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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

            Wednesday, May 21, 2014, Vol. 15, No. 99

                            Headlines


F I N L A N D

NOKIA CORP: S&P Raises CCR to 'BB' on Reduced Debt; Outlook Pos.


F R A N C E

FRENCH POLYNESIA: S&P Affirms 'BB+' LT Issuer Credit Rating
SGD GROUP: Fitch Assigns 'B' Long-Term Issuer Default Rating
VIVENDI SA: Court Overturns 2011 Ruling in Suit v. Ex-CEO


G E R M A N Y

GALAPAGOS HOLDING: Moody's Assigns 'B2' CFR; Outlook Stable
XEFIN LUX: Moody's Rates EUR325MM Senior Secured Notes '(P)Ba3'


I R E L A N D

ARBOUR CLO: Fitch Rates EUR12.125MM Class F Notes 'B-(EXP)sf'
IRISH BANK: Waechter Denies Involvement in Plan to Hide Assets
IRISH BANK: Drumm to Face Fraud Allegations at US Hearing
OPERA FINANCE: Fitch Lowers Ratings on 2 Note Classes to 'Dsf'
VERSAILLES CLO: Moody's Affirms Ba3 Rating on EUR14MM Cl. E Notes


I T A L Y

BANCO POPOLARE: Fitch Downgrades Viability Rating to 'bb+'
BANCA POPOLARE: S&P Puts 'BB-' Rating on CreditWatch Positive
GRUPPO ESPRESSO: S&P Affirms 'BB-' CCR; Outlook Stable


N E T H E R L A N D S

AERCAP HOLDINGS: S&P Lowers CCR to 'BB+'; Outlook Stable
CADOGAN SQUARE: Moody's Hikes Rating on EUR27.9MM Notes to 'Ba1'


M O N T E N E G R O

MONTENEGRO REPUBLIC: S&P Affirms 'BB-/B' Sovereign Credit Ratings


P O L A N D

ALIOR BANK: Fitch Affirms 'BB' LT Issuer Default Rating


P O R T U G A L

EXETER BLUE: Fitch Cuts Rating on Class D Notes to 'Bsf'
* Moody's Raises Gov't Bond Ratings of 3 Portuguese Banks to Ba2


R O M A N I A

MAREX GROUP: Enters Insolvency Proceedings Amid Cash Crunch
ROMANIA: S&P Raises Sovereign Credit Ratings From 'BB+'


R U S S I A

AHML INSURANCE: Fitch Affirms 'BB' IFS Rating; Outlook Stable


S P A I N

BBVA RMBS: Fitch Puts 'CC'-Rated Notes Watch Negative
GAT FTGENCAT 2006: Fitch Affirms Csf Rating on Series E Notes


U N I T E D   K I N G D O M

CO-OPERATIVE GROUP: Ben Reid Steps Down as Director
CUCINA ACQUISITION: Moody's Rates New Sr. Secured Notes 'B3'
PRIORY GROUP: S&P Affirms 'B+' CCR; Outlook Stable
PUNCH TAVERNS: Fitch Maintains Watch Negative on CC-Rated Notes


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F I N L A N D
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NOKIA CORP: S&P Raises CCR to 'BB' on Reduced Debt; Outlook Pos.
----------------------------------------------------------------
Standard & Poor's Ratings Services said that it has raised its
long-term corporate credit rating on Finnish technology company
Nokia Corp. and on its subsidiary Nokia Solutions and Networks
B.V. (NSN) to 'BB' from 'B+'.  The outlook is positive.  Also,
S&P affirmed the 'B' short-term rating on Nokia.

At the same time, S&P raised its issue rating on Nokia's senior
unsecured notes to 'BB' from 'B+'.  The recovery rating is '3',
indicating S&P's expectation of meaningful (50%-70%) recovery in
the event of a payment default.

S&P also raised its issue rating on Nokia Solutions Networks
Finance B.V.'s senior unsecured debt to 'BB' from 'B+' and the
recovery rating to '3' from '4'.  The '3' recovery rating
indicates S&P's expectation of meaningful (50%-70%) recovery in
the event of a default.

S&P removed all ratings from CreditWatch where it had placed them
on Sept. 9, 2013.

The upgrade reflects S&P's anticipation that the company will
reduce gross debt by EUR2 billion by using part of the EUR5.6
billion proceeds from the sale of its cash-burning Device &
Services (D&S) division, and will keep comfortable cash balances
even after Nokia's announced EUR3 billion of shareholder returns.
Given the importance of NSN for the Nokia group following the
sale of the cash-burning D&S, S&P will now equalize its rating on
NSN with that on Nokia.

The upgrade of NSN therefore reflects S&P's view of NSN as a
"core" subsidiary of Nokia, based notably on its integrated and
material role for Nokia and Nokia's full ownership.  As per S&P's
group rating methodology, the ratings and outlook on NSN mirror
the long-term corporate credit rating and outlook on Nokia.

The positive outlook on Nokia and NSN reflects the potential for
a one-notch upgrade in the next 12 months if revenues and
profitability at least stabilize and FOCF remains positive.

S&P could raise the rating if consolidated revenues stabilize or
grow slightly -- which we think would have to stem from increased
revenues at Networks in the second half of 2014 and a larger
market share, as well as other segments reporting some revenue
growth.  Also, S&P would have to observe that consolidated
margins after restructuring costs stabilize at current levels and
that Nokia generates positive and growing FOCF.

This could lead S&P to reassess Nokia's financial risk profile as
"modest" or its business risk profile as "fair" (the latter would
also prompt S&P to reassess Nokia's financial risk profile upward
as S&P would apply surplus cash adjustment in line with its
criteria).

S&P could revise the outlook to stable if FOCF turned negative,
for instance on prolonged revenue decline or market share
erosion, or if current margins weakened.  A major acquisition
could also lead S&P to revise the outlook to negative.



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F R A N C E
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FRENCH POLYNESIA: S&P Affirms 'BB+' LT Issuer Credit Rating
-----------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'BB+' long-term
issuer credit rating on the Overseas Country of French Polynesia,
a French regional government.  The outlook remains positive.

Rationale

The rating is supported by French Polynesia's good budgetary
performance, notably marked by our expectation that the operating
margin will significantly improve, as well as French Polynesia's
"evolving-but-sound" institutional framework.  The region enjoys
high tax autonomy -- modifiable tax revenues represent 80% of
operating revenues -- thereby leading us to consider its
budgetary flexibility as a positive rating factor.

The 'BB+' rating, one notch below investment grade, continues to
reflect S&P's view of French Polynesia's "negative" liquidity
position, "negative" financial management, very high contingent
liabilities, high debt burden, and the structural weaknesses of
its economy, despite moderate GDP per capita of EUR15,868 by
international standards.

In the last decade, French Polynesia has experienced strong
deterioration in its budgetary performance and liquidity.  The
decline was due to persistent political instability, weak budget
management, and very poor economic growth.

Real GDP has declined 3% annually on average since 2008.  French
Polynesia's operating balance reached a very low negative 5.1% of
operating revenues in 2010 and grew gradually to 1.3% in 2011,
2.5% in 2012, and to 5.8% in 2013 thanks to the one-off
underfinancing of the social solidarity fund.  Excluding this
one-off item, the operating margin would have been stable
compared with 2012.  French Polynesia's severe liquidity position
over the past two years was eased only thanks to extraordinary
support from France (unsolicited; AA/Stable/A-1+), mainly through
a CFP franc (XPF)6 billion exceptional state grant in 2012 and a
XPF5 billion cash advance in late 2013, which enabled French
Polynesia to repay most of its commercial debt and ease its
liquidity position, until the July 2013 tax reform takes full
effect in 2014.  This illustrates why we believe that ordinary
and extraordinary state support constitute a predominant element
of our view of the "evolving-but-sound" institutional framework
for French Polynesia.

In S&P's opinion, following the April-May 2013 local elections,
French Polynesia benefits from a stable and strong political
majority.  Moreover, S&P believes that the budgetary decisions --
from the tax reform of July 2013 to the recent supplementary
budget voted in April 2014--show that French Polynesia has a
willingness to restore public finances while supporting the
economic recovery.

Therefore, despite S&P's expectations for limited growth in its
base-case scenario, S&P considers that the full impact of the tax
reform taking effect in 2014 and the continued adjustment of
operating expenditures will allow French Polynesia to
structurally improve its budgetary performance, with an operating
balance at 8% of operating revenues in 2015.  This is lower than
the level in S&P's last base case, because it assumes that France
will not provide its budgetary support punctually to the early
staff retirement plan in 2014 or structurally to the social
solidarity fund.  S&P even assume in its revised base case that
the ordinary state transfer will continue to decrease in 2015-
2016 at the same pace as in 2014 (at -3% annually).  However, S&P
now consolidates into the main budget the Investment and Debt
Guarantee Fund (IDGF), which benefited from XPF4 billion
dividends in 2013, some taxes from 2014 that S&P forecasts at
about XPF2.7 billion per year, and potential asset sales for the
next five years.

"While we view positively the creation of the IDGF, which
contributes to securing French Polynesia's debt repayment, as
well as the consolidation measures recently taken such as the
early retirement plan, we continue to consider French Polynesia's
financial management as "negative" for the rating.  In our view,
financial management remains constrained by poor control over
government-related entities (GREs); inadequate, though improving,
accounting practices; and relatively high potential risks related
to derivatives.  However, we acknowledge that the amount of the
latter has continuously decreased over the past year," S&P said.

Following French Polynesia's implementation of the operating
expenditure-adjustment measure, S&P considers that the country's
ability to further reduce operating spending will be highly
limited.  S&P has the same view regarding capital expenditures,
given the importance of public investment for the local economy.
This was illustrated by the recent economic recovery plan French
Polynesia launched.  As a consequence, S&P expects investments to
increase to XPF20 billion on average in 2014-2016 in its base
case (approximately 18% of total expenditures) from XPF14.2
billion on average in 2012-2013 (including cash advances to the
hospital).

Thanks to the structural improvement of its operating balance,
French Polynesia could increase capital spending while containing
its deficit after capital expenditures to less than 3% over 2014-
2016, in S&P's base-case scenario.

In S&P's view, this good budgetary performance would allow French
Polynesia to contain its recourse to debt and then to post
decreasing tax-supported debt to about 86% of operating revenues
at year-end 2016 from 90% at year-end 2013, essentially thanks to
growing tax revenues and decreasing debt of non-self-supporting
GREs.  S&P includes in its calculation of tax-supported debt
French Polynesia's direct debt (of which XPF5 billion France
advanced as cash at year-end 2013) and financial debt for various
non-self-supporting GREs, such as airline Air Tahiti Nui and the
Polynesian housing office.

S&P considers that French Polynesia reports very high contingent
liabilities, as it is exposed to natural catastrophe risks.  In
addition, it has a large range of local public agencies and
semipublic companies and large off-balance-sheet commitments
related to its social security system.

Liquidity

S&P views French Polynesia's liquidity position as "negative"
under its criteria.  Cash flows, especially tax proceeds, are
largely unpredictable.  S&P considers that the region's cash
position, although significantly improving compared with last
year -- notably thanks to the state cash advance -- would cover
less than 40% of debt service in the next 12 months.

In S&P's base case, it continues to consider that French
Polynesia will benefit from strong access to external liquidity
through the state liquidity support, as it has in the recent
past.

OUTLOOK

The positive outlook reflects S&P's view of a one-in-three
likelihood over the next year that French Polynesia will
structurally improve its stand-alone liquidity -- with available
free cash structurally covering over 40% of debt service --
thanks to a better budgetary performance, and will resume normal
access to external funding from commercial banks or financial
markets.  S&P would then likely raise the long-term rating.

If S&P was to consider its upside scenario as less likely than it
currently envisage, S&P would revise the outlook on French
Polynesia to stable.  This could stem from French Polynesia's
inability to access external funding through commercial banks or
financial markets in the next few months, or the country's
failure to implement its announced measures to restore its public
finances.

In accordance with S&P's relevant policies and procedures, the
Rating Committee was composed of analysts that are qualified to
vote in the committee, with sufficient experience to convey the
appropriate level of knowledge and understanding of the
methodology applicable.  At the onset of the committee, the chair
confirmed that the information provided to the Rating Committee
by the primary analyst had been distributed in a timely manner
and was sufficient for Committee members to make an informed
decision.

After the primary analyst gave opening remarks and explained the
recommendation, the Committee discussed key rating factors and
critical issues in accordance with the relevant criteria.
Qualitative and quantitative risk factors were considered and
discussed, looking at track-record and forecasts.  The chair
ensured every voting member was given the opportunity to
articulate his/her opinion.  The chair or designee reviewed the
draft report to ensure consistency with the Committee decision.
The views and the decision of the rating committee are summarized
in the above rationale and outlook.

RATINGS LIST

Ratings Affirmed

French Polynesia (Overseas Country of)
Issuer Credit Rating                   BB+/Positive/--


SGD GROUP: Fitch Assigns 'B' Long-Term Issuer Default Rating
------------------------------------------------------------
Fitch Ratings has assigned France-based SGD Group SAS (SGD
Pharma) a final Long-term Issuer Default Rating (IDR) of 'B' with
Stable Outlook and the group's EUR350 million senior secured
notes a final 'B'/'RR4' rating.  The final ratings are in line
with the expected rating and follow the receipt of final
documents conforming to information already received.

The ratings are based solely on SGD Group's pharma business and
exclude the perfumery business, which is being demerged from the
group, with expected completion by end-2015.  The ratings are
also based on our assumption that SGD Pharma will continue to pay
for the operational costs of the perfumery business until
separation is complete and that the shareholder, Oaktree Capital,
will provide credit support for any indemnity.

The ratings reflect SGD Pharma's limited scale of operations and
fairly high funds from operations (FFO) adjusted leverage, which
we forecast to reduce to around 5.5x from around 6.0x at end-13.
However, the group's credit profile is supported by leading
positions in the stable pharma glass packaging market, high
barriers to entry and limited end-market and customer
concentration.

Key Rating Drivers

High Leverage

Leverage is high, but adequate for the ratings.  FCF generation
over the next two years will be limited by large investment
outlays of EUR75 million.  "We expect the group to be FCF
positive from 2016, when it completes the separation of its
perfumery and pharma operations and capex returns to normalized
levels," Fitch said.

Sound Business Profile

SGD Pharma's business profile is commensurate with the 'B' rating
category.  The limited scale of its operations and focus on the
pharmaceutical glass market are mitigated by a range of
therapeutic end-markets served by its products.  In addition,
customer concentration is limited, eliminating dependency on the
success of single drugs, formats or customers.

Stable End-Markets

The molded glass packaging market has been growing at healthy
rates of around 4% since the 2009 recession.  "We expect long-
term favorable demand growth for pharma packaging, driven by
global growth in population, life expectancy, chronic diseases
and fast-growing demand for healthcare and pharma in emerging
markets," Fitch said.

