full and timely cost
recovery with a margin.  Other constraints include MIPC's
exposure to high country risk in Russia, weather-dependent demand
for heat, reliance on Mosenergo for about two-thirds of the
supplied heat, and below-average profitability as reflected by a
low return on capital.  Supportive factors include MIPC's
position as Moscow's leading district heating utility, its 100%
regulated earnings, and diverse customer base.

S&P's assessment of MIPC's financial risk profile incorporates
its projection of negative free operating cash flow (FOCF) over
the next two years.  This stems from our assumption of MIPC's
significant investment spending and reliance on external
financing.  S&P forecasts that MIPC's debt-to-EBITDA ratio will
stay below 3.0x and funds from operations (FFO) to debt higher
than 30% in 2014 and 2015.

S&P notes that all of MIPC's debt is denominated in rubles and at
fixed interest rates, so it is not exposed to currency mismatches
and interest rate risks.  In addition, although the weighted
average term of the debt is less than two years, S&P has revised
its view of MIPC's capital structure to "neutral" from
"negative." This reflects S&P's expectation of a more-extended
maturity profile in the near term, in particular, after MIPC
receives the planned loan from the group.

Future developments under the new owner could affect MIPC's SACP,
in S&P's view.  S&P understands that Gazprom is reviewing MIPC's
operational, investment, and financial strategies, which could
result in cost optimizations and capital-expenditure cuts.  In
addition, as S&P understands, some of MIPC's generating
capacities might be shut down, with Mosenergo taking over this
activity.

"We also note that MIPC currently charges uneconomic tariffs for
certain categories of residential customers, for which it
receives compensation through subsidies from Moscow City.  MIPC's
earnings and cash flows therefore rely heavily on these
subsidies: For 2013, the city budgeted for Russian ruble (RUB) 15
billion in subsidies, compared with our estimates of FFO of
RUB18.5 billion and EBITDA of RUB19 billion. Although the Moscow
City government no longer owns MIPC, we assume in our base case
that the subsidies will continue because, otherwise, the company
may have to charge the full tariff to retain positive earnings.
However, we anticipate a gradual phase-out of subsidies from
2015, mitigated by a rise in tariffs, with a neutral impact on
profitability," S&P noted.

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

   -- A single-digit decline in revenues in 2014 and 2015, due to
      lower production;

   -- EBITDA margins of 17%-19% in 2014-2015;

   -- Continued subsidies in 2015, although diminishing to
      RUB12 billion;

   -- Capital expenditures of RUB18 billion annually in 2014 and
      2015, one-third lower than in 2013; and

   -- No dividend payouts.

Based on these assumptions, S&P arrives at the following credit
measures for 2014-2015:

   -- Debt to EBITDA of less than 3.0x; and

   -- FFO to debt in the range of 30%-40%.

The stable outlook reflects S&P's view that, over the next two
years, potential financial support from the Gazprom group and
MIPC's relatively low debt and dominant position as the region's
main heat supplier will mitigate several risks.  These include
uncertainty regarding the development of the company's
operations, its poor profitability, and investment levels, which
are currently under review by the new owner.  The outlook also
reflects S&P's base-case expectation that any change to MIPC's
key purchase arrangement with Mosenergo will not harm MIPC's
earnings or cash flows.

S&P might consider a positive rating action if:

   -- The regulatory environment improved significantly, for
      example, through longer-term tariff setting, a stronger
      cost-compensation mechanism, and lower risk of political
      intervention.  This might lead us to reassess MIPC's
      business risk profile upward to "fair";

   -- The company adopted moderate financial policies, with debt
      to EBITDA consistently below 2.0x and FFO to debt above
      45%, and adequate liquidity and maturity profiles, leading
      S&P to reassess MIPC's financial risk profile upward to
      "intermediate;" or

   -- S&P sees stronger parental support for MIPC than it
      currently expects.  This might stem from more evident
      financial aid to MIPC, for instance, in the form of equity
      injections or debt guarantees.

S&P might consider a negative rating action if it saw:

   -- Weakening liquidity and continued reliance on short-term
      borrowings without tangible plans of refinancing;

   -- Heavier capital spending and debt accumulation than S&P
      currently expects, with debt to EBITDA exceeding 3.0x and
      FFO to debt falling below 30%;

   -- A significant drop in earnings and cash flows, for example,
      because of unexpected cancellation of subsidies, lower
      tariffs, or a reshuffling of MIPC's asset portfolio; or

   -- Gazprom's willingness to provide financial support to MIPC
      as diminishing, which might lead S&P to remove the notch of
      uplift from the rating.  This might occur if S&P saw signs
      that Gazprom were considering the disposal of MIPC,
      focusing less on MIPC's performance, or not supporting MIPC
      if its liquidity were deteriorating.



