TCREUR_Public/140718.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

                           E U R O P E

            Friday, July 18, 2014, Vol. 15, No. 141

                            Headlines

F R A N C E

FORMULA ONE: S&P Affirms 'B' Long-Term Corporate Credit Rating
VIVARTE: 95% of Creditors Back Debt Restructuring Plan
WHA HOLDING: S&P Assigns Preliminary 'B-' CCR; Outlook Stable


G E R M A N Y

WELTBILD: Droege to Participate in EUR20-Mil. Capital Increase


I R E L A N D

HARVEST CLO IX : Moody's Assigns 'B2' Rating to Class F Notes


I T A L Y

AUTOCARAVANS RIMOR: Aug. 10 Expressions of Interest Deadline Set
BANCA POPOLARE: Fitch Lowers IDR to 'BB'; Outlook Stable


K A Z A K H S T A N

HALYK SAVINGS: S&P Raises LT Counterparty Credit Rating to 'BB+'


L U X E M B O U R G

RIOFORTE INVESTMENTS: Gets 7-Day Grace Period to Repay PT Debt


N E T H E R L A N D S

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


P O R T U G A L

BANCO ESPIRITO: Moody's Lowers Long-term Deposit Ratings to B2
BANCO ESPIRITO: S&P Lowers Counterparty Credit Ratings to 'B-/C'


R U S S I A

MECHEL OAO: Finance Minister Doesn't Rule Out Bankruptcy
MOBILE TELESYSTEMS: S&P Raises Corp. Credit Ratings From 'BB+'
NEVA: Goes Bankrupt; Halts Operations
PROBUSINESSBANK: Fitch Raises IDR to 'B'; Outlook Stable
RUSSIAN UTILITIES: Fitch Withdraws 'B+' Issuer Default Rating


S P A I N

BANCAJA 7 FTA: S&P Lowers Rating on Class D Notes to 'B+'
BANCO CEISS: Moody's Raises Senior Deposit & Debt Ratings to 'B2'
GOWEX SA: Judge Issues Search & Detain Warrant for Auditor
UNICAJA BANCO: Moody's Confirms 'Ba3' Sr. Debt & Deposit Ratings


U K R A I N E

IVANO-FRANKIVSK CITY: S&P Affirms 'CCC' Rating; Outlook Stable
LVIV CITY: S&P Revises Outlook to Stable & Affirms 'CCC' ICR


U N I T E D   K I N G D O M

HARBOURMASTER CLO 3: Fitch Cuts Ratings on 3 Note Classes to 'D'
HARVEST CLO IX: Fitch Assigns 'B-sf' Rating to Class F Notes


X X X X X X X X

* BOOK REVIEW: Alfred L. Malabre, Jr.'s Lost Prophets


                            *********


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F R A N C E
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FORMULA ONE: S&P Affirms 'B' Long-Term Corporate Credit Rating
--------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'B' long-term
corporate credit rating on Formula One.

In addition, S&P has assigned its 'B' issue rating to the
proposed US$3,102 million and EUR39.6 million senior secured term
loan B due 2021 and proposed US$75 million senior secured
revolving credit facility (RCF) due 2020, to be issued by
subsidiary Delta 2 (Lux) s.a.r.l.  The recovery rating on these
facilities is '3', indicating S&P's expectation of meaningful
(50%-70%) recovery in the event of a payment default.

S&P has also assigned its 'CCC+' issue rating to the proposed
US$1 billion second-lien facility due 2022, to be issued at the
same level as the first-lien facility.  The recovery rating on
the proposed second-lien facility is '6', indicating S&P's
expectation of negligible (0-10%) recovery in the event of a
payment default.

The affirmation mainly reflects S&P's view that Formula One's
financial risk profile is likely to remain commensurate with the
current rating -- and within S&P's "highly leveraged" category --
despite the significantly higher leverage and interest expense
resulting from the new proposed $1 billion issue.

"We estimate that Formula One's Standard & Poor's adjusted gross
debt-to-EBITDA ratio will be about 16.7x by year-end 2014
including shareholder loans, or about 8.6x excluding the
shareholder loans, up from about 14.7x and 7.4x, respectively, in
2013.  Although we think adjusted leverage will rise
significantly post transaction, our adjusted funds from
operations (FFO)-to-cash interest ratio, pro forma for the new
debt, will likely remain at about 2.3x in 2014 despite the higher
debt burden.  We consider this ratio to be commensurate with a
'B' long-term rating.  This ratio stability would mainly result
from the proposed refinancing of all of the group's debt at more
attractive terms than the current ones.  The rating also
continues to incorporate our assessment of the group's business
risk profile as "satisfactory"," S&P noted.

S&P uses gross debt for credit metrics as it do not give credit
to cash in the light of Formula One's decision to releverage the
group less than two years after raising debt for a similar
distribution to shareholders, which reflects a more aggressive
financial policy than S&P previously anticipated.  Furthermore,
the group will benefit from substantial leeway for further
distributions under the proposed amendments to its existing
senior secured bank loans.

S&P's view of the financial risk profile also incorporates
Formula One's sound free operating cash flow (FOCF) generation
and high cash conversion, which remain supportive of the current
ratings. S&P also factors in its assessment of "adequate"
liquidity, thanks to the group's proposed long-term debt maturity
schedule and covenant-light structure.

S&P's assessment of Formula One's financial risk profile includes
a material amount of shareholder loans, which it understands to
be at holding company Delta Topco level.  S&P considers these
shareholder loans to be debt-like obligations, under its
criteria, as, although S&P understands that they are held in the
same proportion as common equity -- stapled to equity -- by all
shareholders, their indenture does not currently provide for
legal stapling.  S&P understands that, as part of the
transaction, the amount of these loans will not be reduced by the
amount of dividends paid to shareholders, because the proposed
payment will be executed as an ordinary dividend.  The
transaction and debt refinancing are likely to be completed in
late August, with bank consent for the proposed amendments
expected by July 28, 2014.

S&P's assessment of Formula One's business risk profile as
"satisfactory" continues to reflect high earnings visibility
thanks to the group's strong fixed contracted revenues of more
than US$7 billion and F1's position as a premium sport.  S&P
estimates Formula One's contracted revenues to represent over 80%
of 2014-2015 revenues.  The business risk profile also takes into
account the group's sound long-term development prospects
through, among others, growth in sponsorship revenues and a
larger presence in new and existing sizable geographic markets.
Furthermore, the group benefits from solid profitability, with
likely low volatility given the mostly variable cost structure.

These factors are partly offset by a continuous need to maintain
high popularity levels and TV audience shares, as well as the
existence of competing entertainment events.  Finally, S&P also
incorporates potential CEO succession risks over the next few
years.

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

19 races programmed in 2014, stable versus 2013.

S&P estimates of mid- to high-single-digit growth in 2014 over
about US$1.6 billion revenues reported in 2013, thanks to the
combination of price step-up clauses in existing broadcasting and
sponsorship contracts, and potential new sponsorship contracts.

S&P's expectation of broadly stable adjusted EBITDA in 2014 from
the US$481 million recorded in 2013.  Payment of a US$1.05
million dividend to shareholders in the second half of 2014,
beyond the US$332 million already distributed in the form of
shareholder loan note repayments in March and April 2014.  The
latter was pre-approved as a Permitted Distribution under the
amended secured facilities' indentures in October 2012.  Limited
risks to the group's operating performance and commercial
activities in relation to any potential CEO succession risks over
the next two years.  Based on these assumptions, S&P arrives at
the following credit measures for Formula One:

   -- A Standard & Poor's adjusted debt-to-EBITDA ratio of about
      16.7x in 2014, or about 8.6x excluding shareholder loans --
      which S&P expects to remain broadly stable in 2015.

   -- A Standard & Poor's adjusted FFO-to-cash interest coverage
      ratio of about 2.3x in 2014, pro forma for the new
      issuance, and 2015.

The stable outlook reflects S&P's expectation that Formula One
will maintain broadly stable nominal EBITDA and credit metrics
over the next 12 months, while continuing to generate sound
positive free cash flow despite additional interest expense.

S&P considers that Formula One's high proportion of contracted
revenues provides some visibility and stability to the capital
structure.  S&P thinks that adjusted gross debt to EBITDA --
excluding shareholder loans -- is likely to remain stable at
about 8.6x following the proposed releveraging over the next 12
months, reflecting S&P's anticipation of broadly stable EBITDA
and the absence of debt amortization under the new proposed
capital structure.

The stable outlook also incorporates S&P's expectation that
Formula One will maintain its position as the world's most widely
watched annual global sporting competition.  S&P also anticipates
that the group will continue generating sound positive FOCF over
the next 12 months, and that its proposed RCF will remain undrawn
over the period.

S&P could lower the ratings if adjusted the FFO-to-cash interest
coverage ratio fell below 2x.  S&P could also lower the ratings
if FOCF turned negative or if 2014 group EBITDA margin contracted
to substantially less than 27%, or if the group entered sizable
acquisitions this year.

At this stage, S&P views a positive rating action over the next
12 months as unlikely, given its expectation that leverage will
remain very high during the period--absent an IPO--under S&P's
base case.  However, S&P could consider raising the ratings if
Formula One achieved adjusted FFO to cash interest coverage of
about 2.5x, and continued generating positive FOCF, with adjusted
leverage of about 6x and then declining subsequently.


VIVARTE: 95% of Creditors Back Debt Restructuring Plan
------------------------------------------------------
Steve Rhinds at Bloomberg News, citing daily newspaper Les Echos,
reports that Vivarte's debt restructuring plan has been approved
by more than 95% of its creditors.

Les Echos said that the company needs 100% approval for the plan
to be adopted, Bloomberg relates.

According to Bloomberg, Les Echos, citing unidentified people,
said the plan aims to reduce the company's debt to EUR800 million
from EUR2.8 billion to facilitate the takeover of the group by
Oaktree, Alcentra, Golden Tree and Babson and the exit of
Charterhouse, Chequers and Sagard.

Les Echos said the plan also includes EUR500 million in new cash,
Bloomberg notes.

Vivarte is a French fashion retailer.  It is the owner of
numerous fashion and shoe retail chains in France, including
Kookai, Andre and Naf Naf.