Strong Market Positions

SGD Pharma has strong market positions, particularly in the
profitable type I glass market, where it holds a 30% global
share. The market for this type of glass is highly concentrated,
with the top three players supplying 80% of the market.  In its
core western European markets (63% of revenues), the group is the
undisputed leader in type II and III glass markets with a 55% and
33% share, respectively.

High Barriers to Entry

The group's profitability is protected in the short- to medium-
term by high entry barriers provided by its technological
leadership, the large investments required to set up new
production and high switching costs for customers, including high
regulatory requirements and the reputational risks associated
with product quality issues.  For SGD Pharma's customers,
switching suppliers is therefore often not economical, given that
the price of packaging is small compared with the price of the
final product.  It amounts to up to 3% for type I glass and up to
5% for type II glass.

Refurbished Asset Base

The group's assets benefit from large historical investments.
This will enable it to reduce maintenance capex for a number of
years, particularly during the construction of its new French
plant and the operational separation of its pharma and perfumery
businesses, which is capital-intensive.

Rating Sensitivities

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

- FFO adjusted leverage below 4.0x
- Positive FCF generation through the cycle

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

- FFO adjusted leverage above 6.0x
- Quality issues, operational disruptions or growing competitive
   pressure in type II or III markets, resulting in EBITDA margin
   in the teens
- Liquidity pressures from negative FCF or covenant breaches

Liquidity and Debt Structure

SGD Pharma's liquidity is adequate, given around EUR10 million
intra-year working capital swings.  Post transaction, it will
benefit from liquidity of around EUR40 million, of which EUR35
million consists of an undrawn revolving credit facility, with no
debt maturity until 2019, when the new bond matures.


VIVENDI SA: Court Overturns 2011 Ruling in Suit v. Ex-CEO
---------------------------------------------------------
Inti Landauro and Ruth Bender at The Wall Street Journal report
that a French appeals court Monday partly overturned a 2011
ruling that found former Vivendi SA chief executive Jean-Marie
Messier guilty of criminal charges related to the media
conglomerate's near-bankruptcy in 2002.

The Paris appeals court upheld a conviction for embezzlement in
relation to his severance package when he left the top job at
Vivendi, the Journal relates.  The court, however, reduced the
conviction to a EUR50,000 fine and 10-month suspended prison
sentence, down from a EUR150,000 fine and a three-year suspended
prison term, the Journal notes.

The appeals court also dismissed an earlier conviction that
Mr. Messier had mislead investors during his tenure as the
company's CEO, the Journal states.

Francis Szpiner, Mr. Messier's lawyer, said Mr. Messier would
appeal the embezzlement ruling with France's highest court, the
Journal relays.

                         About Vivendi

Vivendi SA -- http://www.vivendi.com/-- is a France-based
company principally engaged in telecommunications services and
media entertainment.  The Company operates five core
subsidiaries: Activision Blizzard, a 54% subsidiary, is a
worldwide pure-play online and console game publisher; Universal
Music Group, a 100% subsidiary, is a recorded music company; SFR,
a telecommunications operator in France is a 56% subsidiary of
Vivendi (the new SFR, created via a merger with Neuf Cegetel, is
a mobile and fixed-line operator in Europe); Maroc Telecom, a 53%
subsidiary, is a mobile and fixed-line and internet access
operator in Morocco; Groupe Canal+, a 100% subsidiary, offers
premium and theme channel distribution and programming in France.
Vivendi holds 20% of NBC Universal.  Vivendi Mobile Entertainment
was founded as a 100% subsidiary of Vivendi in 2007, its
innovative subscription service, branded zaOza, was launched in
France in 2008.


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G E R M A N Y
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GALAPAGOS HOLDING: Moody's Assigns 'B2' CFR; Outlook Stable
-----------------------------------------------------------
Moody's Investors Service, has assigned a B2 corporate family
rating (CFR), a B2-PD probability of default rating to Galapagos
Holding S.A. as well as a provisional (P)Caa1 rating to the
planned EUR250 million senior notes issued by Galapagos Holding
S.A. At the same time Moody's has assigned provisional (P)B1
ratings to the planned EUR525 million senior secured fixed and
floating rate notes issued by Galapagos S.A., a fully owned
subsidiary of Galapagos Holding S.A.. The outlook on all ratings
is stable.

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

Ratings Rationale

The B2 CFR benefits from the group's (1) strong position in the
global heat exchanger market with a broad product portfolio,
global production capability and reasonable end-market and
geographic diversification, with some concentration on the Oil &
Gas and Power markets as well as on Europe; (2) competitive
position in a mature industry being supported by long-standing
customer relationships as well as existing technological know-
how; and (3) ability to generate modest amounts of positive free
cash flow after interest payments as result of low maintenance
capital expenditure and limited working capital needs.

However the ratings are constrained by (1) the group's limited
operating history as a combined entity as the heat exchanger
activities of its former parent GEA Group AG have only been
bundled since 2010; (2) high financial leverage for the rating
category (pro-forma 2014 Moody's adjusted Debt/EBITDA of close to
6.0x) and modest interest coverage; (3) limited regional
diversification in terms of profits, with 44% of revenues
stemming from Western Europe in 2013 but more than two thirds of
profits being generated in Europe; and (4) the cyclicality of the
heat exchangers market which depends mostly on the demand
environment in the end-markets of its customers. While heat
exchangers typically represent a small cost factor for the
customer it is typically installed in a larger power plant or
building. HX is exposed to customers delaying investments in case
of deteriorating demand prospects or limited financing ability.

The assigned CFR also incorporates Moody's expectation that the
low point of the group's operating performance has been reached
in 2013 and that operating performance in 2014 and beyond will
benefit from modest revenue growth and EBITDA improvements before
restructuring expenses. Given the very limited free cash flow
generation, an effective deleveraging will only be possible with
a continuous improvement of the EBITDA generation, leaving little
headroom for weaker than expected performance.

The rating also incorporates Moody's expectation that the company
will maintain an effective risk management system to mitigate
project risk. Moody's note that the group's customer base is
diversified and management is focused on limiting exposure to
larger projects.

Liquidity

Moody's view Galapagos' liquidity profile to be relatively modest
post the refinancing. Moody's estimate a cash position of EUR48
million after the closing of the refinancing. Other cash sources
for the next 12-18 months comprise FFO as well as the new EUR75
million revolving credit facility maturing in 6 years, which is
expected to be regularly used to cover seasonal swings in working
capital as well as day-to-day cash needs for the normal course of
business given the initially small cash position relative to the
size of the company. This leaves limited cushion for unforeseen
events that, contrary to Moody's expectations, might lead to
negative free cash flow generation.

Structural Considerations

In Moody's assessment of the priority of claims in a default
scenario for Galapagos Moody's distinguish between four layers of
debt within the capital structure. The super senior revolving
Credit facility (RCF) signed by Galapagos S.A., the direct
subsidiary of Galapagos Holding S.A., ranks ahead of all other
debt located at the operating entities and the holding level. The
EUR525 million of Senior Secured (fixed and floating rate) Notes
also to be issued by Galapagos S.A. rank behind the RCF and at
the same level as the trade payables. Behind these debt
instruments are pension and lease obligations as well as at the
lowest level the Senior (unsecured) Notes to be issued by
Galapagos Holding S.A.

Based on the draft documents provided, Moody's have assumed that
any contribution by the new owner to capitalize the company will
be in terms of common equity, preferred equity certificates (PEC)
or shareholder loans that would classify for a 100% equity credit
according to Moody's methodology.

Moody's understands that the super senior RCF and guarantee
facilities will share the same guarantor and collateral package
with the senior secured notes but will rank ahead of the senior
secured notes in an enforcement scenario. Furthermore, the
subordinated notes will be unsecured and will benefit from second
ranking guarantees. Based on this assessment the Senior Secured
Notes will benefit from a one notch uplift compared to the CFR
whereas the Senior Notes will be rated two notches below the CFR.

The outlook on the ratings is stable incorporating Moody's
expectation that the low point of the group's operating
performance has been reached in 2013 and that operating
performance in 2014 and beyond will benefit from modest revenue
growth and EBITDA improvements before restructuring expenses and
positive free cash flow generation. The anticipated performance
should result in gradual improvement in key credit metrics
allowing Galapagos to become more solidly positioned within the
rating category. The stable outlook also considers the
expectation that the group will maintain an adequate liquidity
profile with sufficient headroom under financial covenants
throughout the forecast period.

What Could Change The Ratings Down/Up

The ratings could be downgraded should the company (1) not be
able to reduce Debt/EBITDA sustainably below a level of 5.5x or;
(2) experience a deterioration in operating performance and cash
flow generation that would lead to a negative free cash flow
going forward. Furthermore a deterioration in Galapagos'
liquidity position could result in a ratings downgrade.

Moody's currently views the upside potential for the ratings to
be limited, however an upgrade could be envisaged should
Galapagos be able to (1) generate positive free cash flows on a
sustainable basis leading to deleveraging of the balance sheet
both on an absolute and relative basis evidenced by Debt/EBITDA
level towards 4.5x based on Moody's adjusted calculation for
2013.

Principal Methodology

The principal methodology used in these ratings was the Global
Manufacturing Industry published in December 2010. Other
methodologies used include Loss Given Default for Speculative-
Grade Non-Financial Companies in the U.S., Canada and EMEA
published in June 2009.

Galapagos Holdings is owned by funds managed by Triton and it is
the holding company for the operating activities of Galapagos.
Headquartered in Bochum, Germany, Galapagos is a leading global
manufacturer of heat exchangers for industrial applications
selling to six end-markets namely power, climate and environment,
oil and gas, food and beverages as well as chemicals and marine.
In the twelve months ended March 31, 2014, Galapagos generated
revenues of EUR1,482 million.


XEFIN LUX: Moody's Rates EUR325MM Senior Secured Notes '(P)Ba3'
---------------------------------------------------------------
Moody's Investors Service has assigned a (P)Ba3 rating to the
EUR325 million Senior Secured Floating Rate Notes due 2019 to be
issued by Xefin Lux S.C.A. Concurrently, Moody's affirmed the B1
Corporate Family Rating (CFR) and B1-PD Probability of Default
(PDR) of Xella International Holdings S.ar.l .("Xella"). Moody's
also affirmed the B3 rating of the EUR200 million PIK Toggle
Notes due 2018 issued by Xella HoldCo Finance S.A. ("the PIK
Notes"). Moody's expects to withdraw the Ba3 rating of the
existing EUR300 million Senior Secured Notes due 2018 ("the
Existing Notes") upon the issuance of the new Notes and the
redemption of the Existing Notes. The rating outlook on all
ratings is stable.

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

Proceeds from the New Notes will be used to redeem all
outstanding EUR300 million of the Existing Notes and pay
transaction fees and expenses and redemption costs.

Ratings Rationale

The (P)Ba3 rating of the New Notes reflects the cushion from the
subordinated PIK Notes leading to a one notch difference from the
company's CFR. The proposed capital structure remains unchanged
and includes bank loans with currently EUR363 million outstanding
under the facilities. The New Notes are expected to share
security and guarantors and rank pari passu with the bank loans.
In line with the existing structure, the proceeds of the offering
of the New Notes will be on-lent as a new tranche under the
existing senior facilities agreement.

Moody's notes that the New Notes are due in 2019, after the
maturity of the subordinated PIK Notes in 2018. Furthermore, the
New Notes include a restricted payment carve-out for the
repayment of up to EUR220 million of PIK Notes, subject to a
maximum secured leverage of 4.0x pro forma for such a repayment.
However, the existing senior facilities agreement includes an
additional restriction of 1.75x net senior leverage preventing
the distribution of upstream dividend (including for PIK Notes
interest payment), which is not expected to be met in the near-
term.

The proposed transaction is broadly leverage neutral, with a
slight increase in leverage as of March 31, 2014 (including the
PIK Notes) of c. 0.1x to 3.8x (based on management's net leverage
calculation).

The company continued to see some challenges in the construction
industry in 2013, followed by a strong Q1 2014, mainly as a
result of the mild winter. Sales were subject to a 2% year-on-
year decline during 2013 due to continuing volume decrease in
some markets, such as The Netherlands, the Czech Republic,
Slovakia, France and China, partially offset by volume growth in
Germany, Russia, Denmark and Sweden as well as price increases
implemented by the company. Normalized EBITDA at EUR197 million
(as calculated by management) was 10% below last year, affected
by volumes and particularly weak results during Q1 2013 in the
Building Materials business unit, as well as EUR14 million start-
up losses of strategic expansion projects in the Dry Lining
division. This was partially offset by cost management and
optimization measures during the year, such as the temporary
closure of two plants. Xella's lime business unit continued to
perform strongly, supported by diversified end industries with
limited exposure to the more cyclical construction industry. As a
result, Moody's gross adjusted leverage increased to 5.8x as of
year-end. Moody's adjusted leverage includes a Vendor Loan Notes
between Xella HoldCo Finance S.A. and Xella International
Holdings S. a r.l. as reported in Xella International Holdings S.
a r.l.'s financial accounts, rather than the PIK Notes, leading
to a higher leverage number due to higher amount of the Vendor
Loan Notes.

The company demonstrated robust performance in Q1 2014, with LTM
March 2014 sales and Normalized EBITDA growing by 3% and 10%
respectively versus 2013. This was driven by strong market demand
(particularly in Germany) as well as favorable comparison to a
weak Q1 2013, which had been affected by extreme winter
conditions.

Moody's expects the company to achieve deleveraging during 2014
due to some recovery in Xella's key markets and continued growth
in Germany.

Xella's liquidity remains adequate, supported by a cash balance
of approximately EUR71 million pro forma for the transaction and
EUR54 million (including ancillary facilities but excluding
fronted ancillary facilities) availability for cash drawings
under its EUR75 million revolving credit facilities. No
significant debt maturities are coming up until 2016, when some
of the bank loans are due for scheduled repayment leading to a
refinancing need ahead of the bank debt maturity. The financial
covenants under the company's bank loan agreement were met with
sufficient headroom as of 31 December 2013.

The stable outlook reflects Moody's expectation that the company
will maintain stable operating performance and continue to
generate positive free cash flow, combined with a conservative
policy towards acquisitions. It also incorporates Moody's
anticipation of timely refinancing of the bank debt maturing in
2016.

What Could Change The Rating Up/Down

Positive pressure could arise if the company (1) decreases gross
Debt-to-EBITDA ratio (Moody's adjusted) towards 4.5x; (2)
improves its EBIT-to-Interest ratio towards 2.0x; and (3)
achieves a Free Cash Flow-to-Debt ratio towards 5% on a sustained
basis. Conversely, downward pressure could be exerted on the
ratings if Xella's (1) gross Debt-to-EBITDA ratio stays
significantly above 5.5x; (2) EBIT-to-Interest ratio stays below
1.5x; or (3) free cash flow turns negative. Any significant debt-
financed acquisitions or shareholder distribution could also
weigh on the ratings.