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


BANCO POPULAR EMPRESAS 1: Fitch Affirms CC Rating on Cl. E Notes
----------------------------------------------------------------
Fitch Ratings has upgraded IM Grupo Banco Popular Empresas 1's
class C notes and affirmed the others, as follows:

EUR105m Class A2 (ISIN ES0347843015): affirmed at 'AA+sf';
Outlook Stable

EUR28.8m Class B (ISIN ES0347843023): affirmed at 'AA+sf';
Outlook Stable

EUR27.0m Class C (ISIN ES0347843031): upgraded to 'AA+sf' from
'A+sf'; Outlook Stable

EUR54.9m Class D (ISIN ES0347843049): affirmed at 'BBsf';
Outlook Stable

EUR32.4m Class E (ISIN ES0347843056): affirmed at 'CCsf'; RE 50%

IM Grupo Banco Popular Empresas 1 is a cash flow securitization
of an initial EUR1.8 billion static pool of SME loans granted by
six entities of Grupo Banco Popular, which have since merged with
Bano Popular Espanol SA (BB+/Stable/B).

KEY RATING DRIVERS

The upgrade of the class C notes reflects the transaction's
improved performance over the past year and increase in credit
enhancement as the transaction has deleveraged.  Credit
enhancement for the class C notes has risen to 49% from 36% at
the last review allowing it to withstand stresses at the 'AA+sf'
level.  Although the class C can defer interest once the class B
becomes undercollateralized, this trigger is unlikely to be
breached under the 'AA+sf' stress due to the large credit
enhancement for the class B notes.

Credit enhancement has significantly improved for the two senior
notes, rising to 76% from 55% for the class A notes and to 62%
from 59% for the class B notes. Both classes have been affirmed
as the sovereign rating of Spain (BBB+/Stable/F2) caps the
highest achievable rating for the transaction at 'AA+sf'.

The class E notes have been affirmed at 'CCsf' and the Recovery
Estimate reduced to 50% due to the increased reliance of the
junior tranche on recoveries as defaults increase.

The portfolio has amortized to 11% of its original outstanding
balance down from 14% at the last review.  The 90+ and 180+
arrears buckets have also continued to decrease following a peak
of 4.8% 90+ days in arrears in November 2012. 90+ arrears are
currently 2% of the outstanding principal balance and 180+
arrears 1%.  The decrease in arrears is due to the movement of
delinquent loans into default.

Rating Sensitivities

Fitch ran two sensitivities.  In the first the default
probability (PD) was increased by 25% and in the second the
recovery rate was reduced by 25%.  The increase of the PD
resulted in a one-notch downgrade for the class D notes.  The
decrease of 25% to the recovery rates resulted in a two-notch
downgrade for the class D notes.


SANTANDER EMPRESAS 2: Fitch Affirms 'Csf' Rating on Class F Notes
-----------------------------------------------------------------
Fitch Ratings has upgraded the F.T.A. Santander Empresas 2's
tranche C notes and affirmed the rest, as follows:

EUR78.7m Class B (ISIN ES0338058029): affirmed at 'AA+sf'';
Outlook Stable

EUR62.3m Class C (ISIN ES0338058037): upgraded to 'AAsf' from
'Asf'; Outlook Stable

EUR59.5m Class D (ISIN ES0338058045): affirmed at 'BBsf';
Outlook Stable

EUR29m Class E (ISIN ES0338058052): affirmed at 'Bsf'; Outlook
Negative

EUR53.7m Class F (ISIN ES0338058060): affirmed at 'Csf'; RE
(Recovery Estimate) 0%

F.T.A. Santander Empresas 2 is a granular cash flow
securitization of a static portfolio of secured and unsecured
loans granted to Spanish small- and medium-sized enterprises by
Banco Santander S.A. (BBB+/Negative/F2).

KEY RATING DRIVERS

The upgrade of the class C notes is a result of the transaction's
deleveraging following the payment in full of the senior A-1 and
A-2 notes and continued amortization of the underlying portfolio,
which now stands at 7.9% of its original balance.  Due to the
deleveraging, credit enhancement on the class C note rose to
52.2% from 42.2% over the last 12 months, allowing the notes to
now withstand the agency's 'AAsf' rating stress scenario.

