TCREUR_Public/140716.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, July 16, 2014, Vol. 15, No. 139

                            Headlines

C Z E C H   R E P U B L I C

NEW WORLD: 84% of Secured Noteholders Back Debt Restructuring


G E R M A N Y

PROVIDE DOMICILE: S&P Puts Class E Notes' BB Rating on Watch Pos.


H U N G A R Y

CAPE CLEAR: UK Investor Group Buys Heviz-Balaton Airport Assets


I R E L A N D

ELEX ALPHA: Moody's Lifts Rating on Class D Notes From 'Ba2'
EUROCREDIT CDO VIII: Moody's Lowers Class E Notes' Rating to 'B2'
TAURUS CMBS 2007-1: Fitch Affirms 'C' Ratings on 3 Note Classes


I T A L Y

ALITALIA SPA: Creditor Banks Reach Debt Restructuring Deal
CREDITO VALTELLINESE: Fitch Lowers Long-Term IDRs to 'BB'


N E T H E R L A N D S

HEMA BV: S&P Assigns 'B+' Corp. Credit Rating; Outlook Stable


P O R T U G A L

BANCO ESPIRITO: Moody's Cuts Ratings on Covered Bonds to 'Ba1'


R U S S I A

RASPADSKAYA OAO: Moody's Changes 'B2' CFR Outlook to Negative
SISTEMA JSFC: S&P Raises CCR to 'BB+' on Improved Financials
URALTRANSBANK: Fitch Affirms 'B-' Long-term IDR; Outlook Stable


S P A I N

AYT FONDO EOLICO: Moody's Cuts Ratings on E1 & E2 Notes to 'B3'
GOWEX SA: Files for Bankruptcy; Founder May Face Jail Sentence
RMBS SANTANDER 2: Moody's Rates EUR450MM Class C Notes 'Ca'


U N I T E D   K I N G D O M

HARLEYFORD GOLF CLUB: Comes Out of Administration
MONTGOMERY FURNISHINGS: Falls Into Administration
SR WASTE: In Liquidation After Environmental Permits Revoked


                            *********


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C Z E C H   R E P U B L I C
===========================


NEW WORLD: 84% of Secured Noteholders Back Debt Restructuring
-------------------------------------------------------------
Ladka Bauerova at Bloomberg News reports that New World Resources
Plc, which has been trying to avoid bankruptcy, said 84% of
holders of its senior secured notes accepted a debt-restructuring
plan.

According to Bloomberg, NWR said in a regulatory statement on
July 15 it didn't get the required 75% majority from holders of
its senior unsecured notes, with only 65% agreeing to enter the
lockup agreement.  The statement related that the company also
failed to get the majority vote required to make a coupon payment
on its EUR275 million (US$375million) of senior unsecured notes
due July 15, triggering a 30-day grace period, Bloomberg relates.

Czech billionaire Zdenek Bakala, the majority owner of NWR, is
trying to win support for an overhaul that would cut the
company's debt by 45% and increase the number of shares
25 times, Bloomberg relays.  NWR said on July 2 that after six
quarters of losses spurred by plunging coal prices, the only
other option is selling almost all of NWR's assets, which could
leave some investors with nothing, Bloomberg recounts.

NWR's restructuring plan calls for raising EUR150 million from a
share sale, with the new equity representing 96% of the total
after the transaction and current shares outstanding equating to
4%, Bloomberg says, citing the company's July 2 statement.

New World Resources Plc is the largest Czech producer of coking
coal.



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G E R M A N Y
=============


PROVIDE DOMICILE: S&P Puts Class E Notes' BB Rating on Watch Pos.
-----------------------------------------------------------------
Standard & Poor's Ratings Services placed on CreditWatch positive
its credit ratings on PROVIDE Domicile 2009-1 GmbH's class C, D,
and E notes.

The CreditWatch placements follow S&P's performance review of
PROVIDE Domicile 2009-1.  A combination of subordination and a
synthetic excess spread mechanism provides credit enhancement to
the notes.  While the class A+, A, B, C, and D notes benefit from
this combination, the most subordinated class E notes solely rely
on available synthetic excess spread.

Since S&P's May 15, 2013 review of the transaction, cumulative
net losses have increased to EUR566,231 (or 0.3% of the closing
balance) from EUR489,771.  So far, synthetic excess spread has
been available to cure applied net losses, so that the class E
notes are still fully funded.

The transaction's synthetic excess spread is 6.25 basis points
(bps) per quarter on the portfolio's performing balance.  If
unused, it accumulates to a maximum of 25 bps.  While the
transaction amortizes, the amount of available excess spread
amortizes in absolute terms.  However, under the transaction
documents, synthetic excess spread is subject to a EUR2.5 million
floor, set on the July 2013 interest payment date.

The notes pay sequentially.  Therefore, as the transaction has
amortized, the class A to E notes have remained at the same size
since closing.  As a result of subordination, the available
credit enhancement for the class A+ to D notes has increased.

S&P considers that the transaction's increasing available credit
enhancement may enable the class C, D, and E notes to withstand
the stresses that S&P applies at higher rating levels.  S&P has
therefore placed on CreditWatch positive its ratings on these
classes of notes.  S&P intends to resolve the CreditWatch
placements after it completes a comprehensive analysis.

PROVIDE Domicile 2009-1 is a synthetic, partially funded, German
residential mortgage-backed securities (RMBS) transaction.

RATINGS LIST

PROVIDE Domicile 2009-1 GmbH
EUR133.7 mil floating-rate credit-linked notes

                       Rating              Rating
Class   Identifier     To                  From
C       DE000A0L0557   AA (sf)/Watch Pos   AA (sf)
D       DE000A0L0565   A- (sf)/Watch Pos   A- (sf)
E       DE000A0L0573   BB (sf)/Watch Pos   BB (sf)



=============
H U N G A R Y
=============


CAPE CLEAR: UK Investor Group Buys Heviz-Balaton Airport Assets
---------------------------------------------------------------
MTI-Econews reports that an investor group from the United
Kingdom on July 10 purchased the assets of the Heviz-Balaton
Airport at a liquidator's auction.

Imre Linusz, the buyer's representative, Imre Linusz told MTI on
Monday that the UK group, who did not wish to be identified as
yet, intend to make significant developments at the airport
located near Lake Balaton in central Hungary.  Mr. Linusz, as
cited by MTI, said the investors are experienced in the
air-transport industry and represent several investment groups.

Of the two companies operating the airport, then called
FlyBalaton, Cape Clear Aviation went under liquidation in 2009
and FB Airport followed it in 2010, MTI recounts.

The Heviz local council has been operating the airport since
2012, MTI notes.



=============
I R E L A N D
=============


ELEX ALPHA: Moody's Lifts Rating on Class D Notes From 'Ba2'
------------------------------------------------------------
Moody's Investors Service announced that it has taken the
following rating actions on the following classes of notes issued
by eleX Alpha S.A.:

  EUR60M (outstanding balance of EUR50.1M) Class A-1 Senior
  Secured Revolving Floating Rate Notes due 2023, Affirmed Aaa
  (sf); previously on Jul 5, 2011 Upgraded to Aaa (sf)

  EUR133.5M (outstanding balance of EUR62.6M) Class A-2 Senior
  Secured Delayed Draw Floating Rate Notes due 2023, Affirmed Aaa
  (sf); previously on Jul 5, 2011 Upgraded to Aaa (sf)

  EUR28.5M Class B Senior Secured Floating Rate Notes due 2023,
  Upgraded to Aaa (sf); previously on Jul 5, 2011 Upgraded to Aa2
  (sf)

  EUR15M Class C Senior Secured Deferrable Floating Rate Notes
  due 2023, Upgraded to A1 (sf); previously on Jul 5, 2011
  Upgraded to A3 (sf)

  EUR16.5M Class D Senior Secured Deferrable Floating Rate Notes
  due 2023, Upgraded to Baa3 (sf); previously on Jul 5, 2011
  Upgraded to Ba2 (sf)

  EUR16.5M Class E Senior Secured Deferrable Floating Rate Notes
  due 2023, Affirmed B1 (sf); previously on Jul 5, 2011 Upgraded
  to B1 (sf)

eleX Alpha S.A., issued in December 2006, is a multi currency
Collateralised Loan Obligation ("CLO") backed by a portfolio of
mostly high yield European leveraged loans. The portfolio is
managed by DWS Finanz-Service GmbH and this transaction ended its
reinvestment period in March 2013. It is predominantly composed
of senior secured loans.

Ratings Rationale

The rating actions on the notes are primarily a result of the
significant deleveraging of the Class A-1 and A-2 and the
subsequent increase in the overcollateralization ratios ("OC
ratios") of the senior notes. Class A-1 and A-2 have cumulatively
paid down EUR73 million (38% of closing balance) within the last
year.