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

Headquartered in Duisburg (Germany), Xella is a manufacturer of
modern building materials and a producer of lime. Xella is
currently owned by PAI partners and Goldman Sachs Capital
partners. The company reported consolidated revenues of EUR1.3
billion for the year ended December 31, 2013.



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ARBOUR CLO: Fitch Rates EUR12.125MM Class F Notes 'B-(EXP)sf'
-------------------------------------------------------------
Fitch Ratings has assigned Arbour CLO Limited notes expected
ratings, as follows:

EUR208.75 million class A: 'AAA(EXP)sf'; Outlook Stable
EUR26.25 million class B-1: 'AA(EXP)sf'; Outlook Stable
EUR19.95 million class B-2: 'AA(EXP)sf'; Outlook Stable
EUR11.25 million class C-1: 'A+(EXP)sf'; Outlook Stable
EUR10.75 million class C-2: 'A+(EXP)sf'; Outlook Stable
EUR19.75 million class D: 'BBB+(EXP)sf'; Outlook Stable
EUR26.675 million class E: 'BB+(EXP)sf'; Outlook Stable
EUR12.125 million class F: 'B-(EXP)sf'; Outlook Stable
EUR39.5 million subordinated notes: not rated

The assignment of final ratings is contingent on the receipt of
final documents conforming to information already reviewed.

Arbour CLO Limited is an arbitrage cash flow collateralized loan
obligation (CLO).

KEY RATING DRIVERS

Average Portfolio Credit Quality
Fitch expects the average credit quality of obligors to be in the
'B' category. The agency has public ratings or credit opinions on
all 59 obligors in the initial portfolio. The covenanted maximum
Fitch weighted average rating factor (WARF) for assigning the
expected ratings is 34.0. The WARF of the initial portfolio is
31.7.

High Expected Recoveries
The portfolio will comprise a minimum of 90% senior secured
obligations. Recovery prospects for these assets are typically
more favorable than for second-lien, unsecured and mezzanine
assets. Fitch has assigned Recovery Ratings (RR) to all
obligations in the initial portfolio. The covenanted minimum
weighted average recovery rate (WARR) for assigning the expected
ratings is 69%. The WARR of the initial portfolio is 74.8%.

Payment Frequency Switch
The notes pay quarterly while the portfolio assets can reset to a
semi-annual basis. The transaction has an interest-smoothing
account, but no liquidity facility. Liquidity stress for the non-
deferrable class A, B-1 and B-2 notes, stemming from a large
proportion of assets resetting to a semi-annual basis in any one
quarterly period, is addressed by switching the payment frequency
on the notes to semi-annual in this scenario.

Partial Interest Rate Risk
Between 5% and 15% of the portfolio can be invested in fixed rate
assets, while fixed rate liabilities account for 10% of the
target par amount.

Limited FX Risk
The transaction is allowed to invest up to 50% of the portfolio
in non-euro-denominated assets, provided they are hedged with
perfect asset swaps within six months of their purchase. Unhedged
non-euro assets cannot exceed 2.5% of the portfolio at any time.

Trading Gain Release
The portfolio manager may designate trading gains as interest
proceeds, providing the portfolio balance remains above the
reinvestment target par balance and the class E
overcollateralization (OC) test remains above its value at the
effective date.

Transaction Summary
Net proceeds from the note issue will be used to purchase a
EUR365 million portfolio of mostly European leveraged loans and
bonds. The portfolio will be managed by Oaktree Capital
Management (UK) LLP.  The transaction will have a four year re-
investment period scheduled to end in 2018.

The transaction documents may be amended subject to rating agency
confirmation or noteholder approval.  Where rating agency
confirmation relates to risk factors, Fitch will analyze the
proposed change and may provide a rating action commentary if the
change has a negative impact on the ratings.  Such amendments may
delay the repayment of the notes as long as Fitch's analysis
confirms the expected repayment of principal at the legal final
maturity.

If in the agency's opinion the amendment is risk-neutral from a
rating perspective Fitch may decline to comment. Noteholders
should be aware that confirmation is considered to be given if
Fitch declines to comment.

Rating Sensitivities

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

A 25% reduction in expected recovery rates would lead to a
downgrade of one to six notches for the rated notes.


IRISH BANK: Waechter Denies Involvement in Plan to Hide Assets
--------------------------------------------------------------
Tom Lyons at The Irish Times reports that a Swiss former
financial adviser to the family of Sean Quinn has strenuously
denied being the "mastermind" behind an alleged conspiracy to
move EUR500 million worth of overseas property assets away from
the former Anglo Irish Bank, now known as Irish Bank Resolution
Corp.

In an interview with The Irish Times, Michael Waechter -- the
founder of Senat, a United Arab Emirates legal and business
advisory firm -- said he had co-ordinated some of the Quinn's
legal actions and helped set up Belize and Panama firms for them,
but he had at all times acted legally.

Mr. Waechter said in mid-2011 his firm bought controlling shares
in a Quinn company that owned an US$80 million business park in
India on the behalf of an unnamed client for under US$1 million,
The Irish Times relays.

Mr. Waechter, as cited by The Irish Times, said he has met KPMG,
the liquidator of Anglo, with a view to settling matter in India
for a "very small" payment, understood to be about US$2 million.

"We would not accept a settlement and this issue is subject to
current court proceedings," The Irish Times quotes KPMG as saying
in response.

Mr. Waechter said his firm co-ordinated the Quinn family's legal
actions in Cyprus, Ireland and India between mid- 2011 and August
2012 but had nothing to do with events in the Ukraine and Russia,
where the Quinns also own assets, The Irish Times relates.

                  About Irish Bank Resolution

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

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

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

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

Kieran Wallace and Eamonn Richardson of KPMG have been named the
special liquidators.


IRISH BANK: Drumm to Face Fraud Allegations at US Hearing
---------------------------------------------------------
Donal O'Donovan at Irish Independent reports that Anglo Irish
Bank chief David Drumm faces potentially damning allegations of
fraud and perjury when a five-day bankruptcy hearing kicks off in
Boston today, May 21.

An itemized list of the "acts of fraud, misrepresentations,
concealments, transfers or other predicate acts" allegedly
perpetrated by Mr. Drumm has been submitted to the court that
will hear the case, Irish Independent relates.

It was filed jointly by US bankruptcy trustee Kathleen Dwyer and
the liquidators of IBRC, Mr. Drumm's biggest creditor and former
employer, Irish Independent notes.

They said that allegations, which they claim can be proved
against Mr. Drumm, should block him being released debt-free from
bankruptcy later this year, Irish Independent discloses.

The list details more than a dozen cash and property transfers,
totaling millions of euro, allegedly made by Mr. Drumm to his
wife Lorraine in the two years before he sought to be declared
bankrupt in the US in 2010, Irish Independent says.

US bankruptcy trustee Kathleen Dwyer and the liquidators of IBRC,
formerly Anglo, claim that cash transfers to his wife
Lorraine Drumm defrauded creditors, including taxpayer-owned
IBRC, Irish Independent relays.  They claim that Mr. Drumm
attempted to conceal assets that should have been declared under
US bankruptcy, and made false statements, Irish Independent
states.

                  About Irish Bank Resolution

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

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

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

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

Kieran Wallace and Eamonn Richardson of KPMG have been named the
special liquidators.


OPERA FINANCE: Fitch Lowers Ratings on 2 Note Classes to 'Dsf'
--------------------------------------------------------------
Fitch Ratings has downgraded the ratings of Opera Finance CMH
p.l.c. class C and D notes, due January 2015, and withdrawm them
as follows:

EUR31m Class C (XS0241935195): downgraded to 'Dsf' from 'Csf';
Recovery Estimate (RE) 20% and withdrawn
EUR35m Class D (XS0241935609): downgraded to 'Dsf' from 'Csf'; RE
0% and withdrawn

Key Rating Drivers

The withdrawal follows final payment made by the special servicer
of the class A, B and C notes on 11 February 2014.  The downgrade
reflects the respective partial and full write-downs of the class
C and D notes.  All the notes were delisted on 14 February 2014
and cancelled on February 17, 2014.


VERSAILLES CLO: Moody's Affirms Ba3 Rating on EUR14MM Cl. E Notes
-----------------------------------------------------------------
Moody's Investors Service has upgraded the ratings of the
following notes issued by Versailles CLO M.E. I p.l.c.:

EUR22.5M Class B Senior Secured Floating Rate Notes due 2023,
Upgraded to Aaa (sf); previously on Oct 31, 2012 Upgraded to Aa3
(sf)

EUR18M Class C Deferrable Secured Floating Rate Notes due 2023,
Upgraded to A1 (sf); previously on Oct 31, 2012 Upgraded to Baa1
(sf)

EUR12.2M Class D Deferrable Secured Floating Rate Notes due
2023, Upgraded to Baa3 (sf); previously on Oct 31, 2012 Confirmed
at Ba1 (sf)

Moody's also affirmed the ratings of the following notes issued
by Versailles CLO M.E. I p.l.c:

EUR102.75M (current outstanding balance of EUR51,607,227) Class
A-1-D Senior Delayed Draw Floating Rate Notes due 2023, Affirmed
Aaa (sf); previously on Oct 31, 2012 Upgraded to Aaa (sf)

EUR95.3M (current outstanding balance of EUR47,865,390) Class A-
1-T Senior Secured Floating Rate Notes due 2023, Affirmed Aaa
(sf); previously on Oct 31, 2012 Upgraded to Aaa (sf)

EUR33M (current outstanding balance of EUR16,574,382) Class A-2
Senior Variable Funding Floating Rate Notes due 2023, Affirmed
Aaa (sf); previously on Oct 31, 2012 Upgraded to Aaa (sf)

EUR14M (current outstanding balance of EUR13,300,000) Class E
Deferrable Secured Floating Rate Notes due 2023, Affirmed Ba3
(sf); previously on Oct 31, 2012 Confirmed at Ba3 (sf)

EUR7.5M (current outstanding balance of EUR302,066) Class S
Senior Floating Rate Notes due 2023, Affirmed Aaa (sf);
previously on Oct 7, 2011 Confirmed at Aaa (sf)

Versailles CLO M.E. I p.l.c, issued in November 2006, is a
collateralised loan obligation (CLO) backed by a portfolio of
mostly high-yield senior secured European loans. The portfolio is
managed by BNP Paribas. The transaction's reinvestment period
ended in January 2013.

Ratings Rationale

The rating actions on the notes are primarily a result of the
improvement in over-collateralization (OC) ratios and the
significant deleveraging of the Class A notes following
amortization of the underlying portfolio since the payment date
in January 2014. The Class A notes have paid down by
approximately EUR114.4 million (49.6%) in the last 10 months. As
a result of the deleveraging, the over-collateralization (OC)
ratios of the tranches have increased. According to the March
2014 trustee report the OC ratios of Classes A/B, C, D and E are
143%, 126%, 117%, 109% compared to 129%, 118%, 111%, 105%
respectively in December 2013.

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
performing par and principal proceeds balance of EUR170 million,
a weighted average default probability of 21.5% (consistent with
a WARF of 3172), a weighted average recovery rate upon default of
48.9% for a Aaa liability target rating, a diversity score of 25
and a weighted average spread of 3.87%.

In its base case, Moody's addresses the exposure to obligors
domiciled in countries with local currency country risk bond
ceilings (LCCs) of A1 or lower. Given that the portfolio has
exposures to 4.41% of obligors in Italy, whose LCC is A2 and
13.8% in Spain, whose LCC is A1, Moody's ran the model with
different par amounts depending on the target rating of each
class of notes, in accordance with Section 4.2.11 and Appendix 14
of the methodology. The portfolio haircuts are a function of the
exposure to peripheral countries and the target ratings of the
rated notes, and amount to 3.30% for the Class A notes, 2.0% for
the Class B notes, 0.8% for the Class C notes, 0% for the Classes
D and E notes.

The default probability derives from the credit quality of the
collateral pool and Moody's expectation of the remaining life of
the collateral pool. The estimated average recovery rate on
future defaults is based primarily on the seniority of the assets
in the collateral pool. For a Aaa liability target rating,
Moody's assumed a recovery of 50% of the 96.9% of the portfolio
exposed to first-lien senior secured corporate assets upon
default and of 15% of the remaining non-first-lien loan corporate
assets upon default. In each case, historical and market
performance and a collateral manager's latitude to trade
collateral are also relevant factors. Moody's incorporates these
default and recovery characteristics of the collateral pool into
its cash flow model analysis, subjecting them to stresses as a
function of the target rating of each CLO liability it is
analyzing.

Methodology Underlying the Rating Action:

The principal methodology used in this rating was "Moody's Global
Approach to Rating Collateralized Loan Obligations" published in
February 2014.

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

In addition to the base-case analysis, Moody's conducted
sensitivity analyses on the key parameters for the rated notes,
for which it assumed lower credit quality in the portfolio to
address refinancing risk. Loans to European corporates rated B3
or lower and maturing between 2014 and 2015 make up approximately
7% of the portfolio, which could make refinancing difficult.
Moody's ran a model in which it raised the base case WARF to 3238
by forcing ratings on 25% of the refinancing exposures to Ca; the
model generated outputs that were within [one] notch of the base-
case results.

This transaction is subject to a high level of macroeconomic
uncertainty, which could negatively affect the ratings on the
note, in light of 1) uncertainty about credit conditions in the
general economy especially as 18% of the portfolio is exposed to
obligors located in Italy and Spain and 2) the concentration of
lowly-rated debt maturing between 2014 and 2015, which may create
challenges for issuers to refinance. CLO notes' performance may
also be impacted either positively or negatively by 1) the
manager's investment strategy and behavior and 2) divergence in
the legal interpretation of CDO documentation by different
transactional parties because of embedded ambiguities.

Additional uncertainty about performance is due to the following:

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

2) Around 42% of the collateral pool consists of debt obligations
whose credit quality Moody's has assessed by using credit
estimates.

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

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



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


BANCO POPOLARE: Fitch Downgrades Viability Rating to 'bb+'
----------------------------------------------------------
Fitch Ratings has affirmed Banco Popolare's (Popolare) and its
rated subsidiaries' Long-term Issuer Default Ratings (IDRs) at
'BBB' with Negative Outlook.  At the same time it has downgraded
Popolare's VR to 'bb+' from 'bbb-'.

Key Rating Drivers - IDRs, SENIOR DEBT, SR AND SRF

Popolare's Long-term IDR is at its Support Rating Floor (SRF) and
therefore based on Fitch's expectation of support from the
Italian authorities.  The affirmation of the SRF reflects Fitch's
view that there is a high probability that Popolare would receive
support, in case of need, from the Italian government given its
systemic importance domestically.