WHA HOLDING: S&P Assigns Preliminary 'B-' CCR; Outlook Stable
-------------------------------------------------------------
Standard & Poor's Ratings Services assigned its preliminary 'B-'
long-term corporate credit rating to France-based steel abrasives
manufacturer WHA Holding SAS (Winoa).  The outlook is stable.

At the same time, S&P assigned a preliminary 'B-' issue rating to
the EUR260 million proposed senior secured notes with a
preliminary recovery rating of '4'.  S&P also assigned a
preliminary 'B' issue rating to the proposed EUR20 million super
senior revolving credit facility (RCF) with a preliminary
recovery rating of '2'.

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

The rating on Winoa reflects S&P's view of the company's business
risk profile as "weak" and its financial risk profile as "highly
leveraged," according to its criteria.  Winoa is a global leader
in the steel abrasives niche market, with EUR341 million in sales
and reported EBITDA of EUR48.6 million over the 12 months ended
March 2014.

If the transaction closes as expected, gross debt will likely
include the EUR260 million senior secured notes.  This will bring
S&P's adjusted debt to EBITDA ratio to about 5.7x.  S&P views
this as highly leveraged, although significantly below the year-
end 2013 ratio of above 10x reflecting that part of the previous
debt was restructured into equity during the first quarter of
2014.  At the same time, the company's ownership changed when a
group of private equity firms, led by KKR & CO. L.P. (KKR;
Kohlberg Kravis Roberts) (52% stake), took over from LBO-France.

"Under our base case, we forecast Winoa to generate only modest
free operating cash flows (FOCF) in the coming two-to-three
years, as capital expenditures (capex) should increase to above
EUR15 million per year (compared with recurring capex of EUR7
million-EUR9 million in previous years).  This increase is
related to the company's plans to reduce its exposure to Spain by
relocating capacities and to optimize its cost structure.  We
also forecast funds from operations (FFO) cash interest coverage
of about 2.2x, which is lower than higher rated peers.  Further,
we note Winoa's relatively supportive competitive position in its
niche market as well as the fair degree of resilience of its
results; on the other hand, we do not foresee material
improvements in near-term revenue and EBITDA.  This is because
organic growth in certain regions will likely be offset by
increased competition in Europe and further structural profit
pressure in the smaller granite abrasives segment," S&P said.

"Our assessment of Winoa's business risk profile as "weak"
reflects the company's modest scale and scope compared to peers
in the metals downstream industry.  The company is concentrated
in a single product line in the niche abrasive steels industry, a
market generally correlated with steel use; Winoa's key cyclical
end-markets are construction, transportation, metallurgy, and
automotive," S&P added.

"We also foresee increased competition in the coming years, with
Winoa's main U.S. competitor, Ervin, expanding in Europe.  Ervin
is building a new plant in Germany for a total 60-65 thousand
tons capacity, according to management, which adds to its current
plant in the UK.  Finally, we see a risk of further structural
erosion in the granite abrasives segment sales, although this
segment only accounts for 14% of sales following the steep market
decline in 2008-2009.  (This resulted from a partial shift to
multiwire technology to cut granite.)," S&P noted.

Winoa's market positions are relative rating strengths, however.
It has captured about half the market in Europe and just over
one-third in North America (behind market leader Ervin).  The
company also has a well-diversified and global revenue split with
56% of volumes sold in Europe, 26% in the Americas, and 18% in
Asia (with emerging markets representing 38% of revenues).  As
products are uneconomical to transport over long distances, Winoa
has a diversified production base--13 well-positioned production
plants across the globe are within reasonable proximity to
customers.

S&P views Winoa's profitability as adequate and well above its
key competitors; in recent years it has reported about a 14%
EBITDA margin.  S&P notes, however, that the European Commission
fined Winoa EUR27 million for alleged pricing arrangements, which
was paid in second-quarter 2014.  S&P views profit volatility as
relatively contained, helped by geographic diversity and the
timely pass-through of scrap-price increases, representing 68% of
production costs.

S&P's assessment of Winoa's "highly leveraged" financial risk
profile takes into account the aggressive financial policies
related to private-equity ownership and perceived still-high debt
(notwithstanding the debt-to-equity conversion that took place in
early 2014).  Pro forma the transaction, we estimate Winoa's
adjusted gross debt at EUR287 million, including about EUR27
million for operating leases, pensions, and factoring
arrangements.  Under S&P's base case this results in the
following credit measures:

   -- Adjusted gross debt to EBITDA of 5.7x at end-2014, staying
      above 5x in future years.

   -- Modest FOCF in 2014, but minimal in the ensuing two years
      as capex increases.

   -- Low FFO cash interest coverage of 2.2x.

Underpinning this are the following assumptions:

   -- Modest growth in key end-markets, with 1%-2% annual growth
      in revenues supported by a very modest recovery in GDP
      growth in Europe and by more dynamic growth in the U.S.
      construction market and in emerging markets.

   -- Fairly stable EBITDA margins of about 14%, although S&P
      cannot exclude the risk of some erosion as competitive
      pressures from capacity additions in Europe will need to be
      offset by management-planned cost and supply savings.

   -- Capex rising to EUR16 million annually in 2015 and 2016,
      including costs of about EUR12 million over two years for
      the relocation of a Spanish plant, and recurring capex
      estimated at less than EUR10 million yearly.

The stable outlook takes into account Winoa's track record of
resilient profitability, thanks to its well-diversified global
footprint.  S&P believes this makes its future EBITDA levels
clearer, and it assumes management actions would offset increased
competitive pressures in Europe.

As S&P do not anticipate significant FOCF over the next two-to-
three years, it sees adjusted gross debt to EBITDA of about 5.5x
as commensurate with the rating.

Upside scenario

S&P could consider raising the rating if it saw more supportive
free cash flow generation and EBITDA growth, including evidence
of margin resilience in Europe.  At the higher rating level, S&P
would also expect adjusted gross debt to EBITDA to be closer to
4.5x.

Downside scenario

Rating downside could stem from market competition becoming much
more intense than S&P currently anticipates, and an eroding
market share in Europe not being offset by growth elsewhere.
Adjusted gross debt to EBITDA at or above 6x could put pressure
on the rating. Deteriorating liquidity or covenant headroom could
also lead to a downgrade.



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WELTBILD: Droege to Participate in EUR20-Mil. Capital Increase
--------------------------------------------------------------
Joern Poltz at Reuters reports that the administrator of Weltbild
said on Wednesday he had broken off talks with investor Paragon
Partners and agreed to do a deal with restructuring specialist
Droege International Group instead.

According to Reuters, administrator Arndt Geiwitz said that
Droege will participate in a EUR20 million (US$27.1 million)
capital increase at Weltbild and in return receive a 60% stake in
the insolvent group.  It will also give Weltbild an unspecified
loan, Reuters discloses.

Mr. Geiwitz, who said no agreement on the future of Weltbild
could be reached with Munich investment group Paragon, will hold
the remaining 40% on behalf of Weltbild's creditors, Reuters
relates.

Weltbild, owned by the Roman Catholic Church, filed for
insolvency early this year after failing to keep up with
competition from internet-based rivals such as Amazon.com and to
obtain new financing, Reuters recounts.

Mr. Geiwitz has said more than 50 of the company's 220 stores
were to be shut, and a third of its 3,000 jobs would have to go,
Reuters relays.

"Restructuring itself is not yet complete," Reuters quotes Mr.
Geiwitz as saying on Wednesday.

Weltbild is a German bookseller.



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HARVEST CLO IX : Moody's Assigns 'B2' Rating to Class F Notes
-------------------------------------------------------------
Moody's Investors Service announced that it has assigned the
following definitive ratings to the notes issued by Harvest CLO
IX Limited:

  EUR304,200,000 Class A Senior Secured Floating Rate Notes due
  2028, Definitive Rating Assigned Aaa (sf)

  EUR60,800,000 Class B Senior Secured Floating Rate Notes due
  2028, Definitive Rating Assigned Aa2 (sf)

  EUR30,400,000 Class C Senior Secured Deferrable Floating Rate
  Notes due 2028, Definitive Rating Assigned A2 (sf)

  EUR24,100,000 Class D Senior Secured Deferrable Floating Rate
  Notes due 2028, Definitive Rating Assigned Baa2 (sf)

  EUR35,500,000 Class E Senior Secured Deferrable Floating Rate
  Notes due 2028, Definitive Rating Assigned Ba2 (sf)

  EUR15,000,000 Class F Senior Secured Deferrable Floating Rate
  Notes due 2028, Definitive Rating Assigned B2 (sf)

Ratings Rationale

Moody's definitive rating of the rated notes addresses the
expected loss posed to noteholders by legal final maturity of the
notes in 2028. The ratings reflect the risks due to defaults on
the underlying portfolio of loans given the characteristics and
eligibility criteria of the constituent assets, the relevant
portfolio tests and covenants as well as the transaction's
capital and legal structure. Furthermore, Moody's is of the
opinion that the collateral manager, 3i Debt Management
Investments Limited ("3iDM"), has sufficient experience and
operational capacity and is capable of managing this CLO.

Harvest CLO IX Limited is a managed cash flow CLO. At least 90%
of the portfolio must consist of secured senior obligations and
up to 10% of the portfolio may consist of senior unsecured loans,
second-lien loans and mezzanine obligations. The portfolio is
expected to be 60% ramped up as of the closing date and to be
comprised predominantly of corporate loans to obligors domiciled
in Western Europe. The remainder of the portfolio will be
acquired during the six month ramp-up period in compliance with
the portfolio guidelines.

3iDM will manage the CLO. It will direct the selection,
acquisition and disposition of collateral on behalf of the Issuer
and may engage in trading activity, including discretionary
trading, during the transaction's four-year reinvestment period.
Thereafter, purchases are permitted using principal proceeds from
unscheduled principal payments and proceeds from sales of credit
improved and credit impaired obligations, and are subject to
certain restrictions.

In addition to the six classes of notes rated by Moody's, the
Issuer will issue EUR 55,000,000 of subordinated notes. Moody's
has not assigned ratings to this class of notes.

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

Loss and Cash Flow Analysis:

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

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

Par Amount: EUR 507,000,000

Diversity Score: 38

Weighted Average Rating Factor (WARF): 2800

Weighted Average Spread (WAS): 3.70%

Weighted Average Coupon (WAC): 6.00%

Weighted Average Recovery Rate (WARR): 43.5%

Weighted Average Life (WAL): 8 years.

