TCREUR_Public/140611.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

                           E U R O P E

            Wednesday, June 11, 2014, Vol. 15, No. 114

                            Headlines

F R A N C E

DRY MIX SOLUTIONS: Moody's Assigns 'B2' CFR; Outlook Stable
DRY MIX SOLUTIONS: S&P Assigns Prelim. 'B' CCR; Outlook Stable


G E R M A N Y

CENTROSOLAR GROUP: RBI Solar Acquires Renusol
PHOTON HOLDING: German Court Opens Insolvency Proceedings


I R E L A N D

ALME LOAN: Moody's Assigns (P)B2 Rating to EUR11.3MM Cl. F Notes


I T A L Y

ALITALIA SPA: Nears Restructuring Deal with Etihad Airways
EUROHOME MORTGAGES: Moody's Cuts Rating on EUR15.9M B Notes to Ca


L U X E M B O U R G

PENTA CLO 1: Moody's Hikes Rating on EUR15MM Cl. D Notes to Ba1
VIRGOLINO DE OLIVEIRA: Moody's Rates US$135MM Secured Notes 'B2'
VIRGOLINO DE OLIVEIRA: Fitch Rates US$135MM Sr. Sec. Notes 'B-'


N E T H E R L A N D S

SELECTA GROUP: S&P Assigns Prelim. 'B+' CCR; Outlook Stable


P O R T U G A L

LUSITANO SME: Fitch Affirms 'CCC' Rating on Class C Notes


R O M A N I A

OLTCHIM SA: Will Not be Shut Down If Privatized


R U S S I A

GLOBEXBANK: Fitch Cuts LT Issuer Default Ratings to 'BB-'


S L O V E N I A

MERCATOR: Inks Restructuring Deal with Creditor Banks


S P A I N

TDA CAM 4: Fitch Cuts Rating on Class C Tranche to 'CCCsf'
BANCO SANTANDER: Fitch Raises Preference Shares Rating to 'BB'


U N I T E D   K I N G D O M

ALL3MEDIA FINANCE: S&P Puts 'B' Corp. Credit Rating on Watch Pos.
BIBBY OFFSHORE: Moody's Assigns '(P)B2' CFR; Outlook Stable
BIBBY OFFSHORE: S&P Assigns Preliminary 'B+' CCR; Outlook Stable
BANK OF NT BUTTERFIELD: Fitch Affirms 'BB+' Sub. Debt Rating
BV HICKS: Increased Competition Prompts Liquidation

DLG ACQUISITIONS: Moody's Assigns '(P)B3' CFR; Outlook Stable
NEMUS II: Fitch Affirms Rating on Class F Certs. at 'CCsf'
SEADRILL PARTNERS: S&P Assigns 'BB-/B' CCRs; Outlook Stable
VISTEON UK: Former Workers Accept Compensation Deal


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F R A N C E
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DRY MIX SOLUTIONS: Moody's Assigns 'B2' CFR; Outlook Stable
-----------------------------------------------------------
Moody's Investors Service assigned a B2 corporate family rating
(CFR) and B1-PD probability of default rating (PDR) to Dry Mix
Solutions Investissements S.A.S., an intermediate holding company
of France based Parex Group and topco of the restricted group.
Concurrently, Moody's has assigned a provisional (P)B2 (LGD5-71%)
rating to the proposed EUR400 million senior secured floating
rate notes and EUR150 million senior secured fixed rate notes to
be issued by Dry Mix Solutions Investissements S.A.S. The outlook
on all ratings is stable. This is the first time that Moody's has
rated Parex.

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

Ratings Rationale

The assigned B2 CFR is strongly positioned given the sustainably
high profitability and relatively resilient performance in the
past, which is balanced by a narrow product portfolio, dependency
on the cyclical construction industry and a relatively high
leverage.

In detail, the rating positively reflects Parex's (1) strong
positions in the regions served in the niche market of specialty
chemical dry mix solutions for the construction industry (top 3
positions held in its core markets such as France, China, Brazil,
USA and Argentina); (2) strong historical track record with solid
financial performance through the economic downturn in 2009 with
revenues and EBITDA declining only modestly by 7.3% and 12.4%,
respectively, helped by the group broadening its footprint in the
fast growing emerging markets (48% of sales in 2013) as well as a
relatively flexible cost structure and an asset light production
model; (3) solid barriers to entry relating to its dense
distribution network with a high number of selling points
ensuring availability at the jobsites and facilitating access to
smaller end customers, an established local industrial footprint
and strong brand perception by its customers; and (4) favorable
industry trends supporting the group's continued growth such as
increasing substitution of on-site mixed mortars by higher
quality dry mix solutions for the construction industry driven by
rising labor costs in emerging markets as well as tightening
environmental regulations in developed markets and overall
growing demand for more sophisticated solutions.

On a more negative note, the rating takes into account Parex's
(1) rather small size with EUR755 million of group revenues in
2013; (2) limited product diversification with a distinct focus
on specialty dry mix solutions, although with a high number of
SKUs due to the variety of applications and chemical formulas;
(3) large exposure to the cyclical construction industry with a
high share related to residential new housing and non-residential
construction (together approx. 60% of group sales) which is more
affected by changing macroeconomic conditions than renovation
(36%); (4) distinct reliance on its domestic French market which
accounted for around 41% of group EBITDA in 2013 and some
reliance on Argentina (16% of group EBITDA); (5) highly leveraged
capital structure with expected adjusted Debt/EBITDA approaching
5.8x at year-end 2014 pro forma for the envisaged capital
structure; (6) limited ability to generate meaningful positive
free cash flow owed to a sizeable interest burden; (7) exposure
to fluctuating raw material prices combined with the constant
challenge to successfully pass on inflated input cost to end
customers; and (8) marked growth aspirations in emerging
countries which could be challenged by rising local competition
(e.g. in the fragmented Chinese market) or adverse impacts from
foreign currencies weighing on the group's profitability.

Liquidity

Pro forma for the refinancing, Moody's considers Parex's
liquidity profile to be adequate. Following the assumed closing
of the transaction as of June 30, 2014, the group's expected
liquidity uses for the next 12-18 months result from working
capital needs (intra-year working capital swings are estimated at
around EUR40 million), capital expenditures as well as a EUR14
million payment for the acquisition of the remaining shares in
one subsidiary in the first half of 2015. These liquidity needs
should be sufficiently covered by expected EUR25 million cash
overfunding at closing of the transaction and funds from
operations exceeding EUR50 million per annum. Moody's liquidity
assessment of Parex also includes the group's proposed new EUR100
million super senior revolving credit facility (maturing in 2021)
which is expected to be undrawn at closing and which will not be
subject to any financial maintenance covenants.

Rating Outlook

The stable outlook assigned to the ratings reflects Moody's
expectation of Parex being able to sustain its solid
profitability around levels achieved in 2013 and to gradually
reduce its leverage towards 5.0x debt/EBITDA over the next two
years. Moreover, Moody's expects the group to achieve continued
positive free cash flow generation as well as to maintain a
satisfactory liquidity profile.

What Could Change The Rating Up/Down

Moody's might consider upgrading Parex's ratings if the group
were able to (1) reduce adjusted gross debt/EBITDA below 5.0x;
(2) improve adjusted EBITDA margins towards 15.0%; and (3)
generate meaningful positive free cash flow in the double-digit
million range on a sustainable basis.

Negative rating pressure could arise should Parex's (1) adjusted
gross debt/EBITDA exceed 6.0x, and not only temporary; (2)
profitability deteriorate as reflected in adjusted EBITDA margins
reducing to below 13.0%; and (3) free cash flow turn negative.
Moreover, the failure to maintain an adequate liquidity profile
would exert additional pressure on the ratings.

Structural Considerations

In its Loss-Given-Default (LGD) assessment of Parex's proposed
new capital structure Moody's distinguishes between three layers
of debt. Upon completion of the acquisition of Parex by the
Issuer, the senior secured EUR400 million floating rate notes and
senior secured EUR150 million fixed rate notes will be guaranteed
by entities of the group accounting for approximately 79% of the
group's adjusted EBITDA and will be secured by certain assets of
the guarantors within 60 days after completion of the
acquisition.

The proposed EUR100 million super senior revolving credit
facility benefits from the same security package and guarantor
coverage as the senior secured notes but receives enforcement
proceeds in case of liquidation prior to senior secured notes
holders. Hence, Moody's has ranked the senior secured notes
junior to the super senior revolving credit facility.

Moody's has linked trade payables to the same level as the senior
secured notes which together rank ahead of lease rejection claims
and pension obligations which are modelled as unsecured and thus
rank last in the priority of debt analysis. Moody's notes that
shareholder contributions used to finance the transaction will be
provided in the form of common equity and are therefore not
included in the LGD analysis for Parex.

The one-notch difference between the PDR and CFR reflects the
absence of financial covenants under the proposed super senior
revolver which prompted Moody's to assume a lower family recovery
rate of 35% versus the standard 50% rate.

The principal methodology used in this rating 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.

Dry Mix Solutions Investissements S.A.S. is an intermediate
holding company of the Parex Group (Parex), headquartered in
Issy-les-Moulineaux, France. Parex is a global leading
manufacturer and distributor of specialty dry mix solutions for
the construction industry. The group's product offering is
divided into three business lines, (1) Fa‡ade Protection and
Decoration (39% of group sales in 2013); (2) Ceramic Tile Setting
Materials (38%); and (3) Concrete Repair and Waterproofing
Systems (19%) across which Parex holds top 3 positions in its key
markets. In the 12 months ended March 31, 2014, Parex generated
net sales of EUR766 million and reported EBITDA of EUR109 million
with over 3,500 employees worldwide. The group operates 61
manufacturing sites and 9 R&D facilities in 20 countries. In
March 2014, funds advised by private equity firm CVC Capital
Partners have entered into an agreement to acquire all shares in
Parex from French industrial chemicals and building materials
group Materis.


DRY MIX SOLUTIONS: S&P Assigns Prelim. 'B' CCR; Outlook Stable
--------------------------------------------------------------
Standard & Poor's Ratings Services said it has assigned its
preliminary 'B' long-term corporate credit rating to France-based
Dry Mix Solutions Investissements S.A.S. (DMS Investissements),
an indirect holding company for dry mix solutions producer
ParexGroup.  The outlook is stable.

At the same time, S&P assigned its 'B+' preliminary issue rating
to subsidiary Financiere SANTEC S.A.'s proposed EUR100 million
super senior revolving credit facility (RCF), one notch above the
corporate credit rating on ParexGroup.  The recovery rating on
this RCF is '2'.  S&P also assigned its preliminary 'B' issue
rating to the proposed EUR400 million senior secured floating-
rate notes and the EUR150 million senior secured fixed-rate
notes.  The recovery rating on these notes is '4'.

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

The preliminary rating on DMS Investissements reflects S&P's
assessment of ParexGroup's business risk profile as "fair," and
financial risk profile as "highly leveraged."

Dry Mix Solutions Holdings S.a.r.l, a holding company owned by
funds advised by CVC Capital Partners, has agreed to acquire
ParexGroup Participations, the holding company of ParexGroup,
from Materis Group, an entity majority-owned by French
conglomerate Wendel, for an estimated EUR840 million.

The financial sponsor, CVC Capital Partners, has put in place a
EUR550 million bridge-to-bond financing package including a
planned bond issue in early June 2014.  DMS Investissements
(indirectly held by Dry Mix Solutions Holdings S.a.r.l) intends
to issue EUR400 million in senior secured floating-rate notes and
EUR150 million in senior secured fixed-rate notes due 2021.

ParexGroup is a key player in the construction chemicals sector,
as a provider of specialty dry mix solutions for the building
industry with 61 production sites spread across 20 countries.

S&P's view of the "fair" business risk profile reflects
ParexGroup's exposure to the cyclical new build construction
market, which accounted for about 60% of its 2013 revenues.  In
S&P's view, current economic conditions do not support a rebound
in construction in key markets, including France, before 2015.
Because the group's facade and ceramic tile setting materials
segments face a 12 to 18 month time lag, a clear rebound in
revenue growth before 2016 is unlikely in S&P's view.  The
group's small size -- with revenues slightly exceeding EUR700
million and EBITDA of approximately EUR100 million -- alongside
its exposure to foreign exchange rate fluctuations, and more
particularly to the Argentinean peso, represent additional
downside risks.

These weaknesses are somewhat offset by ParexGroup's presence in
a niche market, which shows growth prospects fueled by a
regulatory framework that prompts energy savings and
environmental friendly building construction standards.  The
group's leading positions and strong brand awareness in its core
markets, paired with an attractive exposure to emerging markets
(about 47% of group EBITDA) and proven resilience of the
business -- with EBITDA margin maintained in the range of 14%-16%
amid adverse conditions -- further support the rating.

Following the transaction's close, which S&P anticipates by the
end of June 2014, upon approval of antitrust authorities, the
group's capital structure will chiefly include:

   -- An aggregate EUR550 million in senior secured notes due
      2021;

   -- More than EUR200 million in preferred equity certificates
      (PECs), which S&P treats as debt under its criteria, plus
      EUR163 million in the form of a pure equity injection from
      CVC Capital Partners.

Consequently, post transaction, S&P estimates ParexGroup's ratio
of Standard & Poor's-adjusted debt to EBITDA at approximately 8x
by Dec. 31, 2014.  Excluding the effect of the PECs, this metric
is likely to be more than 5x, which S&P still regards as "highly
leveraged."

S&P's assessment of ParexGroup's financial policy as "financial
sponsor-6" reflects its private equity ownership by CVC Capital
Partners and S&P's view that adjusted debt to EBITDA is likely to
remain at more than 5x.

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

   -- Modest revenue growth in 2014, with a progressive ramp-up
      thereafter, on a growing contribution from the group's
      Chinese operations, along with U.S. activities mostly on
      the recovery path;

   -- Stable EBITDA in 2014, despite a fairly strong first
      quarter when considering the recent devaluation of the
      Argentinean peso.  However, this better-than-anticipated
      performance was also due to mild weather conditions in
      France;

   -- EBITDA margin remaining in the range of 13%-14%, despite
      potential erosion in 2014-2015, with the ramp-up of the
      group's activities in emerging markets, and more
      particularly in China;

   -- Modest capital expenditures in the range of 3%-4% of
      revenues; and

   -- No dividends.

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

   -- Adjusted debt to EBITDA of about 8x.  Even excluding the
      PECs, S&P anticipates this metric will exceed 5x; and

   -- A low ratio of funds from operations (FFO) to debt at less
      than 10%, in part reflecting accruing payment-in-kind (PIK)
      interest at an anticipated rate of 9% on the group's debt-
      like instruments.

The stable outlook reflects S&P's view that ParexGroup will
maintain its EBITDA margin at about 14% over the next 12-18
months.  In S&P's base case, it assumes that EBITDA will stay
flat in 2014 and gradually recovery thereafter, based on sluggish
conditions for ParexGroup's key segments in France, where
recovery is unlikely before 2015.  The stable outlook also
reflects S&P's view that group will maintain its credit metrics
will remain in line with a "highly leveraged" financial risk
profile in the near term, including a ratio of adjusted debt to
EBITDA of about 8x.

S&P do not anticipate substantial deleveraging of the group's
balance sheet over the next year.  Consequently, S&P sees no
upside rating potential in the next 12-18 months.

S&P could consider a downgrade if ParexGroup posted negative free
operating cash flow or we observed a sustained contraction in its
EBITDA margin.  This could arise if its profitability
deteriorated markedly in its various markets or if the number of
new housing builds in France -- at a current low -- did not
recover as of 2015.  S&P has factored the difficult operating
environment in Argentina into its base case, but far slower
growth than S&P currently expects in emerging markets could
represent an additional risk for the group.  Still, S&P expects
ParexGroup to register double-digit revenue growth rates in
China.



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G E R M A N Y
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CENTROSOLAR GROUP: RBI Solar Acquires Renusol
---------------------------------------------

pv-magazine.com reports that U.S. solar mounting systems provider
RBI Solar has signed a deal to acquire Renusol GmbH.

The agreement for the Cologne-based company, a subsidiary of
insolvent German group Centrosolar, includes U.S. division
Renusol America, which is 100% owned by Renusol GmbH, the report
says.

pv-magazine.com relates that the acquisition is seen as a further
step in the Ohio-based RBI's international expansion.

"With Renusol, we gain over 15 years of expertise in the area of
residential and commercial projects," the report quotes RBI
President Richard Reilly as saying.  "This is a decisive step in
our company growth and fits perfectly with our products and
service portfolio. Renusol has proven, innovative and cost-
effective solutions."

According to the report, Centrosolar said the complete sale of
Renusol would bring the insolvent company some EUR2.6 million
following the deduction of debts and the cost of sale. The group
added that the sale had been part of the cornerstones of the
insolvency plan announced in February, pv-magazine.com relays.
Centrosolar will continue to focus on the North American market
through its Centrosolar America, Inc. subsidiary, the report
adds.