The Negative Outlook reflects a likely downward revision of the
SRF on weakening state support as further progress is made
globally in implementing the legislative and practical aspects of
enabling effective bank resolution frameworks. A lower SRF would
result in downgrades of the Long-term IDR and the long-term
senior debt ratings to the level of the bank's VR, unless
mitigating factors arise in the meantime. Mitigating factors
could include an upgrade of Popolare's VR to the level of the
bank's current SRF, the existence of large buffers of junior debt
or corporate actions.

RATING SENSITIVITIES - IDRs, SENIOR DEBT, SR AND SRF

Popolare's ratings are sensitive to a weakening of Fitch's
assumptions around the ability or propensity of Italy to provide
timely support to the bank.

Of these, the greatest sensitivity is to a weakening of support
propensity in respect of the national implementation of the
provisions of the Bank Recovery and Resolution Directive (BRRD).

In Banking Union countries, including Italy, the Single
Supervisory Mechanism will reduce national influence over
supervision and licensing decisions in favor of the European
Central Bank (ECB). While still involving multiple parties in
resolution decisions, the Single Resolution Mechanism will also
result in a dilution of national influence over resolution
decisions.

Overall, Fitch's base case is for sufficient progress to be made
for Popolare's Support Rating to be downgraded to '5' and its SRF
to be revised downwards to 'No Floor' within the next one to two
years. The timing will be influenced by Fitch's continuing
analysis of progress made on bank resolution and could also be
influenced by idiosyncratic events.

The Italian state's ability to provide timely support to Popolare
is dependent on its creditworthiness, as reflected in its Long-
term IDR of 'BBB+' with a Stable Outlook. A downgrade of Italy's
sovereign rating would reflect a weakened ability of the state to
provide support and therefore likely result in a downward
revision of Popolare's SRF.

KEY RATING DRIVERS - VR

The downgrade of Popolare's VR reflects the bank's weakened asset
quality, resulting in a high level of equity encumbered by
unreserved impaired loans and a high vulnerability to negative
movement in asset prices. Furthermore, the small loss reported in
1Q14 testifies to the still fragile earnings outlook. These two
elements, in Fitch's opinion, more than offset the positive
impact of the recent capital strengthening following its EUR1.5
billion new share issue.

Credit deterioration experienced in 4Q13 led the bank to report
an operating loss of over EUR800 million for FY13, including loan
impairment charges of about EUR1.9 billion (EUR1 billion of which
were booked in 4Q13). Gross impaired loans reached EUR17.8
billion, equal to a high 19.6% of total gross loans at end-1Q14
(14.5% at end-2012). Unreserved impaired loans at end-2013
accounted for a high 150% of Fitch Core Capital (including the
new EUR1.5 billion capital). Coverage of gross impaired loans
remains fairly low at just above 30%. However, the low coverage
partly reflects the large proportion of loans backed by
collateral and the group's write-off practices.

Popolare's profitability remains structurally weak, which means
that the bank is not yet able to generate sufficient profits
internally to compensate for further losses that may arise from
its large stock of unreserved impaired loans or unexpected
shocks. As a result, capital may be eroded by further losses
unless impaired loans are dealt with swiftly and effectively.
Management plans to address the bank's weak profitability under
its recently announced strategic plan for the coming years.

The bank completed a EUR1.5bn new share issue in April 2014. It
is also implementing measures to reduce the impact of deductions
of non-controlling interests, through its merger with two banks
subsidiaries, Credito Bergamasco and Banca Italease. The
combination of these measures translates into a pro-forma fully-
phased Basel III CET1 ratio of 11.2% at end-1Q14, which is now
more in line with the estimated ratios of its direct peers.

RATING SENSITIVITIES ? VR

The bank's VR would come under additional pressure if there is
further prolonged deterioration in asset quality, or a sharp fall
in real estate values in Italy.

A sustained strengthening of operating performance or significant
asset quality improvements may result in an upgrade of the VR.

KEY RATING DRIVERS AND SENSITIVITIES - SUBORDINATED DEBT AND
OTHER HYBRID SECURITIES

Subordinated debt and other hybrid capital issued by Popolare and
its subsidiaries are all notched down from Popolare's VR (as the
bank's subsidiaries are not assigned a VR), in accordance with
Fitch's assessment of each instrument's respective non-
performance and relative loss severity risk profiles, which vary
considerably. Their ratings are primarily sensitive to a change
in the VRs, which drive the debt ratings.

The 'C' Long-term rating of Banca Italease's trust preferred
securities reflects their non-performance and Fitch's expectation
that the securities are unlikely to resume coupon payments in the
near future.

SUBSIDIARY AND AFFILIATED COMPANY KEY RATING DRIVERS AND
SENSITIVITIES

The ratings of Popolare's subsidiaries, Credito Bergamasco, Banca
Aletti & C. S.p.A and Banca Italease, are based on Fitch's view
that Popolare would support them, if needed. Fitch considers
Credito Bergamasco and Banca Aletti as core subsidiaries given
their roles in the group. Credito Bergamasco will be merged into
the parent by end-1H14, upon which Fitch will assess and withdraw
Credito Bergamasco's ratings.

Fitch believes that Popolare would also provide support to Banca
Italease, if needed, as failure to do so would pose a significant
reputation risk to the group. Banca Italease will also be merged
into the parent by end-2014. Similarly to Credito Bergamasco,
Fitch will assess and withdraw Banca Italease's ratings once the
merger is completed.

As the ratings of the subsidiaries are based on their parent's
Long-term IDR, the ratings are sensitive to changes in Popolare's
Long-term IDR. The subsidiaries' ratings are also sensitive to
changes in the parent's propensity to provide support, which
Fitch currently does not expect.

The rating actions are as follows:

Popolare:

Long-term IDR: affirmed at 'BBB'; Outlook Negative
Short-term IDR: affirmed at 'F3'
Viability Rating: downgraded to 'bb+' from 'bbb-'
Support Rating: affirmed at '2'
Support Rating Floor: affirmed at 'BBB'
Senior debt (including programme ratings): affirmed at 'BBB'/'F3'
Commercial paper: affirmed at 'F3'
Lower Tier 2 subordinated debt: downgraded to 'BB' from 'BB+'
Preferred stock and junior subordinated debt: downgraded to 'B'
from 'B+'

Banca Italease:

Long-term IDR: affirmed at 'BBB'; Outlook Negative
Short-term IDR: affirmed at 'F3'
Support Rating: affirmed at '2'
Senior debt and programme ratings: affirmed at 'BBB'
Market-linked securities: affirmed at 'BBBemr'
Lower Tier 2 subordinated debt: downgraded to 'BB' from 'BB+'
Trust preferred securities: affirmed at 'C'

Banca Aletti & C. S.p.A.:

Long-term IDR: affirmed at 'BBB'; Outlook Negative
Short-term IDR: affirmed at 'F3'
Support Rating: affirmed at '2'

Credito Bergamasco:

Long-term IDR: affirmed at 'BBB'; Outlook Negative
Short-term IDR: affirmed at 'F3'
Support Rating: affirmed at '2'


BANCA POPOLARE: S&P Puts 'BB-' Rating on CreditWatch Positive
-------------------------------------------------------------
Standard & Poor's Ratings Services placed its 'BB-' long-term
counterparty credit rating on Italy-based Banca Popolare
dell'Emilia Romagna SCARL (BPER) on CreditWatch with positive
implications.  At the same time, S&P affirmed its 'B' short-term
rating on BPER.

The CreditWatch placement reflects the possibility that S&P may
raise its long-term rating on BPER if the announced capital
increase results in the bank being able to strengthen its
solvency more than S&P currently anticipates, and to sustain its
capital position over time, taking into account the high credit
losses S&P believes it will likely face over the next two years.

On May 7, 2014, BPER announced that its board of directors had
approved a rights issue of up to EUR750 million, subject to
approval by an extraordinary general meeting scheduled for
June 7, and that BPER has entered into a pre-underwriting
agreement with respect to the issue.  In general, S&P's ratings
don't reflect potential benefits to an entity's creditworthiness
from capital increases until S&P has certainty about the amount
raised and when the capital increase will be completed.  In
BPER's case, the total amount of the increase has not been
finalized and approved by the extraordinary general meeting, nor
has a final underwriting agreement been executed.

"We think that, if successfully executed for the proposed maximum
amount of EUR750 million, the capital increase could possibly
allow BPER to improve its capitalization to a level greater than
we are currently incorporating into our ratings.  We also believe
that BPER may be able to sustain its capital position over time
despite the still-high credit losses that the bank will likely
face in 2014 and 2015.  Our current forecasts of BPER's internal
capital generation capacity already incorporate what we view as
the relatively high credit losses we think BPER will face over
our rating horizon.  We therefore also think the results of the
European Central Bank's (ECB) upcoming Asset Quality Review (AQR)
are therefore unlikely to lead us to review the credit losses we
have incorporated into our assessment.  In our opinion,
therefore, the downside risks to our current assessment of BPER's
risk position and capital forecast are limited, which means the
capital increase may have a positive impact on BPER's solvency
that is unlikely to be countered by higher-than-expected credit
losses," S&P said.

In particular, under this scenario S&P estimates its risk-
adjusted capital (RAC) ratio for BPER would improve to a level
sustainably and comfortably above 5% by year-end 2015.  This
compares with S&P's current RAC projection of close to 5%.

S&P's ratings on BPER also reflect a one-notch uplift over the
SACP for potential extraordinary government support, based on
S&P's view of BPER's moderate systemic importance and Italy's
supportive stance toward its banking system.

S&P aims to resolve the CreditWatch once we have certainty about
the likelihood of the completion and conditions of the capital
increase (including the amount raised and its timing), as well as
its likely impact on BPER's capacity to sustainably operate with
a capital level that is higher than S&P currently incorporates
into its ratings.  On resolving the CreditWatch S&P could either
raise the long-term ratings on BPER or affirm them.

S&P could raise the ratings if BPER were able to strengthen its
capitalization such that we believe the bank could sustainably
operate with a capital level higher than S&P currently factors
into the ratings.  This would hinge on BPER being able to
maintain a RAC ratio comfortably above 5% by end-2015, and S&P's
assessment that there are no further pressures on its asset
quality beyond what S&P currently anticipate.

"We could affirm the ratings if we considered that BPER's capital
strengthening were not sufficient for it to materially improve
its solvency position sustainably at a higher level than we
currently incorporate into the ratings.  We will assess the
extent to which BPER's financial profile remains under pressure
given the still-difficult economic environment in Italy and the
high stock of nonperforming assets BPER has accumulated during
the downturn," S&P said.

"In addition, we may lower BPER's long-term counterparty credit
rating by one notch if we consider that extraordinary government
support is less predictable under the new EU legislative
framework.  We could remove the one-notch uplift for potential
extraordinary support, which we currently incorporate into the
ratings, shortly before the January 2016 introduction of bail-in
powers under the European Union's Bank Resolution and Recovery
Directive (BRRD) for senior unsecured liabilities.  The BRRD's
bail-in powers indicate to us that EU governments will be less
willing to bail out senior unsecured bank creditors, even though
it may take several more years to eliminate concerns about
financial stability and the resolvability of systemically
important banks," S&P added.


GRUPPO ESPRESSO: S&P Affirms 'BB-' CCR; Outlook Stable
------------------------------------------------------
Standard & Poor's Ratings Services said that it had affirmed its
long-term corporate credit rating on Italy-based newspaper and
magazine publisher Gruppo Editoriale L'Espresso SpA (Gruppo
Espresso) at 'BB-'.  The outlook is stable.

S&P also affirmed its issue rating on Gruppo Espresso's senior
unsecured debt at 'BB-'.  The recovery rating on this debt is
unchanged at '3', indicating S&P's expectation of meaningful
(50%-70%) recovery for debtholders in the event of a payment
default.

"The rating action reflects our view that Gruppo Espresso should
be able to address the refinancing of its EUR228 million of
senior unsecured debt due in October 2014.  The company
successfully issued EUR100 million of convertible notes (not
rated) in April, proceeds of which will be used, together with
cash balances and part of a new securitization program (currently
under discussion) expected to total EUR80 million, to repay the
existing notes.  We anticipate that adjusted debt to EBITDA will
improve following the refinancing and will likely be 3.5x-4.0x in
2014, depending on the mix of cash and debt drawn under the
securitization program that will be used.  The rating action also
factors in our expectations that the company's liquidity will
remain "adequate" according to our criteria, amounting to at
least EUR100 million of cash on hand and undrawn facilities," S&P
said.

"We revised down our assessment of Gruppo Espresso's business
risk profile to "weak" from "fair" to reflect the chronic
pressure on newspaper print advertising because news consumption
and advertising is shifting to digital media.  As a result of
this trend, we think it unlikely that Gruppo Espresso's EBITDA
margin will quickly return to historic levels of 15%.  Gruppo
Espresso's business risk profile is supported by its leading
positions in the Italian newspaper markets, as reflected in its
18% market share. Its ability to cross sell its content through a
variety of distribution channels continues to support its
competitive position," S&P added.

S&P continues to assess Gruppo Espresso's financial risk profile
as "significant."  This reflects the cash-generative nature of
the group's business, partially hampered by volatile credit
metrics on the back of swings in advertising.

S&P's assessment of Gruppo Espresso's business risk profile as
"weak" and its financial risk profile as "significant" lead to an
anchor of 'bb-', which is S&P's starting point for assigning a
rating to a company.

S&P has removed its one-notch downward adjustment reflecting its
comparable ratings analysis, which S&P now views as neutral
rather than negative.  In addition, S&P anticipates that the
company's credit metrics will remain well placed in the
"significant" category.

The stable outlook reflects S&P's view that Gruppo Espresso will
likely maintain credit metrics in line with the current rating
over the next 12 months.  Based on S&P's assumptions of an
approximately 5% revenue decline and stable EBITDA, it
anticipates Standard & Poor's adjusted debt-to-EBITDA will remain
at about 3.5x-4.0x and FOCF to debt at about 10%, levels that S&P
considers commensurate with the current 'BB-' rating.  S&P's view
that the group will preserve its "adequate" liquidity after the
refinancing also supports the stable outlook.

The current rating does not incorporate any adverse effects from
the pending tax ruling.

S&P could consider lowering the rating on Gruppo Espresso if the
group's operating performance fell below its base-case scenario
on the back of an approximately 11%-15% decline in the print
advertising market that resulted in adjusted debt to EBITDA
persistently above 4.0x and FOCF to debt below 10%.  S&P could
also consider a downgrade if the group's sources of liquidity
fall below EUR100 million.

S&P sees limited rating upside at this point, given the
improvement in operating performance that it has already factored
into its assessment.  However, over the next two years, S&P might
consider a positive rating action if Gruppo Espresso posted
adjusted debt to EBITDA below 3.0x and FOCF to debt above 15%.



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


AERCAP HOLDINGS: S&P Lowers CCR to 'BB+'; Outlook Stable
--------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
rating on Amsterdam-based AerCap Holdings N.V. to 'BB+' from
'BBB-'.  S&P removed the rating from CreditWatch, where it placed
it with negative implications on Dec. 16, 2013.  The outlook is
stable.