Moody's has analyzed the potential impact associated with
sovereign related risk of peripheral European countries. As part
of the base case, Moody's has addressed the potential exposure to
obligors domiciled in countries with local currency country risk
ceiling of A1 or below. Following the effective date, and given
the portfolio constraints, only up to 10% of the pool can be
domiciled in countries with foreign currency government bond
rating below A3 with a further constraint of 5% to exposures with
foreign currency government bond rating below Baa3. Given this
portfolio composition, the model was run with different target
par amounts depending on the target rating of each class of notes
as further described in the methodology. The portfolio haircuts
are a function of the exposure size to peripheral countries and
the target ratings of the rated notes and amount to 0.75% for the
class A notes, 0.5% for the Class B notes, 0.375% for the Class C
notes and 0% for Classes D, E and F.

Stress Scenarios:

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

Percentage Change in WARF: WARF + 15% (to 3220 from 2800)

Ratings Impact in Rating Notches:

Class A Senior Secured Floating Rate Notes: 0

Class B Senior Secured Floating Rate Notes: -2

Class C Senior Secured Deferrable Floating Rate Notes: -2

Class D Senior Secured Deferrable Floating Rate Notes: -2

Class E Senior Secured Deferrable Floating Rate Notes: -1

Class F Senior Secured Deferrable Floating Rate Notes: 0

Percentage Change in WARF: WARF +30% (to 3640 from 2800)

Ratings Impact in Rating Notches:

Class A Senior Secured Floating Rate Notes: -1

Class B Senior Secured Floating Rate Notes: -3

Class C Senior Secured Deferrable Floating Rate Notes: -4

Class D Senior Secured Deferrable Floating Rate Notes: -2

Class E Senior Secured Deferrable Floating Rate Notes: -2

Class F Senior Secured Deferrable Floating Rate Notes: -0

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:

The rated notes' performance is subject to uncertainty. The
notes' performance is sensitive to the performance of the
underlying portfolio, which in turn depends on economic and
credit conditions that may change. 3iDM' investment decisions and
management of the transaction will also affect the notes'
performance.



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AUTOCARAVANS RIMOR: Aug. 10 Expressions of Interest Deadline Set
----------------------------------------------------------------
Autocaravans Rimor S.p.A., is accepting interests to buy its
business as a going concern, including its inventory and a claim
towards subsidiary Kentucky Camp S.r.l.

Interested applicants have to send their expressions of interest
within and no later than August 10, 2014.

The terms and conditions and modalities to submit the expressions
of interest and to participate in the tender procedure are set
out, in extended and complete version, in the rules of the tender
procedure which are available on the following website:

      http://www.rimor.it/regolamento/Regolamento_gara.pdf

Those who will have expressed their interest will be admitted,
after signing the requested documents, to the virtual data room
which will be held in accordance with the terms and conditions
set forth in the rules of the tender procedure.

Autocaravans was admitted on June 20, 2014, by the Court of Siena
to the composition with creditors procedure n. 13/2013
(concordato preventivo) pursuant to sections 160 and foll. of the
Italian Bankruptcy Law (Deputy Judge: Ms. Marianna Serrao;
Commissioner: Mr. Giorgio Bocompagni).

Autocaravans Rimor S.p.A., which has registered offices and
production site in Poggibonsi (SI), Italy, manufactures and
distributes motor caravans.  Its motor caravans are sold in Italy
and in the other main European countries.


BANCA POPOLARE: Fitch Lowers IDR to 'BB'; Outlook Stable
--------------------------------------------------------
Fitch Ratings has downgraded Banca Popolare di Vicenza's (BPV)
Long-term Issuer Default Rating (IDR) to 'BB' from 'BB+' and
Viability Rating (VR) to 'bb' from 'bb+'.  The Outlook on the
Long-term IDR is Stable.

The rating actions follow a periodic review of Italian medium-
sized banking groups.  Fitch will shortly publish the main
findings of this review in a report.

KEY RATING DRIVERS - IDRS, VR AND SENIOR DEBT

The downgrades of BPV's VR and Long-term IDR reflect the
deterioration in the bank's asset quality and low reserve
coverage levels.  Even including the EUR608m capital increase
that is expected to be completed shortly, BPV's unreserved
impaired loans would account for 90% of its Fitch core capital,
which Fitch considers high by both domestic and international
comparison.

BPV has already planned additional capital strengthening measures
of EUR600m over the next three years.  Fitch acknowledges that in
the first two quarters of 2014 BPV's inflow of new impaired loans
has decreased, but in our opinion, this capital strengthening is
necessary to compensate for potentially high loan impairment
charges in the context of the Asset Quality Review exercise.

Capitalization is a key rating driver and also drives the Stable
Outlook on the bank's Long-term IDR.  In addition, the Stable
Outlook reflects Fitch's opinion of the existence of initial
signs of normalization in the operating environment and financial
markets in Italy.  BPV is based in one of the most industrialized
and wealthy areas of the country where the density of export-
oriented firms, which are the engine of the Italian economy, is
high.

RATING SENSITIVITIES - IDR, VR AND SENIOR DEBT

BPV's VR 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.

KEY RATING DRIVERS - SUPPORT RATING AND SUPPORT RATING FLOOR

BPV's Support Rating (SR) of '3' and Support Rating Floor (SRF)
of 'BB' reflect the regional importance of BPV to Italy and
Fitch's view that there is a moderate probability that the
authorities would provide support to BPV if required because of
the bank's strong franchise in its home region and fairly large
customer funding base.

In 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.  Fitch expects the EU's Bank Recovery and Resolution
Directive (BRRD) to be implemented into national legislation
later in 2014 or in 1H15.  Fitch also expects 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.

KEY RATING SENSITIVITIES - SUPPORT RATING AND SUPPORT RATING
FLOOR

The SR and SRF 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 term and progress made on establishing the SRM is
looking close to being ready in the next one to two years.  Fitch
expects BPVs' SR to be downgraded to '5' and SRF to be revised
downwards to 'No Floor'.  The timing at this stage is likely to
be some point in late 2014 or in 1H15.  However, a downward
revision of the SRF would not result in a downgrade of BPV's
Long- and Short-term IDRs given that the IDRs are based on its
standalone financial strength, as reflected in its VR.

The SR and SRF 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 AND SENSITIVITIES - SUBORDINATED DEBT

Subordinated lower Tier 2 debt issued by BPV is notched once off
BPV's VR to reflect Fitch's view of loss severity risk based on
their level of subordination.  The absence of coupon flexibility
means that non-performance risk is minimal hence no further
notching is applied.  Its rating is primarily sensitive to any
change in the VR, which drives the rating, but also to any change
in Fitch's view of non-performance or loss severity risk relative
to BPV's viability.

The rating actions are as follows:

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 and EMTN program: Long-term downgraded to
  'BB' from 'BB+', Short-term affirmed at 'B'
Subordinated Lower Tier 2 notes: downgraded to 'BB-' from 'BB'



===================
K A Z A K H S T A N
===================


HALYK SAVINGS: S&P Raises LT Counterparty Credit Rating to 'BB+'
----------------------------------------------------------------
Standard & Poor's Ratings Services revised its long-term
counterparty credit rating on Halyk Savings Bank of Kazakhstan to
'BB+' from 'BB'.  The outlook is stable.

At the same time, S&P affirmed the 'B' short-term rating.

S&P also assigned its 'kzAA-' Kazakhstan national scale rating to
Halyk.

The rating actions reflect S&P's view that Halyk's competitive
position has strengthened over the past four years, leading S&P
to revise its assessment of the bank's business position to
strong from adequate.  Halyk emerged relatively unscathed from
the severe crisis that affected the Kazakh banking sector in
2007-2008, and since then has been able to reinforce its business
and financial profiles, unlike many peers.  S&P believes the bank
will continue to enjoy superior business diversification and
earnings stability in the next two years.

The strong business position reflects the bank's leadership,
business stability, and sustainability in the Kazakh banking
system over the past decade.  With assets of $14 billion as of
June 1, 2014 (unconsolidated), Halyk is the country's second-
largest domestic franchise after Kazkommertsbank.  It benefits
from a stable and experienced management team, and has a more
cautious lending strategy than peers' over a full economic cycle.
In S&P's view, Halyk's business position in the Kazakh banking
sector is superior to that of any other bank.

Halyk has demonstrated stable financial results over the cycle,
due to its strong pricing power and cheap cost of funds.  It did
not post a loss in the 2007-2008 financial crisis and improved
its return on average assets (ROAA) to 2.9% in 2013 from 0.6% in
2009. S&P expects that the bank will outperform its local peers
again in 2014-2015 with an expected average ROAA of 2.7%.

Halyk's business diversification exceeds that of local peers.  It
has the only universal banking model in Kazakhstan, with its core
activities of retail and corporate banking complemented by
brokerage, leasing, and insurance.  The bank's revenues were well
diversified between corporate (51% of total) and retail banking
(43% of total) in 2013.

The bank has by far the strongest franchise in retail deposits,
with a 21% market share as of March 31, 2014, in a country of 17
million people.  It benefits in this respect from its legacy as a
savings bank during the Soviet era, and has the largest
distribution network in Kazakhstan (541 branches and outlets).
While there was a run on three midsize Kazakh banks in February
2014, Halyk saw an inflow of deposits from other banks in a
flight to quality.  It is also a leader in consumer loans backed
by salary payments, a segment that is less risky, in S&P's view,
than unsecured consumer loans.

Halyk's pending acquisition of HSBC Bank Kazakhstan would further
marginally strengthen its competitive position in the Kazakh
banking sector, given the healthy financial profile of HSBC and
its valuable portfolio of blue-chip clients.  HSBC would add
about 9% of assets and 5% of loans to Halyk's balance sheet as of
June 1, 2014 (unconsolidated).

The ratings also reflect Halyk's higher profitability than peers'
through the cycle, lower funding sensitivity, and lower
concentrations in the lending book.  Offsetting factors are
increasing macroeconomic risks in Kazakhstan and the competitive
threat from smaller banks that have experienced a quicker
turnaround due to their size.