As a result, the OC ratios for most of the classes have increased
in the last 12 months. As per the latest trustee report dated May
2014, the Class A/B, Class C and Class D overcollateralization
ratios are reported at 139.07%, 125.01% and 112.5%, respectively,
compared to 127.73%%, 118.95% and 110.59% 12 months ago. Moody's
also notes that the Class E overcollateralization ratio has
diminished from 103.32% reported in May 2013 to the current
102.26% and is failing the 103% target OC. The failure of the
class E OC test has been largely caused by an increased amount of
defaults and a higher number of assets rated Caa which have
reduced the par value numerator in the OC calculation compare to
May last year. Moody's has noticed that over the same period the
credit quality of the collateral pool has worsened as reflected
by the average credit rating of the portfolio (measured by the
weighted average rating factor, or WARF). As of the trustee's May
2014 report, the WARF was 3,155 compared with 2797 in May 2013.
Over the same period, the reported diversity score reduced from
43.06 to 33.8.

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 EUR143 million, and defaulted par of EUR15.7 million
and (b) a GBP pool with performing par and principal proceeds of
GBP 31.3 million, and a defaulted par of 10.9k, a weighted
average default probability of 21.46% (consistent with a WARF of
3051 over a weighted average life of 4.29 years), a weighted
average recovery rate upon default of 47.06% for a Aaa liability
target rating, a diversity score of 31 and a weighted average
spread of 4.03%.

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 91.59% 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.

Methodology Underlying the Rating Action:

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

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

In addition to the base-case analysis, Moody's conducted
sensitivity analyses on the key parameters for the rated notes,
for which it assumed lower credit quality in the portfolio to
address refinancing risk. Loans to European corporates rated B3
or lower and maturing between 2014 and 2015 make up approximately
3.7% of the portfolio, which could make refinancing difficult.
Moody's ran a model in which it raised the base case WARF to 3270
by forcing ratings on 50% of the refinancing exposures to Ca; the
model generated outputs that were within one notch of the base-
case results.

This transaction is subject to a high level of macroeconomic
uncertainty, which could negatively affect the ratings on the
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 30.6% 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.


EUROCREDIT CDO VIII: Moody's Lowers Class E Notes' Rating to 'B2'
-----------------------------------------------------------------
Moody's Investors Service announced that it has taken the
following rating actions on the following classes of notes issued
by Eurocredit CDO VIII Limited:

EUR432,300,000 (current balance EUR 121.0M) Class A Senior
Secured Floating Rate Notes due 2020, Affirmed Aaa (sf);
previously on Dec 13, 2013 Affirmed Aaa (sf)

EUR47,700,000 Class B Senior Secured Deferrable Floating Rate
Notes due 2020, Upgraded to Aaa (sf); previously on Dec 13, 2013
Upgraded to Aa1 (sf)

EUR42,000,000 Class C Senior Secured Deferrable Floating Rate
Notes due 2020, Upgraded to A1 (sf); previously on Dec 13, 2013
Affirmed Baa1 (sf)

EUR29,000,000 Class D Senior Secured Deferrable Floating Rate
Notes due 2020, Affirmed Ba2 (sf); previously on Dec 13, 2013
Affirmed Ba2 (sf)

EUR24,500,000 (current balance EUR 13.3M) Class E Senior Secured
Deferrable Floating Rate Notes due 2020, Downgraded to B2 (sf);
previously on Dec 13, 2013 Affirmed B1 (sf)

Eurocredit CDO VIII Limited, issued in December 2007, is a multi
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 Intermediate Capital Group PLC, and this transaction
ended its reinvestment period in January 2011.

The issued liabilities are denominated in EUR, and collateral
assets are denominated in EUR and GBP, with the latter hedged by
a macro swap which has been modelled in Moody's analysis.

Ratings Rationale

According to Moody's, the upgrade of the Class B and Class C
notes is primarily a result of the continued amortization of the
portfolio and subsequent increase in the collateralization
ratios. Moody's notes that as of May 2014, the Class A notes have
paid down by a further EUR69.9 million (36.6%) since the last
rating action which was based on October 2013 data. As a result
of this deleveraging, the overcollateralization ratios (or "OC
ratios") of the senior notes have increased significantly over
this period. As per the trustee report dated May 2014, the Class
A, Class B, Class C, Class D, and Class E OC ratios are reported
at 224.65%, 161.12%, 129.00%, 113.39%, and 107.42% respectively,
versus October 2013 levels of 179.81%, 143.86%, 122.33%, 110.87%,
and 105.55%.

The downgrade of the most junior rated note results primarily
from a decline in a number of key portfolio metrics. The credit
quality of the pool has marginally worsened as reflected in the
average credit rating of the portfolio (measured by the weighted
average rating factor, or WARF). As per May 2014 trustee report,
the WARF was 3308 compared to 3178 in October 2013. Over the same
period the reported defaults increased from EUR17.7 million (5.3%
of the collateral loan pool) to EUR27.8 million (12.7% of the
collateral loan pool), and the reported diversity score reduced
from 29 to 24.

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 EUR210.1 million, and defaulted par of EUR35.4 million
and (b) a GBP pool with performing par and principal proceeds of
GBP36.9 million, a weighted average default probability of 22.9%
(consistent with a WARF of 3578 over a weighted average life of
3.4 years), a weighted average recovery rate upon default of
46.7% for a Aaa liability target rating, a diversity score of 21
and a weighted average spread of 3.8%.

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
11.1% of obligors in Italy and Spain, whose LCCs are A2 and A1
respectively. 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 0.44% for Class A and B notes, and
0.11% for Class C notes.

Moody's notes that the portfolio includes a small number of
investments in securities that mature after the maturity date of
the notes. Based on the May 2014 trustee report, such securities
currently total EUR10.8 million (5.7%) of reported performing
par.

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 90.5% 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.

Methodology Underlying the Rating Action:

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

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

In addition to the base-case analysis, Moody's conducted
sensitivity analyses on the key parameters for the rated notes,
for which it assumed lower credit quality in the portfolio to
address refinancing risk. Loans to European corporates rated B3
or lower and maturing between 2014 and 2015 make up approximately
5.9% of the portfolio, which could make refinancing difficult.
Moody's ran a model in which it raised the base case WARF to 3734
by forcing ratings on 50% of the refinancing exposures to Ca; the
model generated outputs that were within one notch of the base-
case results.

This transaction is subject to a high level of macroeconomic
uncertainty, which could negatively affect the ratings on the
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 42.2% 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.

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

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


TAURUS CMBS 2007-1: Fitch Affirms 'C' Ratings on 3 Note Classes
---------------------------------------------------------------
Fitch Ratings has affirmed Taurus CMBS (Pan-Europe) 2007-1
Limited all classes of notes as follows:

EUR142.6 million class A1 (XS0305732181) affirmed at 'BBB-sf';
Outlook Negative

EUR10.9 million class A2 (XS0309194248) affirmed at 'BBsf';
Outlook Negative

EUR16 million class B (XS0305744608) affirmed at 'Bsf'; Outlook
Negative

EUR23.3 million class C (XS0305745597) affirmed at 'CCCsf';
Recovery Estimate (RE) 80%

EUR18.4 million class D (XS0305746215) affirmed at 'Csf'; RE0%

EUR2.5 million class E (XS0309195567) affirmed at 'Csf'; RE0%

EUR1.9 million class F (XS0309195997) affirmed at 'Csf'; RE0%

Taurus CMBS (Pan-Europe) 2007-1 Limited is a securitization of
five (originally 13) commercial mortgage loans originated by
Merrill Lynch & Co. Inc., which closed in August 2007. Out of the
five remaining loans, three are currently in special servicing
(Leipzig loan, Fishman JEC, Saturn loan), while all but Fishman
JEC represent senior participations in whole loans.

Key Rating Drivers

The affirmation of the notes is driven by the loan pool
performing largely as expected. The EUR134.1 million Fishman JEC
loan (62.1%), secured by 18 industrial, office and retail
properties located across France, defaulted in April 2014, three
months prior to maturity, with resolution uncertain. Based on the
reported loan to value ratio (LTV) of 84.9%, as well as on
evidence from another Fishman-sponsored defaulted loan, Fishman
IBC, full repayment remains a possibility. Some progress has been
made in extending the lease profile, although it remains highly
concentrated. Fitch expects a loss, as reflected in the
distressed ratings on junior tranches.

The EUR23.7 million senior Saturn loan (11%) also defaulted at
maturity. The loan is secured by a mixed-use property that was
96% let to the retailer Saturn, until it vacated in December
2013. As it stands vacant, the property value has fallen to
EUR21.5 million currently, from EUR37.7 million in January 2011.
An outright redevelopment of the property is possible although it
is not clear whether planning permission has been obtained (or
whether this would be economical for the borrower given its
indebtedness). Fitch expects the senior loan to suffer modest
losses, with risks to vacant possession value on the downside
given its non-prime location in Frankfurt.

The EUR37.6 million senior Hutley loan (17%) is secured by 11
mixed-used secondary quality properties in Germany. In the
absence of a recent revalution, Fitch estimates a base case
senior LTV of 100%, above the reported 82.1%. In Fitch's view the
loan is likely to default at maturity in July. The two smaller
senior loans, EUR14.8 million Ahouvi Leipzig (7%) and EUR5.5
million WPC G&S (2.5%), are both expected to suffer losses (30%
and 60% respectively). The former is extremely over-rented, with
a sharp fall in income expected when the single lease to
Unicredit expires in September 2016; the latter has a reported
LTV of almost 200%.