The rating on the class B notes is driven by the Country Ceiling
of the Kingdom of Spain, which was upgraded to AA+ from AA on 28
April 2014.

The affirmation of class D, E and F reflects the transaction's
stable underlying performance.  Over the last 12 months 90+ day
delinquent loans fell to EUR2.6 million from EUR10.1 million
while cumulative write-offs rose to EUR14.4 million from EUR8.3
million, an indication that the majority of delinquent loans
present in the portfolio 12 months ago have migrated into the
default bucket.  Cumulative failed loans are currently EUR49
million, 1.69% of the initial balance.

The transaction is exposed to high obligor concentration risk and
may therefore be subject to increased performance volatility due
to risks specific to the largest obligors.  The largest obligor
accounts for 8.7% of the portfolio notional and operates in the
utilities industry.  This exposure is not secured by real estate
collateral and is due to mature in June 2016.  The 10 largest
obligors together represent 41.2% of the portfolio.

The Negative Outlook on the class F notes reflects the
vulnerability of the notes to the transaction's obligor
concentration.

Rating Sensitivities

Applying a 1.25x default rate multiplier to all assets in the
portfolio would result in a downgrade of up to three notches on
the notes.  Applying a 0.75x recovery rate multiplier to all
assets in the portfolio would result in a downgrade of up to two
notches on the notes.



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


CO-OPERATIVE BANK: Flowers Gets GBP525 Fine Over Meth Possession
----------------------------------------------------------------
Suzi Ring at Bloomberg News reports that Paul Flowers, the former
chairman of Co-Operative Bank Plc, was fined GBP525 (US$890)
after pleading guilty to possession of cocaine, crystal meth and
ketamine.

Mr. Flowers, a 63-year-old Methodist minister who was Co-Op
Bank's chairman from March 2010 until June of last year, admitted
to the charges at a hearing in Leeds, England, on May 7,
Bloomberg relates.  He was arrested in November after he was
filmed buying crack cocaine by a U.K. newspaper and charged by
prosecutors last month, Bloomberg recounts.

Mr. Flowers apologized for his conduct in a statement after his
arrest, saying there had been a death in the family and pressures
related to the bank, Bloomberg discloses.  Co-Operative Group
Ltd., the lender's parent, ceded control of the bank to
bondholders in October to help plug a GBP1.5 billion capital
shortfall, Bloomberg relays.

According to Bloomberg, Mr. Wright asked for Mr. Flowers to be
sentenced yesterday, his first court appearance, because of his
age and the fact that he pleaded guilty at the first opportunity.

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
Negative.


CO-OPERATIVE GROUP: Must Take Radical Reforms or Face Breakup
-------------------------------------------------------------
Harry Wilson at The Telegraph reports that the Co-op Group has
been told that unless it undertakes radical reforms "very soon,"
it risks heading down a road that could end with the complete
dismantlement of Britain's largest mutual into a charitable
foundation that would be worth "a lot less" than members think.

According to The Telegraph, Lord Myners, the former City
minister, said the Co-op needed to urgently create a professional
board and warned the organization could not continue with its
"deplorable governance failures" and had to address a "democratic
deficit" that allowed a small elite at the top of the mutual to
effectively run the business.

In a 184-page report published on Wednesday morning, Lord Myners
urged the Co-op's 600 "elected members" to vote in favor of his
reforms, despite the fact they would reduce their influence over
the 150-year old organization that he said had wiped out more
than 50pc of its net assets in the past five years, The Telegraph
relates.

As well overhauling the group's board, Lord Myners has proposed
the creation of a new 50-strong National Membership Committee to
provide oversight of the top body and the extension of voting
rights to all individual members of the Co-op, The Telegraph
discloses.

In a stark warning to the Co-op, Lord Myners, as cited by The
Telegraph, said that if the mutual did not adopt his changes the
organization's creditors may force it to accelerate the disposal
of core businesses.

The Co-op Group owes GBP1.4 billion to a six-bank consortium,
including Royal Bank of Scotland, and Lord Myners said the
organization's creditors "may well have their own view on the
appropriate timetable for transition to a new governance
structure", The Telegraph relays.

Co-operative Group is a mutually owned food-to-funerals
conglomerate.  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.