Renusol Managing Director Stefan Liedtke told pv-magazine.com
that all of Renusol's employees would remain with the company
following the sale.

As reported in the Troubled Company Reporter-Europe on
Oct. 21, 2013, SolarServer said Centrosolar Group AG (Munich),
Centrosolar AG and Centrosolar Sonnenstromfabrik GmbH have
applied for "protective shield" creditor protection at a court in
Hamburg, Germany, which the company says will allow for faster
implementation of its restructuring plans.

Centrosolar Group AG, Munich is a supplier of photovoltaic (PV)
systems for roofs and key components.  Its product range
comprises solar integrated systems, modules, inverters and
mounting systems. Over two-thirds of revenue is generated in
North America.


PHOTON HOLDING: German Court Opens Insolvency Proceedings
---------------------------------------------------------
Bernd Radowitz at RechargeNews reports that a German court has
opened preliminary insolvency proceedings for Photon Holding, the
parent company of Photon Publishing GmbH, which produces several
solar magazines and websites.

According to RechargeNews, Photon stresses that it did not
request the move by the district court in the western city of
Aachen and believes that it was unnecessary.

"A preliminary insolvency administrator was appointed due to a
tax obligation to the tax office of Aachen," RechargeNews quotes
the company as saying.

The court appointed attorney Andreas Schmitz as preliminary
insolvency administrator, RechargeNews relates.

Photon Holding has submitted tax refund claims approximately
equal to the amount owed, but these have not yet been validated,
RechargeNews notes.

                         Photon Europe

In a separate report, Sandra Enkhardt at pv-magazine.com relates
that the recent insolvency marks the second collapse of a Photon
group company.  Photon Europe GmbH filed for bankruptcy
protection at the end of 2012, according to the report. In the
course of the insolvency proceedings, the operations were
transferred to Photon Publishing GmbH, whose top management
included many of the same executives of the insolvent company.

pv-magazine.com notes that Photon Holding continues to own the
Photon trademark as it did during the previous Photon Europe
insolvency.  As a result, creditors at the time were largely
unable to reclaim outstanding debt from the insolvent Photon
Europe's assets, the report relays citing the company's former
insolvency administrator Andre Seckler.

Photon Europe's debt pile reached more than EUR9 million,
according to pv-magazine.com's own research.

Photon Europe GmbH is a publisher of leading PV publications such
as Photon International.



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ALME LOAN: Moody's Assigns (P)B2 Rating to EUR11.3MM Cl. F Notes
----------------------------------------------------------------
Moody's Investors Service announced that it has assigned the
following provisional ratings to notes to be issued by ALME Loan
Funding II Limited:

EUR223,500,000 Class A Senior Secured Floating Rate Notes due
2027, Assigned (P)Aaa (sf)

EUR40,800,000 Class B Senior Secured Floating Rate Notes due
2027, Assigned (P)Aa2 (sf)

EUR20,600,000 Class C Senior Secured Deferrable Floating Rate
Notes due 2027, Assigned (P)A2 (sf)

EUR23,300,000 Class D Senior Secured Deferrable Floating Rate
Notes due 2027, Assigned (P)Baa2 (sf)

EUR25,900,000 Class E Senior Secured Deferrable Floating Rate
Notes due 2027, Assigned (P)Ba2 (sf)

EUR11,300,000 Class F Senior Secured Deferrable Floating Rate
Notes due 2027, Assigned (P)B2 (sf)

Moody's issues provisional ratings in advance of the final sale
of financial instruments, but this rating only represents Moody's
preliminary credit opinion. Upon a conclusive review of a
transaction and associated documentation, Moody's will endeavor
to assign a definitive rating. A definitive rating (if any) may
differ from a provisional rating.

Ratings Rationale

Moody's provisional rating of the rated notes addresses the
expected loss posed to noteholders by the legal final maturity of
the notes in 2027. The provisional rating reflects the risks due
to defaults on the underlying portfolio of loans, the
transaction's legal structure, and the characteristics of the
underlying assets. Furthermore, Moody's is of the opinion that
the collateral manager, Apollo Management International LLP
("Apollo"), has sufficient experience and operational capacity
and is capable of managing this CLO.

ALME Loan Funding II Limited is a managed cash flow CLO with a
target portfolio made up of EUR374,100,000 par value of mainly
European corporate leveraged loans. At least 90% of the portfolio
must consist of senior secured loans, senior secured bonds and
eligible investments, and up to 10% of the portfolio may consist
of second-lien loans, unsecured loans, mezzanine obligations and
senior unsecured bonds. The portfolio may also consist of up to
10% of fixed rate obligations. The portfolio is expected to be
50% ramped up as of the closing date and to be comprised
predominantly of corporate loans to obligors domiciled in Western
Europe. The remainder of the portfolio will be acquired during
the six month ramp-up period in compliance with the portfolio
guidelines.

Apollo Management International LLP ("Apollo") will actively
manage the collateral pool of the CLO. It will direct the
selection, acquisition and disposition of collateral on behalf of
the Issuer and may engage in trading activity, including
discretionary trading, during the transaction's three-year
reinvestment period. Thereafter, collateral purchases are
permitted using principal proceeds from unscheduled principal
payments and proceeds from sales of credit risk obligations, and
are subject to certain restrictions.

In addition to the six classes of notes rated by Moody's, the
Issuer will issue one class of subordinated notes which will not
be rated.

The transaction incorporates interest and par coverage tests
which, if triggered, divert interest and principal proceeds to
pay down the notes in order of seniority.

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

The rated notes' performance is subject to uncertainty. The
notes' performance is sensitive to the performance of the
underlying portfolio, which in turn depends on economic and
credit conditions that may change. Apollo's investment decisions
and management of the transaction will also affect the notes'
performance.

Loss and Cash Flow Analysis:

Moody's modelled the transaction using CDOEdge, a cash flow model
based on the Binomial Expansion Technique, as described in
Section 2.3 of the "Moody's Global Approach to Rating
Collateralized Loan Obligations" rating methodology published in
February 2014. The cash flow model evaluates all default
scenarios that are then weighted considering the probabilities of
the binomial distribution assumed for the portfolio default rate.
In each default scenario, the corresponding loss for each class
of notes is calculated given the incoming cash flows from the
assets and the outgoing payments to third parties and
noteholders. Therefore, the expected loss or EL for each tranche
is the sum product of (i) the probability of occurrence of each
default scenario and (ii) the loss derived from the cash flow
model in each default scenario for each tranche. As such, Moody's
encompasses the assessment of stressed scenarios.

Moody's used the following base-case modeling assumptions:

Par amount: EUR 374,100,000

Diversity Score: 34

Weighted Average Rating Factor (WARF): 2810

Weighted Average Spread (WAS): 3.80%

Weighted Average Coupon (WAC): 5.75%

Weighted Average Recovery Rate (WARR): 42.0%

Weighted Average Life (WAL): 8 years

As part of the base case, Moody's has addressed the potential
exposure to obligors domiciled in countries with foreign currency
government bond rating of A3 or below. Following the effective
date, and given the portfolio constraints and the current
sovereign ratings in Europe, such exposure may not exceed 10% of
the total portfolio, where exposures to countries rated below
Baa3 cannot exceed 5%. As a result and in conjunction with the
current foreign government bond ratings of the eligible
countries, as a worst case scenario, a maximum 5% of the pool
would be domiciled in countries with single A local currency
country ceiling and 5% in Baa2 local currency country ceiling.
The remainder of the pool will be domiciled in countries which
currently have a local currency country ceiling of Aaa. Given
this portfolio composition, the model was run with different
target par amounts depending on the target rating of each class
of notes as further described in the rating methodology. The
portfolio haircuts are a function of the exposure size to
peripheral countries and the target ratings of the rated notes
and amount to 0.75% for the class A notes, 0.50% for the Class B
notes, 0.375% for the Class C notes and 0% for Classes D and E.

The rated notes' performance is subject to uncertainty. The
notes' performance is sensitive to the performance of the
underlying portfolio, which in turn depends on economic and
credit conditions that may change. Apollo's investment decisions
and management of the transaction will also affect the notes'
performance.

Stress Scenarios:

Together with the set of modeling assumptions above, Moody's
conducted an additional sensitivity analysis, which was an
important component in determining the provisional rating
assigned to the rated notes. This sensitivity analysis includes
increased default probability relative to the base case. Below is
a summary of the impact of an increase in default probability
(expressed in terms of WARF level) on each of the rated notes
(shown in terms of the number of notch difference versus the
current model output, whereby a negative difference corresponds
to higher expected losses), holding all other factors equal:

Percentage Change in WARF: WARF + 15% (to 3232 from 2810)

Ratings Impact in Rating Notches:

Class A Senior Secured Floating Rate Notes: -1

Class B Senior Secured Floating Rate Notes: -2

Class C Senior Secured Deferrable Floating Rate Notes: - 2

Class D Senior Secured Deferrable Floating Rate Notes: - 2

Class E Senior Secured Deferrable Floating Rate Notes: -1

Class F Senior Secured Deferrable Floating Rate Notes: 0

Percentage Change in WARF: WARF +30% (to 3653 from 2810)

Ratings Impact in Rating Notches:

Class A Senior Secured Floating Rate Notes: -1

Class B Senior Secured Floating Rate Notes: -2

Class C Senior Secured Deferrable Floating Rate Notes: -3

Class D Senior Secured Deferrable Floating Rate Notes: -2

Class E Senior Secured Deferrable Floating Rate Notes: -2

Class F Senior Secured Deferrable Floating Rate Notes: -2

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



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ALITALIA SPA: Nears Restructuring Deal with Etihad Airways
----------------------------------------------------------
ANSA reports that Alitalia SpA is in for some "painful and
arduous" restructuring but should see a deal with Etihad Airways
in a matter of weeks.

Gabriele Del Torchio, Alitalia's chief executive officer, said
Monday that changes were necessary to attract essential
investment from Abu Dhabi-based Etihad, which he said is prepared
to invest EUR560 million in the cash-strapped company, ANSA
relates.

According to ANSA, Mr. Del Torchio acknowledged that 2,200
Alitalia employees from a staff of about 14,000 will be laid off
as part of the changes demanded by Etihad before it finalizes its
investment, likely by July.

Mr. Del Torchio, as cited by ANSA, said that a tentative pact
could be ready to go before the Alitalia board by the end of this
week.

The negotiations, which have been going on for six months, would
see Etihad take a share as large as 49% in Alitalia, ANSA
discloses.

                       About Alitalia

Alitalia-Compagnia Aerea Italiana has navigated its way through
a successful restructuring.  After filing for bankruptcy
protection in 2008, Alitalia found additional investors, acquired
rival airline Air One, and re-emerged as Italy's leading airline
in early 2009.  Operating a fleet of about 150 aircraft, the
airline now serves more than 75 national and international
destinations from hubs in Fiumicino (Rome), Milan, Turin, Venice,
Naples, and Catania.  Alitalia extends its network as a member of
the SkyTeam code-sharing and marketing alliance, which also
includes Air France, Delta Air Lines, and KLM.  An Italian
investor group owns a majority of the company, while Air France-
KLM owns 25%.


EUROHOME MORTGAGES: Moody's Cuts Rating on EUR15.9M B Notes to Ca
-----------------------------------------------------------------
Moody's Investors Service has downgraded the ratings on Class A
notes and Class B Notes in Eurohome (Italy) Mortgages S.r.l., an
Italian residential mortgage backed securities transaction. Class
A notes are downgraded to B1 (sf) from Ba2 (sf) and Class B notes
are downgraded to Ca (sf) from Caa1 (sf).

Ratings Rationale

The rating actions was prompted by the worse than expected
performance from the underlying collateral. The downgrade of the
Class A and B notes reflects the insufficiency of credit
enhancement to address the revision of the expected loss
assumption.

Eurohome (Italy) Mortgages S.r.l is backed by a portfolio of
mortgage loans originated in Italy. All the securitized mortgage
loans have been originated via brokers.

Moody's had already taken action on the deal in June 2013. The
asset performance has continued to deteriorate since June 2013.
The securitized pool is currently performing outside of Moody's
revised expectations as of the latest review. Cumulative default
as a percentage of the original collateral balance increased from
21.66% to 26.16%. As a result, Moody's has increased the
portfolio expected loss (EL) assumption from 18.9% to 21.23% of
original balance.

The increase in the defaulted loans and the low recoveries
resulted in the build-up of unpaid principal deficiency ledgers
(PDL). The unpaid PDL currently exceeds the size of the Class C,
D and E notes. The interest deferral triggers on B,C, D and E
notes are currently breached and the interest payments on the
junior notes has been diverted to pay down senior notes. The pace
at which loans are moving from arrears into write-offs and the
limited amount of recovery received so far suggest that the
unpaid PDL will most likely exceed the size of Class B to E
notes.

Moody's downgraded the ratings of Class B and Class A notes which
lack available credit enhancement to address the revision of
expected loss assumption. Moody's downgraded Class A rating to B1
(sf) from Ba2 (sf) and Class B rating to Ca (sf) from Caa1 (sf).

Factors That Would Lead To An Upgrade Or Downgrade Of The Rating:

Upward pressure on the ratings could result from (1) better-than-
expected performance of the underlying assets; and (2) a decline
in counterparty risk or country risk.

Downward pressure on the ratings could result from (1) worse-
than-expected performance of the underlying collateral; and (2)
deterioration in the counterparties' credit quality or a rise in
country risk.

The principal methodology used in this rating was "Moody's
Approach to Rating RMBS Using the MILAN Framework" published in
March 2014. Please see the Credit Policy page on www.moodys.com
for a copy of this methodology.

List Of Affected Ratings

Issuer: Eurohome (Italy) Mortgages S.r.l.

  EUR211.95M A Notes, Downgraded to B1 (sf); previously on
  Jun 17, 2013 Downgraded to Ba2 (sf)

  EUR15.9M B Notes, Downgraded to Ca (sf); previously on
  Jul 26, 2012 Downgraded to Caa1 (sf)



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


PENTA CLO 1: Moody's Hikes Rating on EUR15MM Cl. D Notes to Ba1
---------------------------------------------------------------
Moody's Investors Service announced that it has taken rating
actions on the following classes of notes issued by Penta CLO 1
S.A.:

Issuer: Penta CLO 1 S.A.

  EUR26,000,000 Class A-2 Senior Floating Rate Notes due 2024,
  Upgraded to Aaa (sf); previously on Nov 10, 2011 Upgraded to
  Aa1 (sf)

  EUR48,000,000 Class B Senior Deferrable Floating Rate Notes due
  2024, Upgraded to A1 (sf); previously on Nov 10, 2011 Upgraded
  to A3 (sf)

  EUR21,000,000 Class C Senior Subordinated Deferrable Floating
  Rate Notes due 2024, Upgraded to Baa2 (sf); previously on
  Nov 10, 2011 Upgraded to Baa3 (sf)

  EUR15,000,000 Class D Senior Subordinated Deferrable Floating
  Rate Notes due 2024, Upgraded to Ba1 (sf); previously on
  Nov 10, 2011 Upgraded to Ba2 (sf)

  EUR5,500,000 Class Q Combination Notes due 2024, Upgraded to
  Baa1 (sf); previously on Nov 10, 2011 Upgraded to Baa3 (sf)

  EUR5,000,000 Class R Combination Notes due 2024, Upgraded to
  Baa1 (sf); previously on Nov 10, 2011 Upgraded to Baa3 (sf)

  EUR8,000,000 Class S Combination Notes due 2024, Upgraded to
  Baa3 (sf); previously on Nov 10, 2011 Upgraded to Ba2 (sf)

  EUR240,000,000 (current balance of EUR 232,393,757) Class A-1
  Senior Floating Rate Notes due 2024, Affirmed Aaa (sf);
  previously on Apr 23, 2007 Definitive Rating Assigned Aaa (sf)

  EUR13,000,000 Class E Senior Subordinated Deferrable Floating
  Rate Notes due 2024, Affirmed B1 (sf); previously on Nov 10,
  2011 Upgraded to B1 (sf)

Penta CLO 1 S.A., issued in April 2007, is a single currency
Collateralised Loan Obligation ("CLO") backed by a portfolio of
mostly high yield European loans. It is predominantly composed of
senior secured loans. The portfolio is managed by Penta
Management Limited, and this transaction has recently ended its
reinvestment period on 04 June 2014.

Ratings Rationale

According to Moody's, the rating actions taken on the notes
result primarily from the benefit of modelling actual credit
metrics following the expiry of the reinvestment period on 4 June
2014.

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

The credit quality of the collateral pool has remained steady as
reflected in the average credit rating of the portfolio (measured
by the weighted average rating factor, or WARF). As of the
trustee's March 2014 report, the WARF was 3077, compared with
3014 in March 2013. The reported diversity score reduced
marginally to 32 in March 2014 from 33 a year ago. The
overcollateralization ratios for various classes of notes have
remained stable over the past twelve months.