Rating Sensitivities

Fitch expects 'Bsf' recoveries of EUR185 million-EUR190 million.
With a sequential paydown structure, should the recovery in the
German secondary property market gather momentum, upgrades are
possible before bond maturity in 2020.  However, a combination of
high reletting risk, idiosyncratic property risk and excessive
whole loan leverage means that risk is mainly on the downside, as
reflected in the Negative Outlooks.



=========
I T A L Y
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ALITALIA SPA: Creditor Banks Reach Debt Restructuring Deal
----------------------------------------------------------
Andrea Mandala at Reuters reports that UniCredit Chief
Executive's Federico Ghizzoni said on Monday creditor banks of
Alitalia SpA have reached agreement on how to share the burden of
a debt restructuring for the Italian airline.

The green light from the banks, together with an agreement
between Alitalia and the unions on job cuts, are key factors for
the airline to seal the final terms of a rescue deal with Abu
Dhabi's Etihad, Reuters discloses.

"All is set among us," Reuters quotes Mr. Ghizzoni as saying at
the end of a closed-door meeting he attended with executives of
Intesa Sanpaolo, Banca Monte dei Paschi, Banca Popolare di
Sondrio and Alitalia.

Until now, Banca Popolare di Sondrio had resisted the other
creditors' attempts to find common ground on the restructuring of
Alitalia debt, which stood at EUR800 million (US$1 billion) at
the beginning of June, Reuters notes.

Alitalia has also made progress on jobs in recent days as it
reached a deal with all but one union on layoffs on Sunday,
Reuters relays.

                         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%.


CREDITO VALTELLINESE: Fitch Lowers Long-Term IDRs to 'BB'
---------------------------------------------------------
Fitch Ratings has downgraded Credito Valtellinese's (Creval)
Long-term Issuer Default Ratings (IDR) to 'BB' from 'BB+'. The
Outlook is Stable. Simultaneously, Fitch has affirmed the Long-
term IDRs of Credito Emiliano (Credem) at 'BBB+', Banca Popolare
di Sondrio (BPS) at 'BBB', Banca Popolare dell'Emilia Romagna
(BPER) at 'BB+', Banca Popolare di Milano (BPM) at 'BB+' and
Banca Carige (Carige) at 'BB'.  The Outlooks remain Negative.
The agency has maintained Banco di Desio e della Brianza's (BDB)
'BBB+' Long-term IDR on Rating Watch Negative (RWN). Fitch also
downgraded the Viability Ratings (VRs) of BPER and Creval to 'bb'
from 'bb+'.

Key Rating Drivers - Support Ratings And Support Rating Floors
(All Banks) And BPER, BPM And CARIGE'S IDRS And Senior Debt

The banks' (excluding BDB) Support Rating (SRs) of '3' and
Support Rating Floors (SRFs) of 'BB+' or 'BB' reflect their
varying degrees of regional importance to Italy and Fitch's view
that there is a moderate probability that the authorities would
provide support to the banks if required because of the banks'
strong franchises in their home regions and fairly large customer
funding bases. BDB's SR of '4' and SRF of 'B+' reflect its mainly
private ownership structure and its fairly small size.

BPM's, BPER's and Carige's Long- and Short-term IDRs and senior
debt ratings are based on external support from authorities as
reflected in their SRFs.

The Negative Outlooks on the Long-term IDRs of BPM, BPER and
Carige reflect Fitch's view there is a clear intention ultimately
to reduce implicit state support for financial institutions in
the EU, as demonstrated by a series of legislative, regulatory
and policy initiatives.  "We expect the EU's Bank Recovery and
Resolution Directive (BRRD) to be implemented into national
legislation later in 2014 or in 1H15. We also expect progress
towards the Single Resolution Mechanism (SRM) for eurozone banks
in this timeframe. In Fitch's view, these two developments will
dilute the influence Italy has in deciding how Italian banks are
resolved and increase the likelihood of senior debt losses in its
banks if they fail solvability assessments," Fitch said.

Rating Sensitivities- Srs And Srfs (All Banks) And BPER, BPM And
CARIGE's IDRs And Senior Debt

As BPM's, BPER's and Carige's Long- and Short-term IDRs and
senior debt ratings are at the banks' SRFs, the sensitivities of
their IDRs and senior debt ratings are predominantly the same as
those for the SRFs.

The seven banks' SRs and SRFs are primarily sensitive to further
progress made in implementing the BRRD and the SRM. The directive
requires 'bail in' of creditors by 2016 before an insolvent bank
can be recapitalized with state funds. A functioning SRM and
progress on making banks 'resolvable' without jeopardizing the
wider financial system are areas of focus for eurozone
policymakers. Once these are operational they will become an
overriding rating factor, as the likelihood of banks senior
creditors receiving full support from the sovereign if ever
required, despite their systemic importance, will diminish
substantially, unless mitigating factors arise in the meantime.
Fitch expects that the BRRD will be enacted into EU legislation
in the near team and progress made on establishing the SRM is
looking close to being ready in the next one to two years. Fitch
expects the banks' SRs to be downgraded to '5' and SRFs to be
revised downwards to 'No Floor'. The timing at this stage is
likely to be some point in late 2014 or in 1H15. A downward
revision of the SRFs would result in downgrades of BPM's, BPER's
and Carige's Long- and Short-term IDRs and senior debt ratings to
the level of the banks' VRs.

The SRs and SRFs are also sensitive to any change in Fitch's
assumptions about the sovereign's ability (for example, triggered
by a downgrade of Italy's sovereign rating) to provide support.

Key Rating Drivers - VRs (All Banks) And CREDEM, BDB, BPS And
CREVAL'S IDRs And Senior Debt

BPER's and Creval's VRs have been downgraded by one notch and the
VRs of five other banks have been affirmed. BDB's VR and IDRs
remain on RWN. The rating actions on the banks' VRs reflect the
capital strengthening measures undertaken by most of these banks,
further deterioration in asset quality and structurally weak
profitability in their commercial businesses.

There have been signs of slowing growth of impaired loans in 2014
but the fragile recovery has not yet resulted in a stabilization
in asset quality, which is one of the main rating drivers for
most of these banks, with the exception of BPM. Credem benefits
from the best asset quality, followed by BDB and BPS. The quality
of lending is weak at Creval, BPER and Carige. High levels of
unreserved impaired loans at the three banks in relation to their
Fitch core capital make their capitalisation vulnerable to
further deterioration in asset quality, despite the recent
capital increases. In Fitch's view, capitalization and leverage
is one of the main rating drivers for the banks, with the
exception of BPM.

Earnings in 2013 were supported by income from the banks'
securities books (primarily consisting of Italian government
bonds). Excluding those, structural profitability of the
commercial business has been weak and Fitch expects further
pressure as the nascent economic recovery in Italy is fragile.
The affirmation of Credem's IDRs and VR reflects asset quality
that is better than peers, even in a deteriorating environment,
thanks to its conservative underwriting practices and prudent
risk management.

As a result, loan impairment charges only absorbed 15% of pre-
impairment operating profit in 2013. Even once the capital
injections at peer banks are completed, Credem's Fitch core
capital (FCC) to weighted risks ratio of nearly 11% at end-1Q14
will continue to compare well with peers, in particular because
of a lower level of unreserved impaired loans. The Outlook on
Credem's Long-term IDR remains Negative as the structural
profitability of its commercial activities (i.e. excluding income
from the securities portfolio) remains weak and under pressure.
The RWN on BDB's IDRs and VR reflects the negative impact that
the announced acquisition of cooperative bank Banca Popolare di
Spoleto (BPSpoleto) will have on BDB's asset quality and, to a
lower extent, on capital, the inherent execution risks in the
transaction and BPSpoleto's ultimate ownership structure, which
will include minority interests.

The ratings continue to reflect the bank's more resilient
profitability than most peers, its relatively prudent lending
policies and a well-diversified loan book by both borrower and by
industry, resulting in better than system-average asset quality
ratios. Capitalization is sound.

The affirmation of BPS' IDRs and VR reflects the strengthening of
the bank's capitalization, after the successful conclusion of a
EUR350 million new share issue, at a time when Fitch sees signs
of normalization in the operating environment in Italy. However,
the capital increase only temporarily compensates for
deteriorating asset quality and the weak profitability of BPS's
commercial banking activities. The affirmation also reflects
BPS's manageable asset quality, although this continues to
weaken, hence the Negative Outlook on the Long-term IDR.

The downgrade of BPER's VR to 'bb' from 'bb+' reflects that Fitch
considers the bank's ongoing capital strengthening not sufficient
to compensate for the strong deterioration in asset quality.

BPER's level of impaired loans is one of the highest among peers,
with end-1Q14 gross impaired loans representing almost 20% of
total gross loans. Unreserved impaired loans will continue to
account for more than 100% of FCC, even after the ongoing EUR750m
capital increase is completed, reflecting the high encumbrance of
capital by assets that do not generate earnings and might
conversely bring further losses. The downgrade also reflects
BPER's structurally weak profitability.