FIRST QUANTUM: Moody's Affirms 'Ba3' CFR; Outlook Negative
----------------------------------------------------------
Moody's Investors Service has affirmed the Ba3 corporate family
rating (CFR) and the Ba3-PD probability of default rating of
First Quantum Minerals Ltd (FQM), and has assigned a B1(LGD4;
66%) rating on the new notes due 2022 being issued by FQM.
Concurrently, the rating agency has affirmed the B1 rating on the
existing FQM notes. The outlook on all ratings is negative.

Ratings Rationale

The Ba3 CFR remains constrained by the company's (1) significant
concentration risk in terms of geography (Government of Zambia,
B1 stable), commodity (copper, although gold by-products and
nickel provide some diversification) and limited number of large
mines; and (2) high exposure to execution and country risk, as a
result of the company's large capex plan for strategic mining
projects currently under development in Zambia, and to the risk
that any major possible delay at these projects -- and
particularly at the new smelter it is building -- could lead to
material operational and financial underperformance, as well as
liquidity pressure. The rating also incorporates Moody's
expectation of a temporary weakening of the credit metrics in
2014, while negative free cash flows will drive leverage up,
before the full positive effect of main projects due to complete
in 2014 can start to support cash flows and credit metrics from
2015.

However, Moody's recognizes that FQM has built a positive track
record in acquiring, integrating and building profitable mines,
as more recently demonstrated by the smooth integration of the
mining assets of Inmet, after its takeover was completed in
March 2013. Furthermore, the rating reflects, as positive
factors, the (1) enlarged size of the company, after the addition
of Inmet's three low cost copper mines in the more stable regions
of Spain, Turkey and Finland where FQM was only marginally
present before; (2) the competitive cash cost position and high
average productivity of its copper and nickel mines, which were
all cash flow generative in 2013, despite persistently weak LME
prices; (3) progress being made in the development of the Cobre
Panama copper deposit, which has been transformed from a
completely externally outsourced project into an in-house project
which FQM's management can better control; and (4) an adequate
liquidity position with respect to the large capex FQM plans to
incur over the next 18-24 months. Moody's notes that such
liquidity position would be strengthened with the cash proceeds
of the new $650 million notes being issued, due 2022.

FQM believes that the financial and business profile of FQM will
improve significantly once Cobre Panama is complete by the end of
2017, by adding a large low-cost copper mine in a more stable
jurisdiction like Government of Panama (Baa2 stable), which would
then start counterbalancing FQM's high exposure to Zambia, a
country where the company is continuing to make large investments
to further expand its local mining asset base.

The new FQM notes are rated at the same level as the existing FQM
notes, as they share the same key terms, covenants and
guarantors, and are therefore pari-passu with them. The one notch
differential of the new and existing FQM notes to the CFR is
maintained. This reflects (1) the persistence of priority debt
obligations at some levels within the capital structure, albeit
their amount has been reduced after the cancellation in full of
the US$1 billion secured Kansanshi facility; and (2) the better
recovery prospects of the US$3.0 billion secured term loan and
revolving credit facilities borrowed by FQM in an hypothetical
default scenario, to the extent of the value of the collateral
securing those facilities. The security package includes first
ranking pledges on 80% of the shares of Kansanshi Mining Plc, a
non-guarantor company controlling the large Kansanshi mine, and
all shares in its immediate holding companies (Kansanshi Holdings
Limited and Black Bark Investments Ltd, both of which are
guarantors to the notes and bank facilities). Furthermore, the
lenders of the bank facilities borrowed by FQM are secured by the
assignment of present and future intercompany receivables from
restricted subsidiaries to FQM's subsidiaries which are non-
guarantors (excluding loans to Minera Panama SA, a non-guarantor
company owning 80% of the Cobre Panama mining project). Moody's
analysis also takes into account (1) the protection offered by
the senior unsecured guarantees equally shared by lenders and
noteholders and offered by FQM's subsidiaries, representing in
aggregate around 52% of FQM's consolidated sales and assets; (2)
carve outs to the negative pledge covenant contemplated in the
notes indentures and loan documentation; and (3) the ability of
subsidiaries which are not guarantors (in particular Minera
Panama SA) to incur additional secured debt, to the extent
permitted by the 2x senior secured leverage ratio incurrence
covenant.

Rationale For The Negative Outlook

The negative outlook reflects Moody's view that FQM's credit
metrics may deteriorate in the next 12 months towards levels not
commensurate with the current rating, as the rating agency
anticipates that the company will need to continue drawing more
debt under its available bank facilities in order to progress
with its ambitious capex plan. The negative outlook also takes
into account the possibility that the company's liquidity may
weaken not only owing to increasing future capex commitments but
also increasing working capital requirements associated with the
commissioning phase of the main projects due to come on-stream in
the next 12 months, and with the difficulties the company is
facing in recovering VAT in Zambia.