At the same time, S&P affirmed its 'BB+' issue-level ratings on
AerCap's unsecured notes, and assigned a '3' recovery rating to
these notes, indicating S&P's expectation for meaningful recovery
(50%-70%) in the event of a default.

"We based our downgrade of aircraft lessor AerCap on
significantly higher debt leverage, resulting from its May 14,
2014, acquisition of competitor ILFC," said Standard & Poor's
credit analyst Betsy Snyder.

AerCap financed the acquisition, valued at approximately US$7.6
billion, through US$3 billion of cash (comprised primarily of the
proceeds of AerCap's recent unsecured debt issuance of US$2.6
billion) and stock issued to former ILFC owner American
International Group Inc. (AIG).

Standard & Poor's characterizes AerCap's business risk profile as
"satisfactory," its financial risk profile as "significant," and
its liquidity as "adequate" under S&P's criteria.

S&P's assessment of the combined company's "satisfactory"
business risk is based on its position as one of the two largest
aircraft lessors.  "The acquisition of ILFC by AerCap should
strengthen the resulting company's competitive position somewhat
and provide opportunities for overhead cost savings," said Ms.
Snyder.

"Our assessment of the company's "significant" financial risk is
based on increased debt leverage, resulting from the acquisition,
and access to diversified funding sources. Under the merger
agreement, ILFC will become a wholly-owned subsidiary of AerCap,
and AerCap will assume ILFC's outstanding debt.  AerCap's recent
issuance of $2.6 billion of unsecured notes financed a portion of
the acquisition.  With the incremental debt to fund the
acquisition, we expect the combined entity's debt-to-capital
ratio to increase to over 80% from AerCap's 71% at Dec. 31, 2013.
This will place it among the highest of the eight aircraft
lessors that Standard & Poor's rates," S&P noted.

"We expect the consolidated entity to generate solid cash flow
and gradually decrease leverage following the merger, but we
don't expect AerCap's debt leverage to return to previous levels
for at least the next 18 to 24 months," said Ms. Snyder.


CADOGAN SQUARE: Moody's Hikes Rating on EUR27.9MM Notes to 'Ba1'
----------------------------------------------------------------
Moody's Investors Service has upgraded the ratings on the
following notes issued by Cadogan Square CLO II B.V.:

EUR31.5M Class A-2 Senior Secured Floating Rate Notes due 2022,
Upgraded to Aaa (sf); previously on Sep 28, 2011 Upgraded to Aa1
(sf)

EUR33.8M Class B Senior Secured Floating Rate Notes due 2022,
Upgraded to Aaa (sf); previously on Sep 28, 2011 Upgraded to
Aa3 (sf)

EUR31.9M Class C Senior Secured Deferrable Floating Rate Notes
due 2022, Upgraded to A1 (sf); previously on Sep 28, 2011
Upgraded to Baa1 (sf)

EUR27.9M Class D Senior Secured Deferrable Floating Rate Notes
due 2022, Upgraded to Ba1 (sf); previously on Sep 28, 2011
Upgraded to Ba2 (sf)

EUR6M (current outstanding amount of EUR 3,444,266.261) Class Y
Combination Notes due 2022, Upgraded to Aa3 (sf); previously on
Sep 28, 2011 Upgraded to A3 (sf)

Moody's also affirmed the ratings of the following notes issued
by Cadogan Square CLO II B.V.:

EUR281.3M (current outstanding amount of EUR 146,841,414.79)
Class A-1 Senior Secured Floating Rate Notes due 2022, Affirmed
Aaa (sf); previously on Sep 28, 2011 Upgraded to Aaa (sf)

EUR10.6M Class E Senior Secured Deferrable Floating Rate Notes
due 2022, Affirmed B1 (sf); previously on Sep 28, 2011 Upgraded
to B1 (sf)

Cadogan Square CLO II B.V., issued in January 2006, is a
collateralised loan obligation (CLO) backed by a portfolio of
mostly high-yield senior secured European loans. The portfolio is
managed by Credit Suisse International. The transaction's
reinvestment period ended in August 2012.

Ratings Rationale

The rating actions on the notes are primarily a result of the
improvement in over-collateralization (OC) ratios and the
significant deleveraging of the Class A-1 notes following
amortization of the underlying portfolio since the payment date
in February 2014. The Class A-1 notes have paid down by
approximately EUR87.6 million (37.4%) in the last 10 months. As a
result of the deleveraging, the over-collateralization (OC)
ratios of the tranches have increased. According to the April
2014 trustee report the OC ratios of Classes A/B, C, D and E are
143%, 124%, 112%, 107% compared to 134%, 118%, 108%, 104%
respectively in January 2014.

The rating on the combination notes addresses the repayment of
the rated balance on or before the legal final maturity. For the
Class Y notes, the 'rated balance' at any time is equal to the
principal amount of the combination note on the issue date times
a rated coupon of 0.25% per annum accrued on the rated balance on
the preceding payment date, minus the sum of all payments made
from the issue date to such date, of either interest or
principal. The rated balance will not necessarily correspond to
the outstanding notional amount reported by the trustee.

The key model inputs Moody's uses in its analysis, such as par,
weighted average rating factor, diversity score and the weighted
average recovery rate, are based on its published methodology and
could differ from the trustee's reported numbers. In its base
case, Moody's analyzed the underlying collateral pool as having a
performing par and principal proceeds balance of EUR269 million,
a weighted average default probability of 24.9% (consistent with
a WARF of 3375), a weighted average recovery rate upon default of
54.5%for a Aaa liability target rating, a diversity score of 29
and a weighted average spread of 4.36%.

In its base case, Moody's addresses the exposure to obligors
domiciled in countries with local currency country risk bond
ceilings (LCCs) of Aa3 or lower. Given that the portfolio has
exposures to 6.03% of obligors in Ireland and Italy, whose LCC is
Aa3 and A2 respectively and 13% in Spain, whose LCC is A1,
Moody's ran the model with different par amounts depending on the
target rating of each class of notes, in accordance with Section
4.2.11 and Appendix 14 of the methodology. The portfolio haircuts
are a function of the exposure to peripheral countries and the
target ratings of the rated notes, and amount to 3.62% for the
Classes A and B notes, 0.91% for the Class C notes and 0% for the
Classes D and E notes.

The default probability derives from the credit quality of the
collateral pool and Moody's expectation of the remaining life of
the collateral pool. The estimated average recovery rate on
future defaults is based primarily on the seniority of the assets
in the collateral pool. For a Aaa liability target rating,
Moody's assumed a recovery of 50% of the 94.9% of the portfolio
exposed to first-lien senior secured corporate assets upon
default and of 15% of the remaining non-first-lien loan corporate
assets upon default. In each case, historical and market
performance and a collateral manager's latitude to trade
collateral are also relevant factors. Moody's incorporates these
default and recovery characteristics of the collateral pool into
its cash flow model analysis, subjecting them to stresses as a
function of the target rating of each CLO liability it is
analyzing.

Methodology Underlying the Rating Action:

The principal methodology used in this rating was "Moody's Global
Approach to Rating Collateralized Loan Obligations" published in
February 2014.

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

In addition to the base-case analysis, Moody's conducted
sensitivity analyses on the key parameters for the rated notes,
for which it assumed lower credit quality in the portfolio to
address refinancing risk. Loans to European corporates rated B3
or lower and maturing between 2014 and 2015 make up approximately
3.93% of the portfolio, which could make refinancing difficult.
Moody's ran a model in which it raised the base case WARF to 3444
by forcing ratings on 25% of the refinancing exposures to Ca; the
model generated outputs that were within one notch of the base-
case results.

This transaction is subject to a high level of macroeconomic
uncertainty, which could negatively affect the ratings on the
note, in light of 1) uncertainty about credit conditions in the
general economy especially as 19% of the portfolio is exposed to
obligors located in Ireland, Italy and Spain and 2) the
concentration of lowly-rated debt maturing between 2014 and 2015,
which may create challenges for issuers to refinance. CLO notes'
performance may also be impacted either positively or negatively
by 1) the manager's investment strategy and behaviour and 2)
divergence in the legal interpretation of CDO documentation by
different transactional parties because of embedded ambiguities.

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

2) Around 36% of the collateral pool consists of debt obligations
whose credit quality Moody's has assessed by using credit
estimates.

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

4) Long-dated assets: The presence of assets that mature beyond
the CLO's legal maturity date exposes the deal to liquidation
risk on those assets. Moody's assumes that, at transaction
maturity, the liquidation value of such an asset will depend on
the nature of the asset as well as the extent to which the
asset's maturity lags that of the liabilities. Liquidation values
higher than Moody's expectations would have a positive impact on
the notes' ratings.

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



===================
M O N T E N E G R O
===================


MONTENEGRO REPUBLIC: S&P Affirms 'BB-/B' Sovereign Credit Ratings
-----------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'BB-/B' long- and
short-term foreign and local currency sovereign credit ratings on
Montenegro.  The outlook remains negative.

Rationale

The ratings on Montenegro reflect its relatively strong fiscal
position and robust growth potential, on the one hand, and its
very weak external economic indicators and lack of monetary
flexibility due to the unilateral adoption of the euro, on the
other.

Montenegro's economy is characterized by relatively low GDP per
capita, which S&P estimates at US$7,120 in 2013, and is primarily
based on tourism and related services.  The economy has emerged
from the double-dip recession of 2012 with output growing by 3.5%
in 2013.  Growth was primarily supported by a strong external
performance as robust electricity exports -- partly reflecting
lower energy use by aluminum producer KAP -- combined with
another favorable tourism season.  S&P notes, however, that
consumption has remained flat in real terms as government
spending has been restrained and the private sector has been
affected by still-high unemployment and a contraction in real
wages.

S&P expects relatively high levels of corporate indebtedness,
coupled with significant nonperforming loans in the banking
sector, to constrain domestic demand growth in the coming years
as private credit recovers only gradually.  Following a runaway
credit boom, the non-government sector's share of credit to GDP
collapsed to 55% in 2013 from close to 90% in 2008.  That said,
S&P anticipates net foreign direct investment (FDI) to average
13% of GDP annually over 2014-2017.  S&P understands that there
is significant potential for Montenegro to further develop its
tourism sector, which is currently approaching capacity
constraints.  It could also take advantage of its mountainous
territory to expand hydropower generation for export.

Overall, S&P expects growth to average close to 3.3% over 2014-
2017.  Export performance will likely be weaker this year as the
tourism sector faces capacity constraints. However, anticipated
FDI into tourism infrastructure will likely boost capacity toward
the end of the 2014-2017 forecast horizon.

With gross external financing needs estimated at 152% of current
account receipts (CARs) plus usable reserves, and narrow net
external debt amounting to 167% of CARs in 2013, Montenegro faces
significant external risks.  The current account deficit, at
close to 15% of GDP in 2013, remains a key vulnerability.

The quality of external data in Montenegro is poor.  Errors and
omissions are consistently large and positive, averaging around
7% of GDP annually in 2011-2013.  S&P considers that this may
indicate unrecorded tourism export revenue, suggesting that the
official current account deficit data may overstate the
imbalance. It could also indicate that the external leverage
indicators, which S&P measures as a share of CARs, may be
somewhat overstated. However, even taking the unrecorded flows
into consideration, external finances will remain a credit
weakness, in S&P's view.

Upcoming infrastructure investment projects -- while ultimately
boosting the capacity of the economy in the tourism and energy
sectors, and therefore exports -- will likely increase imports of
capital goods and lead to a moderate widening of current account
deficits over 2014-2017.  S&P expects these deficits will be
financed largely by FDI. High current account deficits mean that
Montenegro remains vulnerable to sudden changes in the market
environment and risk perceptions, which could lead to a
disorderly unwinding of the existing imbalances.

In recent years, the government has concentrated on delivering
fiscal consolidation measures and making Montenegro more
business-friendly.  Talks on potential EU accession, which
started in 2012, could bring further improvements given the EU's
continued focus on implementing structural reforms.  That said,
S&P do not expect Montenegro to join the EU within the forecast
horizon.

The general government budget has moved into an estimated surplus
of about 0.4% of GDP for the first time in six years, well
exceeding S&P's expectations.  This improvement was driven by
consolidation measures introduced by the government last year,
which included an increase of the VAT rate to 19%, from 17%, as
well as higher taxation of incomes that exceed the national
average.

The government paid about 3% of GDP in 2013 in relation to
guarantees for bankrupt aluminum producer, Kombinat Aluminijuma
Podgorica (KAP).  S&P excluded this one-off expense from the
headline deficit calculation.  Including the servicing of these
guarantees, we estimate the general government deficit at about
2.6% of GDP.  While the government has not provided any more
guarantees to KAP, S&P understands that the authorities could
potentially provide some support to the entity to keep it afloat,
for example in the form of subsidized electricity prices.  S&P
don't expect this support to be sizable and it has already
incorporated it into its forecasts.

"Considerable fiscal risks remain.  The main medium-term risk
relates to the potential construction of a highway that would
link the Montenegrin coast with the Serbian border.  We do not
expect this project to proceed in the near future and continue to
exclude it from our forecasts.  Given the high construction costs
(estimated at close to EUR800 million [23% of 2014 GDP] for the
first phase), we believe the project will either be delayed
further or cancelled.  Were it to go ahead, it could reverse
recent improvements in fiscal dynamics and cause a significant
deterioration in both the government debt ratio and Montenegro's
external indicators.  The longer term developmental impact of the
project is more difficult to assess," S&P said.

The change in general government debt amounted to 6.5% of GDP in
2013, while the general government deficit was 2.6% of GDP
(including the payment of guarantees).  S&P understands that this
is related to the repayment of some arrears from previous periods
at the local government level, resulting in a stock-flow
discrepancy.  S&P expects Montenegro's government debt ratio to
slowly improve from what it considers to be a 2013 peak.  S&P
estimates that net general government debt amounted to about 55%
of GDP in 2013, up from 26% in 2008.  Close to 75% of government
debt is to nonresidents and nearly all of it is in euros.  S&P
anticipates debt levels will stabilize and gradually reduce over
the next three years as budget deficits continue to moderate.

The lack of monetary policy flexibility is reflected in
Montenegro's decision to unilaterally adopt the euro as its
currency.  The country is not part of the European Economic and
Monetary Union (eurozone) and Montenegrin banks have no access to
European Central Bank liquidity facilities.  The government's
policy options are further constrained by shrinking domestic
credit and a relatively undeveloped capital market.

The banking system is largely foreign-owned and dominated by the
Hungarian, Slovenian, and Austrian institutions.  S&P believes
that weak asset quality remains a risk for the banking sector in
Montenegro.  At year-end 2013, nonperforming loans were close to
18% of total loans.