The ratings of the Combination Notes address the repayment of the
Rated Balance on or before the legal final maturity. For Classes
Q and R, the 'Rated Balance' is equal at any time to the
principal amount of the Combination Note on the Issue Date minus
the aggregate of all payments made from the Issue Date to such
date, either through interest or principal payments. For Class S,
the 'Rated Balance' is equal at any time to the principal amount
of the Combination Note on the Issue Date increased by a Rated
Coupon of 0.25% per annum, accrued on the rated Balance on the
preceding payment date minus the aggregate of all payments made
from the Issue Date to such date, either through interest or
principal payments. The Rated Balance may 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) an EUR pool with performing par and principal proceeds
balance of EUR380.1 million, and defaulted par of EUR8.0 million,
a weighted average default probability of 22.6% (consistent with
a WARF of 3201 over a weighted average life of 4.3 years), a
weighted average recovery rate upon default of 45.42% for a Aaa
liability target rating, a diversity score of 28 and a weighted
average spread of 4.13%.

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. The portfolio has exposures to
13.59% of obligors in Spain, whose LCC is A1. Moody's ran the
model with different par amounts depending on the target rating
of each class of notes, in accordance with Section 4.2.11 and
Appendix 14 of the methodology. The portfolio haircuts are a
function of the exposure to peripheral countries and the target
ratings of the rated notes, and amount to 1.44% for Classes A-1
and A-2, and 0.36% for Class B notes.

The default probability derives from the credit quality of the
collateral pool and Moody's expectation of the remaining life of
the collateral pool. The estimated average recovery rate on
future defaults is based primarily on the seniority of the assets
in the collateral pool. For a Aaa liability target rating,
Moody's assumed that 84.5% of the portfolio exposed to senior
secured corporate assets would recover 50% upon default, while
the non first-lien loan corporate assets would recover 15%. In
each case, historical and market performance and a collateral
manager's latitude to trade collateral are also relevant factors.
Moody's incorporates these default and recovery characteristics
of the collateral pool into its cash flow model analysis,
subjecting them to stresses as a function of the target rating of
each CLO liability it is analyzing.

Moody's notes the May 2014 trustee report has recently been
issued. Key portfolio metrics such as reported diversity score,
WARF, weighted average spread and OC ratios for all classes of
notes are materially unchanged from March 2014 data.

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 a lower weighted average spread in the
portfolio. Moody's ran a model in which it lowered the weighted
average spread by 30bp; the model generated outputs that were
within one notch of the base-case.

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

Additional uncertainty about performance is due to the following:

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

2) Around 35.3% of the collateral pool consists of debt
obligations whose credit quality Moody's has assessed by using
credit estimates.

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

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.


VIRGOLINO DE OLIVEIRA: Moody's Rates US$135MM Secured Notes 'B2'
----------------------------------------------------------------
Moody's Investors Service assigned a B2 rating to Agropecuaria
Nossa Senhora do Carmo S.A. ("GVO")'s proposed issuance to USD
135 million secured notes due 2020. The notes will be issued by
its Luxembourg-based offshore subsidiary, Virgolino de Oliveira
Finance S.A., with an unconditional guarantee from Agropecuaria
Nossa Senhora do Carmo S.A., and its subsidiaries Virgolino de
Oliveira S.A. Acucar e Alcool, ("Virgolino de Oliveira"),
Acucareira Virgolino de Oliveira S.A. ("Acucareira Virgolino"),
and Agropecuaria Terras Novas S.A. ("Agropecuaria Terras Novas"),
and secured by the mortgage of the Moncoes mill. The ratings
remain under review for downgrade.

The transaction is part of GVO's liability management strategy
and net proceeds will be used to pay existing secured debt within
the company. The rating of the notes assumes that the final
transaction documents will not be materially different from draft
legal documentation reviewed by Moody's to date and assume that
these agreements are legally valid, binding and enforceable.

Ratings unchanged:

Issuer: Agropecuaria Nossa Senhora do Carmo

-- Corporate Family Rating: B3 (global scale)

Issuer: Virgolino de Oliveira Finance Limited

-- USD300 million senior unsecured notes due 2018: B3 (global
    scale)

-- USD300 million senior unsecured notes due 2022: B3 (global
    scale)

Ratings assigned:

Issuer: Virgolino de Oliveira Finance S.A.

-- USD135 million senior secured notes due 2020: B2 (global
    scale)

The ratings are under review for downgrade.

Ratings Rationale

The proposed issuance is part of GVO's liability management
initiatives and proceeds will be used to pay down existing
secured debt. The notes will improve GVO's liquidity profile and
lengthen its amortization schedule. Pro forma for the
transaction, the company's cash balance of about BRL457 million
would be sufficient to cover short term debt by 1.2x (all figures
are adjusted and based on January 2014 financials and short-term
debt does not consider Copersucar's advancements). However, not
all proceeds will be directed to short term debt reduction, and
cash coverage of short term debt at the conclusion of the
transaction may still be weak. In May 2014, GVO also announced
the refinancing of two credit lines with Banco Votorantim,
jointly amounting to BRL79 million (approximately USD33 million).
Originally, the credit lines would come due in June 2015 and June
2016 and were extended to November 2017. Additionally, earlier
this month, the company concluded the extension of a credit line
of BRL121.5 million maturing in December 2015 to April 2017.

The notes were rated one notch above GVO's CFR due to its higher
recovery prospects compared to unsecured debt instruments. The
proposed security package includes a second-priority security
interest in the Moncoes Mill (which will become a first-priority
security interest upon the liquidation of existing debt secured
by the Moncoes Mill mortgage), and a first-priority security
interest in funds on deposit from time to time in a Brazil and US
collection account. Pro forma to the transaction, approximately
26% of the company's reported debt will be secured, in line with
current levels.

GVO's B3 ratings remain under review for downgrade due to the
company's weak liquidity profile and Moody's concerns regarding
the refinancing of its short term debt. The review process has
been focusing on GVO's ability to extend debt profile, while
maintaining a minimum liquidity cushion to support operations in
the next harvest year. Although the company has been able to roll
over its short term debt over the last several quarters, the
current capital structure implies no liquidity cushion and leaves
the company too exposed to changes in the macro environment and
to the risks present in the inherent volatility of the sugar-
ethanol sector, such as commodity prices and weather conditions.
Accordingly, the successful placement of the proposed notes is a
key consideration for the maintenance of current ratings. Moody's
will also assess the impact of the proposed issuance in GVO's
annual interest expense and free cash flow generation, and
analyze the resulting capital structure to conclude the review
process.

Over the last few quarters, GVO was able to partially offset the
impact of the drop in international sugar prices in its top line
by increasing the volume of sugarcane crushed and improving
capacity utilization. As a result adjusted EBITDA margin
increased to 51.6% 9M14 from 46.6% 9M13. The depreciation of the
Brazilian Real during the last harvest also contributed to
mitigate the negative revenue impact and to improve
profitability, but cash flow pressures arising from high capital
expenditures and more expensive dollar-denominated debt
constrained the company's free cash flow generation.

The principal methodology used in this rating was Global Protein
and Agriculture Industry published in May 2013.

Headquartered in Sao Paulo, Brazil, Agropecuaria Nossa Senhora do
Carmo S/A ("GVO") is a privately-held sugar and ethanol producer.
The company founded in the 1920s by Comendador Virgolino de
Oliveira is still controlled by the family, while higher
management positions are filled by family and professionals. With
annual sugarcane crushing capacity close to 12.0 million tons,
Virgolino posted revenues of BRL1.3 billion (approximately USD
582 million converted by the average exchange rate) for the last
twelve months period (LTM) ending in January, 2014.


VIRGOLINO DE OLIVEIRA: Fitch Rates US$135MM Sr. Sec. Notes 'B-'
---------------------------------------------------------------
Fitch Ratings has assigned a 'B-/RR4' rating to Virgolino de
Oliveira Finance S/A (Virgolino Finance)'s USD135 million
proposed senior secured notes due 2020.  The proposed issuance
will be unconditionally guaranteed by Virgolino de Oliveira S.A.
Acucar e Alcool S.A. (GVO), Agropecuaria Nossa Senhora do Carmo
S.A, Acucareira Virgolino de Oliveira S.A and Agropecuaria Terras
Novas S.A and will be secured by second lien on the Moncoes Mill.
Fitch has placed the proposed issuance on Rating Watch Negative,
following the last rating action taken on GVO's ratings on May
28, 2014. Net proceeds from this issuance will mostly be used to
prepay existing senior secured debt. Fitch currently rates GVO
with the Foreign and Local Currency Issuer Default Rating (IDRs)
'B-' on Rating Watch Negative.

Key Rating Drivers

GVO and Virgolino Finance's ratings reflect the group's leveraged
capital structure and tight liquidity position. The ratings
further incorporate the issues associated with the cyclicality of
the sugar and ethanol commodities' price cycle, as well as the
volatility of cash flow generation. It also reflects the exposure
of GVO's sugarcane production business to weather conditions,
foreign currency risk relative to a large portion of its debt;
and the ethanol industry dynamics, which are strongly linked to
Brazil's regulated gasoline prices and related government energy
policies.

The ratings benefit from GVO's adequate business model and the
geographical location of its production units. The ratings also
incorporate positively GVO's strategic shareholding position in
Copersucar and its long-term commercial partnership with this
cooperative. The Rating Watch Negative reflects Fitch's concerns
about GVO's high debt refinancing risks.

High Refinancing Risk:

GVO's liquidity is under pressure, to which the recent financial
problems of another company in the sugar and ethanol business
(Aralco) plays a role. The company has just concluded
negotiations with two domestic banks to rollover its short-term
debt, with the amount involved of BRL200 million deemed
insufficient compared to the company's overall refinancing needs.
The benefit from this expected new issuance should not be enough
to trigger a positive rating action. The agency considers that at
the average price levels for sugar and ethanol of the last 12
months, GVO's current operating cash generation should be
insufficient to cover interest expenses and the maintenance
capital expenditures, leading to the necessity of increasing debt
levels in the near future.

As of Jan. 31, 2014, GVO's cash and marketable securities of
BRL129 million remained tight and was covering only 0.15 time (x)
its short-term debt of BRL834 million. The unencumbered own land
of 4,000 hectares may give some financial flexibility to GVO as
the company can use it as collateral for debt issuances.

Increased Leverage:

GVO presents a weak financial profile underpinned by its
aggressive capital structure in a volatile sector. In the last 12
months (LTM) ended Jan. 31, 2014, the company's consolidated net
adjusted debt/EBITDAR ratio, considering Copersucar dividends,
was 6.1x, compared with 5.1x on April 2013 and 4.8x on April
2012. Excluding advances from Copersucar backed by sugar and
ethanol inventories (BRL534 million), GVO's net adjusted
debt/EBITDAR would be 5.0x for the same period. This high
leverage results from the combination of pressured free cash flow
(FCF) due to larger capital expenditures during the last
harvests, which included crop expansion to increase the
contribution of owned sugar cane supply.

Cash Flow Generation to Improve:

GVO's main challenge is to effectively reduce leverage through
improved operational cash flow in the next two years. Positively,
GVO has concluded its expansion program and as a result Fitch
expects GVO to be able to enhance its FCF generation. During the
LTM ended on January 2014, the company's cash flow from
operations (CFFO) of BRL436 million was able to meet capital
expenditures of BRL365 million, resulting in a positive FCF of
BRL71 million. Net revenues have been increasing in recent years
and the company's EBITDAR margin has ranged between 38% and 41%.
During the LTM ended Jan. 31, 2014, net revenues were BRL1.2
billion and EBITDAR was around BRL500 million, with the EBITDAR
margin of 40%. Fitch expects GVO's CFFO to increase in the coming
years supported by significant scale gains and reduced idle
capacity.

Relationship with Copersucar Viewed as a Positive:
GVO has an adequate business profile, based on its favorable
location, diversified production base and operational
flexibility. The company runs a total crushing capacity of 12
million tons. GVO enjoys competitive advantages linked to its
participation in Copersucar, which allows it to maintain EBITDAR
margin in line with the industry average. The company benefits
from Copersucar's robust scale, which mitigates demand risks,
lower logistics costs and provides better stability in the
company's collection flow. Copersucar accounts for approximately
22% of crushed sugar cane in the Central South region of Brazil
and for 11% and 12% of the global trade of sugar and ethanol,
respectively, making it an important price making agent.
Copersucar is formed by 47 mills that belong to 24 independent
economic groups. Its members crushed 118 million tons of sugar
cane in the 2012/2013 season.

GVO's businesses are exposed to the volatility of the sugar and
ethanol prices. The company transfers 100% of its production to
Copersucar through a long-term exclusivity contract. Prices for
its products are linked to the average sugar and ethanol market
prices plus a small premium. Copersucar remunerates GVO based on
the realized production on a monthly basis during the year,
independently of the moment the sale to the final customer
occurs. This translates to a higher flexibility in GVO's working
capital management compared to other companies that face
seasonality in their activities.

Fitch contemplates in the analysis that GVO has some flexibility
related to its debt with Copersucar, as the main shareholder of
this cooperative. Those loans, included in the debt amount as per
Fitch's criteria, typically involve lower refinancing risks than
a regular bank or capital market debt. GVO can tap its credit
line with Copersucar of over BRL500 million as long as it is able
to crush sugar cane and deliver sugar and ethanol to the
cooperative. This facility is an important liquidity source for
GVO, especially in periods of more restrictive access to credit.
As of Jan. 31, 2014, GVO's debt with Copersucar was BRL534
million or 17% of total adjusted debt of BRL3.1 billion. The
short-term debt with this cooperative of BRL467 million
represented 56% of total short-term debt.

High Exposure to FX Fluctuations:
GVO's debt profile has a relevant exposure to foreign exchange
movements with 58% of debt denominated in USD at the end of
January 2014. The principal amount of its foreign currency debt
is not protected through derivatives, with this risk partially
mitigated by the fact that the price for GVO's products is linked
to the dollar. The company hedges its coupons payments. As of
January 31, 2014, consolidated adjusted debt including
obligations related to leased land was BRL3.1 billion. GVO's debt
is comprised of two international notes issuances (47%); loans
granted by Copersucar (17%); trade related transaction (15%),
land lease agreements according to Fitch's methodology (12%);
financings from the Brazilian Economic Social and Development
Bank (BNDES, 4%); others (5%).

Rating Sensitivities

The failure or delay to roll over its short-term debt in the near
term should place GVO on a difficult financial situation and
negatively pressure the ratings. The Rating Watch Negative may be
removed should significant liquidity improvements occur.

Fitch currently rates GVO and Virgolino Finance as follows:

Virgolino de Oliveira S.A. Acucar e Alcool

-- Foreign and local currency IDRs 'B-';
-- Long term National Scale Rating 'BB+(bra)';
-- BRL100 million Senior Unsecured debentures due 2014
    'BB+ (bra)'.

Virgolino de Oliveira Finance S/A

-- USD300 million Senior Unsecured Notes due 2022 'B-/RR4';
-- Foreign and local currency IDRs 'B-



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


SELECTA GROUP: S&P Assigns Prelim. 'B+' CCR; Outlook Stable
-----------------------------------------------------------
Standard & Poor's Ratings Services assigned its preliminary 'B+'
long-term corporate credit rating to Netherlands-registered food
and beverage vending services provider Selecta Group B.V.
(Selecta).  The outlook is stable.

"At the same time, we assigned our preliminary 'B+' issue rating
to the proposed EUR550 million-equivalent senior secured notes
due 2019, and our preliminary 'BB' issue rating to the proposed
EUR50 million super senior revolving credit facility (RCF), both
to be issued by Selecta.  The preliminary recovery rating on the
senior secured notes is '3', indicating our expectation of
meaningful (50%-70%) recovery in the event of a payment default.
The preliminary recovery rating on the super senior RCF is '1',
indicating our expectation of very high (90%-100%) recovery in
the event of a payment default," S&P said.

"The ratings on Selecta primarily reflect our assessment of the
group's financial risk profile as "highly leveraged" and its
business risk profile as "fair," as our criteria define these
terms.  The ratings also reflect our "favorable" comparable
rating analysis--whereby we review an issuer's credit
characteristics in aggregate.  This results in a one-notch uplift
to Selecta's anchor of 'b' to reach a 'B+' corporate credit
rating," S&P noted.

Selecta is planning to issue EUR820 million-equivalent of new
debt, including a junior payment-in-kind (PIK) facility of EUR220
million.  S&P views this PIK facility as debt under its criteria.
S&P understands that Selecta will use all issuance proceeds to
immediately retire existing term and mezzanine debt of roughly
the same amounts.  Following the execution of this comprehensive
refinancing, Selecta's capital structure will have changed
significantly, with the next term debt maturity in 2019, while
the PIK facility will be due in 2020.