The downgrade of Creval's Long-term IDR and VR reflects pressure
from the accelerating asset quality deterioration and low
coverage levels, with unreserved impaired loans accounting for
more than 95% of FCC even after the successful completion of the
EUR400m capital increase. The downgrade also reflects Creval's
structurally weak profitability. However, Fitch's opinion that
there are initial signs of normalization in the operating
environment and financial markets in Italy drives the Stable
Outlook on its Long-term IDR.

BPM's VR reflects Fitch's opinion of the bank's weak corporate
governance, which acts as a constraint on the rating. Fitch views
the bank's corporate governance, which is significantly
influenced by minority shareholders, as convoluted and
suboptimal. The bank successfully raised EUR500 million capital
to strengthen its balance sheet in May 2014, while the Bank of
Italy removed the punitive risk weightings (EUR8.1 billion)
imposed on the bank back in 2011. These actions strengthened the
bank's capitalization to a level that compares adequately with
its direct domestic peers and put the bank in a stronger position
ahead of the Asset Quality Review undertaken by the European
Central Bank. The pace of asset quality deterioration at BPM
remains in line with sector trends. The bank's exposure to the
real estate and construction sectors has decreased considerably
since 2011 but continues to influence BPM's credit risk profile.

Carige's VR has been affirmed and removed from RWN following the
completion of the EUR800m capital increase announced in 2013. The
VR continues to reflect weaknesses in the bank's management and
corporate governance, although Fitch believes that changes
introduced in the past year - including an overhaul of the top
management and the entrance of new institutional investors in the
bank's ownership structure, reducing the dominant ownership and
influence of Carige's largest shareholder, banking foundation
Fondazione Carige -- could be beneficial to the bank's ratings
over time. The VR remains lower than all other rated Italian
medium-sized banks because Carige's financial position remains
weak, in Fitch's opinion. Asset quality deteriorated sharply in
2013 with impaired loans equal to about 20% of gross loans and
unreserved impaired loans still accounting for more than 150% of
FCC at end-2013.

Rating Sensitivities - VRs (All Banks) And CREDEM, BDB, BPS and
CREVAL'S IDRs and Senior Debt

The Negative Outlooks on Credem and BPS mainly reflect pressure
on their ratings relative to similarly rated peers. Failure to
restore structural profitability to acceptable and sustainable
levels in the next 12 months would result in a downgrade of
Credem's and BPS's VRs and IDRs. At the same time, material asset
quality and capital deterioration, which Fitch currently does not
expect, given the banks' sound underwriting standards, would put
pressure on their ratings. The combination of a turnaround in
profitability and stabilization of asset quality would be
required for the Outlooks to be revised to Stable.

Creval's and BPER's VRs would come under pressure if asset
quality were to deteriorate and capitalization to weaken above
the agency's expectations as a result of the Asset Quality Review
or higher inflows of impaired loans. Upward movements in the
ratings are unlikely at the moment and would require a material
improvement of asset quality, a turnaround in the structural
profitability of commercial activities and adequate
capitalization.

Fitch expects to resolve the RWN on BDB once the acquisition is
formally complete, which is expected to take place in 2H14. The
acquisition of BPSpoleto will result in weaker asset quality and
capital but in the longer term could provide BDB with more room
for cost efficiencies than currently available and ultimately
support its revenue generation capacity. Fitch believes that a
downgrade would most likely be of two notches.

Any upgrade of BPM's VR is contingent on a credible strengthening
of its corporate governance standards. An upgrade of Carige's VR
would require a material improvement in asset quality and profit
generation. The disposal of the bank's two insurance subsidiaries
would be an indicator of the bank's improved risk appetite and
could also positively affect the VR.

Key Rating Drivers and Sensitivities - Subordinated Debt And
Other Hybrid Securities

Subordinated debt and other hybrid capital issued by the banks
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,
which drive the ratings, but also to any change in Fitch's view
of non-performance or loss severity risk relative to the banks'
viability.

Legacy Lower Tier 2 debt is notched once off the banks'
respective VRs to reflect Fitch's view of loss severity risk
based on their level of subordination, while the absence of
coupon flexibility means that non-performance risk is minimal
hence no further notching is applied.

The ratings of BPM's and Carige's subordinated notes and
preferred securities reflect Fitch's opinion that non-performance
risk in the form of non-payment of coupons is high, given the
weak standalone profile of the two banks. The rating of Carige's
subordinated notes is vulnerable to a potential capital shortfall
that might result from the European Banking Authority's stress
tests, which might impose some write down of the principal to
cover for the shortfall.

The rating actions are as follows:

Credito Emiliano

Long-term IDR: affirmed at 'BBB+'; Outlook Negative
Short-term IDR: affirmed at 'F2'
Viability Rating: affirmed at 'bbb+'
Support Rating: affirmed at '3'
Support Rating Floor: affirmed at 'BB'
Long-term senior unsecured debt (EMTN): affirmed at 'BBB+'

Banco di Desio e della Brianza

Long-term IDR: 'BBB+'; RWN maintained
Short-term IDR: 'F2'; RWN maintained
Viability Rating: 'bbb+'; RWN maintained
Support Rating: affirmed at '4'
Support Rating Floor: affirmed at 'B+'

Banca Popolare di Sondrio

Long-term IDR: affirmed at 'BBB'; Outlook Negative
Short-term IDR: affirmed at 'F3'
Viability Rating: affirmed at 'bbb'
Support Rating: affirmed at '3'
Support Rating Floor: affirmed at 'BB'

Banca Popolare dell'Emilia Romagna

Long-term IDR: affirmed at 'BB+'; Outlook Negative
Short-term IDR: affirmed at 'B'
Viability Rating: downgraded to 'bb' from 'bb+'
Support Rating: affirmed at '3'
Support Rating Floor: affirmed at 'BB+'
Senior unsecured notes (including EMTN): affirmed at 'BB+'/'B'
Subordinated notes: downgraded to 'BB-' from 'BB'

Banca Popolare di Milano

Long-term IDR: affirmed at 'BB+'; Outlook Negative
Short-term IDR: affirmed at 'B'
Viability Rating: affirmed at 'b+'
Support Rating: affirmed at '3'
Support Rating Floor: affirmed at 'BB+'
Senior unsecured notes (including EMTN): affirmed at 'BB+'/'B'
Commercial paper: affirmed at 'B'
Subordinated lower tier 2 debt: affirmed at 'B'
Preferred stock and hybrid capital instrument: affirmed at 'CCC'

Credito Valtellinese

Long-term IDR: downgraded to 'BB' from 'BB+'; Outlook Stable
Short-term IDR: affirmed at 'B'
Viability Rating: downgraded to 'bb' from 'bb+'
Support Rating: affirmed at '3'
Support Rating Floor: affirmed at 'BB'
Senior unsecured notes, including notes guaranteed by Credito
Valtellinese and EMTN: Long-term rating downgraded to 'BB' from
'BB+'; Short-term rating affirmed at 'B'

Banca Carige

Long-term IDR: affirmed at 'BB'; Negative Outlook
Short-term IDR: affirmed at 'B'
Viability Rating: affirmed at 'b-'; off RWN
Support Rating: affirmed at '3'
Support Rating Floor: affirmed at 'BB'
Senior unsecured notes: affirmed at 'BB'/'B'
Subordinated notes: affirmed at 'CCC'; off RWN



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HEMA BV: S&P Assigns 'B+' Corp. Credit Rating; Outlook Stable
-------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B+' long-term
corporate credit rating to the Netherlands-based general
merchandise and food retailer Hema B.V.  The outlook is stable.

"At the same time, we assigned a 'BB+' long-term issue rating and
'1+' recovery rating to Hema's EUR80 million super senior
revolving credit facility (RCF) due 2018.  We assigned our 'B+'
rating and '3' recovery rating to the EUR250 million senior
secured floating-rate notes and EUR315 million senior secured
fixed-rate notes, both due 2019.  We assigned a 'B-' rating and
'6' recovery rating to the EUR150 million senior unsecured notes
due 2019.  The notes were issued by special purpose vehicles HEMA
Bondco I B.V. and HEMA Bondco II B.V. owned by Dutch Lion B.V.,
the parent company of Hema.  The proceeds of the notes were lent
on to Hema," S&P said.

The rating reflects S&P's view of Hema's "fair" business risk
profile and "highly leveraged" financial risk profile, resulting
in an anchor of 'b'.  S&P adjusts the anchor upward by one notch
to account for its positive view of Hema under its comparable
ratings analysis, where S&P reviews the company's credit
characteristics in aggregate.

The rating on Hema is primarily constrained by S&P's view of the
company's highly leveraged financial profile and its assessment
of the company's financial policy as "financial sponsor-6," based
on Hema's private equity ownership.  S&P understands that the
shareholder, Lion Capital, partly financed its acquisition of
Hema in 2007 through a shareholder loan with a principal amount
of EUR269.6 million.  In addition, a payment-in-kind (PIK)
facility amounting to about EUR85 million outstanding, before
refinancing, was substituted by EUR85 million senior PIK notes
due 2020, issued by Dutch Lion B.V.  Although S&P considers that
these facilities have certain equity characteristics, are noncash
paying, and subordinated, S&P treats them as debt-like, according
to its criteria.  At year-end 2014, S&P therefore assumes
adjusted debt to EBITDA will be above 12x (excluding our
operating-lease adjustment).  However, although S&P views the
shareholder loan and the PIK facility as debt-like, it recognizes
their cash-preserving function, especially supported by the
company's prudent financial policy regarding shareholder returns.
Excluding these debt-like instruments, Hema's leverage would be
in the upper range of 5x-6x over the next three years.