What Could Drive The Rating Up/Down

Moody's currently considers positive rating actions to be
unlikely in the near future. However, a stabilization of the
outlook could result if FQM performs according to its plan and is
able to complete its key projects in Zambia in 2014 without
delays or main cost overruns. The outlook would also benefit from
the company preserving credit metrics commensurate with the
current rating, including a leverage ratio, on a Moody's-adjusted
basis, not exceeding 3x. Positive pressure could build over time
if the group were able to successfully execute its ambitious
growth strategy, which would result in a stronger business
profile supported by wider operational and geographic
diversification, stronger credit metrics, including a debt/EBITDA
ratio sustainably below 2.0x, as well as a strong liquidity
position.

Moody's would consider downgrading the rating if there were a
material deterioration in FQM's liquidity profile, decline in the
group's operating cash flow generation and/or higher-than-
anticipated capex as a result of overruns or delays at major
projects. Such a deterioration would be reflected by less robust
credit metrics, including debt/EBITDA materially in excess of 3x
on a sustained basis. Furthermore, any material and persistent
deterioration in the operating environment in Zambia which would
translate into a lower sovereign rating could affect FQM's
ratings.

First Quantum Minerals Ltd. (FQM), headquartered in Canada and
listed on the Toronto Stock Exchange and the London Stock
Exchange, is a medium-sized mining company with a large operation
in Zambia, where it manages Kansanshi, a large and low-cost
copper and gold deposit. FQM also operates a small copper and
gold mine in Mauritania, a junior nickel mine in Australia and a
junior nickel-copper mine in Finland. Following the acquisition
of Inmet, FQM has gained access to one of the world's largest
copper deposits, Cobre Panama, as well as to small copper and
zinc mining operations in EMEA. In 2013 FQM reported revenues of
US$3.54 billion.


IDH FINANCE: DD Acquisition No Impact on Fitch 'BB-' Notes Rating
-----------------------------------------------------------------
Fitch Ratings says that UK-based primary care dental services
provider Integrated Dental Holdings' (IDH) acquisition of The
Dental Directory (DD) has no impact on IDH's credit profile.
Fitch rates IDH's parent, Turnstone Midco 2 Ltd, Issuer Default
Rating (IDR) 'B+' with a Stable Outlook.

In addition, Fitch believes that IDH's announced bond tap issue
of GBP100 million to refinance amounts drawn under its revolving
credit facility (RCF) will not affect the 'BB-'/'RR3' ratings on
IDH Finance plc's outstanding GBP125 million (GBP225 million pro
forma for the tap issue) senior secured floating rate notes.
This is because the increased senior debt is matched by a growing
revenue-generating asset base resulting from on-going bolt-on M&A
and therefore does not change our opinion regarding above-average
recovery prospects for senior secured creditors, nor the already
low recoveries for IDH's GBP75 million second lien notes, which
are rated 'B-'/'RR6'.

The acquisition of DD, a leading multi-channel distributor of
dental supplies and consumables to the dental sector, will
further cement IDH's vertical integration in the dental clinics
value chain.  Despite a mild erosion expected in EBITDA margin in
FY15 (ending March 2015), Fitch assumes some cost savings in
procurement over the medium term and some diversification to the
business profile of the group.  This is mitigated by slightly
slower deleveraging than previously assumed.

DD's enterprise value is mainly debt-funded by drawings on the
RCF.  Once the drawn RCF is refinanced via the planned issue of
additional notes, the RCF is expected to be drawn again over the
next few years to support continuing bolt-on acquisitions of
dental clinics in the UK, in line with the management strategy of
increasing scale in a fragmented market.  Adjusting for
contribution of such acquisitions, Fitch forecasts slight
deterioration in funds from operations (FFO) adjusted net
leverage to over 6.0x for FY15.  However, over the longer-term
positive free cash flow (FCF) along with the increasing scale of
the business and profitability should support deleveraging,
sending FFO adjusted net leverage lower to 5.0x-5.5x range by
March 2018.

Fitch continues to assume that IDH's acquisition strategy will be
aimed at taking advantage of the fragmented dentistry market in
the UK.  The acquisition of small practices with 'evergreen
contracts' with the NHS is a sensible strategy as it complements
the group's operations and thus does not bear major integration
costs.  However, failure to integrate the latest and future
acquisitions, leading to either the revenue contribution of new
practices being below historical levels, or an erosion of group
profitability due to cost overruns could put pressure on the
already stretched credit metrics.