The bank continues to benefit from a "high" likelihood of
extraordinary government support, leading to a one-notch rating
uplift above its stand-alone credit profile (SACP).

The stable outlook reflects S&P's expectation that Halyk will
maintain greater business stability than peers and sustainable
profitability, leveraging on its leading market position in key
business segments, strong pricing power, and the low confidence
sensitivity of funding.

S&P could take a negative rating action if the bank's
capitalization weakened materially, due for example to
significantly higher provisioning costs or large dividends,
resulting in our projected risk-adjusted capital (RAC) ratio
before adjustments falling below 5%.  This is not S&P's base-case
scenario, however.  A reversal of the positive trend in asset
quality and single-name loan concentrations, or a material
increase in credit costs, would negatively affect S&P's
assessment of the bank's risk position.

S&P does not expect to take a positive rating action on Halyk
over the next 12-18 months.  S&P expects operating risk for banks
in Kazakhstan to remain high, which it believes would prevent
further substantial improvement in their creditworthiness.



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


RIOFORTE INVESTMENTS: Gets 7-Day Grace Period to Repay PT Debt
--------------------------------------------------------------
Andrei Khalip at Reuters reports that Brazilian
telecommunications company Oi said on Wednesday EUR847 million in
unpaid debt held by its merger partner Portugal Telecom has a
grace period of seven business days for its issuer Rioforte to
make the payment.

PT has been forced to take a cut in its share of the merger with
Brazil's Grupo Oi after Rioforte, a holding company of the
Espirito Santo family, failed to repay the commercial paper,
Reuters relates.  PT said it will take legal action to recover
the money, Reuters discloses.

"The unpaid commercial paper establishes a cure period of seven
business days for Rioforte to make such payment.  On July 17,
2014, additional commercial paper of Rio Forte in the amount of
EUR50 million will mature, which is also subject to the same cure
period," Reuters quotes Oi as saying in a statement released in
Portugal by PT.

As reported by the Troubled Company Reporter-Europe on July 17,
2014, The Wall Street Journal related that Espirito Santo
International SA's main unit, Rioforte Investments, is preparing
to file for creditor protection in Luxembourg because of mounting
pressure to repay debt with funds it doesn't have.  A person
familiar with the situation, as cited by the Journal, said on
July 15 that the filing for creditor protection should be made in
the next few days in Luxembourg, where Rioforte is based.  That
will allow the unit to sell assets and take other steps to raise
funds without interference from creditors, the Journal noted.

Rioforte Investments is the holding company of the Espirito Santo
Group for its non-financial investments.  The company is present
in Portugal, Spain, Brazil, Paraguay, Angola and Mozambique,
among other countries, through various companies operating in
different economic sectors.



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


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

At the same time, S&P assigned its 'B+' issue rating to the
EUR550 million-equivalent senior secured notes due 2020, and its
'BB' issue rating to the EUR50 million super senior revolving
credit facility (RCF), both issued by Selecta.  The recovery
rating on the senior secured notes is '3', indicating S&P's
expectation of meaningful (50%-70%) recovery in the event of a
payment default. The recovery rating on the super senior RCF is
'1', indicating S&P's expectation of very high (90%-100%)
recovery in the event of a payment default.

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

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

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

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

   -- The group's diversified client base;

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

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

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

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

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

However, these attributes are partially offset by:

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

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

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

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

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

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

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

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

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

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

   -- GDP growth of 2.2% in Switzerland and 0.7% in France in
      2014.

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

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

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

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

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

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

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

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

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

This results in the following credit measures:

   -- Debt to EBITDA of about 7.0x in 2014 and 6.5x in 2015.
   -- FFO to debt of about 8% in both 2014 and 2015.

The stable outlook reflects S&P's view that Selecta will be able
to maintain a leading market share in its three core markets,
enabling it to sustain its adjusted EBITDA margin at the existing
level in the near term.  S&P thinks the group can achieve this
partly through the full implementation of strategic cost-cutting
initiatives and the renegotiation or withdrawal of loss-making
vending machines in the private vending space.  S&P believes that
cash flow generation in the near term will be aided by an
improvement, albeit modest, of macroeconomic conditions in
Europe. That said, stiff competition from branded coffee houses
will continue to pressure operating results.

S&P anticipates that the group's adjusted debt to EBITDA should
be about 7x in financial 2014, with good FFO cash interest
coverage of well above 3x.  However, S&P's base-case forecast
reflects no free operating cash flow (FOCF) in financial 2014,
mostly due to higher capex and a significant increase in interest
expense, compared with positive FOCF of EUR46 million in
financial 2013.

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

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



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


BANCO ESPIRITO: Moody's Lowers Long-term Deposit Ratings to B2
--------------------------------------------------------------
Moody's Investors Service downgraded Banco Espirito Santo, S.A.
(BES) long-term deposit ratings to B2, on review for downgrade
from Ba3, on review for downgrade as of July 11, 2014

This downgrade reflects Moody's concerns regarding BES's
creditworthiness that are heightened by the lack of transparency
on the ring-fencing of BES against any troubles emerging from its
holding company Espirito Santo Financial Group S.A. (ESFG) or any
other group entity. The rating action also reflects the
deteriorating credit strength of ESFG. The continued review for
downgrade of BES's deposit ratings will assess the full extent of
the financial liabilities that could emerge for BES from its
holding company ESFG and from other parts of the Espirito Santo
Group.

BES is the servicer in six Portuguese RMBS transactions rated by
Moody's: Lusitano Mortgages No. 1 plc; Lusitano Mortgages No. 2
plc; Lusitano Mortgages No. 3 plc; Lusitano Mortgages No. 4 plc;
Lusitano Mortgages No. 5 plc and Lusitano Mortgages No. 6
Limited.

The deterioration of the creditworthiness of BES exposes the RMBS
transactions to increased operational, commingling and set-off
risks. The main concern is operational risk which refers to a
scenario of servicing disruption that may result in a weakening
of collection activities leading to increased delinquencies,
lower recoveries and ultimately higher losses on the securitized
pool as well as payment disruption in the notes in case of
insufficient liquidity to cover for these. BES continues to
perform its collection activities. Although no back-up servicer
has been appointed for any of the deals, the documentations
include some provisions for the Fund (we understand the Fund
Manager acting on behalf of the Fund, for the benefit of the note
holders) to appoint a substitute servicer. In addition BES is the
third-largest bank in Portugal with around 15% of customer
deposits and 19.6% customer loans share as of December 2013 and
as mentioned in 11 July 2014 press release BES's deposit ratings
reflect Moody's assessment of a high probability of support from
the Portuguese government for the bank in case of need.

Regarding set-off risk, as per legal opinion, borrowers in
Portugal can set-off amounts of deposits against outstanding loan
amounts in the event of originator insolvency. As a result
Moody's accounts for this risk in its cash-flow analysis. Finally
the risk of collections being commingled in a bankruptcy stay is
mitigated by the daily transfers of payments to the issuer
account.

BES also performs a calculation role for Volta Electricity
Receivables Securitisation ("Volta"). No back-up has been
appointed, however documentation includes provisions for the
Issuer or Common Representative to find a suitable successor.

Moody's will closely monitor the evolution of the
creditworthiness of the entity and its collection or calculation
activities to determine any negative impact on the credit quality
of the Lusitano Mortgages series and Volta notes and will take
into account all the above factors when concluding its review of
the RMBS transactions.


BANCO ESPIRITO: S&P Lowers Counterparty Credit Ratings to 'B-/C'
----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its counterparty
credit ratings on Portugal-based Banco Espirito Santo S.A. (BES)
and BES' core subsidiary Banco Espirito Santo de Investimento
S.A. (BESI) to 'B-/C' from 'B+/B'.  The long-term rating remains
on CreditWatch, where it was placed with negative implications on
July 11, 2014.  The short-term rating is removed from the
CreditWatch listing (it had also been placed there with negative
implications on July 11, 2014).

S&P also lowered its issue rating on BES' non-deferrable
subordinated debt to 'CCC-' from 'CCC+' and lowered its issue
rating on BES' hybrid instruments to 'CCC-' from 'CCC'.  The
'CCC-' ratings on the non-deferrable subordinated debt and
hybrids remain on CreditWatch with negative implications.

The rating action reflects S&P's assessment that BES' capital
position has weakened as a result of the higher losses that,
according to its expectations, it is likely to face given its
direct exposure to the Espirito Santo Financial Group, S.A.
(ESFG; not rated), to its subsidiaries, and to Rio Forte
Investments SA (Rio Forte; not rated).  ESFG remains BES' largest
single shareholder, despite reducing its direct stake in BES to
20% from 25% on July 14, 2014.  The lowering of the ratings also
reflects S&P's view of higher risks to BES' financial position,
resulting mainly from its exposure to and links with Grupo
Espirito Santo (GES)--the holding and operating companies group
that includes ESFG and Rio Forte.

"We are maintaining our long-term rating on BES on CreditWatch
with negative implications because we could lower the rating if,
in our view, there are likely to be material further negative
implications for BES' franchise or its financial position beyond
our current expectations.  In particular, we could lower the
ratings if BES experiences customer deposit outflows; if its
liquidity position deteriorates; or if potential losses related
to BES' exposure and links to GES are likely to exceed our
current base-case expectations," S&P said.

On July 10, 2014, ESFG suspended from trading its listed shares
and bonds and announced that it was in the process of assessing
the financial impact of its exposure to its largest indirect
shareholder, Espirito Santo International S.A. (ESI), because of
the ongoing material difficulties at ESI.  ESFG's securities have
not yet resumed trading since being suspended on July 10 and no
additional information on the assessment has been published.
After this announcement by ESFG, ESI and some other entities
within GES have been reported to be potentially considering
filing for creditors' protection.  Furthermore, on July 16, 2014,
Portugal Telecom, who subscribed EUR0.90 billion of debt
instruments issued by Rio Forte -- a company of GES and 100%
directly owned by ESI -- published a press release stating that
Rio Forte has failed to repay EUR0.85 billion of those
instruments that have already matured.  Given all of these
developments, S&P believes ESFG could report new impairments on
its exposure to ESI and other GES entities beyond the EUR700
million provision it reported in its year-end 2013 accounts.
S&P's view is that, if that happened, ESFG's financial position
would be substantially weakened.  In this context, the likelier
potential losses associated with BES' material direct exposure to
the ESFG group entities and Rio Forte have led S&P to revise its
assessment of BES' capital and earnings position to "weak" from
"moderate" as its criteria defines these terms.  In S&P's view,
the magnitude of potential new impairments associated with BES'
direct exposure to the ESFG group entities and Rio Forte could be
of a magnitude at least offsetting the benefit from BES' recently
completed capital increase in our risk-adjusted measure of BES'
solvency.