In S&P's understanding, Selecta's private equity shareholder
Allianz Capital Partners (ACP) remains a "committed investor" and
has no predefined exit strategy.  S&P notes that under ACP's
ownership, Selecta has not undertaken significant acquisitions
over the past two years, and its general strategy continues to be
organic growth and tight cost control.  ACP's stance on Selecta
gives us some comfort for the short to medium term, which S&P
reflects in its assumptions of shareholder compensation in its
base-case operating forecast for Selecta.  Nevertheless, S&P
still recognizes that private-equity ownership is equity-
friendly, which therefore constrains Selecta's financial risk
profile, as well as the corporate credit rating.

Selecta's "fair" business risk profile is underpinned by S&P's
assessment of the business and consumer services' industry as
posing an "intermediate" level of risk, as well as Selecta's
"very low" country risk, as the vast majority of its revenue base
is generated in Western and Northern Europe.  Selecta's business
risk profile also reflects:

   -- The group's diversified client base;

   -- Good brand recognition, reflected in a high contract
      renewal rate of over 90% for the past three years;

   -- Adequate scale, with revenues of roughly EUR740 million in
      the financial year ending Sept. 30, 2013;

   -- A wider product mix than close peers, including a variety
      of hot beverages and snacks;

   -- S&P's assessment of Selecta's profitability as "strong,"
      mostly because S&P deems the volatility of its
      profitability to be "low"; and

   -- A flexible cost position, demonstrated by steady EBITDA
      generation through the negative European macroeconomic
      cycle of the past two years.

However, these attributes are partially offset by:

   -- Selecta's exposure to increasingly stiff price and service
      competition from branded coffee chains such as Starbucks
      Coffee Company, Costa, and Pret a Manger;

   -- High reliance on coffee sales, which account for over 50%
      of total revenues;

   -- A relatively narrow geographic focus, as Selecta generates
      about 54% of total sales in France and Switzerland; and

   -- S&P's assessment of "average" historical profitability
      margins compared to other rated business and consumer
      services companies.

Private vending services to large and midsize businesses
contribute most to Selecta's revenues (about 53% of revenues in
financial 2013).  This sector is led by hot drink vending
machines, with impulse-buy machines selling cold drinks and
snacks to complement offerings.  In the private vending services
market, Selecta has leading shares in Switzerland, France, and
Sweden. However, it is important to note that the general vending
market, especially private vending, is highly fragmented.  Public
vending is Selecta's second-largest contributor to revenues
(about 25% of revenues in financial 2013).  This sector is led by
impulse sales and centers on railway stations, airports, and
metro stations.  In this sector, one of Selecta's biggest
clients, representing about 4% of total revenues, recently
renewed its contract with the group for the next 10 years,
thereby removing a fair measure of uncertainty from our base-case
operating scenario.

Selecta has exhibited a relatively steady EBITDA margin in the
mid-teens over the past two years.  S&P forecasts that the
group's Standard & Poor's-adjusted EBITDA margin will slightly
improve to about 17%-18% over the next two years, on the back of
some overhead cost savings, as well as a reduction in the number
of loss-making machines starting in financial 2013.  Capital
expenditure (capex) was low in financial 2013, at slightly under
EUR43 million.  S&P's forecast for Selecta's adjusted EBITDA
margin reflects a significant ramp-up of capex to EUR57 million
in financial 2014 and EUR75 million in financial 2015.  These
increases are mainly earmarked for new machines in the public
vending sector, and significant new investments in Selecta's
expanding partnership with Starbucks to establish self-service
"Corner Cafes" in various offices across Europe and introduce an
"on the go" offering in public spaces.  S&P forecasts that the
Selecta-Starbucks partnership will account for most of Selecta's
top-line and cash flow growth over the next couple of years.
According to S&P's base-case operating forecast, capex as a
percentage of revenues will be nearly 10% in financial 2015,
compared with only 5.8% in financial 2013.

S&P assess Selecta's management and governance as "fair,"
reflecting its experienced management team and clear strategic
plan for organic growth.  S&P assess Selecta's financial policy
as "FS-6", as the group is owned by a private equity sponsor and
has a tolerance for high leverage.  Adjusted debt to EBITDA was
6.9x in financial 2012 and 7.6x in financial 2013.

Selecta uses a relatively modest quantum of operating leases,
which S&P views as debt under its criteria.  S&P adds about EUR40
million of operating lease adjustments to Selecta's adjusted
debt, but also add back an interest and depreciation portion to
EBITDA. These adjustments apply to historical numbers and also to
S&P's forecasts.

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

   -- Stable to positive economic growth in the eurozone
     (European Economic and Monetary Union) in 2014.

   -- Real GDP growth of 2.2% in Switzerland, 0.7% in France, and
      2.6% in Sweden in 2014.

   -- A weakening of 2014 revenues, but a strengthening of 2014
      EBITDA owing to exits from loss-making contracts in Germany
      and the U.K. in 2013.

   -- A revenue decrease of almost 3% in 2014 to EUR720 million,
      followed by revenue growth of 5% in 2015 to about EUR760
      million.

   -- Revenue growth mostly stemming from increasing coffee
      corner installations in offices, growth of volumes under
      the Selecta-Starbucks partnership, and slightly higher same
      machine sales (SMS) thanks to continued economic recovery.

   -- Relatively stable gross margin and selling, general, and
      administrative expenses as a percentage of revenues (50%-
      52%).

   -- An improvement in the group's EBITDA margin toward the high
      teens, driven by marginally higher SMS, the withdrawal of
      loss-making machines, and productivity improvements.

   -- An increase in capex reflecting growth needs, mostly, but
      not limited, to the Selecta-Starbucks partnership.

   -- Adjusted funds from operations (FFO) of about EUR67 million
      in both financial 2014 and 2015.

   -- Adjusted EBITDA of about EUR123 million in financial 2014
      and EUR137 in financial 2015.

   -- No major acquisitions, divestitures, or shareholder
      remuneration over the next two years.

This results in the following credit measures:

   -- Debt to EBITDA of about 7.0x in 2014 and 6.5x in 2015.

   -- FFO to debt of about 8% in both 2014 and 2015.

The stable outlook reflects S&P's view that Selecta will be able
to maintain a leading market share in its three core markets,
enabling it to sustain a high-double-digit adjusted EBITDA margin
in the near term.  S&P thinks the group can achieve this partly
through the full implementation of strategic cost-cutting
initiatives and the renegotiation or withdrawal of loss-making
vending machines in the private vending space.  S&P believes that
cash flow generation in the near term will be aided by an
improvement, albeit modest, of macroeconomic conditions in
Europe, although stiff competition from branded coffee houses
will continue to pressure operating results.  S&P anticipates
that the group's adjusted debt to EBITDA should be about 7x in
financial 2014, with good FFO cash interest coverage of well
above 3x. However, S&P notes that its base-case forecast reflects
no FOCF in financial 2014, mostly due to higher capex and a
significant increase in interest expense, compared with positive
FOCF of EUR46 million in financial 2013.

Downside scenario

S&P could take a negative rating action if Selecta experiences
significant margin pressure, resulting in poorer cash flows than
S&P anticipates, and leading to substantially weaker credit
metrics.  This could occur as a result of a rapid deterioration
in macroeconomic conditions in Europe and/or increased
competition from existing or potential new entrants in the coffee
segment. Downward rating pressure may also stem from debt-funded
acquisitions and/or unanticipated shareholder returns.

Upside scenario

S&P believes that rating upside is limited at this stage due to
Selecta's private equity ownership, which results in a financial
policy assessment of "FS-6."  This score effectively caps
Selecta's financial risk profile at "highly leveraged."  While
S&P do not think that ACP will be an aggressive shareholder in
the near term, its medium- and long-term mandate is equity-
friendly by definition.  Therefore, S&P believes that Selecta's
credit metrics are likely to stay in the "highly leveraged"
financial risk profile category.



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P O R T U G A L
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LUSITANO SME: Fitch Affirms 'CCC' Rating on Class C Notes
---------------------------------------------------------
Fitch Ratings has affirmed Lusitano SME No.1 plc's notes as
follows:

  EUR22 million class A notes affirmed at 'A+sf'', Outlook
  revised to Stable from Positive

  EUR29 million class B notes affirmed at 'AAAsf', Outlook Stable

  EUR24 million class C notes affirmed at 'CCCsf', Recovery
  Estimate (RE) 10%

Lusitano SME No.1 plc is a cash flow securitization of a EUR862.6
million revolving pool of loans granted to Portuguese small and
medium enterprises by Banco Espirito Santo (BES). In accordance
with the transaction documents, the revolving period ended in
February 2010.

KEY RATING DRIVERS

The affirmation reflects the pool's stable performance over the
past year. The transaction has continued deleveraging, with the
class A notes at 2.8% of their original outstanding balance, down
from 8% at last review.

The class A notes have been affirmed at 'A+sf' as their rating is
capped at six notches above the sovereign rating of Portugal
(BB+/Positive/B). The Outlook has been revised to Stable from
Positive to reflect the payment interruption risk from the nearly
depleted reserve fund.

The reserve fund currently stands at EUR32,884, well below its
target level of EUR4.3m. It amortized to its floor level (0.5% of
the original collateral balance) in August 2013 when it was
reduced from its original target level of EUR8.6 million. After
amortization it remained volatile before being almost fully drawn
in May this year.

The class B notes have been affirmed at 'AAAsf' as the tranche is
guaranteed by the European Investment Fund (EIF; AAA/Stable/F1+).

The class C notes have been affirmed at 'CCCsf'. Their credit
enhancement has reduced to 14.6% from 20.8% last year. This is
due in part to the amortized and depleted reserve fund but also
to the EUR7.2 million of currently unprovisioned delinquent loans
(EUR5 million last year). The transaction staggers provisioning
for delinquent loans depending on the number of days they have
been in arrears.

The class C notes are also exposed to concentration risk. The
number of obligors in the pool has decreased to 332 from 545. The
top 10 largest obligors account for 31.5% of the transaction
compared with 20.3% when our last review.

The transaction is currently amortizing sequentially but
amortized pro-rata as recently as February this year. This is
because the conditions under which the notes can amortize
pro-rata are loosely defined. Currently, only the drawn reserve
fund is effecting sequential amortization. Given the reserve
fund's volatility over the life of the transaction, further pro-
rata amortization is a possibility.

Rating Sensitivities

Fitch has run two sensitivity scenarios. 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 B and C notes. The reduction in
the recovery rates resulted in a one-notch downgrade for the
class B notes.



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OLTCHIM SA: Will Not be Shut Down If Privatized
-------------------------------------------------
Irina Popescu at Romania-Insider.com reports that Economy
Minister Constantin Nita said insolvent Romanian state-owned
chemical producer Oltchim SA in Ramnicu Valcea will not be shut
down, and if the privatization set for June 6 fails, the company
will be sold later.

Romania-Insider.com, citing Mediafax, relates that Mr. Nita said
Oltchim should no longer accumulate losses and in order to
accomplish this objective, the company must find financing to
restart one or two production lines.

Romania-Insider.com notes that Oltchim's legal administrator
wants to sell the company's viable assets, debt free, in order to
repay some of the creditors. The sale has already been postponed
some five months as it was supposed to happen in January, as
there were no formal offers for the chemical plant.

The assets were valued at EUR305 million, in December 2013, but
the minimum price for the privatization was set at EUR160
million, the report discloses.

According to the report, the company had a turnover of RON136.2
million (EUR30.2 million) in the first quarter of 2014, up
64.7 percent against the same period of the previous year. It had
losses of RON56.2 million (EUR 12.4 million), down 34.6 percent
year-on-year.

Oltchim is a Romanian chemical producer.  The company has been
under insolvency procedures since January 2013.  This came soon
after the state failed to privatize Oltchim in its first
privatization stage, which was won by media mogul Dan Diaconescu.



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


GLOBEXBANK: Fitch Cuts LT Issuer Default Ratings to 'BB-'
---------------------------------------------------------
Fitch Ratings has downgraded Globexbank's (GB) Long-term Issuer
Default Ratings (IDRs) to 'BB-' from 'BB'. At the same time the
agency has affirmed the Long-term IDRs of the following banks
that also have indirect state ownership: Sviaz-Bank (SB) at 'BB',
Bank Rossiysky Capital (RosCap) at 'B+', Evrofinance Mosnarbank
(EMB) at 'B+' and Novikombank (Novikom) at 'B'. The Outlooks on
GB and SB are Negative. The Outlooks on RosCap and EMB are
Stable, and Positive on Novikom.

KEY RATING DRIVERS: SB, GB and RosCap's IDRS, SUPPORT RATINGS,
SENIOR DEBT RATINGS, NATIONAL RATINGS

SB, GB and RosCap's IDRs reflect their indirect state ownership
and therefore the potential for shareholder support in case of
need. SB and GB are fully owned by Vnesheconombank (VEB,
BBB/Negative), and RosCap is almost wholly owned by the Deposit
Insurance Agency (DIA, not rated). However, the IDRs incorporate
at best a moderate probability of support, given the banks'
limited policy roles and moderate long-term strategic importance
for their respective parents.

The downgrade of GB reflects Fitch's view of a somewhat lower
probability of support from VEB than previously. This factors in
a further significant increase in high-risk exposures at GB,
mostly in real estate development, which also raises concerns
about the bank's corporate governance standards and risk
appetite. In Fitch's view, the bank's higher-risk profile and
significant loss potential could moderately affect VEB's
propensity to provide support in a sufficient amount and/or
timely fashion.

At the same time, GB's and SB's IDRs continue to be driven by the
potential support that the banks could receive, if needed, from
VEB. Fitch's view of potential support for the banks takes into
account (i) the track record of support to date; (ii) potential
reputation risk for VEB and its senior management in case of a
default at GB or SB, in particular given VEB's representation on
the subsidiaries' boards of directors and involvement in
approvals of large exposures; and (iii) limited near-term market
opportunities to sell the banks (although Fitch understands that
VEB could be ready to consider the sale of GB at least, under the
right terms).

The Negative Outlooks on SB and GB reflect that on VEB's IDR.

The affirmation of RosCap's Long-term IDR and other support-
driven ratings reflects the limited probability of external
support for the bank, given its 99.99% ownership by the state-
controlled DIA. In Fitch's view, the DIA and/or other government
bodies may provide liquidity or further moderate capital support
to RosCap, if needed, as long as the bank is state-owned. In
assessing support, Fitch views positively the recent extension of
RosCap's financial recovery plan to at least ten years (subject
to approval of the Central Bank of Russia), suggesting a likely
longer holding period for the DIA and lower near-term risk of
sale to a third party.

However, Fitch's view of potential support is constrained by (i)
the bank's limited strategic value to its shareholder; and (ii)
insufficient capital support to date. RosCap's Fitch core capital
(FCC) ratio was a low 3.4% at end-2013, and the positive impact
of a RUB6.6 billion equity injection (equal to 7.2pps of risk
weighted assets), made by the DIA in May 2014, is likely to be
more than offset by the planned merger with Ellips Bank (RUB9
billion of negative net assets at end-1Q14), a small regional
bank also bailed out by the DIA. Although an additional RUB7
billion of "new-style" Tier-2 subordinated debt (with a loss-
absorption clause) was provided to Ellips by DIA, core capital
will remain very limited.

RATING SENSITIVITIES: IDRS, SENIOR DEBT RATINGS, NATIONAL
RATINGS, SUPPORT RATINGS of SB, GB, RosCap

SB and GB could be downgraded if (i) the Russian Federation
(BBB/Negative), and hence VEB, are downgraded; (ii) timely
support for either bank is not forthcoming in case of need; or
(iii) in Fitch's view, a sale of either bank becomes
significantly more likely than currently perceived.

An upgrade of either bank is currently viewed as unlikely.
However, the ratings could stabilize at their current levels if
the Outlooks on Russia and VEB were revised to Stable. GB's
ratings could be upgraded back to the level of SB if the bank
de-risks its balance sheet and improves its corporate governance,
and Fitch views these changes as sustainable. The rating
differential between VEB and SB/GB could also narrow if the banks
gain significant policy roles and VEB affirms their importance
for the long-term implementation of its development mandate.

RosCap's IDR could be upgraded by one notch if the DIA
demonstrates its commitment to support the bank with sufficient
recapitalization, which would sustain the bank's solvency at a
reasonable level.

KEY RATING DRIVERS: ALL BANKS' VIABILITY RATINGS (VR)

The banks' VRs benefit from help with business origination and
relative stability of funding, which the banks derive as a result
of their indirect state ownership. However, the VRs (with the
exception of EMB) also reflect weaknesses in corporate
governance, significant risk of further asset impairment and
tight capital - the latter the result of recent rapid growth and
modest pre-impairment profitability.

KEY RATING DRIVERS AND SENSITIVITIES: SB's AND GB's VRs

The VRs of SB (b) and GB (b-) are constrained by the banks' tight
capitalization (in particular at SB), modest profitability, high
concentrations on both sides of the balance sheet and asset
quality concerns (particular at GB). However, the VRs are
supported by the banks' so far comfortable liquidity. GB's lower
VR is driven by the large volume of higher-risk non-core assets,
and corporate governance concerns related to the origination of
these exposures.