Fitch will continue to focus on IDH's ability to generate
positive free cash flow (FCF) to help support the on-going
acquisition activity, as financial headroom under the current
ratings remains limited for large debt-funded acquisitions over
the next two years.  Reduced FCF margin below 4% of sales due to
significant profitability erosion, combined with aggressive
future acquisitions translating into sustained higher-than-
expected leverage, could be detrimental to the ratings.


MIZZEN BONDCO: Fitch Assigns 'B-' Rating to GBP200MM Sr. Notes
--------------------------------------------------------------
Fitch Ratings has assigned Mizzen Bondco Limited's (Mizzen
Bondco) GBP200 million 7% senior notes 'B-'/'RR6' final ratings.
The ratings are in line with the expected ratings assigned on
April 29, 2014.

Key Rating Drivers

Mizzen Bondco is a wholly owned subsidiary of Mizzen Mezzco
Limited UK (MML), which ultimately owns Premium Credit Finance
(PCL), a leading provider of third-party insurance premium
finance in the UK and Ireland.

The notes are senior, mature in 2021 and are guaranteed by Mizzen
Midco Limited and Mizzen Mezzco2 Limited UK (intermediate holding
companies between MML and PCL).  Their ratings are two notches
below MML's 'B+' Long-term IDR, reflecting poor recovery
prospects as indicated by the 'RR6' Recovery Rating assigned by
Fitch.

Rating Sensitivities

The securities ratings are primarily sensitive to any movement in
their anchor rating, MML's Long-term IDR, and to potential
changes to recovery prospects.


R&R ICE CREAM: Moody's Rates GBP315MM Sr. Secured Notes '(P)B1'
---------------------------------------------------------------
Moody's Investors Service has assigned (P)B1 rating to the GBP315
million Senior Secured Notes due 2020 to be issued by R&R Ice
Cream Plc. Concurrently, Moody's moves the B2 Corporate Family
Rating (CFR) and B2-PD Probability of Default (PDR) to R&R Ice
Cream plc, the top entity of R&R Ice Cream group. Moody's also
affirmed the Caa1 rating of the EUR253 million senior PIK Toggle
notes due 2018 issued by R&R PIK plc. Moody's expects to withdraw
the B1 rating of the existing EUR350 million Senior Secured Notes
due 2017 upon the issuance of the new Notes. The rating outlook
on all ratings is stable.

Proceeds from the new notes will be used to redeem all
outstanding EUR350 million Senior Secured Notes due 2017.

Ratings Rationale

The (P)B1 rating of the new Notes reflects the cushion from the
subordinated PIK Notes leading to a one notch difference to the
company's CFR. The terms and conditions of the new Notes are
similar to the existing Notes they intend to replace.

The proposed capital structure also includes a EUR60 million
super senior Revolving Credit Facility (RCF). The senior secured
notes share first-ranking asset security with the RCF, however
rank behind the RCF in an enforcement waterfall scenario. The
senior secured notes also benefit from the senior guarantees
provided by most of the operating companies.

The company demonstrated a 13% year-on-year growth in sales
during 2013 supported by the full-year effect of Eskigel
acquisition acquired in July 2012 and contribution from
Fredericks acquired in July 2013. However, management-adjusted
EBITDA margin declined to 13.5% from 14.1% primarily due to
rising dairy prices partially offset by price increases and cost
efficiency measures.

Leverage as of the end of 2013 pro forma for the transaction is
considered high, at 5.9x net reported (including cost savings and
synergies from Frederick's acquisition) or 7.3x gross Moody's
adjusted (excluding these items). However Moody's expects the
company to achieve deleveraging during 2014 due to full-year
contribution and synergies from Fredericks, the full year impact
of price increases achieved in late 2013 and impact from cost
reduction and 3 plants closures during 2013.

R&R's liquidity is supported by a cash balance of approximately
EUR13 million on a pro forma basis for the proposed transaction
and access to an undrawn EUR60 million super senior RCF --
extendable to EUR75 million -- which was due to mature on
September 15, 2017. This RCF has been extended broadly in line
with the new Notes Moody's considers the liquidity profile weak,
impacted by the PIK Notes interest paid in cash. Moody's does not
include non-recourse factoring of receivables financing
facilities available to the company into its liquidity sources.
The facilities are implemented in the UK, France and Germany and
allow approximately EUR36 million borrowing capacity available as
of December 31 of each year and approximately EUR99 million
available as of June 30 of each year. Together, they are expected
to be sufficient to fund sizeable seasonal working capital swings
(peak in May).