On July 13, 2014, BES' board of directors unexpectedly decided to
move forward the appointment of BES' new management team proposed
on July 5, 2014 ahead of the next shareholders' meeting on
July 31, 2014 that would need to approve this appointment.  S&P
interprets this as a measure to try to protect BES from
developments at GES and to provide BES with effective decision-
making capacity to deal with the significant challenges it is
facing.  Nevertheless, S&P believes this does not mitigate the
heightened risks we see for BES of a potential negative financial
impact because of the above-mentioned developments at the GES
level, in connection with, among other things, BES' exposure to
GES entities and the placement of securities (which S&P do not
rate) issued by GES entities with BES' retail and institutional
clients.  These heightened risks (which we cannot at this point
fully capture in S&P's expectations of the evolution of our risk-
adjusted capital measure for BES) add to other potential
financial risks that S&P already considered to be putting
pressure on BES' risk position, including the uncertain operating
conditions of its subsidiary in Angola.  As a result, S&P has
revised its assessment of BES' risk position to "weak" from
"moderate" as its criteria defines these terms.

The revision of S&P's assessments of BES' capital and earnings
and risk positions has led S&P to lower BES' stand-alone credit
profile (SACP) to 'ccc+' from 'b'.  S&P has left unchanged its
assessment of BES' other stand-alone rating factors.  BES' SACP
thus continues to incorporate the 'bb' anchor that S&P applies to
financial institutions operating primarily in Portugal, plus
S&P's view of BES' funding as "average" and its "moderate"
assessment of its liquidity position, which is already
constrained by what S&P views as BES' significant reliance on
European Central Bank funding.  S&P's assessment of BES' business
position is still "moderate", balancing BES' historical leading
market position in Portugal with recent negative developments in
terms of management instability and franchise challenges.

S&P's long-term rating on BES continues to incorporate a one-
notch uplift in regards to its view of the potential for
extraordinary government support, according to S&P's criteria.
This reflects S&P's view of the likelihood of extraordinary
government support, given the combination of BES' 'ccc+' SACP and
the 'BB' long-term sovereign credit rating on the Republic of
Portugal, and S&P's view of BES' high systemic importance within
the Portuguese banking sector and Portugal's supportive stance
toward its banking system.

The lowering of S&P's long-term ratings on Banco Espirito Santo
de Investimento S.A. (BESI) to 'B-' from 'B+', and the
maintenance of S&P's negative CreditWatch, mainly reflect the
rating actions on its parent, BES, given that it considers BESI
to be a core subsidiary of BES.

S&P's long-term rating on BES remains on CreditWatch negative,
reflecting the possibility that S&P could lower the rating if it
believed that BES' franchise could suffer further material
deterioration as a result of developments at GES, given BES'
exposure to and links with entities in this group.  In
particular, S&P could lower the rating if it perceives that there
is an increased likelihood of BES experiencing outflows of
customer resources.  In this scenario, and particularly if BES
needed to further increase its dependency on central bank
funding, S&P could also consider that its assessment of BES'
funding and liquidity position had weakened.  S&P's view of the
financial position of BES could also deteriorate if losses--
particularly those associated from its exposure to GES--end up
exceeding S&P's current expectations and further weaken its
assessment of BES' capital and earnings position.  In this
context, S&P will closely monitor BES' expected compliance with
minimum regulatory capital requirements.

S&P will also monitor any further developments regarding BES' new
management team, and will seek to understand BES' future
strategic direction, on which S&P currently has little
visibility.  S&P could lower the ratings if it perceives that
developments in this process further debilitate BES' franchise or
business stability. S&P could also consider a downgrade if it
anticipates that the process would result in BES losing its
strategic focus or cause BES to take on greater risk,
particularly in the context of it seeking to mitigate the impact
of risks we see to its financial profile.

"Finally, our ratings on BES incorporate our current view of
Portugal's supportive stance toward its banking system, and BES'
high systemic importance.  As a result, and in the context of
Portugal's existing regulatory framework, we believe BES would
receive extraordinary capital support in case of need.  In
addition, we also take into account the Portuguese government's
EUR6 billion fund, earmarked for potential bank recapitalization
created as a part of Portugal's EU-IMF economic adjustment
program.  We nevertheless take into account that the European
bank resolution regulation framework is currently under
development. Therefore, if the likelihood of BES receiving
capital support from the government in case of need were to
deviate from our current expectations, we could reconsider the
amount of support we currently incorporate into our rating on
BES," S&P said.

"The CreditWatch negative placement of the ratings on BESI
reflects that on the parent, BES, as well as the possibility
that, consistent with our criteria, we might lower the degree of
parent support that we currently incorporate into our ratings on
BESI if, in contrast to our current belief, BESI's strategic
importance within the BES group were to diminish.  We believe
this could be the case if there were changes to BESI's
shareholder structure and strategic focus, or there was
significant financial pressure," S&P added.

S&P could affirm all the ratings and remove them from CreditWatch
if it concludes that the developments at GES and other
uncertainties S&P currently sees on BES' financial profile do not
have further negative effects on its business and financial
profile.  An affirmation would also depend on BES successfully
undergoing changes to its management and corporate governance
while protecting its franchise and maintaining its strategic
focus without engaging in higher risk-taking practices.



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


MECHEL OAO: Finance Minister Doesn't Rule Out Bankruptcy
--------------------------------------------------------
ITAR-TASS reports that Russian Finance Minister Anton Siluanov
does not rule out bankruptcy for Mechel OAO.

Mr. Siluanov, as cited by ITAR-TASS, said the Russian government
is considering many options, and bankruptcy is among them.

On July 11, Industry and Trade Minister Denis Manturov said the
government is considering various options of saving Mechel other
than direct budgetary support, and bankruptcy is an undesired
option, ITAR-TASS relays.  According to ITAR-TASS, he said that
the government is in talks with foreign investors on entering
Mechel, whose net debt stands at US$8.3 billion.

On July 10, Mr. Manturov said Mechel must improve administrative
control to recover financially, ITAR-TASS relates.

On July 9, state-owned Vnesheconombank CEO Vladimir Dmitriyev
said the bank is not interested in bailing out Mechel,
ITAR-TASS recounts.

Mechel OAO is a Russian steel and coking coal producer.

As reported by the Troubled Company Reporter-Europe on April 2,
2014, Moody's Investors Service downgraded Mechel OAO's corporate
family rating (CFR) and probability of default rating (PDR) to
Caa1 and Caa1-PD, respectively.  Moody's said the outlook remains
negative.


MOBILE TELESYSTEMS: S&P Raises Corp. Credit Ratings From 'BB+'
--------------------------------------------------------------
Standard & Poor's Ratings Services raised its long-term foreign
and local currency corporate credit ratings on Russia's largest
telecommunications operator, Mobile TeleSystems (OJSC) (MTS), to
'BBB-' from 'BB+'.  The outlook on the foreign currency rating is
negative and that on the local currency rating is stable.

At the same time, S&P raised its ratings on the company's senior
unsecured debt to 'BBB-' from 'BB+'.

The upgrade follows that of MTS' parent company, Sistema (JSFC)
to 'BB+' from 'BB' and S&P's assessment of MTS as an insulated
subsidiary of Sistema, as per its criteria.  S&P continues to
assess MTS' stand-alone credit profile (SACP) at 'bbb-'.

Although S&P believes Sistema's majority ownership (51.5% stake)
of MTS constrains MTS' credit quality, it allows for a one-notch
difference between the two ratings.  This primarily reflects MTS'
sufficient autonomy and solid governance practices as a NYSE-
listed company, which could limit Sistema's ability to take
assets from MTS or burden it with liabilities.

"Our assessment of MTS' business risk profile as "satisfactory"
is supported by MTS' leading positions in the Russian and
Ukrainian telecom markets, where it has leading market shares,
robust operating performance, and strong profitability.
Offsetting these strengths are MTS' exposure to country risk in
Russia and other countries in the Commonwealth of Independent
States (CIS) and the general risks of the telecom industry, such
as regulation and competition.  We expect MTS to continue to
expand in line with the Russian telecom market, primarily
benefiting from increasing data usage.  We also expect a moderate
decline in profitability in 2014, primarily resulting from
competition and weakening macroeconomic conditions in Russia and
Ukraine," S&P said.

"Our assessment of MTS' financial risk profile as "modest" is
supported by the company's solid credit ratios, such as an
average historical and Standard & Poor's-forecast debt-to-EBITDA
ratio of below 2x.  It also reflects MTS' solid cash-generation
profile, which allows the company to generate substantial free
operating cash flow despite high capital expenditures.  These
factors are partly offset by MTS' somewhat constrained
discretionary cash flow generation, due to significant dividend
payouts and tight interest coverage ratios because most of its
debt is denominated in Russian ruble," S&P added.

S&P's SACP assessment is constrained by its view of MTS'
financial policy and its comparable ratings analysis, whereby it
reviews an issuer's credit characteristics in aggregate:

   -- S&P considers MTS' financial policy to be negative,
      reflecting the material likelihood of leverage increasing
      above its base-case scenario expectations, primarily
      because of acquisitions.

   -- The outcome of our comparable rating analysis is negative
      for MTS because the company's business risk profile is at
      the lower end of the range for its "satisfactory" category,
      similar to that of its immediate peers MegaFon and
      VimpelCom Ltd.

The negative outlook on the foreign currency rating on MTS
mirrors that on the foreign currency rating on Russia.  S&P caps
the rating on MTS at the 'BBB-' transfer and convertibility (T&C)
assessment for Russia because MTS does not have any meaningful
hard currency earnings.  The T&C assessment is currently at the
same level as the foreign currency sovereign credit rating on
Russia, which carries a negative outlook.  Therefore the outlook
on our foreign currency rating on MTS is also negative.