In the absence of acquisitions and with the continuation of a
prudent financial policy in terms of distributions to the
shareholder, S&P forecasts that Hema will continue to generate
sound free operating cash flow (FOCF), which serves as a buffer
against unexpected business deterioration and enables the company
to invest in expansion outside its core Dutch market.  Although
S&P do not net cash against gross debt, owing to Hema's financial
sponsor ownership, it expects a mild improvement in leverage over
the next three years thanks to increased EBITDA and cash flow.

S&P's assessment of Hema's business risk profile as "fair"
incorporates its view that the company is well positioned as the
leading general merchandise retailer in its core markets in the
Netherlands, Belgium, and Luxemburg.  In addition, given its
strong brand recognition, leading niche positions, and strong
track record of operations over many decades, Hema should be able
to maintain its market position even under intensifying
competition from local and international retail chains.

Hema is a midsize company that reported about EUR1.1 billion of
revenues for fiscal year 2013 (ended Feb. 2, 2014).  About 70%
comes from the sale of nonfood products.  Its revenues declined
by 5.3% in 2013, affected by a challenging economy in the core
Dutch market.  EBITDA margins also came under pressure, not only
due to declining revenues, but also as a result of stiffening
competition from discount retailers.  However, the company's
operations are supported by the almost 30% share of sales from
food and catering, which are more resilient to adverse market
conditions.

The company sells almost all products under the Hema brand,
which, on the one hand, supports Hema's bargaining power with
suppliers, resulting in an increasing gross margin even in
difficult economic times.  On the other hand, this exposes Hema's
gross margin to adverse currency or raw materials price trends.

The major factors constraining Hema's business risk profile are
its operations in highly fragmented and competitive markets and
still limited geographic diversification, as it generates over
70% of EBITDA in the Netherlands, which is only starting to show
some signs of recovery.  In addition, S&P considers that the
nonfood retail segment faces strong price competition, high
seasonality, and the discretionary nature of purchases.  However,
Hema's focus on basic low-cost clothing somewhat mitigates these
risks.

S&P's positive comparable ratings analysis primarily reflects
Hema's healthy free cash flow generation and interest coverage.
It further incorporates S&P's view of Hema's business risk
profile at the upper end of the "fair" category, based on its
opinion that Hema's competitive position is stronger than that of
other similarly rated global peers, thanks to its above-average
market share in its home markets in most of its product
categories.

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

   -- An overall improving economy in the Netherlands, with real
      GDP to rise by 1% in 2014 and 1.3% in 2015.

   -- Flat revenue growth in fiscal year 2014 (ending Feb. 2,
      2015), with still slightly negative like-for-like revenue
      growth in the Netherlands.

   -- Modest 1%-3% revenue growth from 2015.

   -- Relatively stable gross margins.

   -- Improvement in the adjusted EBITDA margin of about 130
      basis points in fiscal 2014, mostly owing to cost
      reductions.

   -- Operating-lease commitments, which represent S&P's largest
      adjustment to reported debt, apart from the shareholder
      loan and PIK notes, and  will continue to increase in line
      with business growth.

   -- Positive free cash flow generation as a result of limited
      working capital needs and decreasing capital expenditures
      of about EUR40 million.

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

   -- Adjusted debt to EBITDA (including shareholder loans, PIK
      notes, and operating-lease adjustments) remaining above 9x
      (5x-6x excluding the shareholder loan and PIK notes).

   -- FOCF of more than EUR20 million in 2014.

   -- If management commits to a prudent financial policy, some
      credit ratios in line with a better financial risk profile
      category than "highly leveraged", for example funds from
      operations (FFO) cash interest coverage and EBITDA cash
      interest coverage exceeding 2x (1x adjusted EBITDA interest
      coverage) in fiscal 2014.

The stable outlook reflects S&P's view that Hema will continue to
improve its market position and pursue a prudent diversification
strategy to expand its operations.  Furthermore, S&P considers
that profitability is likely to improve following the company's
implementation of its cost-saving strategy and that Hema should
be able to continue generating positive FOCF and maintain
adequate coverage of debt service costs.  Hema's "adequate"
liquidity, as well as its sufficient financial covenant headroom,
should, in S&P's opinion, enable the company to withstand
potential temporary operating setbacks.

S&P don't think it likely that Hema will meaningfully reduce its
total adjusted leverage, owing to the PIK nature of the
shareholder loan.

Ratings upside is limited in the next 12 months.  However, S&P
would likely consider a positive rating action if Hema's business
operations grew more strongly than we currently forecast, on the
back of a successful expansion strategy in other countries, and
translated into a higher business risk profile assessment.

S&P could also consider a positive rating action if Hema's core
leverage ratios improved toward the "aggressive" category.  This
would occur if adjusted FFO to debt increased to more than 12%
and adjusted debt to EBITDA fell below 5x.

If Hema's financial policy toward shareholder remuneration became
more aggressive, S&P could consider a downgrade.

S&P could also lower the rating if the company experiences an
unexpected loss of market share or considerable revenue or profit
declines, leading S&P to lower its assessment of its business
risk profile.

S&P could also lower the rating because of lower EBITDA and cash
generation, resulting in FFO cash interest coverage falling below
2x or free cash flow turning negative.



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BANCO ESPIRITO: Moody's Cuts Ratings on Covered Bonds to 'Ba1'
--------------------------------------------------------------
Moody's Investors Service has downgraded to Ba1 from Baa2 on
review for downgrade, the ratings of the mortgage covered bonds
issued by Banco Espirito Santo, S.A. (the issuer/BES). The
ratings on the mortgage covered bonds remain on review for
downgrade, which, in turn, corresponds with the continued review
for downgrade of BES's B2 deposits ratings.

Ratings Rationale

The rating actions follow Moody's downgrade of the deposit and
debt ratings of BES.

For BES mortgage-backed covered bonds, the covered bond anchor
point is the issuer's deposit ratings. When determining the
correct anchor point in covered bond analysis, Moody's takes into
account the likelihood of an issuer ceasing to make payments on,
or otherwise support, the covered bonds.

Following the recent European regulatory developments with regard
to the positioning of covered bonds in the capital structure of
an issuer, Moody's has concluded that the deposit rating is a
better indicator of a covered bond anchor event (i.e., the
likelihood that an issuer ceases to make payments on covered
bonds), than the senior unsecured rating.

The ratings of the mortgage covered bonds issued by BES remain on
review for downgrade, reflecting the ongoing corresponding review
on BES's deposit ratings.

Key Rating Assumptions/Factors

Moody's determines covered bond ratings using a two-step process;
an expected loss analysis and a Timely Payment Indicator (TPI)
framework analysis:

EXPECTED LOSS: Moody's uses its Covered Bond Model (COBOL) to
determine a rating based on the expected loss on the bond. COBOL
determines expected loss as (1) a function of the probability
that the issuer will cease making payments under the covered
bonds (a covered bondanchor event); and (2) the stressed losses
on the cover pool assets following a covered bond anchor event.

The cover pool losses for BES's mortgage covered bonds are 23.4%.
This metric is an estimate of the losses Moody's currently models
following a covered bond anchor event. Moody's splits cover pool
losses between market risk of 16.7% and collateral risk of 6.7%.
Market risk measures losses stemming from refinancing risk and
risks related to interest-rate and currency mismatches (these
losses may also include certain legal risks). Collateral risk
measures losses resulting directly from the credit quality of the
cover pool assets. Moody's derives collateral risk from the
collateral score, which, for this program, is currently 10.0%.

The over-collateralization in the cover pool is 36.7%, of which
BES provides 5.26% on a "committed" basis. The minimum over-
collateralization level consistent with the Ba1 rating target is
2.0%, of which the issuer should provide 5.26% in a "committed"
form. These figures show that Moody's is not relying on
"uncommitted" over-collateralization in its expected loss
analysis.

All figures in this section derive from Moody's most recent
modelling, based on data as per 30 March 2014. For further
details on cover pool losses, collateral risk, market risk,
collateral score and TPI Leeway across all covered bond programs
rated by Moody's please refer to "Moody's Global Covered Bonds
Monitoring Overview", published quarterly.

The cover pool losses are an estimate of the losses Moody's
currently models following a covered bond anchor event. Moody's
splits cover pool losses between market risk and collateral risk.
Market risk measures losses stemming from refinancing risk and
risks related to interest-rate and currency mismatches (these
losses may also include certain legal risks). Collateral risk
measures losses resulting directly from the credit quality of the
cover pool assets. Moody's derives collateral risk from the
collateral score.

TPI FRAMEWORK: Moody's assigns a (TPI), which measures the
likelihood of timely payments to covered bondholders following a
covered bond anchor event. The TPI framework limits the covered
bond rating to a certain number of notches above the covered bond
anchor.

For BES's mortgage covered bonds, Moody's has assigned a TPI of
"Improbable".