The transaction improves the liquidity profile of the company by
further extending the maturity of the notes, with no major debt
maturities before 2020 within the senior secured notes restricted
group.

The two financial covenants under the company's RCF agreement
were met with sufficient headroom as of December 31, 2013,
according to the company and the interest cover ratio has been
excluded from the covenants on an ongoing basis.

Moody's maintains the rating on PIK notes based on the
expectation that sufficient disclosure on PIK Notes issuer will
be available on quarterly basis.

The stable outlook reflects our expectations that R&R will
successfully integrate its acquisitions, continue to deliver cost
efficiencies and increase sales of branded products which will
all contribute to improve its profitability over time. Stable
outlook also requires that R&R decreases its adjusted debt/EBITDA
ratio (including the PIK) to 6.0x over the next 12 to 18 months.

What Could Change The Rating Up/Down

The company's ratings could be downgraded if Moody's adjusted
gross debt to EBITDA does not decline below 6x over the period of
12-18 months. Furthermore, any deterioration in the company's
liquidity position could result in a downgrade, or if R&R were to
generate negative free cash flows during an extended period of
time.

Moody's could consider an upgrade if R&R were to reduce its
adjusted debt/EBITDA metric towards 4x and its EBIT/interest
expense ratio increases towards 2x, on a sustainable basis.

Headquartered in Northallerton, UK, R&R Ice Cream is one of the
largest European private label ice cream manufacturers with total
sales in 2013 of EUR681 million. R&R Ice Cream's product
portfolio also includes branded ice cream such as Kelly's and
Landliebe as well as products sold under the Nestle, Mondelez and
Cadbury brands.


TURNSTONE BIDCO 1: S&P Affirms 'B' Corp. Credit Rating
------------------------------------------------------
Standard & Poor's Rating Services said that it affirmed its 'B'
long-term corporate credit rating on U.K.-based dental health
care provider Turnstone BidCo 1 Ltd. (IDH).  The outlook is
stable.

At the same time, S&P affirmed its 'B' issue rating on IDH's
GBP425 million senior secured notes, including the proposed
increase of GBP100 million, due 2018.  The recovery rating on
these notes is unchanged at '4', indicating S&P's expectation of
average (30%-50%) recovery in the event of a payment default.

In addition, S&P affirmed its 'CCC+' issue rating on IDH's
second-lien notes.  The recovery rating on these notes is
unchanged at '6', indicating S&P's expectation of negligible (0%-
10%) recovery prospects in the event of a payment default.

The affirmation reflects IDH's plan to issue an additional
EUR100 million of senior secured notes to finance the acquisition
of dental equipment supplier Dental Directory.  In S&P's view,
the acquisition is in line with IDH's growth strategy, and will
not lead its debt protection metrics to deteriorate beyond the
levels S&P' assume under its base case.

S&P derives its 'B' rating on IDH from its anchor of 'b', which
in turn is based on S&P's "fair" business risk and "highly
leveraged" financial risk profile assessments for the group.

S&P continues to view IDH's business risk as "fair" under its
criteria.  This incorporates S&P's view of IDH's "very low"
country risk due to the entirety of its revenues being derived in
the U.K., and the health care services industry's "intermediate"
risk, which reflects the importance of third-party payors and
governments in the reimbursement mechanism.

S&P's assessment of IDH's business risk profile is constrained by
its view of the group's relatively small size and lack of
diversity due to its concentration on publicly-funded dentistry
in the U.K.  In S&P's view, there are limited organic volume
growth opportunities in NHS dentistry, given the fixed number of
contracts in circulation.  S&P therefore believes that any
significant top-line growth is likely to be as a result of
acquisitions.

These weaknesses are offset by the highly visible and stable
nature of revenue streams from NHS dentistry, which accounts for
the majority of IDH's revenues.  IDH has grown its share of
private revenues, which now account for about 14% of the group's
revenue base.  S&P believes that this growth will continue in
light of relatively subdued funding for NHS contracts.

Although the U.K. primary dental market is highly fragmented,
IDH's market-leading position allows it to benefit from greater
operational efficiencies.  Contrary to other health care services
in the U.K., NHS dentistry represents a small share of overall
NHS expenditure and is almost entirely provided by the private
sector. In its view, the risk of the NHS insourcing dental
services to save costs is low.  Other supporting factors are the
positive demographic trends in the U.K. for health care services
companies, as well as the NHS' intention to increase the
accessibility of dental care.