The stable outlook on S&P's local currency rating on MTS reflects
its view that this rating would not be affected if it was to
lower the foreign currency sovereign credit rating and revise its
T&C assessment on Russia by one notch.

S&P could revise the outlook on the foreign currency rating to
stable if there were a similar action on Russia.

The upside for the local currency rating is limited at this stage
by Sistema's credit profile, as S&P currently sees a maximum one-
notch difference between the two ratings.  In the longer term,
S&P might consider a positive rating action if it was to take a
less negative view of MTS' acquisition risk and see its
management's commitment to maintaining moderate leverage, and if
its ties to Sistema were to weaken.

S&P could lower the foreign currency rating on MTS if the T&C
assessment on Russia were revised downward to 'BB+'.

At this stage, a downgrade resulting from weakening of MTS' SACP
appears less likely than the aforementioned scenario.  For that
to happen, the Standard & Poor's adjusted debt to EBITDA ratio
would have to increase to consistently higher than 2x and
discretionary cash flow generation turn negative, which S&P do
not currently anticipate.


NEVA: Goes Bankrupt; Halts Operations
-------------------------------------
Novinite.com, citing ITAR-TASS, reports that Neva went bankrupt
and said it is terminating its activities.

According to Novinite.com, Irina Tyurina, press secretary of the
Russian tourist industry association, said currently there were
around 6000 customers of the agency abroad.

The General Consulate of the Russian Federation in Bulgaria's
Varna told BGNES that in Bulgaria there are clients of the
company, but there have been no complaints so far, Novinite.com
relates.

Neva is one of the largest Russian tour operators.


PROBUSINESSBANK: Fitch Raises IDR to 'B'; Outlook Stable
--------------------------------------------------------
Fitch Ratings has upgraded Probusinessbank's (PBB) Long-term
Issuer Default Ratings (IDR) to 'B' from 'B-' with Stable
Outlook.

KEY RATING DRIVERS

The upgrade mainly reflects: (i) the improvement in PBB's capital
quality following the sale of a material part of non-core assets;
(ii) slower loan growth in the challenging unsecured retail
segment, which is still profitable for the bank despite some
recent deterioration; and (iii) healthy liquidity position.
However, the ratings also take into account moderate
capitalization, which is still weakened by significant non-
banking assets, and considerable market risk.

PBB's consolidated (including six smaller Russian banks,
factoring and property development companies) Basel total capital
ratio (CAR) stood at a moderate 12.4% at end-1Q14.  The Fitch
core capital (FCC) ratio was lower at 9.5%.  The quality of
capital is undermined by investments in development property
(RUB3.9 billion, 25% of FCC at end-2013) valued mainly using
subjective discount cash flow models and certain interbank
placements (RUB2.9 billion, 20% of FCC), which in Fitch's view
may be fiduciary in nature. Positively, the group managed to sell
RUB6.4bn worth of real estate assets in 2013, moderately
improving capital quality.

PBB's standalone regulatory capitalization was tight at 10.4% at
end-5M14 partly due to deduction of investments in subsidiaries,
although there is some flexibility in managing this.  For
example, in June PBB transferred its investment in Bank24.ru to a
separate holding company, controlled by PBB's shareholders, which
should improve the standalone regulatory capital ratio to 11.4%
at end-6M14.  However, the latter only provides a moderate
ability to absorb losses equal to 3.6% of loan book before
falling below a 10% required minimum level.

As a source of additional capital and mitigating potential credit
losses, there was solid pre-impairment profitability equaling 7%
of average gross loans (annualized) in 1Q14.  At the same time,
net profitability was undermined by a RUB1.6 billion mark-down
revaluation of the bank's large securities book (RUB42 billion or
2.7x of FCC at end-2013), mostly consisting of bonds with rather
long (around four years) duration.  However, the quality of
securities is good (most are Russian sovereign bonds), so the
bank is unlikely to realize these losses.

Asset quality is reasonable for a bank with a focus on unsecured
retail lending.  Non-performing loans (NPLs; overdue more 90
days) accounted for a high 15% of gross loans at end-1Q14, but
were reasonably (0.8x) covered by impairment reserves.  Retail
NPL generation ratio (defined as net increase in NPLs plus write-
offs divided by average performing loans) was 14.5% in 1Q14,
which although an increase from 11.7% in 2013, is still below the
estimated break-even rate of about 20% due to high interest
rates.

As a potential contingent risk, Fitch considers the acquisition
by PBB's shareholders of failed Bank Solidarnost (BSD) in 1Q14,
which was done under the sanitation process organized by the
Depository Insurance Agency (DIA).  BSD is a medium-sized
regional bank with assets of RUB17 billion and capital shortage
estimated at around RUB2 billion in local accounts at the time of
sale.  Under the sanitation plan, BSD received a RUB6 billion
effectively interest-free loan from DIA in late 2013, which
allowed it to recognize a RUB3 billion fair value gain in its
IFRS accounts, thereby restoring the bank's capital. However,
this gain will be recognized only gradually in local accounts, so
to recapture BSD's regulatory capital position PBB's shareholders
acquired its new RUB2.2 billion shares issue and utilized a four-
year loan from DIA for a similar amount to finance it.  PBB's
management expects to improve BSD performance in the next two to
three years, although there is a risk that BSD's asset quality
turns out to be worse than anticipated.

PBB's liquidity is comfortable with a cushion of liquid assets
(cash and equivalents, unrestricted short-term interbank
placements and bonds eligible for REPO financing with Central
Bank) sufficient to cover customer accounts by 57% at end-1Q14.

Senior unsecured debt is rated in line with the bank's Long-term
IDRs, reflecting Fitch's view of average recovery prospects
(corresponding to a Recovery Rating of '4'), in case of default.

RATING SENSITIVITIES

PBB's ratings could be downgraded if asset quality and/or
capitalization materially deteriorate.  Upside potential is
currently limited taking into account the challenging economic
environment, elevated retail credit losses and weakened quality
of capital.

Any changes to the banks' VRs would likely impact the rating of
senior unsecured debt.

The rating actions are as follows:

  Long-term foreign currency IDR: upgraded to 'B' from 'B-',
  Outlook Stable

  Long-term local currency IDR: upgraded to 'B' from 'B-',
  Outlook Stable

  Short-term IDR: affirmed at 'B'

  Viability Rating: upgraded to 'b' from 'b-'

  Support Rating: affirmed at '5'

  Support Rating Floor: affirmed at 'No Floor'

  National Long-term rating: upgraded to 'BBB(rus)' from
  'BB+(rus)', Outlook Stable

  Senior unsecured Long-term Rating (including that issued by PBB
  LPN Issuance): upgraded to 'B'/RR4 from 'B-'/RR4

  Senior unsecured Short-term Rating : affirmed at 'B'

  Senior unsecured Long-term Rating: upgraded to 'B (EXP)'/RR4
  from 'B- (EXP)'/RR4 and withdrawn

  Securities National Rating: upgraded to 'BBB(rus)' from
  'BB+(rus)'


RUSSIAN UTILITIES: Fitch Withdraws 'B+' Issuer Default Rating
-------------------------------------------------------------
Fitch Ratings has withdrawn Joint-Stock Company Russian Utilities
Systems' ratings.

Fitch has withdrawn the ratings as the issuer has been
reorganized and no longer exists.  The newly formed issuer has
chosen to stop participating in the rating process and therefore,
Fitch will not have sufficient information to maintain the
ratings.  Accordingly, Fitch will no longer provide ratings or
analytical coverage for Joint-Stock Company Russian Utilities
Systems or its successor. Joint-Stock Company Russian Utilities
Systems did not have any outstanding bonds.

The ratings actions are as follows:

  Long-term foreign currency Issuer Default Rating (IDR): 'B+',
   Outlook Stable, withdrawn

  Short-term foreign currency IDR: 'B', withdrawn

  Long-term local currency IDR: 'B+', Outlook Stable, withdrawn

  Short-term local currency IDR: 'B', withdrawn

  National Long-term Rating: 'A(rus)', Outlook Stable, withdrawn



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


BANCAJA 7 FTA: S&P Lowers Rating on Class D Notes to 'B+'
---------------------------------------------------------
Standard & Poor's Ratings Services lowered its credit ratings on
Bancaja 7 Fondo de Titulizacion de Activos' class B, C, and D
notes.  At the same time, S&P has affirmed its 'AA (sf)' rating
on the class A2 notes.

The rating actions follow S&P's assessment of the collateral's
credit quality, the transaction structure's robustness, and the
counterparty and sovereign risk that the transaction is exposed
to.  S&P has used the latest available portfolio and structural
features information from the May 2014 trustee investor report.

Arrears of more than 90 days have declined to 1.28% in May 2014
from 1.82% of the outstanding pool balance in May 2013.  However,
defaulted loans (defined in this transaction as loans that are
delinquent for 18 months or longer) have increased to 1.70% in
May 2014 from 0.82% of the outstanding pool balance in May 2013.

This has resulted in the partial depletion of the reserve fund.
At closing, the reserve was set at 0.85% of the issuance balance
and it is currently at 72.1% of its required level -- after the
issuer started using it for the first time in May 2013.  The
reserve fund covers potential interest shortfalls and principal
losses for the class A2, B, C, and D notes.

Because the transaction is highly seasoned (10 years), the use of
the reserve fund, at this stage of its life, has eroded the
available credit enhancement.  Currently, if S&P takes into
account the cash available in the transaction, which includes the
performing balance of the loans that are up to 90 days in
arrears, the available credit enhancement would be 10.47%, 5.21%,
1.99%, and -0.18% for the class A2, B, C, and D notes,
respectively.  This compares with the amounts at closing of
4.92%, 2.82%, 1.57%, and 0.72% for the class A2, B, C, and D
notes, respectively. Consequently, the subordinated notes are now
more sensitive to the stresses that S&P applies in its analysis.
As a result, S&P has lowered its ratings on the class B, C, and D
notes.

The transaction has a trigger system based on the level of
available funds so that in a stressful economic environment, the
more senior notes are amortized before the interest payment on
the subordinated classes of notes.  Given the transaction's
historical performance, S&P don't expect it to breach interest
deferral triggers during its remaining life.