Capitalization is weak at both banks with FCC ratios standing at
7.8% (SB) and 8.0% (GB) at end-2013. Regulatory total capital
ratios are supported by subordinated debt from VEB, but were
still a modest 11.7% (SB) and 11.5% (GB) at end-1Q14. Capital
weakness is aggravated by under-provisioning of existing problem
loans at SB, large construction and real estate exposures at GB
and weak internal capital generation at both banks. VEB's near-
term recapitalization plans for both banks include conversion of
RUB10 billion subordinated debt to equity for SB and a new RUB5
billion subordinated loan for GB.

GB's total commercial real estate exposure was around RUB83bn at
end-2013, or 3.2x FCC, Fitch estimates. This includes RUB45bn of
loan exposures comprising less risky infrastructure construction
projects and financing of completed properties with low loan-to-
value ratios. Higher risk exposures include real estate mutual
funds and properties of development company RGI (consolidated in
GB's IFRS accounts) that jointly amounted to a significant 1.5x
FCC, exposing the bank to considerable market risk. SB's non-
performing loans (NPL; 90+ days overdue) ratio stood at 8.1% at
end-2013, mainly driven by a default on the bank's largest
exposure (specific reserve 14% due to management's recovery
expectations). GB's NPL ratio was a moderate 2.8%, but this does
not take into account the bank's other high risk assets.

Both SB and GB have short-term lumpy funding dominated by state-
owned companies and VEB, and -- in the case of GB -- significant
wholesale market borrowings. However, liquidity positions are
reasonable, in part due to available lines from VEB.

SB's and GB's VRs could be downgraded further if asset quality
problems and non-core assets continue to accumulate and
capitalization remains tight. Reductions in high-risk exposures,
improved asset quality and profitability coupled with stronger
capital cushions could result in upgrades.

KEY RATING DRIVERS AND SENSITIVITIES: ROSCAP'S VR

RosCap's 'b-' VR reflects the bank's weak capital position, high
exposure to the development and real estate sector (equal to an
estimated 2.3x current FCC), its recent rapid growth in both
corporate and retail lending, and its funding of generally
longer-term assets with short-term deposits. However, the rating
also considers the bank's limited wholesale debt, currently
adequate liquidity and the potential for improving scale to
gradually support internal capital generation.

The Rating Watch Negative (RWN) on RosCap's VR reflects risks
resulting from the anticipated merger with Ellips Bank, which
will likely result in RosCap's FCC ratio returning to a low
level. However, regulatory capitalization will be supported by
gradual creation of statutory reserves against Ellips' problems
assets, as well as the new tier 2 instrument.

The RWN could be resolved with a downgrade if the merger with
Ellips leads to significant deterioration of RosCap's
capitalization. Conversely, if the merger is abandoned, or if
capitalization is supported sufficiently by further injections by
the DIA, the VR could be affirmed.

KEY RATING DRIVERS - EMB

The affirmation of EMB's Long-term IDR, and its removal from
Rating Watch Positive (RWP), reflects continued delays with
ratification of an intergovernmental agreement, signed by Russia
and Venezuela (B/Negative) in 2011, which would transform the
bank into an international financial institution (IFI), equally
owned by the two governments. The eventual transformation of the
bank could result in an upgrade to the 'BB' category.
EMB's ratings are driven by the bank's standalone profile, as
reflected in its 'b+' VR. The VR considers the bank's limited and
concentrated franchise, moderate profitability and volatile
funding base. However, the rating also factors in the bank's
currently solid capitalization, ample liquidity and sound asset
quality. EMB's credit risks stem primarily from the securities
book (46% of assets at end-1Q14), loan book (12%) and off-balance
sheet exposures (equal to 20% of assets). These are of mostly
reasonable quality, and Venezuelan exposures are manageable
relative to the bank's capital. NPLs and restructured loans were
a low 2.3% and 1.7% of gross loans, respectively, at end-1Q14
while the bank's regulatory capital ratio of 29.5% provided a
buffer against market and credit risks.

EMB's balance sheet has been volatile due to lumpy short-term
placements by a limited number of Venezuelan customers,
reflective of EMB's focus on trade finance and settlement
operations. However, these are prudently covered with liquid
assets.

EMB is currently owned by Gazprombank (BBB-/Negative; 25% plus
one share), VTB Bank (not rated; 25% plus one share) and the
National Development Fund of Venezuela (50% minus two shares).
EMB's Support Rating of '5' and Support Rating Floor of 'No
Floor' reflect Fitch's view that support from the bank's
shareholders and/or the Russian/Venezuelan authorities, while
possible, cannot be relied upon.

RATING SENSITIVITIES - EMB

The change in EMB's status to an IFI with 50% direct Russian
state ownership would likely lead to an upgrade of its IDRs.
However, the level of the ratings would depend on the ratings of
Russia and Venezuela, Fitch's assessment of the importance of the
bank's policy role and the extent of the shareholders' capital
commitments to the bank.

Upside potential for EMB's VR is currently limited given the
bank's narrow franchise and weak performance. A significant
increase in leverage and/or asset quality deterioration could
result in downward pressure on the VR.

KEY RATING DRIVERS - NOVIKOM

The affirmation of Novikom's ratings reflects the bank's narrow
franchise, resulting in high concentrations on both sides of the
balance sheet, and weak capitalization in light of the bank's
growth plans. Positively, the ratings also reflect the currently
reasonable reported asset quality and adequate liquidity,
supported by funding from state-owned companies.

The Positive Outlook continues to reflect the potential benefits
of higher cooperation with Russian state-owned corporation
Rostechnologii (Rostec, not rated), especially in light of the
latter having increased its stake in the bank to 49% from 17.6%
in 2Q14. Rostec, a holding company consolidating stakes in mainly
technology and defence sector companies, plans to ultimately
consolidate a majority stake in Novikom, possibly by end-2014. At
present, Fitch does not factor support from Rostec into Novikom's
ratings due to the minority shareholding, the limited strategic
importance of the bank for Rostec, and limited visibility on
Rostec's credit profile and its plans for Novikom.

Novikom's reported loan quality is reasonable with NPLs and
restructured loans each comprising less than 1% of loans.
However, the loan book is highly concentrated, with the 25
largest groups of borrowers making up 66% of end-2013 loans,
equal to 6.8x FCC. Fitch considers the bank's exposures to state-
owned borrowers from the technology and defence industry (32% of
end-2013 loans) as relatively low risk due to the sector's
strategic importance and the potential of state support. However,
loans extended to private companies (68% of the portfolio) are of
somewhat higher risk, in particular given their long tenors and
the generally weak financials of the borrowers.

The bank's FCC ratio was a low 6.45% at end-2013, but Fitch
estimates that this will have increased by about 3ppts as a
result of the conversion of subordinated debt into equity in May
2014. At end-5M14, the total regulatory capital ratio was 12.5%,
allowing the bank to additionally reserve 5% of gross loans
before the ratio would have fallen to the 10% minimum level; pre-
impairment profitability (equal to 3.6% of average loans in 2013)
provides a moderate additional buffer. The liquidity cushion is
moderate compared with the bank's significant near-term wholesale
repayments, but the liquidity profile is supported by the bank's
stable funding from predominantly state-owned companies.

RATING SENSITIVITIES - NOVIKOM

The bank's Long-term IDRs could be upgraded if Rostec acquires a
majority stake in Novikom and demonstrates a strong commitment to
support the bank's development, and Fitch is able to reliably
assess the shareholder's ability to provide support. The ratings
could also be upgraded if the bank's standalone metrics improve.
The ratings could be affirmed and the Outlook revised back to
Stable if Rostec does not acquire a controlling stake or there is
no visible increase in cooperation between the bank and Rostec.

The ratings could be downgraded in case of a marked deterioration
in asset quality or capital erosion, or if the bank's funding
base suffers as a result of lesser cooperation with Rostec.

The rating actions are as follows:

SB

  Long-term foreign and local currency IDRs: affirmed at 'BB';
  Negative Outlook

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

  Viability Rating: affirmed at 'b'

  Support Rating: affirmed at '3'

  National Long-term rating: affirmed at 'AA-(rus)'; Stable
  Outlook

  Senior unsecured debt: affirmed at 'BB'

  Senior unsecured debt National rating: affirmed at 'AA-(rus)'

GB

  Long-term foreign and local currency IDRs: downgraded to 'BB-'
  from 'BB'; Negative Outlook

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

  Support Rating: affirmed at '3'

  Viability Rating: affirmed at 'b-'

  National Long-term rating: downgraded to 'A+(rus)' from 'AA-
  (rus)'; Stable Outlook

  Senior unsecured debt: downgraded to 'BB-' from 'BB'

  Senior unsecured debt National rating: downgraded to 'A+(rus)'
  from 'AA-(rus)'

RosCap

  Long-term foreign currency IDR: affirmed at 'B+'; Stable
  Outlook

  Long-term local currency IDR: assigned at 'B+'; Stable Outlook

  Short-term IDR: affirmed at 'B'

  National Long-term Rating: affirmed at 'A-(rus)'; Stable
  Outlook

  VR: 'b-'; placed on RWN

  Support Rating: affirmed at '4'

  Support Rating Floor: affirmed at 'B+'

  Senior unsecured debt: affirmed at 'B+'/'A-(rus)'; Recovery
  Rating 'RR4'

EMB

  Long-term foreign and local currency IDRs: affirmed at 'B+',
  removed from RWP, Stable Outlook

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

  National Long-Term Rating: affirmed at 'A-(rus)', removed from
  RWP, Stable Outlook

  Viability Rating: affirmed at 'b+'

  Support Rating: affirmed at '5', removed from RWP

  Support Rating Floor: affirmed at 'No Floor', removed from RWP

  Senior unsecured debt: affirmed at 'B+(EXP)', removed from RWP;
  Recovery Rating 'RR4(EXP)'; affirmed at 'A-(rus)(EXP)', removed
  from RWP

Novikom

  Long-term foreign and local currency IDRs affirmed at 'B';
  Outlook Positive

  Short-term foreign-currency IDR affirmed at 'B'

  National Long-term Rating affirmed at 'BBB(rus)'; Outlook
  Positive
  Viability Rating affirmed at 'b'

  Support Rating affirmed at '5'

  Support Rating Floor affirmed at 'No Floor'

  Senior debt assigned at 'B'/'BBB(rus)'/'RR4'



===============
S L O V E N I A
===============


MERCATOR: Inks Restructuring Deal with Creditor Banks
-----------------------------------------------------
STA reports that Mercator announced on Tuesday it had signed a
deal with creditor banks and leasing institutions on extensive
financial restructuring which would allow it to implement its
strategy for turning around operations independently.

As reported by the Troubled Company Reporter-Europe on Sept. 19,
2013, Reuters related that Mercator appointed advisers to help
with a EUR1 billion debt restructuring.  The restructuring is a
condition of a proposed sale of a 53.12% stake in Mercator to
Croatian food and retail group Agrokor, Reuters disclosed.

Mercator is Slovenia's largest grocer.



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S P A I N
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TDA CAM 4: Fitch Cuts Rating on Class C Tranche to 'CCCsf'
----------------------------------------------------------
Fitch Ratings has downgraded two junior tranches of FTPYME TDA
CAM 4, FTA and affirmed the rest, as follows:

  EUR94.9 million Class A2: affirmed at 'BBBsf''; Outlook revised
  to Stable from Negative

  EUR76.7 million Class A3(CA): affirmed at 'BBB+sf' ; Outlook
  Stable

  EUR66 million Class B: downgraded to 'CCCsf' from 'Bsf'; RE
  (Recovery Estimate) 65%

  EUR38 million Class C: downgraded to 'CCsf' from 'CCCsf'; RE 0%

  EUR29.3 million Class D: affirmed at 'Csf'; RE 0%

FTPYME TDA CAM 4, FTA is a granular cash flow securitization of a
static portfolio of secured and unsecured loans granted to
Spanish small- and medium-sized enterprises (SMEs) by Banco de
Sabadell.

Key Rating Drivers

The downgrades are a result of increased defaults in the
underlying portfolio of SMEs. Between March 2013 and March 2014,
the cumulative level of gross defaults in the portfolio rose to
7.21% of the initial portfolio balance (EUR1.5 billion) from
5.59%. As a result of the increased defaults, the credit
enhancement available to the class B notes has fallen to 6.85%
from 9.95% during the same period. Additionally, the transaction
includes a deferral trigger for class B interest once cumulative
gross defaults rise above 8%. If this trigger is breached, the
interest due on the class B notes will rank junior to principal
due on the senior notes and will remain unpaid until the
principal deficiency ledger (PDL) has been reduced to zero. The
PDL balance currently is EUR20.5 million.

Credit enhancement on the class C notes has fallen to -8.04%
From -1.66% in March 2013. Given the material deterioration in
credit protection available to these notes, default is viewed as
probable and the notes were downgraded to 'CCsf'.

The rating of the class A2 notes was affirmed as amortization of
the senior notes offset the defaults in the underlying portfolio,
with EUR31.6 million repaid in the last 12 months. As a result
the credit enhancement available to the notes rose to 32.72% from
30.11%. In addition to the growth in credit enhancement, 90
delinquencies in the portfolio (which give an indication of the
credit quality of the performing portfolio) fell to 3.32% from
8.31%. As a result, the Outlook was revised to Stable from
Negative.

The rating on the class A3(CA) notes is driven by the Kingdom of
Spain (BBB+/Stable/F2), which guarantees the ultimate payment of
principal and interest on the notes.

The class D notes will be repaid through the proceeds of the
reserve fund. As the reserve fund has been depleted and is
unlikely to be replenished, the notes were affirmed at 'Csf' as
default is viewed as inevitable.

As the transaction's reserve fund has been depleted to zero and
the servicer of the underlying SME loans is unrated, the
transaction has a material exposure to payment interruption risk.
As a result of this, the ratings of the notes have been capped at
'Asf'.

RATING SENSITIVITIES

Applying a 1.25x default rate multiplier or a 0.75x recovery rate
multiplier to all assets in the portfolio would result in a
downgrade of one notch on the notes.


BANCO SANTANDER: Fitch Raises Preference Shares Rating to 'BB'
--------------------------------------------------------------
Fitch Ratings has upgraded Banco Santander, S.A.'s (Santander)
and Banco Bilbao Vizcaya Argentaria's (BBVA) Long-term Issuer
Default Rating (IDR) to 'A-' from 'BBB+' and Viability Rating
(VR) to 'a-' from 'bbb+'.

At the same time, the agency has affirmed the two banks' Short-
term IDRs at 'F2', Support Ratings (SR) at '2' and Support Rating
Floor (SRF) at 'BBB'.  The Outlook on their Long-term IDR is
Stable.

The banks' IDRs are one notch above the Spanish sovereign rating
in line with Fitch's criteria "Rating Financial Institutions
above the Sovereign".  Fitch upgraded Spain's sovereign rating on
April 25, 2014, and the two banks' upgrade reflect Fitch's view
of their standalone credit profiles.

KEY RATING DRIVERS - IDRS, VRS AND SENIOR DEBT RATINGS

The IDRs and senior debt ratings of Santander and BBVA are driven
by their stand-alone creditworthiness, as expressed by their VRs.
The upgrade of their VRs primarily reflects the upgrade of
Spain's sovereign rating and related signs of macro-economic
improvements in the domestic market.  Continued diversification
benefits, especially for Santander, support these banks' ratings
at one notch above the sovereign rating.

In particular these two banks' ratings benefit from solid retail
franchises in a number of European and Latin American countries
and in the US.  Santander and BBVA generated 14% and 30%,
respectively, of their ordinary attributable profits from Spain
(excluding their run-off real estate units) in 1Q14 while Spanish
loans accounted for 23% and 52% of the total, respectively.

Their diversified footprints spread risks and have proven key in
supporting the resilience of earnings generation and loss
absorption capacity at times of stress.  Fitch also considers the
two banks' continued capacity to access wholesale markets across
different jurisdictions, which together with their self-funded
bank subsidiary approach, has protected their funding and
liquidity.  Benefits of international diversification include,
but are not limited to, the ability of subsidiaries to upstream
dividends, financial flexibility resulting from potential
disposal or listing of stakes in subsidiaries and, in some cases,
fungibility of liquidity and capital.

Despite Santander's and BBVA's international diversification
Fitch considers that the banks' risk profiles remain
significantly correlated with that of the sovereign and as part
of its analysis Fitch also takes into account the standalone
financial profile of the Spanish legal entity to which the
ratings are assigned.  In Fitch's view, this correlation is,
among other factors, reflected in the banks' domestic performance
and asset quality, which have proven sensitive to the economic
environment.  Funding access, stability and costs are also
typically influenced by broad perceptions of sovereign risk.

The upgrade also reflects Fitch's view that Santander's and
BBVA's Spanish business and risk profiles should benefit from
Spain's improved creditworthiness, economic outlook and financing
conditions given their leading domestic retail franchises.
Earnings at the unconsolidated bank level should also continue to
benefit from regular and substantial dividend contributions from
performing foreign bank subsidiaries.