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

The covered bond anchor is the main determinant of a covered bond
program's rating robustness. A change in the level of the covered
bond anchor could lead to an upgrade or downgrade of the covered
bonds. The TPI Leeway measures the number of notches by which
Moody's might lower the covered bond anchor before the rating
agency downgrades the covered bonds because of TPI framework
constraints.

Based on the current TPI of "Improbable", the TPI Leeway for this
program is zero notches. This assessment implies that Moody's
might downgrade the covered bonds because of a TPI cap, if it
lowers the covered bond anchor by one notch -- all other
variables being equal.

A multiple-notch downgrade of the covered bonds might occur in
certain limited circumstances, such as (1) a sovereign downgrade
negatively affecting both the issuer's senior unsecured rating
and the TPI; (2) a multiple-notch downgrade of the issuer; or (3)
a material reduction of the value of the cover pool.

Rating Methodology

The principal methodology used in this rating was "Moody's
Approach to Rating Covered Bonds", published in March 2014.



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RASPADSKAYA OAO: Moody's Changes 'B2' CFR Outlook to Negative
-------------------------------------------------------------
Moody's Investors Service has changed to negative from stable the
outlook on Raspadskaya OAO's B2 corporate family rating (CFR) and
B2-PD probability of default rating (PDR). Concurrently, Moody's
has affirmed these ratings. At the same time, Moody's has
affirmed the B2 rating on the senior unsecured debt issued by
Raspadskaya Securities Ltd., a limited liability company
incorporated in Ireland, as well as its B2-PD PDR (with a loss-
given-default (LGD) assessment of LGD4, 50%), respectively.

The change in outlook reflects Moody's expectations that low
domestic demand and subpar profitability of export deliveries
will likely continue in the near term, which will continue to
negatively affect the company's financial metrics over the next
quarters. Moreover, low coking coal prices and the lack of formal
guarantees from EVRAZ plc (unrated) or Evraz Group S.A. (Ba3
stable) limit the level of alignment between the CFRs of
Raspadskaya and Evraz Group.

"Moody's decision to change the outlook on Raspadskaya's ratings
to negative was prompted by the continued deterioration in coking
coal prices over the last few months and the lack of visibility
with respect to the timing of recovery," says Denis
Perevezentsev, a Moody's Vice President -- Senior Analyst and
lead analyst for Raspadskaya. "Improvements in the company's
metrics are largely contingent on its ability to ramp up
production at its Raspadskaya mine, the timing of which is
difficult to estimate," adds Mr. Perevezentsev.

Ratings Rationale

The outlook change reflects Moody's expectation that
Raspadskaya's financial metrics will remain weak due to weak
metallurgical coal market conditions, which have been marked by a
second and third quarter benchmark settlement for high quality
hard coking coal of approximately $120 per tonne, down from
$152/tonne in fourth quarter 2013. The sluggish recovery in the
global steel industry and slowing GDP growth rates in China may
delay the pricing recovery.

For Russian producers, the current benchmark prices will
translate into a domestic coking coal concentrate price of around
US$70/tonne-$80/tonne on a "Free carrier", or FCA (i.e.,
excluding transportation costs) basis, or US$55/tonne-US$60/tonne
for export deliveries. Given such weak prices, the gap is quite
narrow between these and Raspadskaya's cash costs of around
US$54.9/tonne in 2013, shrinking the company's operating margins
and operating cash flows. Devaluation of the rouble in H1 2014,
while contributing to cash cost reduction in 2014, will not fully
counterbalance the negative impact of weak demand in the domestic
market and the low profitability of export sales.

Given its current low cash flow generation, Raspadskaya's
liquidity profile is weakening with operating cash flows being
almost fully utilized by maintenance capex needs, which means the
company now has limited cash headroom. That said, the company has
no immediate maturity (the company had US$503 million in debt as
of December 31, 2013, comprising 7.75% loan participation notes
(LPN) for $400 million due in 2017 and loans to EVRAZ plc/Evraz
Group S.A. of US$94 million due in 2016). As of December 31,
2013, the company exceeded its total debt/EBITDA financial
covenant requirement (incurrence test) of 3.0x (actual ratio was
about 18x) set in the LPN documentation, which limits the
company's ability to increase debt by more than US$100 million.

Raspadskaya's B2 CFR reflects (1) low coking coal prices, with a
limited probability of substantial recovery over the next few
quarters; (2) recurring operational issues at the company's main
production mine following the temporary suspension of operations
in May 2013; (3) the company's fairly small size and narrow
operating footprint; (4) Raspadskaya's lack of product,
geographical or operational diversification; (5) its high
leverage and modest cash flow metrics; (6) the company's heavy
dependence on the steel sector, which is fairly volatile; (7)
Raspadskaya's customer concentration, including significant sales
to the companies affiliated with its shareholders (EVRAZ
plc/Evraz Group S.A.); and (8) ownership concentration, which
could lead to a shareholder-friendly financial policy (high
dividends or share buybacks).

However, these negative factors are partially offset by
Raspadskaya's (1) extensive high-quality and fairly low-cost
semi-hard and hard coking coal reserves, with an average cash
cost of around US$54.9/tonne in 2013, which compares favourably
with the cash costs of many international coal producers and
Russian vertically integrated steel producers; (2) strategic
importance to its controlling shareholder (EVRAZ plc); and (3)
the expectation that Evraz would be likely to provide support to
address near-term liquidity needs, which are expected be modest
considering there are no debt repayments until 2016, and only
interest and coupon of around US$36 million per year to be paid
until then.

What Could Change The Rating Down/Up

Negative rating pressure will develop if (1) Raspadskaya's
financial metrics fail to improve over the next 12 to 18 months
as a result of unfavorable market dynamics; (2) the company's
ability to refinance in 2016-17 appears increasingly uncertain;
(3) major operational issues at the Raspadskaya mine lead to a
significant deterioration in unit cash costs, operating profits
and cash flow generation capacity; (4) the CFR of Evraz Group
S.A. is downgraded; or (5) there is a noticeable reduction in
support provided by EVRAZ plc/Evraz Group S.A. to the company.

Given the negative outlook on the rating, an upgrade is unlikely
over the next 12-18 months. However, positive pressure on the
outlook or rating might develop if coking coal prices on domestic
and export deliveries improve materially and the company manages
to successfully resolve operational issues at its main production
mine improving coking coal production in 2014. A formal
commitment of Evraz Group S.A./Evraz plc to support debt at
Raspadskaya OAO may also trigger an upgrade of the company's
rating.

Moody's will stabilize the rating if coking coal prices on
domestic and export deliveries improve sustainably to above
Raspadskaya's cash costs and the company manages to successfully
ramp-up production at its Raspadskaya mine following commencement
of new longwalls.

Principal Methodologies

The principal methodology used in these ratings was the Global
Mining Industry published in May 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.

Raspadskaya is one of Russia's largest coking coal producers,
with a coal extraction volume of 7.8 million tonnes in 2013
(2012: 7.0 million tonnes) and sales of 5.8 million tonnes of
coal concentrate and raw coal (2012: 5.1 million tonnes).

The company's production assets consist of three underground
mines, one open-pit mine, a coal preparation plant, as well as a
coal transportation network and a number of integrated
infrastructure companies. All these assets are located in the
Kuzbass Basin (Kemerovo region, Russia). The company is
controlled by Evraz plc (unrated). In 2013, Raspadskaya reported
revenues of US$545 million (2012: US$543 million) and EBITDA of
US$28 million (2012: US$136 million).


SISTEMA JSFC: S&P Raises CCR to 'BB+' on Improved Financials
------------------------------------------------------------
Standard & Poor's Ratings Services said that it had raised its
long-term corporate credit rating on Russian holding company
Sistema (JSFC) to 'BB+' from 'BB'.  The outlook is stable.

The rating action reflects S&P's view of improvements in
Sistema's financial risk profile, management, and governance
practices.

"We now view Sistema's financial risk profile as "intermediate,"
compared with "significant" previously.  Debt at the holding
company is relatively low, with the gross amount at US$1.7
billion on March 31, 2014, or only US$0.5 billion net of cash and
cash equivalents.  This compares with expected dividend income of
no less than US$1.5 billion from the subsidiaries in 2014, which
translates into a loan-to-value ratio of well below 10%.  We
don't expect the holding company's debt to increase because its
acquisitions and dividends to shareholders are likely to be
manageable and its cash flow should remain solid.  We expect
Sistema to stick to its financial policy, which is aimed at
keeping the consolidated ratio of net debt to EBITDA lower than
2x (compared with 1.4x on March 31, 2014); gradually reduce
holding-company debt; and keep a comfortable liquidity cushion of
no less than US$1 billion on its own books," S&P said.

"In our view, Sistema has made several important steps to improve
its management and governance practices, which we now view as
"fair," compared with "weak" previously.  For example, it has
introduced new policies for acquisitions and portfolio
management. In our view, Sistema is increasingly operating as a
pure holding company, with well-defined procedures, a clear exit
strategy for each investment, and almost all subsidiaries having
autonomous management and financing.  We believe that Sistema
continues to rely heavily on its key shareholder and chairman,
Vladimir Evtushenkov, and his future standing in Russia's
business and political landscape.  Still, most of Sistema's board
members are independent directors who actively participate in
decision-making, which should somewhat counterbalance the key-man
risk, in our view," S&P noted.