In December 2008, the trustee entered into an interest swap
agreement with Credit Suisse International (A/Negative/A-1),
which does not comply with S&P's current counterparty criteria.
The swap provider pays to the issuer three-month Euro Interbank
Offered Rate (EURIBOR), plus the weighted-average margin of the
class A2, B, C, and D notes, and a guaranteed margin of 55 basis
points.

Under S&P's current counterparty criteria, the class A2, B, C,
and D notes cannot achieve a rating higher than its long-term
issuer credit rating (ICR) on the swap counterparty plus one
notch -- when relying on the support provided by the swap
agreement.  As a result, the maximum rating that the notes can
achieve in that case is 'A+'.

S&P conducted its cash flow analysis assuming that the
transaction does not benefit from any support from the interest
rate swap provider to see if the ratings on the notes could be
delinked from the ICR on the swap counterparty.  In this
scenario, only the class A2 and B notes are able to achieve a
higher (class A2 notes) or the same (class B notes) rating than
S&P's long-term ICR on Credit Suisse International plus one
notch.

Bancaja 7 is also exposed to country risk as all of the
securitized assets are in Spain.  Based on S&P's classification
of underlying assets in this transaction as having low country
risk exposure in accordance with its non-sovereign ratings
criteria, the maximum rating differential between the long-term
rating on the Kingdom of Spain (BBB/Stable/A-2) and S&P's ratings
in this transaction is up to six notches.  S&P has therefore
affirmed its 'AA (sf)' rating on the class A2 notes as, from a
credit and cashflow point of view, it is commensurate with a 'AAA
(sf)' rating, but S&P's non-sovereign ratings criteria cap it at
six notches above the sovereign.

Bancaja 7 is a Spanish residential mortgage-backed securities
(RMBS) transaction that closed in July 2004.  It securitizes a
portfolio of residential mortgage loans, originated between 1997
and 2004.  The loans are secured over Spanish properties, mainly
in Valencia (43.92% of the balance of the outstanding pool).
Bancaja (Caja de Ahorros de Valencia, Castellon, y Alicante) (now
part of Bankia S.A.) originated the underlying loans.  Bankia,
which was formed in December 2010 as a result of the union of
seven Spanish financial institutions, is now the transaction's
servicer.

RATINGS LIST

Class       Rating           Rating
            To               From

Bancaja 7 Fondo de Titulizacion de Activos
EUR1.9 Billion Mortgage-Backed Floating-Rate Notes

Rating Affirmed

A2          AA (sf)

Ratings Lowered

B           A+ (sf)          AA- (sf)
C           BBB- (sf)        BBB (sf)
D           B+ (sf)          BB (sf)


BANCO CEISS: Moody's Raises Senior Deposit & Debt Ratings to 'B2'
-----------------------------------------------------------------
Moody's Investors Service has upgraded the long-term debt and
deposit ratings of Banco CEISS from B3 to B2 and affirmed the
short-term ratings at Not Prime. The rating action has been
triggered by (1) the improved credit profile of the institution
following the restructuring undertaken in 2013, which has raised
the baseline credit assessment (BCA) to caa1 from caa3, while
confirming the standalone bank financial strength rating (BFSR)
at E level; and (2) the provision of parental support that
partially offsets Moody's assessment of lower systemic support,
following the transfer of the capital of Banco CEISS to Unicaja
Banco. The outlook on all the ratings is stable.

This rating action concludes the review with direction uncertain
that was initiated on 13 November 2012.

Ratings Rationale

Upgrade of the Debt and Deposit Ratings

While Moody's has reduced its consideration of systemic support,
upon the transfer of Banco CEISS's ownership to Unicaja Banco to
a level in line with domestic peers, this has been partially
offset by Moody's assessment of support from the bank's new
parent company. Moody's assessment of the probability of parental
support results in a two-notch uplift from its caa1 BCA, bringing
the long-term debt and deposit ratings to B2.

Raising of the Standalone BCA

The raising of Banco CEISS's BCA to caa1 from caa3, within the E
BFSR category, is prompted by the institution's enhanced credit
profile, especially in terms of asset quality, following the
restructuring undertaken in 2013. The transfer of real-estate-
related assets to the Sareb (Spain's so-called "bad bank"), in
February 2013, for a gross amount of almost EUR7 billion, had a
significant effect on Banco CEISS's asset quality indicators. The
bank's non-earning assets ratio, which takes into consideration
not only problem loans but also real estate assets acquired from
troubled borrowers, decreased from 28.9% to 13.6% between
December 2012 and June 2013 as a consequence of this transfer.
Moreover, the exposure to the ailed real estate sector declined
from 24% to 8% of the total loan book, which reduces the risk of
further potential asset quality deterioration. As of March 2014,
the asset quality indicators of Banco CEISS compared favorably
with the system average, as well as with other institutions that
have also been subject to restructuring following the stress test
carried out by Oliver Wyman in 2012.

The transfer of assets to the Sareb also benefitted the liquidity
position of Banco CEISS, as it allowed the bank to exchange
illiquid loans and real estate properties with bonds issued by
the Sareb and guaranteed by the Spanish government. The shrinkage
of the loan book, in line with the system deleveraging trends, is
also improving the liquidity profile of the bank which, as of end
of March 2014, showed a loan to deposit ratio below 100%.

Nevertheless, the bank's profitability remains very weak, with
(1) a risk-weighted recurring earning generation power of 0.5% in
2013; and (2) the bank reporting net losses in 2013 as well as in
the first quarter of 2014. This weak profitability is a major
factor constraining the rating. While some profitability gains
could be achieved through the incorporation of Unicaja Banco's
stronger risk and operational management practices, Moody's
believes that Banco CEISS will be very challenged to improve its
recurrent earnings to a significant extent, in light of the low
interest-rate environment and subdued business levels.

Rationale For Stable Outlook

The long-term debt and deposit ratings carry a stable outlook,
which reflects (1) the lower downside risks for the bank
following the improvement in asset quality metrics, coupled with
the economic growth expectations for Spain; and (2) the
resilience of the parental support uplift to a downgrade of
Unicaja Banco's ratings (which holds a negative outlook on the
long-term debt and deposit ratings).

What Could Change The Rating Up/Down

Upward pressure could be exerted on Banco CEISS's ratings as a
result of (1) an improvement in the level of recurring
profitability; or (2) a sustainable improvement of asset quality
metrics that leads to a reduction in the stock of problematic
assets. Such improvements could result from the implementation of
Unicaja Banco's stronger risks and operational management
practices into its subsidiary. Any sign that indicates a stronger
willingness of Unicaja Banco to support Banco CEISS or to fully
include Banco CEISS into its operations could also trigger a
rating upgrade.

Downward pressure on Banco CEISS's ratings could ultimately
result from (1) any worsening in operating conditions beyond
Moody's current expectations (e.g., economic growth below Moody's
current GDP forecasts of 1.2% for 2014); (2) an acceleration in
the trend of the formation of non-performing loans, which drives
up provisioning requirements. At the current BCA level, any
downgrade would indicate a high likelihood of needing external
support to avoid an insolvency situation.

In addition, Banco CEISS's long-term debt and deposit ratings
could be downgraded if Moody's assesses a lower probability of
parental support, or if Unicaja Banco's ratings are downgraded.

Principal Methodology

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


GOWEX SA: Judge Issues Search & Detain Warrant for Auditor
----------------------------------------------------------
Sarah White and Emma Pinedo at Reuters report that Spain's
High Court said on Thursday the judge investigating the collapse
of Gowex had issued a search and detain warrant for the company's
auditor, who had gone missing.

According to Reuters, Antonio Diaz Villanueva, from small firm
M&A Auditores, is due to testify in court today, July 18, as part
of an investigation into an alleged accounting fraud at the firm,
but the court said it had not been able to find him.

The fall of Gowex, which filed for bankruptcy on July 14, was
precipitated nearly two weeks ago by former boss Jenaro Garcia
Martin's admission that he misrepresented its accounts for at
least the past four years, Reuters relays.

Mr. Villanueva, who was responsible for signing off the firm's
accounts, was among nine people beside Mr. Garcia Martin to be
charged in connection with the collapse, Reuters discloses.

The High Court said that Mr. Garcia Martin's wife Florencia Mate,
the former head of investor relations at Gowex, was out of the
country and would be called to testify on July 28, Reuters
relates.  She has also been charged and had been due to testify
in court on Thursday, July 17, Reuters notes.

Police raided Gowex's headquarters this week, as ordered by
investigating magistrate Santiago Pedraz, who is leading the
probe, Reuters recounts.  The High Court, as cited by Reuters
said that he has asked for Mr. Garcia Martin's bank account with
Banco Popular in Luxembourg to be frozen.

As reported by the Troubled Company Reporter-Europe on July 16,
2014, Reuters related that Gowex filed for bankruptcy on July 14
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 disclosed.

Gowex is a Spanish wireless networks provider.


UNICAJA BANCO: Moody's Confirms 'Ba3' Sr. Debt & Deposit Ratings
----------------------------------------------------------------
Moody's Investors Service confirmed the long-term senior debt and
deposit ratings of Unicaja Banco at Ba3 and affirmed the short-
term deposit ratings at Not Prime, following the confirmation of
the bank's standalone bank financial strength rating (BFSR) at E+
(equivalent to a b1 baseline credit assessment). Following the
rating confirmation, the outlook on the bank's debt and deposit
ratings is negative, while the BFSR carries a stable outlook.

The confirmation of Unicaja's ratings reflects the resilience of
the bank's risk absorption capacity after the recently completed
integration of Banco CEISS (B2 stable, E stable/caa1). Banco
CEISS had EUR35.5 billion in assets, compared to EUR41.2 billion
for Unicaja at end-December 2013.

This rating action concludes the review for downgrade that was
extended on July 11, 2013.

Ratings Rationale

The confirmation of Unicaja's senior debt and deposit ratings
reflects (1) the confirmation of its standalone BCA at b1; and
(2) Moody's assessment of a moderate probability of support from
the Spanish government for the bank in case of need.