OUTLOOK

The negative outlook reflects S&P's view of Montenegro's
persistent external vulnerabilities in the context of a possible
tightening of global liquidity conditions.  It also reflects what
S&P views as potentially significant fiscal risks.  There is at
least a one-in-three chance that we could lower the ratings
during 2014.  Specifically, S&P could lower the ratings on
Montenegro if one or more of the following scenarios
materializes:

   -- A sizable deterioration in the fiscal position compared to
      S&P's current base-case scenario.  This could be brought
      about, for instance, by a material increase in borrowing as
      a result of the government's involvement in the highway
      construction project; by more guarantees being called; or
      by budgetary support provided to KAP significantly
      exceeding S&P's expectations.

   -- A marked deterioration in external financing conditions
      forcing a disorderly adjustment of the balance of payments.

S&P could revise the outlook to stable if it concludes that these
risks have abated or if EU accession talks bring structural
improvements to Montenegro's policymaking and institutions that
exceed S&P's current expectations.

In accordance with S&P's relevant policies and procedures, the
Rating Committee was composed of analysts that are qualified to
vote in the committee, with sufficient experience to convey the
appropriate level of knowledge and understanding of the
methodology applicable.  At the onset of the committee, the chair
confirmed that the information provided to the Rating Committee
by the primary analyst had been distributed in a timely manner
and was sufficient for Committee members to make an informed
decision.

After the primary analyst gave opening remarks and explained the
recommendation, the Committee discussed key rating factors and
critical issues in accordance with the relevant criteria.
Qualitative and quantitative risk factors were considered and
discussed, looking at track-record and forecasts.  The chair
ensured every voting member was given the opportunity to
articulate his/her opinion.  The chair or designee reviewed the
draft report to ensure consistency with the Committee decision.
The views and the decision of the rating committee are summarized
in the above rationale and outlook.

RATINGS LIST

Ratings Affirmed

Montenegro (Republic of)
Sovereign Credit Rating                BB-/Negative/B
Transfer & Convertibility Assessment   AAA
Senior Unsecured                       BB-



===========
P O L A N D
===========


ALIOR BANK: Fitch Affirms 'BB' LT Issuer Default Rating
-------------------------------------------------------
Fitch Ratings has affirmed the Long-term Issuer Default Ratings
(IDRs) of mBank at 'A', Bank Millennium at 'BBB-', and Alior Bank
SA and Getin Noble Bank SA at 'BB'.  The agency has also affirmed
the Long-term IDRs of two of mBank's subsidiaries, mBank
Hipoteczny and mLeasing, at 'A'. The Outlooks on Alior, Getin and
Millennium are Stable, and Negative on mBank and its
subsidiaries. A full list of rating actions is at the end of this
commentary.

Key Rating Drivers: Mbank And Subsidiaries' Idrs, Support Rating
And Senior Debt

The IDRs, senior debt rating and Support Rating (SR) of mBank,
and the ratings of mBank Hipoteczny and mLeasing, reflect Fitch's
opinion that there is an extremely high probability that these
entities would be supported, if required, by their ultimate
almost 70% shareholder, Commerzbank AG (A+/Negative/bbb).

Fitch believes that mBank is a strategically important subsidiary
of Commerzbank, and its support-driven Long-term IDR is notched
once from that of the parent.  mBank aims to gradually repay
parental funding, which finances the majority of foreign-
currency-denominated mortgages.  However, in Fitch's opinion,
parent facilities will remain available, if mBank is unable to
refinance these with market funding.

The agency views mBank Hipoteczny and mLeasing as core
subsidiaries of mBank, and equalises their ratings with those of
the direct parent.  This reflects their high dependence on mBank
for funding and close operational integration with and
supervision by the parent.  Potential support from Commerzbank
for mBank Hipoteczny and mLeasing could be extended directly or
flow through mBank.

Rating Sensitivities

The Long-term IDRs and senior debt ratings will most likely be
downgraded if Commerzbank's Long-term IDR is downgraded.  A
downward revision of Commerzbank's Support Rating Floor (SRF) is
likely to cause downgrades of its Long-term IDR to the level of
its Viability Rating (VR) at the time.  Commerzbank's VR is
currently four notches below its Long-term IDR, thus a lowering
of the bank's SRF could result in a downgrade of similar
magnitude for mBank, mBank Hipoteczny and mLeasing, to 'BBB-'.

Fitch expects that the propensity of Commerzbank to support
mBank, mBank Hipoteczny and mLeasing will remain strong. However,
the support-driven ratings could also be sensitive to any
weakening of propensity of the parent to provide support, which
Fitch views as unlikely in the foreseeable future.

Key Rating Drivers And Sensitivities: ALIOR, GETIN AND
MILLENNIUM's IDRs; ALL BANKS' VRS

The IDRs of Alior, Getin and Millennium are driven by their
standalone strength, reflected in their VRs, and are sensitive to
changes in the VRs.

The VRs of mBank, Millennium and Getin reflect their mid-sized
franchises in the Polish banking sector and the currently broadly
supportive operating environment.  However, the ratings are
constrained by the banks' material (albeit slowly declining)
exposure to foreign currency mortgages and substantial foreign
currency refinancing needs.  The higher (bbb-) VRs of mBank and
Millennium reflect their lower risk appetite, somewhat stronger
franchises, solid capitalization and reasonable recent
performance.  The lower (bb) VR of Getin reflects primarily its
weaker capitalization, asset quality and profitability.

Alior's VR reflects its more limited franchise, shorter track
record, rapid credit expansion (particularly in somewhat higher
risk segments), significant impaired loan origination and modest
internal capital generation.  However, the rating also considers
the bank's conservative funding strategy (based primarily on
customer deposits), experienced management team and solid pre-
impairment performance.

Retail mortgages denominated in foreign currency (predominantly
in Swiss francs) continued to reduce in 2013.  However, they
remained material at 28% (Getin), 35% (mBank) and 42%
(Millennium) of total gross loans at end-2013.  The quality of
these loans at mBank and Millennium has held up reasonably well
to date due to selective credit origination and a more urban
geographical focus, but impaired loans comprised 9.2% of Getin's
mortgage portfolio (comprising zloty and foreign currency
exposures) at end-1Q14 (market average: 3.1%).  A significant and
prolonged weakening of the Polish zloty (not Fitch's base case)
would be likely to impair borrowers' payment ability and drive up
defaults.  The average loan/value ratio in mortgages is high at
all three banks, which indicates likely weaker recovery prospects
if the operating environment deteriorates.  Retail foreign
currency lending at Alior is minimal, with FX mortgages
comprising just 5% of the total gross loan portfolio.

Getin's and Millennium's liquidity position in zloty is
comfortable but both banks are strongly dependent on financial
markets to hedge their large foreign currency loan portfolios.
Consequently, their liquidity is sensitive to a potential
depreciation of the Polish zloty against major currencies, which
would bring about margin calls on derivative hedging
transactions. However, refinancing risk related to these
transactions is mitigated by improving average maturity and the
track record of maintaining swap market access since the onset of
the global financial crisis.  mBank's strong liquidity is
underpinned by a stable and diversified deposit base and on-
balance sheet financing of foreign currency loans, sourced mainly
from Commerzbank, but increasingly also through medium-term bond
issuance.  Alior's liquidity is adequate in light of its
substantial growth plans and the relatively short tenor of the
loan book.

In Fitch's opinion, capitalization at mBank and Millennium is
stronger than at Alior and Getin, due to better loss absorption
capacity, higher internal capital generation and a smaller
proportion of unreserved impaired loans (Millennium).  Relatively
strong Fitch core capital (FCC) ratios at mBank (end-1Q14: 15.6%)
and Millennium (end-1Q14: 14.4%) benefit from lower risk weights
for mortgages in foreign currency calculated under the advanced
internal ratings-based method.  Polish banks applying the
standardized method (such as Getin) use a 100% risk weight
required by the local regulator.  Getin and Alior's FCC ratios
were 9.6% and 12.7%, respectively, at end-2013.  The latter is
adjusted for PLN458m of equity raised in December 2013, but
registered in January 2014, which the bank plans to utilize by
fast credit growth by end-2016.

At end-1Q14, impaired loan ratios stood at 8.1% (Alior), 12.5%
(Getin), 6.1% (mBank) and 4.3% (Millennium), compared with the
7.2% sector average.  Better asset quality at mBank and
Millennium reflects their more conservative risk management and
should also be viewed in light of their stricter rules for
classification of impaired loans.  Origination of impaired loans
has been substantial at Alior and Fitch believes that this will
continue due to seasoning of the loan book and further likely
fast credit growth.  Alior's high single-name concentrations are
also a potential source of lumpy credit losses.  The impaired
loan ratio at Getin was one of the highest among the largest
banks in Poland, but the inflow of bad debts subsided in 2013 and
the latest vintages indicate more contained default rates in new
loans in all major product segments.

In 2014, the performance of all four banks is likely to be
supported by the improving operating environment in Poland.
Alior's net interest margin is considerably better than peers,
supported by a lending mix more focused on higher-yield products.
However, Alior's income is sensitive to the volume of disbursed
loans, the fast growth of which may not be sustainable.  Getin
expects a further reduction in risk and funding costs in 2014 and
aims to achieve a PLN1bn net result in 2015 (2013: almost
PLN400m), which Fitch considers ambitious.

Millennium's Long-term IDR is one notch above that of its parent,
Banco Comercial Portugues, S.A. (BCP; BB+/Negative/b).  The
agency's base case expectation is that any further weakening of
BCP's credit profile, including a potential downgrade of its
Long-term IDR to the level of its VR, will not lead to a negative
rating action on Millennium.  Fitch's view of low contagion risk
for Millennium from BCP was outlined in its rating commentary,
"Fitch Affirms Bank Millennium at 'BBB-'; Outlook Stable" dated
20 May 2013 at www.fitchratings.com.

Rating Sensitivities:

Viability Rating (ALIOR, GETIN, MBANK, MILLENNIUM)

Upgrades of VRs would be likely to require (i) further re-
balancing of credit portfolios (Getin, mBank, Millennium); (ii)
significant reductions of balance-sheet currency mismatch (Getin,
Millennium); (iii) stronger capitalisation (Getin, Alior); (iv) a
significant strengthening of the bank's self-financing capacity
(mBank); (v) a moderation of growth rates (Alior); and (vi) a
longer track record of solid performance and stable asset-quality
trends (Alior, Getin).

Downward pressure on the VRs of all four banks could arise from
(i) material deterioration in asset quality; (ii) considerably
weaker internal capital generation; and (iii) a sharp and
prolonged depreciation of the domestic currency combined with a
deterioration of the operating environment (not Fitch's base
case).

Key Rating Drivers And Sensitivities: SRFs AND SRs (ALIOR, GETIN,
MILLENNIUM)

The SRFs and SRs of Getin and Millennium are underpinned by
Fitch's view of the moderate probability of support from the
Polish sovereign.  This reflects their significant systemic
importance, reflected in considerable market shares in domestic
retail deposits (7.2% and 4.8% at end-2013, respectively).

However, these ratings are sensitive to a weakening in Fitch's
assumptions on sovereign support propensity, as a result of which
they are likely to be revised down to 'No Floor' and downgraded
to '5', respectively, within the next one to two years.  Provided
Getin's and Millennium's VRs are not downgraded in the meantime,
any downward revision of their SRFs or SRs will have no impact on
their Long-term IDRs.  Alior's SR of '5' reflects Fitch's view
that potential support from the bank's largest shareholders
cannot be relied upon.  Carlo Tassara (an Italian holding
company) held a 28% stake at end-1Q14 and plans to exit the bank
by end-2014. Alior's SRF of 'No Floor' reflects Fitch's opinion
that potential sovereign support cannot be relied upon in light
of Alior's small systemic importance.

The rating actions are as follows:

Alior

Long-Term foreign currency IDR: affirmed at 'BB', Stable Outlook
Short-Term foreign currency IDR: affirmed at 'B'
National Long-Term Rating: affirmed at 'BBB+(pol)', Stable
Outlook
National Short-Term rating: affirmed at 'F2(pol)'
Viability Rating: affirmed at 'bb'
Support Rating: affirmed at '5'
Support Rating Floor: affirmed at 'No Floor'

Millennium

Long-Term foreign currency IDR: affirmed at 'BBB-'; Outlook
Stable
Short-Term foreign currency IDR: affirmed at 'F3'
National Long-Term Rating: affirmed at 'A-(pol)'; Outlook Stable
Viability Rating: affirmed at 'bbb-'
Support Rating: affirmed at '3'
Support Rating Floor: affirmed at 'BB'

Getin

Long-term foreign currency IDR: affirmed at 'BB'; Outlook Stable
Short-term foreign currency IDR: affirmed at 'B'
National Long-Term Rating: affirmed at 'BBB(pol) '; Outlook
Stable
Viability Rating: affirmed at 'bb'
Support Rating: affirmed at '3'
Support Rating Floor: affirmed at 'BB'

mBank

Long-term foreign currency IDR: affirmed at 'A'; Outlook Negative
Short-term foreign currency IDR: affirmed at 'F1'
Viability Rating: affirmed at 'bbb-'
Support Rating: affirmed at '1'
Long-term senior unsecured debt rating: affirmed at 'A'
Short-term senior unsecured debt rating: affirmed at 'F1'

mFinance France

Long-term senior unsecured debt rating: affirmed at 'A'

mBank Hipoteczny

Long-term foreign currency IDR: affirmed at 'A'; Outlook Negative
Short-term foreign currency IDR: affirmed at 'F1'
Support Rating: affirmed at '1'

mLeasing

Long-term foreign currency IDR: affirmed at 'A'; Outlook Negative
Short-term foreign currency IDR: affirmed at 'F1'
Support Rating: affirmed at '1'



===============
P O R T U G A L
===============


EXETER BLUE: Fitch Cuts Rating on Class D Notes to 'Bsf'
--------------------------------------------------------
Fitch Ratings has downgraded Exeter Blue Limited's class A
through D notes, and affirmed the class E notes as follows:

  EUR31.9 million class A notes downgraded to 'Asf' from 'AAsf',
  Outlook Stable

  EUR31.9 million class B notes downgraded to 'BBBsf' from 'Asf',
  Outlook Stable

  EUR26.6 million class C notes downgraded to 'BBsf' from
  'BBBsf', Outlook Stable

  EUR10.6 million class D notes downgraded to 'Bsf' from 'BBsf',
  Outlook Stable

  EUR8.5 million class E notes affirmed at 'CCCsf', Recovery
  Estimate 40%

Exeter Blue is a managed synthetic balance sheet securitization
of project finance and infrastructure loans primarily located in
western Europe.  The senior exposure was retained by the
originator.  The EUR125.9 million proceeds from the note issue
are deposited with Lloyds TSB Bank PLC (A/Stable/F1).

Key Rating Drivers

The downgrade is driven by the recent publication of Fitch's
sovereign risk criteria, under which additional default and
recovery stresses are applied to assets located in European
peripheral countries for structured finance notes that are rated
above the Country Ceiling.  Europe's peripheral countries
represent 9.05% of the outstanding portfolio, led by Portugal
(3.8%), Spain (3.1%) and Cyprus (2.2%).