S&P continues to regard Sistema's business risk profile as
"fair," constrained by substantial concentration in its two core
assets, Mobile TeleSystems (OJSC) (MTS) and Bashneft, and large
exposures to Russia, which S&P views as a high-risk country.  The
liquidity of Sistema's company portfolio is limited by Sistema's
position as the majority owner of both MTS and Bashneft.  S&P
views this as a long-term feature and expect any portfolio
diversification to happen only gradually.  Sistema's other assets
are much smaller and unlisted, and, in S&P's view, carry higher
risk.  On the positive side, MTS and Bashneft both demonstrate
robust profitability, pay substantial dividends to Sistema, and
keep manageable leverage, despite ongoing high investments.

S&P understands that most of Sistema's smaller assets, excluding
Sistema Shyam TeleServices Ltd., do not require any support from
Sistema, are now profitable, and likely to pay dividends to
Sistema.  S&P notes Sistema's ability and willingness to divest
assets, as illustrated by the successful sale of its stake in
Russneft in 2013 for US$1.2 billion, the restructuring of SG-
Trans, and a strategic partnership regarding Binnofarm, which it
announced in early 2014.  In addition, S&P understands Sistema
plans to sell minority stakes in Bashneft and possibly Detsky Mir
if market conditions are favorable.

The stable outlook reflects S&P's expectation that Sistema's
loan-to-value ratio will be comfortably below 20%, acquisitions
and support to existing subsidiaries will be only moderate, and
improvements in management and governance will continue.

Rating upside is currently limited by portfolio concentration and
the difficult business environment in Russia.  In the longer
term, an upgrade will depend on a gradual improvement in
portfolio quality, for example via additional meaningful
diversification; as well as on higher liquidity and on business
conditions not deteriorating further.

S&P may consider a negative rating action if there were a large
increase in debt at the holding company level, due for instance
to very large investments or dividend payouts, which S&P
currently do not foresee occurring, however.  Moreover, S&P could
lower the rating if it saw negative developments in the company's
financial policy or governance practices.  Rating downside could
also develop if S&P was to lower the sovereign credit rating on
Russia and business conditions worsened.


URALTRANSBANK: Fitch Affirms 'B-' Long-term IDR; Outlook Stable
---------------------------------------------------------------
Fitch Ratings has affirmed Russia-based Uraltransbank's (UTB)
Long-term Issuer Default Rating (IDR) at 'B-' with Stable
Outlook.

Key Rating Drivers

UTB's ratings reflect the bank's weak asset quality, narrow
franchise and moderate capitalization. At the same time the
ratings reflect adequate pre-impairment profitability and
currently comfortable liquidity position.

Asset quality risks stem less from high non-performing loans
(NPLs; more 90 days overdue), which are fully reserved, than from
weakly provisioned restructured loans. The former accounted for
13.8% of gross loans at end-2013, while a further 7.3% of bad
loans were transferred to debt collection companies with the bank
retaining credit risk. Both categories were fully covered by loan
impairment reserves which equaled 22% of total loans. However,
restructured loans, which would otherwise be NPLs, accounted for
another 14.7% of loans and were weakly reserved.

Fitch Core Capital (FCC) ratio stood at a reasonable 15.2% at
end-2013, but regulatory Tier 1 ratio was much tighter at 7.4% at
end-4M14, mainly because the former includes property revaluation
reserves, and due to a larger operational risk component under
regulatory rules. Total regulatory capital ratio was 14.1% at
end-4M14, allowing the bank to increase impairment reserves by
only 4% (up to a maximum 19%) before breaching the minimum
required 10% capital ratio which is a small buffer for the bank's
high restructured loans.

Pre-impairment profit was reasonable at 5.4% of average gross
loans in 2013, offering additional loss absorption capacity.
However, this was insufficient to cover impairment charges in
2013, leading to moderate bottom-line losses. The bank also
showed a small loss in 5M14 regulatory accounts.

UTB's liquidity is comfortable with liquid assets covering 40% of
total customer accounts (main source of funding representing 95%
of total liabilities) at end-4M14.

Rating Sensitivities

UTB's ratings could be downgraded if asset quality and capital
come under greater pressure. Upside potential is currently
limited taking into account the narrow franchise and weak asset
quality.

The ratings are as follows:

Long-term IDR: affirmed at 'B-', Outlook Stable
Short-Term IDR: affirmed at 'B'
Viability Rating: affirmed at 'b-'
Support Rating: affirmed at '5'
Support Rating Floor: affirmed at 'No Floor'
National Long-term rating: affirmed at 'BB-(rus)', Outlook
  Stable



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


AYT FONDO EOLICO: Moody's Cuts Ratings on E1 & E2 Notes to 'B3'
---------------------------------------------------------------
Moody's Investors Service announced that it has downgraded to B3
from B2 the ratings on the Series E1 and E2 notes issued under
the AyT FONDO EOLICO, FTA program (AyT Fondo Eolico). This rating
action follows Moody's downgrade of the rating on the notes'
guarantor, NCG Banco S.A., to Caa1 from B3 on June 30, 2014.

The rating action concludes the review for downgrade of the
ratings on the E1 and E2 notes initiated by Moody's on 13 January
2014.

The affected ratings are:

Issuer: AyT FONDO EOLICO, FTA

  EUR7.7M E1 Notes, Downgraded to B3; previously on Jan 13, 2014
  B2 Placed Under Review for Possible Downgrade

  EUR7.6M E2 Notes, Downgraded to B3; previously on Jan 13, 2014
  B2 Placed Under Review for Possible Downgrade

Ratings Rationale

The rating action follows Moody's downgrade of the rating on the
notes' guarantor, NCG Banco S.A., to Caa1 from B3 on June 30,
2014.

As Moody's analysis of the likelihood of payments under the notes
relies primarily on a guarantee from NCG Banco S.A., the ratings
on the notes have been fully linked to those of the bank itself.
In 2008, however, the guarantor strengthened its collateral
guarantee in making cash deposits (for about a third of the
outstanding balance of each class of notes). The cash deposits
are currently held at the paying agent, Barclays Bank PLC,
Sucursal en Espana.

Moody's rating methodology takes into account the joint benefit
of the guarantee and of the cash deposits. The rating agency
assumes a default probability for the notes that is consistent
with the rating of the guarantor but currently includes in its
recovery assumption the benefit of the cash deposit, as well as a
claim on the guaranteeing bank for the residual amount of the
principal. As a result, Moody's currently rates the notes one
notch above the rating of the guaranteeing bank.

The principal methodology used in this rating was "Rating
Transactions Based on the Credit Substitution Approach: Letter of
Credit-backed, Insured and Guaranteed Debts" published in March
2013.

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

An upgrade or downgrade of NCG Banco S.A. could result in an
upgrade or downgrade of the notes' ratings respectively.

The Transaction

AyT Fondo Eolico represents the securitization of loans granted
for the purpose of developing different Eolic projects in the
region of Galicia. These projects are established under the
Galician Eolic Plan (Plan Eolico Estrategico), which the Galician
government has approved to promote the development of Eolic parks
in Galicia.

The transaction features a guarantee from NCG Banco S.A. on any
principal payments due on the loans. NCG Banco S.A. also
guarantees the portion of interest that does not depend on the
turnover of the debtor. However, there is no guarantee that
bondholders will receive the variable amount (2.75% of turnover)
of interest to which they are entitled.

Moody's ratings do not address the timely payment of this portion
of interest, but only the 1) timely payment of interest accrued
at the reference index plus 25 basis points; and 2) payment of
principal at final legal maturity of the E1 and E2 notes in
October 2014 and December 2016 respectively.

Moody's did not conduct a cash flow analysis or stress scenarios
as it directly derived the rating by accounting for the joint
benefit of the guarantee and of the cash deposits.


GOWEX SA: Files for Bankruptcy; Founder May Face Jail Sentence
--------------------------------------------------------------
Julien Toyer at Reuters reports that Gowex filed for bankruptcy
on Monday, a week after an accounting fraud at the firm was
revealed, while the High Court said its founder could face a jail
sentence of more than 10 years.

Law firm Velez & Urbina said Gowex had decided to file for
bankruptcy because it was in a state of "imminent insolvency" and
faced a "financial standstill" after a high number of contracts
were ended and new projects were canceled, Reuters relates.

Former Chief Executive and Chairman Jenaro Garcia Martin said on
July 6 that he had misrepresented the financial accounts for at
least the last four years, Reuters recounts.  Last week, he was
charged with false accounting, distortion of economic and
financial information, and insider trading, Reuters relays.

Following his testimony before the High Court on Monday,
Mr. Garcia Martin was given 15 days to pay a EUR600,000
(US$818,400) bail or face jail, Reuters discloses.

Judge Pedraz did not rule out taking further measures against
Mr. Garcia Martin but decided not to seize his passport, ban him
from leaving Spain or require him to report to a court every
week, as requested by the public prosecutor, Reuters notes.

A judge now has to rule on whether Gowex was correct to file for
bankruptcy, Reuters says.

The financial and management situation at the company remains
unclear, Reuters states.