Santander's and BBVA's retail banking company profile is
reflected by the fact that more than 60% of their revenues is
derived from this business line, which despite the crisis has
proven fairly resilient, supported by their critical mass in the
core markets in which they operate.  This, together with their
cost control-oriented corporate culture, has enabled both banks
to absorb high impairment charges in the last three years,
notably in Spain, without reporting consolidated operating
losses.  Fitch expects profitability in 2014 to benefit from
generally better GDP growth prospects in many of the countries
where they operate, including Spain.

Asset quality deterioration in Spain has driven up impaired loans
(NPL) ratios, particularly at BBVA given its larger share of
loans in Spain relative to Santander, which nevertheless continue
to compare fairly well with their international peer group.
Fitch- adjusted NPL ratio was 5.9% at Santander and 7.6% at BBVA
at end-2013.  Lower NPL inflows since 4Q13 and stabilizing loan
volumes should help ease asset quality pressure in Spain.  NPL
reserve coverage has consistently remained around 60%, which
Fitch views as adequate for their risk profiles.

In Fitch's opinion, BBVA's Fitch core capital (FCC)/weighted
risks ratio is sound, amounting to 10.4% at end-2013.  At 9.2%,
Fitch views Santander's capitalization at the lower end of the
international peer group range, largely held back by goodwill
from acquisitions.

Capitalization and leverage have a high influence on Santander's
VR, and our assessment of capitalization takes into account the
bank's high flexibility to generate capital through retained
earnings and its fairly sound balance sheet leverage.  The
transitional Basel III CET 1 ratio stood at 10.6% for Santander
and 10.8% for BBVA at end-1Q14.  Santander's and BBVA's capital
is also supported by their well-capitalized main subsidiaries and
by their fairly low-risk retail focus.

Santander and BBVA are primarily funded by deposits in their core
markets.  The net loans/deposits ratio stood at 116% at Santander
and 117% at BBVA at end-2013.  Loan deleveraging in mature
markets and a proven ability to access capital market funding in
turbulent times have protected the banks' sound funding and
adequate liquidity profiles.  While the banks hold ample
unencumbered assets at the consolidated level, liquidity buffers
at the unconsolidated bank level are weaker, particularly at
Santander. However, refinancing risks are limited in view of
well- distributed debt maturities.  Santander's and BBVA's
funding profiles are also supported by subsidiaries being locally
funded.

RATING SENSITIVITIES - IDRS, VRS AND SENIOR DEBT RATINGS

The Stable Outlook reflects Fitch's expectation that Santander's
and BBVA's overall financial and credit profile will remain
stable.

Upside rating potential for both banks may be supported by a
potential further upgrade of the Spanish sovereign rating as long
as this is driven by further improvements in macroeconomic
indicators, which should eventually benefit the unconsolidated
banks' profitability and credit risk profiles.  This factor is
somewhat more relevant for Santander than for BBVA given the
former's higher exposure to highly rated sovereigns.

It should be noted that a sovereign upgrade alone would not
automatically result in an upgrade of these banks' ratings.  An
upgrade of Santander's ratings would likely be contingent on
further improvements in capitalization at the consolidated level.
An upgrade of BBVA's ratings would be contingent on a sovereign
upgrade accompanied by an improved operating environment in the
main countries in which it operates as well as by improved asset
quality.

While currently not expected by Fitch, potential drivers for a
downgrade may include a downgrade of Spain's sovereign rating;
marked deterioration of group asset quality that could put
significant pressure on earnings and capital and a reduced
capacity to upstream dividends.  A prolonged inability to
competitively access wholesale markets or a marked deterioration
of credit risk and capitalization at the respective
unconsolidated banks would also put pressure on ratings.

KEY RATING DRIVERS AND SENSITIVITES - SUPPORT RATING AND SUPPORT
RATING FLOOR

The 'BBB' SRFs of Santander and BBVA reflect Fitch's opinion that
the Spanish authorities show a high propensity to support the
country's largest banks given their domestic systemic importance.
The SR and SRF are sensitive to a weakening of the assumptions
around Spain's ability and propensity to provide timely support
to the group.  Of these, the greatest sensitivity is to progress
made in implementing bank resolution legislation, which is likely
to result in the downgrade of the two banks' SRs to '5' and the
revision of their SRFs to 'No Floor', most likely in late 2014 or
1H15.

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

Subordinated debt and other hybrid capital instruments issued by
Santander, BBVA and their issuing vehicles are all notched down
from their VRs 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 any change in the VRs of
Santander and BBVA.

KEY RATING DRIVERS AND SENSITIVITIES - SUBSIDIARIES

Santander Consumer Finance (SCF) is 100% owned by Santander and
benefits from being an integral part of the group as it manages
most of the group's consumer finance operations.  Fitch regards
SCF as a core subsidiary and, as such, aligns its Long- and
Short-term IDRs with Santander's.  SCF's IDRs and debt ratings
are sensitive to the same factors that might drive a change in
Santander's IDRs.

The rating actions are as follows:

Santander
  Long-term IDR upgraded to 'A-' from 'BBB+'; Outlook Stable
  Short-term IDR affirmed at 'F2'
  VR upgraded to 'a-' from 'bbb+'
  Support Rating affirmed at '2'
  Support Rating Floor affirmed at 'BBB'
  Senior unsecured debt long-term rating and certificates of
   deposit upgraded to 'A-' from 'BBB+'
  Senior unsecured debt short-term rating, commercial paper and
   certificate of deposits affirmed at 'F2'
  Market-linked senior unsecured securities: affirmed at
   'BBB+emr'
  Subordinated debt upgraded to 'BBB+' from 'BBB'
  Preference shares upgraded to 'BB' from 'BB-'

Santander International Debt, S.A. Unipersonal
  Senior unsecured debt long-term rating upgraded to 'A-' from
   'BBB+'
  Senior unsecured debt short-term rating affirmed at 'F2'
  Market-linked senior unsecured securities upgraded to 'A-emr'
   from 'BBB+emr'

Santander International Preferred, S.A. Unipersonal
  Preference shares upgraded to 'BB' from 'BB-'

Santander Commercial Paper, S.A. Unipersonal
  Commercial paper affirmed at 'F2'

Santander Finance Capital, S.A. Unipersonal
  Preference shares upgraded to 'BB' from 'BB-'

Santander Finance Preferred, S.A. Unipersonal
  Preference shares upgraded to 'BB' from 'BB-'

Santander Financial Issuance Ltd.
  Subordinated debt upgraded to 'BBB+' from 'BBB'

Santander Perpetual, S.A. Unipersonal
  Upper Tier 2 upgraded to 'BBB-' from 'BB+'

Santander US Debt, S.A.U.
  Senior unsecured debt long-term rating upgraded to 'A-' from
  'BBB+'

Emisora Santander Espana, S.A.U.
  Senior unsecured debt long-term rating programme assigned at
   'A-'
  Senior unsecured debt short-term rating programme assigned at
   'F2'

Santander International Products PLC
  Senior unsecured debt long-term rating upgraded to 'A-' from
  'BBB+'

SCF
  Long-term IDR upgraded to 'A-' from 'BBB+'; Outlook Stable
  Short-term IDR affirmed at 'F2'
  Support Rating upgraded to '1' from '2'
  Senior unsecured debt long-term rating upgraded to 'A-' from
   'BBB+'
  Senior unsecured debt short-term rating and commercial paper
   affirmed at 'F2'
  Subordinated debt upgraded to 'BBB+' from 'BBB'

BBVA
  Long-term IDR upgraded to 'A-' from 'BBB+'; Outlook Stable
  Short-term IDR affirmed at 'F2'
  VR upgraded to 'a-' from 'bbb+'
  Support Rating affirmed at '2'
  Support Rating Floor affirmed at 'BBB'
  Senior unsecured debt long-term rating upgraded to 'A-' from
   'BBB+'
  Senior unsecured debt short-term rating and commercial paper
   affirmed at 'F2'
  Market-linked senior unsecured securities upgraded to 'A-emr'
   from 'BBB+emr'
  Subordinated debt upgraded to 'BBB+' from 'BBB'
  Preference shares upgraded to 'BB' from 'BB-'

BBVA Capital Finance, S.A. Unipersonal
  Preference shares upgraded to 'BB' from 'BB-'

BBVA International Preferred, S.A. Unipersonal
  Preference shares upgraded to 'BB' from 'BB-'

BBVA Senior Finance, S.A. Unipersonal
  Senior unsecured debt long-term rating upgraded to 'A-' from
   'BBB+'
  Senior unsecured debt short-term rating and commercial paper
    affirmed at 'F2'

BBVA U.S. Senior, S.A. Unipersonal
  Senior unsecured debt long-term rating upgraded to 'A-' from
   'BBB+'
  Senior unsecured debt short-term rating and commercial paper
   affirmed at 'F2'

BBVA Subordinated Capital, S.A. Unipersonal
  Subordinated debt upgraded to 'BBB+' from 'BBB'



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


ALL3MEDIA FINANCE: S&P Puts 'B' Corp. Credit Rating on Watch Pos.
-----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B' long-term
corporate credit rating to All3Media Finance Ltd. and placed the
rating on CreditWatch with positive implications.

At the same time, S&P assigned its 'B' issue rating to the GBP290
million first-lien term loan maturing in 2021.  The recovery
rating on this loan is '3', indicating S&P's expectation of
meaningful (50%-70%) recovery prospects in the event of a payment
default.  S&P also placed the issue ratings on CreditWatch
positive.

In addition, S&P assigned its 'B+' preliminary long-term
corporate credit rating to DLG Acquisition Ltd.  The outlook on
this entity is stable.

Finally, S&P assigned its preliminary issue rating of 'B-' to the
proposed EUR100 million second-lien term loan maturing in 2022.
The recovery rating on this loan is '6', indicating S&P's
expectation of negligible recovery (0%-10%) if payment default
occurred.

The preliminary ratings and the resolution of the CreditWatch
placement are subject to the successful completion of the
acquisition of All3Media by DLG, which S&P understands is likely
to occur toward the end of the third quarter of 2014.

The ratings on All3Media reflect S&P's view of its "highly
leveraged" financial risk profile and "fair" business risk
profile.

S&P assess All3Media's financial risk profile as "highly
leveraged" pre-acquisition.  Based on the current capital
structure, S&P estimates that All3Media runs a Standard & Poor's-
adjusted debt-to-EBITDA ratio in excess of 12x.  This ratio
calculation includes the recently borrowed GBP290 million first-
lien term loan, GBP516 million of subordinated preference
certificates (SPCs) held by Permira and existing management,
GBP26 million of deferred considerations, and the net present
value of GBP40 million operating leases.

S&P understands that, post-acquisition of All3Media by DLG, DLG's
capital structure will include not only the GBP290 million first-
lien term loan (which will be moved up to DLG, but also an
additional EUR100 million second-lien term loan, GBP123 million
of shareholder loans (SHLs), and GBP57 million new equity.
Meanwhile, the GBP516 million of subordinated preference
certificates (SPCs) currently sitting at the level of All3Media
Finance Ltd. will be entirely redeemed to the previous owners of
All3Media as part of the acquisition.

Pro forma for the acquisition, and according to S&P's criteria
for non-common equity financing, the GBP123 million SHLs would be
treated as equity.  S&P estimates that DLG will run a Standard &
Poor's-adjusted debt-to-EBITDA ratio of 6.1x and an adjusted
funds from operations (FFO)-to-debt ratio of 9.6%.  These ratios,
combined with modest but positive free operating cash flow (FOCF)
generation, are consistent with the "highly leveraged" financial
risk assessment and an overall 'b' anchor rating and a 'b' stand-
alone credit profile.

The notch up to a 'B+' issuer credit rating reflects, in line
with S&P's group rating methodology, its assessment that DLG will
become a "moderately strategic" subsidiary for its new owners.
Based on S&P's view that DLG is unlikely to be sold in the near
term by its new shareholders, it is likely to receive support
from the group should it fall into financial difficulty.

S&P's assessment of All3Media's "fair" business risk reflects the
group's leading position in the U.K., the ongoing growth in the
U.S. and Germany, and its balanced mix of more than 300
television programs annually from 18 independent production
studios.  S&P expects the company's growth momentum to continue
due to the increased revenue generation from recommissioned shows
with higher margins, as well as growth in the TV series
production market.  These positives are tempered by All3Media's
sole exposure to the TV program production market and its
relatively modest size. Moreover, in S&P's view, All3Media
operates in a highly competitive and fragmented industry.

S&P has revised its GDP projection for the U.K. upward on faster
growth momentum than it had previously anticipated.  S&P now
projects 2.7% real GDP growth this year.  Also, based on the
belief that the fundamentals of the economies have improved, S&P
assumes 2014 growth rates for the U.S. and Germany to be 2.5% and
1.8%, respectively.  Further, S&P assumes a continued increase in
the demand for TV program production.

S&P's base case, pro forma for the successful completion of the
acquisition, assumes:

   -- Flat revenue growth in financial 2014 due to being at an
      early stage of the drama series production cycle.

   -- Fiscal 2015-2016 revenue to increase by 4% due to newly
      commissioned shows and larger digital income stream from
      secondary market opportunities.

   -- Slightly increasing EBITDA margin due to larger production
      of higher-margin recommissioned shows.

   -- Capital expenditures (capex) of GBP3 million-GBP4 million
      in fiscal 2014 and about GBP4 million in fiscal 2014-2015.

   -- Purchase of subsidiaries (partly deferred considerations)
      of GBP25 million-GBP30 million in fiscal 2014.  This amount
      is assumed to steadily decrease in the subsequent years.

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

   -- Standard & Poor's-adjusted debt to EBITDA of 6.1x and FFO
      to debt of 9.6% at the end of financial 2014.

   -- EBITDA cash interest coverage of about 3.0x in financial
      2014.

   -- Positive FOCF in the mid-single-digit million range in
      fiscal 2014.

S&P intends to resolve the CreditWatch on All3Media Finance Ltd.
after the proposed acquisition is completed.  Based upon the
preliminary terms of the proposed transaction, S&P expects to
raise the corporate credit rating on All3Media to 'B+'.  At that
time S&P would also raise the issue-level ratings on the first-
lien term loan to 'B+'.

Under this scenario, S&P also expects to review the preliminary
'B+' rating on DLG Acquisition Ltd. and revise it from
preliminary to final and assign a stable outlook.

If the acquisition did not take place, a possibility S&P now sees
as unlikely, it would withdraw the rating on DLG Acquisition Ltd.
and new issue-level ratings on the second-lien term loan, and S&P
would expect to affirm the existing 'B' corporate credit rating
on All3Media Finance Ltd. and its first-lien term loan.


BIBBY OFFSHORE: Moody's Assigns '(P)B2' CFR; Outlook Stable
-----------------------------------------------------------
Moody's Investors Service has assigned a provisional (P)B2
corporate family rating to Bibby Offshore Holdings Ltd.
Concurrently, Moody's has assigned a provisional (P)B2 rating to
the proposed GBP175 million senior secured notes due 2021, to be
issued by Bibby Offshore Services Plc, a wholly owned subsidiary
of Bibby Offshore, and subsequently on-lent to Bibby Offshore.
The ratings outlook is stable. This is the first time Moody's has
assigned a rating to Bibby Offshore.

The proceeds from the notes will be used to repay existing debt,
to pay a dividend to its parent company, pay fees and expenses,
and provide cash pre-funding for the company's capital
expenditure and working capital requirements.

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

Company Profile

Bibby Offshore is a leading provider of offshore and subsea
services in the UK North Sea where it commenced operations in
2003. The company offers an integrated service portfolio that
encompasses project management, engineering, procurement and
subsea intervention services to build, maintain and extend the
life of subsea oil fields. Its clients include independent oil
companies, larger oil majors as well as a range of national oil
companies. Bibby Offshore's services are utilized by its
customers primarily during the operational phase of the subsea
oilfield exploration and production lifecycle.

Bibby Offshore is wholly owned by Bibby Line Group Limited,
through common equity.

Ratings Rationale

The (P)B2 rating reflects, among other factors: (1) the company's
relatively high leverage (as adjusted by Moody's); (2) its
geographical concentration, small size, and recent rapid growth
in a market with significantly larger global competitors; (3) the
cyclicality of the oilfield services industry in which it
operates; and (4) its high capital expenditure and investment
needs.

However, the rating is also supported by: (1) the current
favorable market dynamics in the UK North Sea market for subsea
services; (2) the company's position as a leading regional
competitor with control of key operating assets; (3) its project
track record and higher exposure to less risky reimbursable-type
contracts; and (4) its ability to scale its investment spend to
changing demand.

Pro-forma for the transaction, Bibby Offshore's debt/EBITDA
adjusted by Moody's will be around 4x, including an adjustment
for the company's operating leases and charter costs. However, it
has an adequate liquidity profile with pro-forma unrestricted
cash over-funding at closing of approximately GBP49 million, in
addition to access to a new committed GBP20 million super senior
revolving credit facility with good financial covenant headroom
which Moody's expect to be undrawn at closing. The CFR is
adequately positioned at the (P)B2 level.