Under Fitch's criteria, a borrower default must be assumed
(commensurate with a sovereign default) for assets located in
multi-jurisdictional portfolios for structured finance notes that
are rated above the Country Ceiling.  For structured finance
ratings within four notches above a Country Ceiling, a 50%-70%
reduction in recovery proceeds is assumed for assets in those
jurisdictions to reflect a devaluation to proceeds from borrowers
with loans domiciled in those countries.  For structured finance
ratings greater than four notches above a Country Ceiling, zero
recoveries are assumed.

Portugal, Spain and Cyprus have Country Ceiling ratings of
'A+sf', 'AA+sf' and 'Bsf', respectively.  Given the transaction's
highest rated tranche was 'AAsf', there was no additional rating
stress across the capital structure as a result of the
transaction's exposure to Spain.

The cumulative result of the peripheral stresses is a downgrade
of the class A to D notes by one category, and an affirmation of
the 'CCCsf' rated class E notes, which are not impacted by the
transaction's peripheral country exposure.

Rating Sensitivities

The portfolio remains heavily concentrated, with the largest
obligor accounting for 8.9% of assets, and the top five
accounting for 32.8%. Fitch applied a further correlation stress
of 50%, combined with a recovery multiple of 75% for the top five
borrowers in the pool.  The result was a one notch difference for
the class A and B notes, with no impact for the transaction's
remaining note classes.


* Moody's Raises Gov't Bond Ratings of 3 Portuguese Banks to Ba2
----------------------------------------------------------------
Moody's Investors Service has upgraded to Ba2 from Ba3 the
government-guaranteed debt ratings of 3 Portuguese banks: Caixa
Geral de Depositos, S.A. (CGD), Banco Espirito Santo, S.A. (BES),
and BANIF-Banco Internacional do Funchal, S.A.(Banif). At the
same time, the ratings of the government-guaranteed debt of these
banks has been placed on review for further upgrade.

These rating actions follow the upgrade of the government bond
ratings of Portugal to Ba2 and review for further upgrade,
implemented on May 9, 2014.

The rating actions only affect the ratings of those instruments
that are based on the unconditional and irrevocable guarantee by
the Portuguese government. Moody's will separately assess the
potential impact of the upgrade and review for further upgrade of
Portugal's government bond ratings on the debt and deposit
ratings of Portuguese banks.

Ratings Rationale

Rationale For Government-Guaranteed Debt

Moody's rates Portuguese government-guaranteed debt at the
sovereign rating level. The rating on the government-backed debt
of the 3 affected banks has therefore been aligned with
Portugal's Ba2 government bond rating on review for further
upgrade.

Principal Methodology

The principal methodology used in these ratings was Global Banks
published in May 2013.



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


MAREX GROUP: Enters Insolvency Proceedings Amid Cash Crunch
-----------------------------------------------------------
Gabriel Razi at Ziarul Financiar reports that Marex and Vegetal
Trading companies, controlled by entrepreneurs in Braila, entered
insolvency proceedings at their own request amid a cash crunch.

According to Ziarul Financiar, the companies' biggest creditors
include BCR, Bancpost and Banca Romaneasca.

Marex and Vegetal Trading companies are based in Romania.


ROMANIA: S&P Raises Sovereign Credit Ratings From 'BB+'
-------------------------------------------------------
Standard & Poor's Ratings Services raised its long- and short-
term foreign and local currency sovereign credit ratings on
Romania to 'BBB-/A-3' from 'BB+/B'.  The outlook is stable.

Rationale

The upgrade reflects Romania's rapid progress in improving its
external balances.  It also underlines S&P's view that progress
toward consolidating the fiscal accounts and bolstering financial
sector stability will continue.

S&P believes Romania will maintain steady GDP growth, averaging
3% over 2014-2017.  While this is slower than before the 2009
financial crisis, it is above any regional peer.  This underlines
the return of relatively healthy fundamentals, even if Romania's
national income per capita in 2014 is still roughly equal to its
2008 high.  In 2013 and 2014, external demand has been driving
growth and S&P expects a gradual shift toward domestic demand
with net exports slightly dragging on growth in 2016-2017.

This should not dramatically reverse the progress in the external
account, which S&P considers to be largely structural.  Romania's
shift toward a more open economy means that exports now
constitute 42% of GDP, compared to 31% in 2009.  Rapid export
growth and flat import demand in 2013 helped lower the current
account deficit to 1.1% of GDP, its lowest in two decades.  While
S&P forecasts the deficit to slowly double to 2.1% by 2017, this
rise nevertheless constitutes structurally lower deficits.  The
underlying reasons appear to be increased value-added (seen in
the declining imports-to-exports ratio) and overall increased
energy efficiency in the export sector.  These recent trends are
unlikely to be reversed in the medium term.

Lower current account deficits also translate into a healthier
external debt profile, with net FDI exceeding headline deficits
at least until 2017.  Consequently, Romania's external debt
levels are also bound to decline, with net external debt
shrinking to 15% of GDP in 2015 from a high of 22% in 2012.  The
increased absorption rate of EU structural funds should also
ensure a capital account surplus of about 1.7% annually, further
supporting the external deleveraging.  That said, part of the
decrease of Romania's external indebtedness pertains to its
financial sector, which has seen foreign-owned banks repatriate
significant funds since 2009. Systemwide, net financial sector
external debt has declined to 22% of current account receipts in
2014, from 44% in 2009.

Since signing a two-year precautionary Stand-By Arrangement with
the International Monetary Fund (IMF) last September, Romania has
undergone two reviews which have confirmed its fiscal
consolidation trend.  Romania also appears to have made progress
in paying down arrears, the bulk of which remains in public-
sector enterprises--totaling about 1% of GDP.

In light of the policy anchor provided by the Stand-By-
Arrangement, S&P forecasts general government deficits remaining
close to but below 2% of GDP in the medium term.  In terms of
government debt levels, this means that S&P expects sovereign
indebtedness to remain largely flat over the coming three years.
S&P do not foresee any lessening in the government's overall
interest burden, as improvements in Romania's spread are likely
to be offset by global trends in rising benchmark interest rates.
However, with interest payments at about 5.5% of government
revenues and net debt at roughly 33% of GDP, general government
debt metrics are neutral at this rating level and, if anything,
offer the potential for improvement.  More than 60% of gross
general government debt is in foreign currency, indicating some
vulnerability to adverse exchange-rate movements.

While Romania enjoys a flexible exchange rate regime, an
independent monetary policy remains constrained by a relatively
high share of foreign currency use in the economy, especially in
bank lending.  That said, S&P expects euroization to continue to
decline in the near future before picking up again ahead of
eurozone entry.

Domestic political uncertainty has not recently affected economic
performance, but S&P continues to view Romania's governance
framework as a ratings weakness.  Emerging geopolitical risks
should also be contained as Romania's economic links with Ukraine
and Russia remain fairly limited (for instance, combined exports
and imports are less than 5% of total exports and imports) and
S&P do not foresee any direct security implications.

Outlook

The stable outlook indicates that upside and downside risks to
the long-term ratings are broadly balanced.  S&P could raise the
ratings if the planned program of budgetary consolidation, public
finance reform, and public enterprise restructuring is
implemented successfully without changing current trends
regarding external imbalances and financial sector stability.

S&P could lower the ratings if Romania's external imbalances re-
emerge, if stability in its financial sector weakens, or budget
deficits widen significantly.

In accordance with S&P's relevant policies and procedures, the
Rating Committee was composed of analysts that are qualified to
vote in the committee, with sufficient experience to convey the
appropriate level of knowledge and understanding of the
methodology applicable.  At the onset of the committee, the chair
confirmed that the information provided to the Rating Committee
by the primary analyst had been distributed in a timely manner
and was sufficient for Committee members to make an informed
decision.

After the primary analyst gave opening remarks and explained the
recommendation, the Committee discussed key rating factors and
critical issues in accordance with the relevant criteria.
Qualitative and quantitative risk factors were considered and
discussed, looking at track-record and forecasts.  The chair
ensured every voting member was given the opportunity to
articulate his/her opinion.  The chair or designee reviewed the
draft report to ensure consistency with the Committee decision.
The views and the decision of the rating committee are summarized
in the above rationale and outlook.

RATINGS LIST

Romania

Upgraded
                                        To                 From
Romania
Sovereign Credit Rating                BBB-/Stable/A-3
BB+/Positive/B
Senior Unsecured                       BBB-               BB+
Short-Term Debt                        A-3                B
Transfer & Convertibility Assessment   A-                 BBB+



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


AHML INSURANCE: Fitch Affirms 'BB' IFS Rating; Outlook Stable
-------------------------------------------------------------
Fitch Ratings has affirmed Russia-based OJSC AHML Insurance's
(AHMLI) Insurer Financial Strength (IFS) rating at 'BB' and its
National IFS rating at 'AA-(rus)'.  The Outlook is Stable.

Key Rating Drivers

The ratings continue to reflect the 99.98% ownership of AHMLI by
the state-owned Agency for Housing Mortgage Lending (AHML) and
significant capital injections from the parent. The ratings also
take into account that AHMLI does not have any guarantee or other
formal support agreement either from the government or from the
parent. AHMLI receives substantial non-monetary support in the
form of methodological and statistical advice from AHML.

AHMLI failed to meet its aggressive growth targets in 2013 as
gross written premiums (GWP) fell 46% yoy in 2013 (or 57% if
premium refunds are deducted from GWP), mainly due to pool and
bulk products.  Although the insurer's claims experience has
remained favorable to date, business volumes were insufficient to
compensate for administrative expenses.  The insurer continued to
offset underwriting losses with investment returns, improving its
net profit to RUB25 million in 2013 from RUB7 million in 2012.

The reduction of business volumes was primarily driven by trends
in the Russian residential mortgage lending sector. Firstly,
because AHMLI's parent refinanced a smaller volume of mortgage
loans in 2013, AHMLI had less opportunity to sell insurance
coverage for the portfolios eligible for refinancing on a semi-
compulsory basis.  Secondly, AHMLI's legal incentives to make
mortgage insurance attractive for banks not using AHML's
refinancing have yet to be adopted.  Thirdly, the insurer's
targeted segment of loans with high loan-to-value (LTV) ratios
shrank in 2013.  Finally, an audit of mortgage repayments by AHML
and AHMLI triggered more premium refunds in 2013.

Nevertheless, AHMLI has been successful in its strategy of
becoming the local pioneer underwriter of securitized pools of
mortgage loans.  This success significantly increased the
insurer's risk-in-force to RUB8.1 billion at end-2013 from RUB3
billion at end-2012.  AHMLI's exposure to risk has not increased
proportionally as the insured pools had significantly lower
average LTV levels than loans insured under primary flow and bulk
products.  Fitch considers AHMLI's capitalization to be
significantly in excess of that needed for its risk-in-force.

AHMLI operates as a specialized mortgage (re)insurer in both the
primary and secondary segments of the residential mortgage
lending sector in Russia.  Key industry risks faced by mortgage
insurers include a deteriorating economic environment --
specifically, rising unemployment, along with declining lending
and underwriting standards, and elevated house prices and
mortgage debt levels.  The insurer's exposure to a cyclical
deterioration in these risk factors is heightened by the monoline
and long-term nature of the business.

At present AHMLI offers three products: primary flow, bulk and
pool insurance.  In all cases the insurer protects either lenders
or investors from principal and interest losses in the event that
a borrower defaults and the property held as security is sold for
less than the amount owed.  According to the strategy set by its
parent, AHMLI plans to provide insurance for up to 21% of
securitized pools issued in Russia by 2015 and sees risk-in-force
increasing to RUB37 billion in 2015. Fitch views these growth
targets as rather aggressive and unlikely to be achieved within
the stated timeframe.

Rating Sensitivities

Key rating triggers for a downgrade include a reduction in AHML's
participation to a minority interest, or aggressive growth, both
in volume and product mix, as rapid growth can often be
accompanied by declines in underwriting quality or pricing.

The rating may also be downgraded if capitalization deteriorates
to a level no longer consistent with the risks for the rating
level.  Given AHMLI's current overcapitalization, Fitch envisages
such a scenario would materialize only if the company is unable
to access new capital over the medium term.

An upgrade is unlikely in the near- to medium-term based on the
company's credit fundamentals. However, an upgrade could be
possible if AHMLI receives a formal support agreement from AHML.



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


BBVA RMBS: Fitch Puts 'CC'-Rated Notes Watch Negative
-----------------------------------------------------
Fitch Ratings has placed all 13 tranches of three BBVA RMBS on
Rating Watch Negative (RWN).

The loans in the portfolios are originated and serviced by Banco
Bilbao Vizcaya Argentaria (BBVA; BBB+/Stable/F2).

Key Rating Drivers

Increasing Volume of Un-Provisioned Loans
Under the transactions' provisioning mechanism defaulted loans
(defined as balance in arrears by more than 12 months) are
written off.  The transactions' swaps produce a guaranteed margin
of 35bp on a notional that is the outstanding balance of the
portfolio net of loans in arrears by more than 90 days.  Proceeds
available following the payment of senior fees and interest are
used to provision for defaulted loans

Excess spread has not been sufficient to provision for the
defaulted loans and therefore the reserve funds have been fully
utilized.  This has led to a build-up in the volume of un-
provisioned loans, which now stands at EUR11.4 million, EUR52.9
million and EUR198.2 million for BBVA RMBS 1, 2 and 3
respectively.  These balances have been on an upward trend since
the reserve funds were fully utilized in November 2012 (BBVA RMBS
1), August 2010 (BBVA RMBS 2) and July 2009 (BBVA RMBS 3).

Fitch has been in touch with the management company (Europea de
Titulizacion, EdT) to gain a better understanding of the causes
behind the growth of defaults that is putting pressure on credit
enhancement.  EdT has provided the additional information
requested by Fitch and pending completion of its analysis, Fitch
has placed the notes on RWN.  The agency expects to resolve the
RWN within a month and the outcome could include a downgrade of
the note tranches or affirmation of existing ratings.

Loans in 3-Month Arrears Stable
Loans in arrears by more than three months remain low relative to
Fitch's benchmark indices at between 71bp (BBVA RMBS 1) and 127bp
(BBVA RMBS 3).  The volume of loans entering early stage arrears
has remained stable over the last year.  Loans in arrears between
one and two months range between 1.4% (BBVA RMBS 1) and 2.2%
(BBVA RMBS 3) of the current outstanding balance compared with
1.4% and 2.8% a year earlier, suggesting that period defaults are
set to continue at the pace seen in the past.

High Dependency on Recoveries
All three transactions remain highly dependent on recoveries from
defaulted loans.  The market value decline indicated by the sale
of properties taken into possession from these transactions has
been steeper than the market average.  Fitch's analysis suggests
that sales in 2013 achieved only 27.5% of the original property
values.