As reported by the Troubled Company Reporter-Europe on July 14,
2014, Reuters related that Gowex started insolvency proceedings
on July 10, giving it four months to reach a deal with creditors
or face bankruptcy.

Gowex is a Spanish wireless networks provider.


RMBS SANTANDER 2: Moody's Rates EUR450MM Class C Notes 'Ca'
----------------------------------------------------------------
Moody's Investors Service has assigned definitive ratings to
three classes of notes issued by Fondo de Titulizacion de
Activos, RMBS Santander 2:

Issuer: FTA RMBS Santander 2

EUR2,520M A Notes, Definitive Rating Assigned A3 (sf)

EUR480M B Notes, Definitive Rating Assigned B2 (sf)

EUR450M C Notes, Definitive Rating Assigned Ca (sf)

The transaction is a securitization of Spanish prime mortgage
loans originated by Banco Santander S.A. (Spain) (Baa1 / P-2) to
obligors located in Spain. The portfolio consists of high Loan To
Value ("LTV") mortgage loans secured by residential properties
including a high percentage of renegotiated loans (21%).

The rating addresses the expected loss posed to investors by the
legal final maturity of the notes. In Moody's opinion, the
structure allows for timely payment of interest and ultimate
payment of principal for the Serie A and B notes and the ultimate
payment of principal for the Serie C notes by the legal final
maturity. Moody's ratings only address the credit risk associated
with the transaction. Other non credit risks have not been
addressed, but may have a significant effect on yield to
investors.

Moody's will monitor this transaction on an ongoing basis. For
updated monitoring information, please contact
monitor.rmbs@moodys.com.

Ratings Rationale

FTA RMBS Santander 2 is a securitization of loans granted by
Banco Santander S.A. (Spain) (Banco Santander, Baa1 / P-2) to
Spanish individuals. Banco Santander is acting as Servicer of the
loans while Santander de Titulizacion S.G.F.T., S.A. is the
Management Company ("Gestora").

The ratings of the notes take into account the credit quality of
the underlying mortgage loan pool, from which Moody's determined
the MILAN Credit Enhancement and the portfolio expected loss.

The key drivers for the portfolio expected loss of 12% are (i)
benchmarking with comparable transactions in the Spanish market
via analysis of book data provided by the seller, (ii) the very
high proportion of renegotiated loans in the pool (21%), and
(iii) Moody's outlook on Spanish RMBS in combination with
historic recovery data of foreclosures received from the seller.

The key drivers for the 32% MILAN Credit Enhancement number,
which is higher than other Spanish HLTV RMBS transactions, are
(i) renegotiated loans represent 21% of the portfolio and 15% of
the pool corresponds to loans in principal grace periods; (ii)
the proportion of HLTV loans in the pool (18.7% with current LTV
> 80% based on original valuations) with Current Weighted Average
LTV of 97.7% (based on revaluations as of 2013); (iii)
approximately 10% of the portfolio correspond to self employed
debtors; (iv) 51% of the loans have been in arrears less than 90
days at least once since the loans was granted (v) weighted
average seasoning of 6.8 years and (vi) the geographical
concentration in Madrid (21.7%) and Andalusia (17.3%).

According to Moody's, the deal has the following credit
strengths: (i) sequential amortization of the notes (ii) a
reserve fund fully funded upfront equal to 15% of the Serie A and
B notes to cover potential shortfall in interest and principal.
The reserve fund may amortize if certain conditions are met.

The portfolio mainly contains floating-rate loans linked to 12-
month EURIBOR, and most of them reset annually; whereas the notes
are linked to three-month EURIBOR and reset quarterly. There is
no interest rate swap in place to cover this interest rate risk.
Moody's takes into account the potential interest rate exposure
as part of its cash flow analysis when determining the ratings of
the notes.

Moody's Parameter Sensitivities provide a quantitative/model-
indicated calculation of the number of rating notches that a
Moody's structured finance security may vary if certain input
parameters used in the initial rating process differed.

The analysis assumes that the deal has not aged and is not
intended to measure how the rating of the security might migrate
over time, but rather how the initial rating of the security
might have differed if key rating input parameters were varied.
Parameter Sensitivities for the typical EMEA RMBS transaction are
calculated by stressing key variable inputs in Moody's primary
rating model.

At the time the rating was assigned, the model output indicated
that the Serie A notes would have achieved an A3 even if the
expected loss was as high as 14% and the MILAN CE was 32% and all
other factors were constant.

The principal methodology used in this rating was "Moody's
Approach to Rating RMBS using the MILAN Framework" published in
March 2014.

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

Factors that may lead to an upgrade of the rating include a
significantly better than expected performance of the pool,
together with an increase in credit enhancement of the notes.

Factors that may lead to a downgrade of the rating include
significantly different loss assumptions compared with Moody's
expectations at close due to either a change in economic
conditions from Moody's  central scenario forecast or
idiosyncratic performance factors would lead to rating actions.
Finally, a change in Spain's sovereign risk may also result in
subsequent upgrade or downgrade of the notes.



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


HARLEYFORD GOLF CLUB: Comes Out of Administration
-------------------------------------------------
Bucks Free Press reports that Harleyford Golf Club members won't
not have to pay annual subscription fees for a second time this
year, which was a possibility after the club was bought by new
owners after falling into administration.

Harleyford Golf Club Ltd went into administration earlier this
summer but has now been bought from the administrators by
Harleyford Golf Club Marlow Ltd, a wholly owned subsidiary of The
Harleyford Group Ltd, who are the landlords of the golf course,
according to Bucks Free Press.

The report notes that the new owners have placed the club on a
firm financial footing and plan to move ahead with new capital
expenditure projects.

However, the report relates that annual subscriptions were lost
when the club went into administration, but the new owners have
pledged to honor existing subscriptions.

The report relays that Rob Marsh of The Harleyford Group Ltd
said: "We are delighted that we've been able to bring the club
back on a freehold basis.  This acquisition will sit well within
our existing leisure group and we very much wish to preserve the
reputation and goodwill built up over many years.

"We believe Harleyford can be one of the premier clubs in the
area and we're looking forward to working with the members on
this exciting new chapter in the club's history," the report
quoted Mr. Marsh as saying.


MONTGOMERY FURNISHINGS: Falls Into Administration
-------------------------------------------------
Insider Media reports that Flintshire-based curtain manufacturer
Montgomery Furnishings has entered administration less than a
year after being rescued by a2e Venture Catalysts.

The report notes that an onerous trading arrangement inherited by
the buyer and issues with Her Majesty's Revenue & Customs led to
the administration, according to a2e director Will Rawkins.

Stephen Clancy -- Stephen.Clancy@duffandphelps.com -- and David
Whitehouse -- David.Whitehouse@duffandphelps.com -- of Duff and
Phelps were appointed joint administrators of Montgomery
Furnishings Ltd on July 1, 2014, a company founded last year to
buy the assets and business of Montgomery Tomlinson Ltd,
according to Insider Media.

The deal to purchase the assets saved 200 jobs at the Bretton-
based business in September 2013, the report relates.

Will Rawkin, a director at a2e, told Insider Media there were
issues with an inherited onerous trading arrangements with some
large retail customers, which had unfavorable terms for the
business, the report notes.

Although trading was good for an initial five months, there was a
significant downturn from the company's main customer in February
2014, the report discloses.

This hit Montgomery's ability to invest in its working capital,
Mr. Rawkin said, as the minimal commission was required to be
paid despite low sales, the report relates.

Mr. Rawkin added a "draconian and anti-business attitude" from
HMRC had also hit the company, the report notes.

Discussions with the company's external fundraisers had been
taking place to secure a joint additional finance package to cope
with enhanced working capital requirements, the report relays.

However, Mr. Rawkin said as a result of HMRC seeking full
settlement of all liabilities and the difficult trading
conditions from the main customer, Montgomery was left with
reduced facilities, the report notes.

This led to a fall in sales and as a result, the company entered
administration, the report discloses.

Montgomery Furnishings is based at Bretton in Flintshire.


SR WASTE: In Liquidation After Environmental Permits Revoked
------------------------------------------------------------
Mike Cotton at Barnsley Chronicle reports that SR Waste Recycling
Ltd. has gone into liquidation with a loss of ten jobs after the
Environment Agency revoked its environmental permits.

The permits allowed the company to operate its waste electrical
and electronic recycling facility at Shaw Lane, Carlton, and a
site at Oakwell Business Park, although the latter was not in
use, Barnsley Chronicle discloses.

Both permits were revoked on June 30 following a notice period,
Barnsley Chronicle notes.

Both the firm, and its owner Simon Robinson, are due in Barnsley
Magistrates' Court later this month to answer charges of failure
to comply with an enforcement notice requiring the removal of
non-permitted waste, and to ensure that any waste electrical and
electronic equipment stored at the site is covered and has
appropriate weatherproofing, Barnsley Chronicle relays.

Mr. Robinson, as cited by Barnsley Chronicle, said the revocation
of permits had been a "death knell" and the firm had to cease
trading, but declined to comment further due to the pending court
case.

SR Waste Recycling Ltd. is a recycling business.


                            *********

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.


                 * * * End of Transmission * * *