Outlook

The stable outlook reflects Moody's expectation that Bibby
Offshore will maintain its current operating performance, with
continued good vessel utilization and stable day rates, and that
industry conditions remain favorable. Moody's also expects that
the company will continue with its steady organic growth strategy
and make no material debt-funded acquisitions. In addition,
Moody's assumes that, following this transaction, the company
will adhere to its financial policy of making no dividends or
other shareholder distributions that would re-leverage the
business from its opening level.

What Could Change The Rating Up

Whilst the company is adequately positioned in the B2 category,
in view of its relatively recent rapid growth, there is unlikely
to be near-term upward ratings pressure until the company has
established a longer track record of profitability at around the
current level. However, there could be positive pressure if
Moody's-adjusted debt/EBITDA ratio falls below 3.5x on a
sustained basis and the company maintains a Moody's-adjusted
EBITDA margin of around 40%, whilst generating positive free cash
flow and keeping a solid liquidity profile. Any potential upgrade
would also include an assessment of market conditions.

What Could Change The Rating Down

Moody's could downgrade the ratings if any of the conditions for
maintaining a stable outlook are not met, or if the company's
liquidity profile or debt protection ratios deteriorate as the
result of a weakening of its operational performance.
Quantitatively, Moody's could downgrade the ratings if the
company's Moody's adjusted debt/EBITDA ratio rises towards 5x or
if the company fails to generate free cash flow after taking into
account the cash over-funding at closing.

The principal methodology used in these ratings was the Global
Oilfield Services Rating Methodology published in December 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.

Bibby Offshore Holdings Limited, headquartered in Aberdeen, UK,
is a leading provider of offshore and subsea services in the UK
North Sea. For the financial year ended December 31, 2013, Bibby
Offshore reported revenues of approximately GBP264 million.

Bibby Offshore is wholly owned by Bibby Line Group Limited,
formed over 200 years ago as a ship owner and operator, and a
diversified group of companies with international interests in
shipping, marine services, logistics, financial services,
offshore services and retailing, with revenue of GBP1.59 billion
for the year ended December 31, 2013.


BIBBY OFFSHORE: S&P Assigns Preliminary 'B+' CCR; Outlook Stable
----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its preliminary 'B+'
long-term corporate credit rating to U.K.-based subsea service
provider Bibby Offshore Holdings Ltd.  The outlook is stable.

At the same time, S&P assigned its preliminary 'BB-' issue rating
to Bibby Offshore's proposed GBP20 million super senior revolving
credit facility (RCF).  The recovery rating on this instrument is
'2', indicating S&P's expectation of substantial (70%-90%)
recovery for noteholders in the event of a payment default.

In addition, S&P assigned its preliminary 'B+' issue rating to
the proposed GBP175 million senior secured notes.  The recovery
rating on these instruments is '4,' reflecting S&P's expectation
of average (30%-50%) recovery for noteholders in the event of a
payment default.

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

The 'B+' preliminary rating on Bibby Offshore reflects S&P's
assessment of the company as being core to its parent under its
group methodology criteria.  Therefore, the ratings and outlook
on the subsidiary reflect the group credit profile (GCP).

Despite the company being relatively young from a group
perspective, S&P's view of its "core" group status takes into
consideration Bibby Line group's intent and purpose to hold a
diversified portfolio of companies to provide long-term returns
to its shareholders.  This, combined with the fact that Bibby
Offshore is the largest contributor of group operating cash
flows, in S&P's view suggests that the likelihood of the group
divesting Bibby Offshore is very limited.

In arriving at S&P's decision of Bibby Offshore's "core" group
status, S&P also took into consideration the long-term intent of
the group to reinvest operating cash flows into its companies and
the commitment shown by the group's efforts to grow Bibby
Offshore rapidly over the past decade.

S&P currently assess Bibby Line Group's GCP as stronger than
Bibby Offshore, based on its view of the group's companies, which
include operations in diversified unrelated businesses such as
retail, offshore vessel accommodation, logistics, financial
services, or subsea services.  Although S&P recognizes the
group's business diversification, it still notes that if the
group influences the credit quality of Bibby Offshore, the
reciprocal is also true, given Bibby Offshore's significant size
when measured in terms of relative share of EBITDA.  Therefore,
developments at the Bibby Offshore level could in S&P's view
affect the GCP, both positively and negatively.

S&P's stand-alone credit profile (SACP) of 'b' for Bibby Offshore
reflects its small scale by global standards and relatively high
customer concentration, given its narrow geographic focus and
limited service offering in a niche market.  S&P also takes into
consideration the relatively high volatility of profitability in
recent years.  That said, S&P notes that the company has since
improved its EBITDA margins, notably by enhancing its service
offering through the introduction of a remotely operated vehicles
(ROV) fleet.  While S&P incorporates some diversification
weaknesses, it nevertheless views the company's established
presence in the mature but active North Sea as favorable, as it
is less risky than other regions.  S&P also notes that the
company has a solid market share on the diving support vessel
(DSV) market, which in S&P's view offers Bibby Offshore a
competitive advantage; S&P considers that the market has higher
barriers to entry than the more commodity-like platform supply
vessel (PSV), which is much more sensitive to supply factors.

"Despite our expectations of slightly lower operating margins in
2014 and 2015 than in 2013 (on the back of growth-related costs
at the support function level but also start-up costs of new
vessels), we expect free operating cash flow to be neutral in
2014 and positive in 2015. Pro forma the bond issuance, we expect
Bibby Offshore's debt-to-EBITDA ratio to be about 2.8x in 2014,
improving to about 2.5x by the end of 2015.  We anticipate the
company's funds from operations (FFO)-to-debt ratio to improve
moderately to above 30% in 2015, from our forecast of below 30%
in 2014.  Both ratios are within the "intermediate" financial
risk profile category on a weighted-average basis, according to
our criteria," S&P said.

RECOVERY ANALYSIS

Key analytical factors

   -- The issue rating on the proposed GBP20 million super senior
      RCF is 'BB-' with a recovery rating of '2'.  The ratings
      reflect S&P's view of the comprehensive security package
      including the vessels Bibby Polaris and Bibby Sapphire and
      the RCF's priority over the senior secured notes, for which
      the RCF shares the same security and guarantor packages.

   -- The recovery prospects for the super senior RCF are in
      excess of 100%.

   -- However, S&P caps the recovery rating at '2' to account for
      multijurisdictional risk, given that the vessels travel
      between jurisdictions.

   -- The issue rating on the proposed GBP175 million senior
      secured notes is 'B+', with a recovery rating of '4',
      reflecting their contractual subordination to the super
      senior RCF.

   -- S&P understands that the super senior RCF documentation
      also includes a total leverage covenant test set at 4.5x,
      when the drawings on the RCF are greater than 25% of its
      total commitments, and a GBP5 million uncommitted
      incremental facility.

   -- S&P's hypothetical default scenario would be triggered by
      the company's inability to secure contracts as existing
      contracts expire, and volatility in market rates.

   -- S&P uses a discrete-asset valuation methodology to estimate
      the value of the assets, to which S&P applies a 40% haircut
      from their average market value.

Simulated Default Assumptions

   -- Year of default: 2018
   -- Jurisdiction: U.K.

Simplified Waterfall

   -- Net enterprise value at default(1): GBP115 million
   -- Super senior secured debt claims: GBP21 million(2)
   -- Recovery expectation: 70%-90%
   -- Senior secured debt claims: GBP178 million(2)
   -- Recovery expectation: 30%-50%

(1)After 10% administrative costs.
(2)All debt amounts include six months' prepetition interest.


BANK OF NT BUTTERFIELD: Fitch Affirms 'BB+' Sub. Debt Rating
------------------------------------------------------------
Fitch Ratings has affirmed Bank of N.T. Butterfield & Son
Limited's (BNTB) long-term Issuer Default Rating (IDR) at 'A-'
and Viability Rating (VR) at 'bbb-'. The Rating Outlook is
Negative. The Outlook reflects Fitch's evolving views of
sovereign support. Fitch envisions the resolution of the Rating
Outlook could extend beyond the typical 18 to 24-month Outlook
horizon given the evolving nature of sovereign support dynamics.

BNTB's ratings are unaffected by the recent downgrade of
Bermuda's foreign currency long-term IDR to 'A+' from 'AA-'.
Fitch noted in the RAC dated June 11, 2013, 'Fitch Affirms Bank
of N.T. Butterfield & Sons Ltd IDR at 'A-'; Upgrades Viability
Rating to 'bbb-', that a one-notch downgrade would not translate
into a downgrade of the IDR, which is currently at the support
floor rating of 'A-'.

RATING DRIVERS - VRs and SUBORDINATED DEBT

BNTB's VR reflects its strong market position, liquid balance
sheet, and good capital levels, offset by modest earnings
measures, significant product concentration in residential
lending, geographic concentration in Bermuda and large exposures
in its commercial loan portfolio. Although BNTB's credit
performance has improved, nonperforming loans remain higher than
similarly rated peers and when compared to Fitch rated U.S.
community banks.

Historically, BNTB has operated with above-average liquidity in
the balance sheet evidenced by its low loan-to-deposit ratio
averaging 53.7% over the last five years. Further, the company
has strong capital ratios which support its risk profile. BNTB's
Fitch Core Capital/RWA ratio averaged 11.4% for the last five
years.

Although BNTB continues to face asset quality pressures,
specifically in its residential loan portfolio, Fitch expects net
losses to remain manageable. Despite BNTB's non-performing assets
(NPAs; inclusive of accruing troubled debt restructurings and
foreclosed real estate) remaining high at 3.5% as of Dec. 31,
2013, average net chargeoffs (NCOs) remain extremely low at 44
basis points (bps).

More recently, BNTB's earnings improved with return on assets
(ROA) and net interest margins (NIM) reflecting a positive trend.
Most of the improvement was supported by increased net interest
income due to investment revenue yields rising and a rise in fee
revenues, while expenses have been relatively flat. Nonetheless,
Fitch notes that earnings measure remain in line with similarly
VR 'bbb-' rated peers. Also, when compared to U.S. Community
banks, performance is below peer averages.

RATING SENSITIVITIES - VRs and SUBORDINATED DEBT

BNTB's VR could see positive momentum should the company
demonstrate sustainable core profitability improvement while
materially reducing its non-performing loans. Although capital
measures are very high and may come down, Fitch would expect BNTB
to continue to operate with above-average capital position.

Conversely, a downgrade of the VR could occur in the event of
significant deterioration of financial performance, a rise in
NCOs due to asset quality pressures, and an increase to the risk
level of the balance sheet mix.

KEY RATING DRIVERS - IDR, SUPPORT RATING (SR) AND SUPPORT RATING
FLOOR (SRF)

The affirmations of BNTB's IDR, SR and SRF reflect its systemic
importance to the local economy, as well as demonstrated support
from the Bermudian government in the past, namely the 2009
guarantee on the principal and interest payments of BNTB's
preferred stock. The preferred stock rating would be unaffected
by any changes to BNTB's SR or SRF as it is based off of
sovereign support.

However, the revision of the Rating Outlook to Negative reflects
Fitch's evolving view of support from Bermuda. Fitch considers
Bermuda to be a Path 2 country, defined as one in which there is
a weakening of sovereign support of the banking sector.

The Bermuda Monetary Authority's (BMA) proposal regarding a
statutory framework for a special resolution regime for banks
licensed in Bermuda embeds many of the provisions of the UK
Banking Act of 2009, according to the BMA. It proposes to provide
the authorities with the necessary stabilization powers to
transfer part or all of a failing bank's business to a private-
sector purchaser, assume control of part or all of a failing
bank's business through a bridge bank, and acquire temporary
public ownership of a bank where required. The proposed framework
suggests a weakening of support for the financial sector over
time, in Fitch's view.

RATING SENSITIVITIES - IDR, SUPPORT RATING AND SUPPORT RATING
FLOOR

BTNB's IDR is sensitive to changes in the SRF as the IDR is at
its SRF. Fitch adopts a 'higher of' approach in assigning Long-
Term IDRs to financial institutions, taking the higher of the SRF
and the standalone financial strength (as reflected in the VR of
'bbb-' for BTNB). In this case, BTNB's IDR relies on the SRF of
'A-'. If the SRF is downgraded, BTNB's IDR would be vulnerable to
a downgrade to as low as its VR of 'bbb-'.

As a Path 2 country, SRF revisions for systemically important
banks are likely initially to be up to one rating category (e.g.
a SRF in the 'A' range could fall into the 'BBB' range), while
SRF revisions for mid-sized or small banks could be greater,
potentially as far as 'No Floor'. Fitch considers BNTB to be a
systemically important institution to Bermuda, as it represents
approximately 40% of banking assets.
Fitch will also assess the government's ability to support BNTB
and potentially revise the SRF if the sovereign's rating were
downgraded by more than one notch. The ability has clearly come
into question given the weakening fiscal position of the
sovereign.

KEY RATING DRIVERS - PREFERRED STOCK

Preferred stock issued by BNTB is equalized with Bermuda's
foreign currency long-term IDR, reflecting the guarantee from the
Bermuda government. The Ministry of Finance agreed to guarantee
the principal and dividends on BNTB's preferred stock when it was
issued in 2009.

RATING SENSITIVITIES - PREFERRED STOCK

BNTB's preferred stock rating is highly sensitive to any changes
in the ability of the Bermuda government to fulfill its
obligation. A downgrade in the sovereign rating of Bermuda would
trigger a commensurate downgrade of the preferred stock.

RATING DRIVERS & SENSITIVITIES - SUBORDINATED DEBT RATING

Subordinated debt issued by BNTB is notched down from the VR, and
the rating of specific issues is typically sensitive to any
change in the bank's VR.

Fitch has taken the following rating actions:

Bank of N.T. Butterfield & Son

-- Long-term IDR affirmed at 'A-'; Outlook Negative;
-- Short-term IDR affirmed at 'F1';
-- Viability Rating affirmed at 'bbb-' ;
-- Preferred stock affirmed at 'A+';
-- Subordinated debt affirmed at 'BB+';
-- Support rating affirmed at '1';
-- Support Floor affirmed at 'A-'.


BV HICKS: Increased Competition Prompts Liquidation
---------------------------------------------------
Matt Scott at EADT24 reports that insolvency practitioners McTear
Williams and Wood said B V Hicks Ltd. in Hadleigh will be placed
in liquidation after its owner died last year and finding it
"difficult to compete" with nearby supermarkets, out-of-town
retail parks and internet shopping.

In a statement, McTear Williams and Wood, as cited by EADT24,
said: "With the rise in the number of out-of-town retail parks
and the increasing use of the internet, competition increased and
as a small local retailer it became more and more difficult to
compete.

"Unfortunately, Mr. Hicks Senior passed away late last year and
as two further large supermarket chains locally started selling
electrical goods the directors decided to close the business."

The company has instructed McTear Williams and Wood to convene a
meeting of creditors to place the company in to liquidation,
EADT24 relates.

B V Hicks Ltd. is a high street electrical retailer in Suffolk.


DLG ACQUISITIONS: Moody's Assigns '(P)B3' CFR; Outlook Stable
-------------------------------------------------------------
Moody's assigned a first-time (P)B3 corporate family rating (CFR)
to DLG Acquisitions Ltd., a company which has agreed to acquire
All3Media Holdings Limited. UK-based All3 Media Holdings is,
through its subsidiaries, an internationally active producer and
distributor of television programming. DLG Acquisitions is a
joint venture of Discovery Communications Inc. ("Discovery",
rated Baa2; stable at the Discovery Communications LLC level) and
Liberty Global plc ("Liberty Global", rated Ba3; stable). The
transaction is still subject to regulatory approval and is
expected to close during the 3rd quarter of 2014. At the same
time Moody's assigned a (P)B2 rating to the GBP290 million first
lien term loan due 2021 and GBP30 million revolving credit
facility due 2020 of All3Media Finance Limited, an indirect
subsidiary of All3Media Holdings. Finally, Moody's assigned a
(P)Caa2 rating to the EUR100 million (GBP82 million equivalent)
second lien term loan due 2022 at DLG Acquisitions. The rating
outlook is stable.

All ratings assigned are provisional pending a conclusive review
of final documentation and closing of the underlying acquisition
transaction. The ratings have been assigned on the basis of
Moody's expectation that the transaction will close as described
above. Should the acquisition not be consummated, the second lien
term loan, which will initially be funded into a blocked account,
would be repaid and Moody's would reassign the CFR to All3Media
Holdings, reevaluating the then current capital structure.
Following closing (or abandonment) of the acquisition Moody's
will endeavour to assign a definitive rating to the facilities.
Moody's notes that a definitive rating may differ from a
provisional rating. In this press release "All3Media" or "the
company" refer to the post acquisition group, headed by DLG
Acquisitions.