Rating Sensitivities

The transactions remain highly susceptible to recoveries on
properties sold.  Evidence of property sales at values that are
below Fitch's assumptions could indicate reduced prospects for
future recoveries on defaulted loans and therefore put pressure
on the ratings of the notes.

Fitch is analyzing the information received to gain greater
insight into the performance of these transactions.  If this
suggests that future defaults will be greater than the volumes
assumed in its analysis, the agency will assess the effect they
are expected to have on the levels of available credit
enhancement.  Downgrades would result if the credit enhancement
is not expected to be sufficient to withstand the corresponding
rating scenarios.

Fitch has placed the following ratings on RWN:

BBVA RMBS 1:
Class A2 (ISIN ES0314147010): rated 'BBBsf'; placed on RWN
Class A3 (ISIN ES0314147028): rated 'BBBsf'; placed on RWN
Class B (ISIN ES0314147036): rated 'BB-sf'; placed on RWN
Class C (ISIN ES0314147044): rated 'CCCsf'; placed on RWN;
Recovery Estimate 0%

BBVA RMBS 2, FTA:
Class A2 (ISIN ES0314148018): rated 'BBsf'; placed on RWN
Class A3 (ISIN ES0314148026): rated 'BBsf'; placed on RWN
Class A4 (ISIN ES0314148034): rated 'BBsf'; placed on RWN
Class B (ISIN ES0314148042): rated 'Bsf'; placed on RWN
Class C (ISIN ES0314148059): rated 'CCsf'; placed on RWN;
Recovery Estimate 0%

BBVA RMBS 3, FTA:
Class A1 (ISIN ES0314149008): rated 'Bsf'; placed on RWN
Class A2 (ISIN ES0314149016): rated 'Bsf'; placed on RWN
Class B (ISIN ES0314149032): rated 'CCsf'; placed on RWN;
Recovery Estimate 0%
Class C (ISIN ES0314149040): rated 'CCsf'; placed on RWN;
Recovery Estimate 0%


GAT FTGENCAT 2006: Fitch Affirms Csf Rating on Series E Notes
-------------------------------------------------------------
Fitch Ratings has affirmed GAT FTGENCAT 2006, FTA's notes and
revised the Outlook on the Series B notes to Stable, as follows:

Series A2(G) (ISIN ES0341097014) affirmed at 'Asf'; Outlook
Stable

Series B (ISIN ES0341097022) affirmed at 'Asf'; Outlook revised
to Stable from Negative

Series C (ISIN ES0341097030) affirmed at 'BBsf', Outlook
Negative

Series D (ISIN ES0341097048) affirmed at 'CCsf'; Recovery
Estimate RE 0%

Series E (ISIN ES0341097055) affirmed at 'Csf'; Recovery
Estimate
RE 0%

GAT FTGENCAT 2006, FTA is a cash flow securitization of an
initial static pool of EUR440 million of 6,922 loans to Spanish
small and medium enterprises (SMEs) originated and serviced by
Catalunya Banc, S.A..

Key Rating Drivers

The affirmation reflects the largely stable performance of the
transaction since it was last reviewed in March 2013. The
transaction has continued to amortize, aided in part by the
guarantee on series A2(G) provided by the state of Catalonia
(BBB-/Stable/F3).  Series A1 has paid in full and series A2(G)
has paid down to 7.8% of its original balance and now stands at
EUR14.2m. This has led to an increase in credit enhancement for
all notes.

Credit enhancement for the series A2(G) notes is now 71.8% and
64.5% for the series B notes.  Although credit enhancement is
high, the notes' rating remains 'Asf' as they are capped at this
level. The cap is in place as the transaction is serviced by
Catalunya Banc, S.A. which is not rated and the reserve fund is
nearly fully depleted (currently EUR13).  The transaction is
therefore exposed to commingling and payment interruption risk as
if Catalunya Banc defaulted, there would be no funds available to
mitigate the loss of liquidity.

The revision of the Outlook on the series B notes to Stable
reflects its improved credit enhancement.

At the last payment date, the transaction drew on funds provided
by its guarantor (Catalonia).  The transaction is required to
reimburse these funds after series A2(G) has paid in full, the
current amount outstanding is EUR5.7 million.  This additional
liability has a minor effect on the rated notes given the
transaction's significant amortization.

The issuer required these extra funds from the guarantor in order
to provision for the significant level of defaults contained in
the pool.  Current defaults have risen to EUR18 million (29%)
from EUR13 million (22%) at the last review.  Cumulative defaults
now stand at EUR26.7 million and this has triggered an interest
deferral mechanism which diverts interest from series D to
principal.  In Fitch's base case it appears likely that defaults
will eventually trigger interest deferral on the series B and C
notes.

Delinquencies have returned to levels consistent with historical
performance. 90+ arrears are 6.5% and 180+ arrears are 3.5%, a
reduction from the peaks experienced at the last review of 9.5%
and 5.1%, respectively.  The portfolio has paid down to EUR44.5
million from its initial balance of EUR440 million and therefore
has highly concentrated obligors, regions and industries.

The agency received loan level data for this transaction in the
new ECB template.  Defaults and current balance data did not
match the published investor reports.  After contacting the
Management Company, Gestion de Activos Titulizados, S.G.F.T.,
S.A., additional data was provided to rectify the issue.

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 series C notes.  A
decrease of the recovery rates by 25% resulted in a one-notch
downgrade for the series B notes and a two-notch downgrade for
the series C notes.



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


CO-OPERATIVE GROUP: Ben Reid Steps Down as Director
---------------------------------------------------
Andrew Bounds at The Financial Times reports that the
Co-operative Group's longest-serving director has resigned after
an historic vote to reform its governance, the fifth board member
to stand down in the last two months.

Ben Reid, chief executive of the largest independent regional
co-op, Midcounties, tendered his resignation from the Co-op Group
board on Monday after 14 years, the FT relates.  He will remain
as chief executive of Midcounties, the FT notes.

Representatives of the Co-op group's 8m members voted unanimously
to adopt the broad principles of reform at a weekend AGM but a
dispute remains about the implementation of changes, the FT
recounts.

These include a slimmed-down board without guaranteed membership
for independent co-ops, the FT states.

Lord Myners, who drew up the plan for reforms to save the mutual,
stepped down as a non-executive director this weekend, the FT
discloses.  He proposed a two-tier system with elected members on
a powerful oversight committee, and all candidates for the
management board being subject to approval by all members in a
ballot, the FT relays.

Lord Myners had attacked Mr. Reid for his three years on the
Co-op bank audit committee, suggesting to MPs that he should have
resigned, the FT discloses.  The group lost control of the bank
last year after a GBP1.5 billion capital shortfall was
identified, the FT recounts.

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.


CUCINA ACQUISITION: Moody's Rates New Sr. Secured Notes 'B3'
------------------------------------------------------------
Moody's Investors Service says that the ratings of Cucina
Acquisition UK Limited (Brakes) remain unchanged following the
proposed issuance of senior secured notes by Brakes Capital via a
tap of the existing senior secured notes and new floating rate
notes to refinance bank debt. The corporate family rating and
probability of default ratings remain at Caa1 and Caa1-PD
respectively, and the existing and new senior secured notes are
rated B3. All ratings have a stable outlook.

Ratings Rationale

The company proposes a GBP 260 million tap on the senior secured
notes due 2018 issued in November 2013, plus EUR150 million
(equivalent) senior secured floating rate notes due 2018. The new
notes will rank pari passu with the existing senior secured notes
due 2018, sharing the same security and guarantee package and
covenants.

Brakes proposes to use the notes' proceeds to make up the
Facilities E1 and E2 Loans to Cucina Acquisition UK, which in
turn will fully refinance existing senior bank debt of Cucina
Acquisition UK and thereby extend the group's debt maturity
profile. The group's liquidity profile remains supported by a
(currently undrawn) GBP75 million revolver maturing in 2018.

In the first three months of 2014, Brakes reported slightly
increased year-on-year revenue at GBP736 million and improvement
in EBITDA by 4.9% to GBP 26 million. This was driven by
continuing cost savings, positive effect from previous year
investments and better trading conditions in the UK and France.
Despite these encouraging trends, the company's debt metrics
leave the rating positioned in the Caa1 category.

Brakes's ratings could potentially be upgraded if the company
were to significantly improve its EBITDA margin, leading to
sustained positive free cash flow generation, with leverage
falling materially below 7x. Conversely, a rating downgrade could
occur if there be further business weakening, potentially
resulting in reductions in margins or free cash flow, slower
deleveraging than anticipated, or if liquidity weakens.

The principal methodology used in this rating 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.

Founded in 1958 and headquartered in the UK, Brakes is
foodservice distribution operator which operates in the UK,
France and Sweden. Brakes generated GBP3.0 billion sales in 2013.

Assignments:

Issuer: Brakes Capital

Senior Secured Regular Bond/Debenture Dec 15, 2018, Assigned B3

Senior Secured Regular Bond/Debenture Dec 15, 2018, Assigned a
range of LGD3, 37 %


PRIORY GROUP: S&P Affirms 'B+' CCR; Outlook Stable
--------------------------------------------------
Standard & Poor's Rating Services said that it affirmed its 'B+'
long-term corporate credit rating on U.K.-based health and social
care provider, Priory Group No.3 PLC.  The outlook is stable.

At the same time, S&P affirmed its 'BB+' issue rating on Priory's
GBP70 million super senior revolving credit facility (RCF), due
2017.  The recovery rating on the super senior RCF is unchanged
at '1+', indicating S&P's expectation of full (100%) recovery in
the event of a payment default.

S&P also affirmed its 'BB' issue rating on Priory's GBP631
million senior secured notes, due 2018.  The recovery rating on
these notes is unchanged at '1', indicating S&P's expectation of
very high (90%-100%) recovery in the event of a payment default.

In addition, S&P affirmed its 'B' issue rating on Priory's GBP175
million senior unsecured notes, due 2019.  The recovery on these
notes is unchanged at '5', indicating S&P's expectation of modest
(10%-30%) recovery prospects in the event of a payment default.

"The affirmation reflects our view that Priory will be able to
maintain its operating performance in 2014, despite ongoing cost
inflation and continued pressure on funding from public sources
in the U.K.," said Standard & Poor's credit analyst Marketa
Horkova.

S&P forecasts that Priory's debt protection metrics will not
deteriorate beyond the levels it assumes under its base case.


PUNCH TAVERNS: Fitch Maintains Watch Negative on CC-Rated Notes
---------------------------------------------------------------
Fitch Ratings has maintained Punch Taverns Finance Plc's (Punch
A) and Punch Taverns Finance B Ltd's (Punch B) notes on Rating
Watch Negative (RWN), pending further announcements regarding the
debt restructuring.

Key Rating Drivers

The maintained RWN is driven by the on-going uncertainty in
relation to the potential debt restructuring.  Following the
rejection of the restructuring proposal presented to bondholders
in January 2014, Punch has continued to facilitate discussions
between stakeholders.  In order to avoid a default occurring
while discussions are on-going, Punch announced on April 7, 2014
that the Punch A and Punch B securitizations had given notice
convening noteholder meetings for the purpose of voting on
covenant waiver requests.  Initial meetings took place on 30
April, with voting subsequently concluded on May 13, 2014, just
two days prior to a potential borrower event of default.  All
securitization creditors ultimately consented to the waiver
requests.  The covenant waivers will expire at the latest on 29
August 2014, and it is a condition of the waivers that a
restructuring is launched by June 30, 2014.

If no consensual restructuring solution can be found and with no
more cash support from Punch Taverns for Punch A and/or Punch B,
a breach of financial covenants and subsequent borrower event of
default under the issuer/borrower facility agreements would
likely occur. Such a scenario could lead to increased operating
costs for the borrower (currently not reflected in Fitch's free
cash flow forecasts) as well as operational uncertainty impacting
both Punch A and Punch B's revenues and cash flow.

Fitch's view of the underlying performance of the securitized
estates has not materially changed compared with its last reviews
in November 2013.  Based on Punch Tavern's trading statements for
the entire group's estate, performance has been broadly in line
with expectations in FY14 thus far with the core estate like-for-
like net income up by 1.4% (year on year) in the 28 weeks to 1
March 2014. However, trading was somewhat assisted by weak
weather comparatives.

The agency's base case free cash flow debt service coverage
ratios (DSCR; minimum of both the average and median DSCRs to the
notes' legal final maturity) for Punch A's class A, M, B, C and D
notes remain around 1.3x, 1.1x, 0.85x, 0.8x and 0.8x,
respectively and for Punch's B class A, B and C around 1.4x, 0.8x
and 0.8x, respectively. Further asset disposals, potential debt
prepayments or re-profiling could have a material impact on the
assumptions and DSCRs.

Rating Sensitivities

The transactions' ratings are currently on RWN due to the
upcoming potential restructuring. The outcome of the debt
restructuring could have an impact on the ratings.  The ratings
could also be adversely affected if Punch A or Punch B's
performance falls materially short of Fitch's base case or if
there is a borrower event of default under the issuer/borrower
facility agreements.

Summary of Credit

Punch A and Punch B are two whole business securitizations of
2,272 and 1,619 leased and tenanted pubs, respectively, located
across the UK and owned by Punch Taverns Group.

The rating actions are as follows:

Punch A:

GBP270.0 million class A1(R) fixed-rate notes due 2022: 'BB';
maintained on RWN
GBP197.0 million class A2(R) fixed-rate notes due 2020: 'BB';
maintained on RWN
GBP100.9 million class M1 fixed-rate notes due 2026: 'B-';
maintained on RWN
GBP398.7 million class M2(N) floating-rate notes due 2029: 'B-';
maintained on RWN
GBP79.5 million class B1 fixed-rate notes due 2026: 'CC';
maintained on RWN
GBP83.7 million class B2 fixed-rate notes due 2029: 'CC';
maintained on RWN
GBP134 million class B3 floating-rate notes due 2031: 'CC';
maintained on RWN
GBP85.1 million class C(R) fixed-rate notes due 2033: 'CC';
maintained on RWN
GBP83.8 million class D1 floating-rate notes 2032: 'CC';
maintained on RWN

Punch B:

GBP155.0 million Class A3 fixed-rate notes due 2022: 'B+';
maintained on RWN
GBP220.0 million Class A6 fixed-rate notes due 2024: 'B+';
maintained on RWN
GBP155.6 million Class A7 fixed-rate notes due 2033: 'B+';
maintained on RWN
GBP44.3 million Class A8 floating-rate notes due 2033: 'B+';
maintained on RWN
GBP61.5 million Class B1 fixed-rate notes due 2025: 'CC';
maintained on RWN
GBP99.4 million Class B2 fixed-rate notes due 2028: 'CC';
maintained on RWN
GBP125.0 million Class C1 floating-rate notes due 2035: 'CC';
maintained on RWN


                            *********

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

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

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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