S&P's view of IDH's "highly leveraged" financial risk profile
reflects its financial sponsor ownership and our calculation that
its Standard & Poor's-adjusted debt-to-EBITDA ratio will remain
at about 7x over the next two years.  This includes IDH's recent
GBP100 million tap of its senior secured floating-rate notes,
which the group used to help refinance drawings under its
revolving credit facility (RCF) as a part of its acquisition of
U.K. dental supplies group Dental Directory.  S&P notes that all
shareholder loans in the group structure have been repaid, either
through the issue of common equity or from the proceeds of last
year's debt issuance.

"We project that IDH will maintain fixed-charge coverage of about
2x (2.2x on average over the next three years), a level that
should enable the group to comfortably service its financial
obligations.  We factor a slight increase in IDH's rent costs
into our operating lease adjustments, as the group continues to
add practices to its portfolio. Our assessment also encompasses
IDH's positive, albeit small, free cash flow generation.  Given
limited organic volume growth opportunities and the highly
fragmented nature of U.K. primary dental care, we believe that
any material cash flow generation is likely to be absorbed by
acquisitions," S&P said.

S&P bases its estimates on the following:

   -- U.K. GDP growth of 2.7% in 2014 and 2.4% in 2015.  However,
      S&P expects the U.K. government to continue its efforts to
      curb health care expenditure by the NHS. On April 1, 2014,
      the Department of Health announced a 1.6% uplift in pricing
      for NHS dentistry contracts, although this comes amid
      increasing lab and staff costs;

   -- Double-digit revenue growth.  This reflects higher units of
      dental activity (UDAs) and a further contribution from the
      dental supplies business.  The contribution is primarily
      from acquisitions, as well as the development of services
      to support an increased share of private dentistry;

   -- Dilution in EBITDA margins of about 100 basis points in
      2015 due to the lower-margin nature of Dental Directory and
      associated integration costs.

   -- S&P estimates a gradual improvement in EBITDA margins
      thereafter, reflecting higher dental fees and lab costs
      being offset by operating efficiency initiatives and an
      improved payor mix;

   -- Annual capital expenditures (capex) of GBP20 million-GBP25
      million, reflecting continued investment in the asset base
      and infrastructure network; and

   -- Acquisitions of GBP90 million-GBP100 million.  S&P expects
      IDH to continue to pursue bolt-on acquisitions to increase
      the number of UDAs given the highly fragmented nature of
      the market, and to further grow the dental supplies
      business.

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

   -- An adjusted debt-to-EBITDA ratio of about 7x.

   -- Adjusted fixed-charge coverage of about 2.2x.

The stable outlook reflects S&P's view that over the next 12
months, IDH should be able to sustain positive organic revenue
growth of at least low-single digits, while adding new business
through acquisitions.  The outlook also assumes that IDH will be
able to successfully integrate newly acquired companies without
jeopardizing its profitability.  S&P views adjusted fixed-charge
coverage of about 2x -- a level that would enable the group to
comfortably service its financial obligations -- on a sustainable
basis as commensurate with the 'B' rating.

Downside scenario

S&P could lower the rating if IDH's adjusted EBITDA margin
deteriorates below 15%, which could lead to S&P reviewing its
assessment of its business risk profile. S&P could also lower the
rating if the group's ability to service its debt obligations and
maintain adequate headroom under its covenants deteriorates.
This would broadly correspond with fixed-charge coverage
approaching 1.5x.  The most likely cause of such deterioration
would be if fee increases by the NHS do not keep up with
inflationary pressure on the group's cost base.  In addition, an
unexpected regulatory change could put pressure on the group's
volumes and earnings.

Upside scenario

S&P could consider an upgrade if IDH reduces its adjusted
leverage to less than 5x on a sustained basis.  In view of the
amount of deleveraging required to achieve this reduction, S&P
believes it would most likely occur as a result of a change in
financial policy.  S&P therefore views an upgrade as unlikely.


                            *********

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.

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


                            *********


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

Troubled Company Reporter-Europe is a daily newsletter co-
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Valerie U. Pascual, Marites O. Claro, Rousel Elaine T. Fernandez,
Joy A. Agravante, Ivy B. Magdadaro, and Peter A. Chapman,
Editors.

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

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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