Ratings Rationale

The (P)B3 CFR reflects : (i) All3Media's modest scale and high
initial leverage which Moody's estimates will stand at around
6.8x as measured by the Debt/EBITDA ratio (Moody's definition) on
a 2014 IFRS pro forma basis; (ii) some volatility in operating
performance with steady EBITDA growth only expected from 2015
onwards; (iii) dependence on continued strong US growth to
compensate for near-term softening in the company's UK and German
markets, (iv) a degree of reliance on key customers (Channel 4 in
the UK), (v) Moody's expectations that free cash flow could well
be used to fund add-on acquisitions and (vi) the company's
industry-typical challenge to continuously refresh its
intellectual property and to retain key creative personnel.

More positively the CFR recognizes : (i) the company's
established position in its core UK and German television
production markets, (ii) a well-diversified portfolio of programs
in terms of size, genre and series ageing, (iii) a stable
proportion of returning programs and newly created shows as well
as a growing secondary distribution business; (iv) an
advantageous funding model whereby production costs are generally
funded by commissioning broadcasters, (v) the encouraging recent
performance of the company's US operations and (v) the declared
strategic interest in programming assets of its more highly rated
new owners to be, Liberty Global and Discovery.

All3Media, formed in 2003 is an internationally active creator
and distributor of TV programming producing over 300 shows each
year, including 72 recurring TV shows across all genres with its
strongest positions in scripted and factual entertainment shows.
The company operates through a federation of 18 independently run
production studios in the UK, the US, Germany, the Netherlands
and New Zealand, of which MME Moviement in Germany and Lime
Pictures in the UK (together 30% of 2013 revenues) are the
largest. Production contributed 80% to 2013 revenues and
distribution, digital and other revenues accounted for the
remainder. Geographically (by destination) revenues are split
between the UK (46%), the US (21%) and the rest of the world
(33%).

Over time Moody's expects that the joint venture partners will
build on the All3Media acquisition and add additional programming
assets by way of acquisition or contribution of assets. The
financing documents provide the company with significant
flexibility to pursue this objective.

Moody's expects All3Media's liquidity provision to be adequate
for its near term operational needs. Liquidity provision will be
supported by on-balance sheet cash of GBP30 million and access to
the RCF of GBP30 million, which is expected to be undrawn at
closing, but might be utilized from time to time for working
capital purposes. There is some seasonality in working capital
use with the weaker cash generative months clustered around the
end of the calendar year. However, due to the weighting towards a
broadcaster cash-flowed funding model working capital is
generally negative and operating cash flows positive.

All3Media has no scheduled repayments under the facilities before
their final maturity date. Moody's expects the company to
generate sufficient cash after interest and capex to fund
expected pay-outs under existing earn-out agreements in 2015 and
2016. There is a springing maintenance covenant of 6.25x Net
Senior Debt to Annualized EBITDA (if drawn > 33.3%) under which
Moody's expects the company to maintain adequate headroom.

All3Media's capital structure will consist of the rated credit
facilities and equity, which Moody's anticipates will be
contributed predominantly in the form of shareholder loans at
closing of the acquisition of All3Media by subsidiaries of
Discovery and Liberty Global. Moody's has also assumed that the
shareholder loans will meet the agency's criteria for equity-
equivalent treatment.

The loan agreements stipulate that post closing of the
acquisition the rated loans will receive upstream guarantees from
group companies representing 80% of All3Media's EBITDA. Security
for the rated debt is limited to share pledges and charges over
certain intergroup receivables. The second lien debt ranks behind
the senior debt (first lien and RCF) in relation to the
realization of enforcement of the transaction security as
stipulated in the inter-creditor agreement. For the purposes of
its Loss-Given-Default methodology Moody's has accordingly ranked
the RCF and the first lien term loan first together with
All3Media's trade payables and the second lien term loan second,
together with the lease rejections claims. Given the presence of
a second lien loan in this all bank loan structure Moody's has
used a 50% family recovery rate (instead of the usual 65%).
Consequently the first lien term loan has been assigned a (P)B2
rating, one notch above the CFR level and second lien term loan a
(P)Caa2 rating.

Rating outlook

The rating is initially weakly positioned at the B3 CFR level. A
stable outlook is therefore based on Moody's expectation that the
company's Debt/EBITDA leverage ratio (Moody's definition) will
not deteriorate materially from the 6.8x level anticipated for
FY2014 and show visible improvement from 2016 onwards.

What Could Change The Rating -- UP

While Moody's does not anticipate near-term upward pressure on
the rating, positive pressure could develop over time if (i) the
company delivers on its business plan, especially the continued
development of its US business; (ii) its Debt/EBITDA ratio falls
visibly and sustainably below 6.0x and (iii) free cash flow
(after capex and dividends) is positive, also on a sustained
basis.

What Could Change The Rating -- DOWN

Downward pressure on the rating could ensue if (i) leverage
increases towards 7.5x, (ii) free cash flow is negative or other
liquidity pressures emerge for more than a limited period of time
and/or (iii) the company loses momentum in growing its US
production and secondary distribution businesses.

All3Media Finance Limited & DLG Acquisitions Limited's ratings
were assigned by evaluating factors that Moody's considers
relevant to the credit profile of the issuer, such as the
company's (i) business risk and competitive position compared
with others within the industry; (ii) capital structure and
financial risk; (iii) projected performance over the near to
intermediate term; and (iv) management's track record and
tolerance for risk. Moody's compared these attributes against
other issuers both within and outside All3Media Finance Limited &
DLG Acquisitions Limited's core industry and believes All3Media
Finance Limited & DLG Acquisitions Limited's ratings are
comparable to those of other issuers with similar credit risk.
Other methodologies used include Loss Given Default for
Speculative-Grade Non-Financial Companies in the U.S., Canada and
EMEA published in June 2009.

DLG Acquisitions Ltd. is a holding company, which has agreed to
acquire All3Media Holdings, an internationally active producer
and distributor of television programming with revenues of GBP
511 million revenues (IFRS-based) for the financial year ended
August 2013. Both companies are based in London, England.


NEMUS II: Fitch Affirms Rating on Class F Certs. at 'CCsf'
----------------------------------------------------------
Fitch Ratings has affirmed Nemus II (Arden) plc's commercial
mortgage backed securities due 2020 as follows:

  GBP138.6 million Class A (XS0278300487) affirmed at 'AAsf';
   Outlook revised to Negative from Stable

  GBP11.3 million Class B (XS0278300560) affirmed at 'Asf';
   Outlook Negative

  GBP7.7 million Class C (XS0278300727) affirmed at 'BBBsf';
   Outlook Negative

  GBP7.1 million Class D (XS0278301295) affirmed at 'BBsf';
   Outlook Negative

  GBP13.9 million Class E (XS0278301378) affirmed at 'CCCsf';
   Recovery Estimate (RE) RE30%

  GBP1.0 million Class F (XS0278301535) affirmed at 'CCsf'; RE0%

KEY RATING DRIVERS

The affirmation reflects the largely unchanged situation since
the last rating action in June 2013, the expectation of a full
repayment of the largest loan (Victoria) and minor losses from
the defaulted Carlton House and Buchanan House loans. The
Negative Outlooks reflect the unresolved collateral issues
affecting Buchanan House.

The GBP126.1 million Victoria loan breached its loan-to-value
(LTV) covenant (80.21%) in February 2009. In August 2010, the
borrower cured the breach by making a payment of GBP8 million
into an issuer account. Consequently, the LTV was 78.0% in April
2014. At loan maturity in October 2013, the borrower used its
contractual option to extend the loan by three years. All
required conditions were met. The projected exit balance for
October 2016 (using cash sweep) is GBP124.4 million.

The loan is secured on a fully let mixed use property in London's
Victoria Street. The asset serves as John Lewis's headquarters
(office space, on a lease until 2069, break in 2031). The
remaining retail space is let to a variety of tenants on leases
expiring between 2015 and 2024 and generates 20% of the total
income. The asset was revalued at GBP176.4 million in May 2013.

The GBP11.9 million Carlton House loan has been in special
servicing since December 2008, due to a missed amortization
payment as the result of financial difficulties. The loan is
scheduled to mature in October 2014, and despite special
servicing, the borrower requested a loan extension. The servicer/
special servicer are considering this.

The loan is secured on three retail assets in the Greater
Birmingham area (Sutton Coldfield), let to 38 tenants, none of
which accounts for more than 9% of the total rent. Vacancy has
improved to 3.3% from 5.3% one year ago (and from a trough of
16.8% in November 2011). A desktop revaluation in May 2013
resulted in a reduction in the collateral value to GBP10.7
million from GBP11.2 million, increasing the LTV to 111.9% (from
106.9% in April 2013 and 80.3% at closing).

The GBP41.2 million Buchanan House loan entered special servicing
in April 2013, when in addition to an on-going LTV covenant
breach, a defect requiring substantial remedial works was
detected on the underlying building. All surplus income is being
trapped and retained on deposit pending completion of the
strategic review conducted by the special servicer.
Meanwhile the senior loan is paying interest while the B-note has
been switched off. A standstill agreement will expire in July
2014, at which point the special servicer intends to give an
update on the required works and their funding.

Fitch 'Bsf' recoveries are approximately GBP168 million.

RATING SENSITIVITIES

Should the Buchanan House borrower be required to fund the
required repairs or if the related costs exceed previous
estimates released by the special servicer (ranging from GBP7
million to GBP12 million), the notes may be downgraded.


SEADRILL PARTNERS: S&P Assigns 'BB-/B' CCRs; Outlook Stable
-----------------------------------------------------------
Standard & Poor's Ratings Services said that it has assigned its
'BB-/B' long- and short-term corporate credit ratings to Marshall
Islands-domiciled offshore drilling company Seadrill Partners LLC
and its subsidiary, Seadrill Capricorn Holdings LLC.  The outlook
is stable.

At the same time, S&P assigned its 'BB' issue rating to the
US$100 million super senior revolving credit facility (RCF) due
in 2019, co-issued by Seadrill Operating LP and Seadrill
Capricorn Holdings LLC.  The recovery rating is '2', indicating
S&P's expectation of substantial (70%-90%) recovery prospects for
lenders in the event of a payment default.

S&P also assigned its 'BB-' issue rating to the increased US$2.8
billion secured term loan B maturing in 2021, issued by Seadrill
Operating LP and guaranteed by Seadrill Capricorn Holdings.  The
recovery rating is '3', indicating S&P's expectation of
meaningful (50%-70%) recovery prospects in the event of a payment
default.

The ratings on Seadrill Partners reflect S&P's assessment of the
company's business risk profile as "fair" and its financial risk
profile as "significant."  S&P's business risk assessment
recognizes Seadrill Partners' very modern, high specification
fleet of contracted vessels with a revenue backlog of US$5.7
billion.  S&P also notes that the contracts have relatively high
day rates and an average length of nearly four years, with the
earliest finishing in 2015.  These provide medium-term visibility
on revenues and also operating cash flow generation, as a result
of cost escalation clauses.  Rig utilization and profitability
were weaker in first quarter 2014 than 2013, but S&P projects
that they should be solid for 2014 on average.  S&P forecasts
free operating cash flow (FOCF) to be positive as a result of
only modest capital expenditures on the modern vessels.  S&P sees
the anticipated lack of new vessel building as positive for its
ratings.  Seadrill Partners is likely to avoid construction,
start-up, initial contracting, and associated funding and
liquidity risks, as these are largely borne by its parent, the
large Bermuda-based offshore driller Seadrill Ltd.  S&P assess
Seadrill Partners as strategically important to Seadrill Ltd.

Under agreements with its majority owner Seadrill Ltd., Seadrill
Partners is likely to continue to acquire rigs and fractional
interests in rigs that already have contracts for more than five
years.  These so-called "drop downs" have been funded with a mix
of new equity or unit interests in Seadrill Partners as well as
secured debt, raised externally by Seadrill Ltd. and lent to
Seadrill Partners' entities, including the borrowers.  The
proposed US$1.0 billion term loan tap increase will refinance
some of these facilities and other intercompany loans.

As a result of its growing asset base and cash generation,
Seadrill Partners is expected to continue increasing
distributions to its unitholders.  The future balance between
fleet expansion, leverage, and quarterly distributions will be
important factors for S&P's assessment of Seadrill Partners'
financial policy.  S&P notes that proposed maintenance covenants
would allow debt to EBITDA of up to 5x, closer to the leverage at
Seadrill Ltd., although S&P do not project this in the near term
for Seadrill Partners.

Another constraint for the ratings is the relative lack of
diversification across the business, compared with Seadrill Ltd.
and other large operators.  Geographically, the vessels under
current contracts are in three main regions.  Operationally,
there are four ultra-deepwater floaters, two drillships, and
three tender barges, so more than a few days off day-rate for one
or more vessels has a meaningful effect on performance.  Also,
although Seadrill Partners currently has indirect stakes in these
nine vessels, Seadrill Ltd. has the remaining, material
interests. Seadrill Ltd. has a 44% interest in collateral vessel
West Capella, although the other borrowers have 100% interests in
the zig-owning entities.  S&P analytically consolidates Seadrill
Partners and its controlled entities in line with the
International Financial Reporting Standards accounts.  S&P notes
the cross-default clauses between these entities, but also see
Seadrill Partners' 30% interest in borrower Seadrill Operating LP
and 51% interest in borrower Seadrill Capricorn Holdings LLC as a
structural shortcoming, resulting in material dividend leakage to
Seadrill Ltd.

In S&P's view, Seadrill Partners' organizational complexity,
including partial ownership of assets and consequent dividend
leakage, is a relative weakness.  In addition, credit metrics are
at the weaker end of the range S&P considers commensurate with a
"significant" financial risk profile.  S&P reflects this
assessment in its "comparable rating analysis" modifier, through
which S&P applies a one-notch downward adjustment to the
company's 'bb' anchor to result in the 'bb-' stand-alone credit
profile.

S&P's base case assumes:

   -- A Brent oil price of $110 per barrel (/bbl) in 2014 and
      $105/bbl in 2015.

   -- Day rates as contracted and average utilization of over 90%
      in 2014 and 2015.

   -- EBITDA margins of more than 55%.

   -- No modeled drop downs or acquisitions of interests in
      specific rigs.

   -- Although these activities are likely, S&P assumes no
      resultant material net change in cash flow leverage
      measures.

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

   -- Adjusted funds from operations to debt of 20%-25% in 2014
      and 2015.

   -- Adjusted debt to EBITDA of 3.4x-4.0x in 2014 and 2015.

   -- Positive FOCF, after maintenance capital investment and
      before distributions, of US$300 million-US$500 million in
      2014 and 2015.

The stable outlook reflects S&P's view that with the contracted
revenues providing visibility on operating cash flow in 2014 and
2015 (at least), debt coverage measures should remain in line
with a "significant" financial risk profile, as defined by S&P's
criteria.  S&P forecasts funds from operations (FFO) to debt to
be more than 20% and S&P projects discretionary cash flow (after
modest capital investment and distributions) to be positive.

S&P do not see an upgrade as likely in the near term.  S&P could
raise the ratings, however, if funds from operations (FFO) to
debt reaches more than 30% on a sustained basis and discretionary
cash flow is at least breakeven.  This could happen if operating
performance is stronger than S&P's base case assumes and the
increased assets at Seadrill Partners are funded prudently.

S&P could consider a negative rating action if it observes a
deterioration in operating performance, such that FFO to debt
declines to below 20% on a sustained basis and debt to EBITDA
increases to more than 4x.  This would be exacerbated if
utilization falls or if the predictability or profitability of
operations weakens materially at Seadrill Partners or Seadrill
Ltd.

Borderline metrics alone would not necessarily result in a
downgrade if S&P considers that Seadrill Partners is establishing
a solid operating track record and discretionary cash flow is
positive.  This reflects the strong cash conversion of EBITDA
into free cash flow that S&P anticipates.


VISTEON UK: Former Workers Accept Compensation Deal
---------------------------------------------------
BBC News reports that former workers at Visteon UK whose pension
values fell when it went into administration have accepted a
compensation deal estimated at GBP28 million.

The deal was reached following negotiations between the trade
union Unite and Ford, who once owned Visteon, BBC relates.

The BBC understands the deal will benefit 1,400 people.

Visteon was placed into administration in 2009, BBC recounts.
That put more than 1,000 people out of work at factories across
the UK, BBC relays.

With the support of the union, the workers took legal action
against Ford, claiming it still had a responsibility to protect
the pensions, BBC discloses.

The case was due to heard later this year but an agreement was
reached between Ford and the union in April and has now been
accepted by the pensioners, BBC notes.

Visteon is a car parts firm.


                            *********

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

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

The TCR Europe subscription rate is US$775 per half-year,
delivered via e-mail.  Additional e-mail subscriptions for
members of the same firm for the term of the initial subscription
or balance thereof are US$25 each.  For subscription information,
contact Peter Chapman at 215-945-7000 or Nina Novak at
202-241-8200.


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