The negative outlook on Unicaja's long-term debt and deposit
ratings takes into consideration the recent adoption of the Bank
Recovery and Resolution Directive (BRRD) and the Single
Resolution Mechanism (SRM) regulation in the EU. With the
legislation underlying the new resolution framework now in place
and the explicit inclusion of burden-sharing with unsecured
creditors as a means of reducing the public cost of bank
resolutions, the balance of risk for banks' senior unsecured
creditors has shifted to the downside. Although Moody's support
assumptions are unchanged for now, the probability has risen that
they will be revised downwards as a consequence of the new
framework. For further details, please refer to Moody's Special
Comment entitled "Reassessing Systemic Support for EU Banks,"
published on 29 May 2014.

Confirmation of the Standalone Credit Assessment

The confirmation of Unicaja's standalone rating is based on the
rating agency's view that the combined entity's financial
strength remains resilient despite the integration of Banco
CEISS, which has a weaker credit profile. On a consolidated basis
(post-integration) Moody's considers Unicaja's risk absorption
capacity to remain commensurate with a BCA of b1, based on the
combined entity's (1) adequate capital cushions (financial data
for the new group is not publicly available), as Unicaja's core
capital ratio of 11.7% at end-December 2013 has only been mildly
impacted by the integration of Banco CEISS, and; (2) a modest
increase in the group's consolidated risk assets, which is
explained by Banco CEISS' significant balance sheet restructuring
as part of the bank's restructuring and recapitalization plan
approved by the European Commission on December 20, 2012.

The transfer of the real-estate-related assets to the Sareb
(Spain's Spain's so-called "bad bank") in February 2013 had a
significant effect on Banco CEISS's credit risk profile and on
its asset quality indicators. On 28 February 2013, the bank
transferred almost EUR7 billion of real-estate-related assets (in
gross terms) to the SAREB, which resulted in a drastic reduction
of its exposure to this sector to 8% from 24% of the total loan
book. Unicaja's asset quality-metrics have compared favorably to
the system's average during the crisis as demonstrated by its
non-performing loan (NPL) ratio of 8.4% at end December 2013,
which compares to the system's average of 13.6% for the same
period. In confirming the ratings of Unicaja, Moody's has taken
into consideration the increase of the group's problem loans
after the integration of Banco CEISS (which had a NPL ratio of
12.7% at end-December 2013), which nevertheless continues to
compare favorably to the system's average on a consolidated
basis.

In addition to the amount of problem loans, Unicaja has other
problematic assets broadly defined to include real estate asset
the bank received in return for the cancellation of the loan plus
refinanced loans categorized as substandard or performing. In
aggregate, these problematic assets totaled 25% of gross loans as
of end-December 2013, which has remained broadly stable after the
integration of Banco CEISS. This ratio compares well to domestic
peers in the same rating category, although it remains high in
absolute terms, and represents a key factor constraining the
standalone BCA of b1.

In Moody's view, the moderate recovery of the Spanish economy
(i.e., Moody's forecasts GDP growth of 1.2% for 2014) should
underpin a deceleration in gross NPLs formation as well as in new
foreclosed real estate assets during 2014, which is expected to
benefit Unicaja's bottom line profitability from a lower level of
provisions. The rating action also captures Moody's expectations
of a modest pre-provision income for Unicaja during 2014, because
of the continued low interest rates and subdued business levels.
Integration costs, which will also weigh on Unicaja's recurrent
profitability, will be largely mitigated by the very limited
branch overlapping of both franchises and the deep restructuring
that had been already undertaken by Banco CEISS prior to its
integration into Unicaja, and as required by the restructuring
and recapitalization plan approved by the European Commission.

The stable outlook that Moody's has assigned to Unicaja's BFSR
balances (1) the bank's resilient credit fundamentals even after
incorporating the impact of Banco CEISS's acquisition; and (2)
Moody's view that the downside risks to the bank's credit profile
have substantially diminished, sustained by the gradual recovery
of the Spanish economy.

Rationale For Confirming Subordinated Debt Rating

In line with the confirmation of the bank's BCA, Moody's has
confirmed the senior subordinated debt provisional ratings of
Unicaja at (P)B2.

What Could Move The Rating Up/Down

Unicaja's standalone BCA could be raised if the bank is able to
(1) work out its asset-quality challenges, with a notable decline
in provisioning requirements, and (2) achieve a sustainable
recovery in its recurring earnings, with improved profitability
metrics (i.e., pre-provision income as % of risk weighted assets
consistently above 1.5%-2%).

Downward pressure could be exerted on the standalone BFSR by (1)
an acceleration in the trend of formation of NPLs, both on an
absolute level and in relation to the system average; (2)
weakening of Unicaja's internal capital generation and risk-
absorption capacity; and/or (3) any worsening in operating
conditions beyond Moody's current expectations, (i.e., a broader
economic recession beyond the rating agency's current GDP
forecast of 1.2% GDP growth for 2014).

Moody's could downgrade Unicaja's senior debt and deposit ratings
as a result of the evolution of systemic support prospects in
Spain and in the EU, in light of developments associated with
resolution mechanisms and burden sharing for European banks. In
addition, a lowering of the BCA and/or a downgrade of Spain's
sovereign rating could prompt a downgrade of Unicaja's senior
ratings.

Principal Methodology

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



=============
U K R A I N E
=============


IVANO-FRANKIVSK CITY: S&P Affirms 'CCC' Rating; Outlook Stable
--------------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on the
Ukrainian City of Ivano-Frankivsk to stable from negative.  At
the same time, S&P affirmed its 'CCC' foreign currency long-term
issuer credit and 'uaB-' Ukraine national scale ratings on the
city.

As defined in EU CRA Regulation 1060/2009 (EU CRA Regulation),
the ratings on Ivano-Frankivsk are subject to certain publication
restrictions set out in Art 8a of the EU CRA Regulation,
including publication in accordance with a pre-established
calendar.  Under the EU CRA Regulation, deviations from the
announced calendar are allowed only in limited circumstances and
must be accompanied by a detailed explanation of the reasons for
the deviation.  In this case, the deviation has been caused by
the events described in the following Rationale.

RATIONALE

The rating action follows S&P's similar action on Ukraine.

Under S&P's methodology, a local or regional government (LRG) can
be rated higher than its sovereign only if it considers that it
exhibits certain characteristics.  S&P currently do not believe
that Ukrainian LRGs, including Ivano-Frankivsk, meet these
conditions.  S&P consequently caps the rating on Ivano-Frankivsk
at the level of the long-term foreign currency rating on Ukraine.

Additionally, in accordance with S&P's criteria, it assess the
city's stand-alone credit profile (SACP) at 'b'.  The SACP is not
a rating, but a means of assessing an LRG's intrinsic
creditworthiness under the assumption that there is no sovereign
rating cap.  The SACP results from the combination of S&P's
assessment of an LRG's individual credit profile and the effects
S&P sees from the institutional framework in which it operates.

Furthermore, S&P's rating on Ivano-Frankivsk reflects Ukraine's
very volatile and underfunded institutional framework, resulting
in the city's low wealth, weak financial management, very weak
budgetary flexibility, adequate liquidity, and moderate
contingent liabilities related to the weak financial position of
the city's government-related entities.  The city's very low debt
and average budgetary performance help offset these weaknesses,
however.

OUTLOOK

The stable outlook on Ivano-Frankivsk reflects the stable outlook
on Ukraine.  Because S&P caps the rating on the city at the level
of its long-term foreign currency sovereign rating, any rating
action on Ukraine would likely lead to a similar action on Ivano-
Frankivsk, all else being equal.

S&P would consider a positive rating action on Ivano-Frankivsk if
it took a positive action on Ukraine.

S&P currently do not see a viable downside scenario in which the
city's SACP would fall below 'ccc'.  Consequently, any negative
rating action on Ivano-Frankivsk would follow a negative action
on the sovereign, if one were to occur.

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

After the primary analyst gave opening remarks and explained the
recommendation, the Committee discussed key rating factors and
critical issues in accordance with the relevant criteria.
Qualitative and quantitative risk factors were considered and
discussed, looking at track-record and forecasts.

The committee's assessment of the key rating factors is reflected
in the Ratings Score Snapshot above.

The chair ensured every voting member was given the opportunity
to articulate his/her opinion.  The chair or designee reviewed
the draft report to ensure consistency with the Committee
decision. The views and the decision of the rating committee are
summarized in the above rationale and outlook.

RATINGS LIST

Ratings Affirmed; Outlook Action
                                 To             From
Ivano-Frankivsk (City of)
Issuer Credit Rating            CCC/Stable/--  CCC/Neg/--
Ukraine National Scale Rating   uaB-/--/--     uaB-/--/--


LVIV CITY: S&P Revises Outlook to Stable & Affirms 'CCC' ICR
------------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on the
Ukrainian City of Lviv to stable from negative.  At the same
time, S&P affirmed its 'CCC' long-term issuer credit rating and
'uaB-' Ukraine national scale rating on the city.

As defined in EU CRA Regulation 1060/2009 (EU CRA Regulation),
the ratings on Lviv are subject to certain publication
restrictions set out in Art 8a of the EU CRA Regulation,
including publication in accordance with a pre-established
calendar.  Under the EU CRA Regulation, deviations from the
announced calendar are allowed only in limited circumstances and
must be accompanied by a detailed explanation of the reasons for
the deviation.  In this case, the deviation has been caused by
the events described in the following Rationale.

RATIONALE

The outlook revision follows S&P's similar action on Ukraine.

Under S&P's methodology, a local or regional government (LRG) can
be rated higher than its sovereign only if it considers that it
exhibits certain characteristics.  S&P do not currently believe
that Ukrainian LRGs, including Lviv, meet these conditions.
Consequently, S&P would lower the ratings on Lviv if it lowered
the long-term rating on Ukraine.

The long-term rating on Lviv is therefore capped at 'CCC' by the
Ukrainian sovereign foreign currency rating, although, in
accordance with S&P's criteria, it assess Lviv's stand-alone
credit profile (SACP) at 'b-'.

The SACP is not a rating, but a means of assessing an LRG's
intrinsic creditworthiness under the assumption that there is no
sovereign rating cap.  The SACP results from the combination of
our assessment of an LRG's individual credit profile and the
effects S&P sees of the institutional framework in which it
operates.

S&P also takes in account Ukraine's very volatile and underfunded
intergovernmental system and Lviv's low wealth levels and limited
financial flexibility on revenues and expenditures.  S&P views
the city's liquidity as weak.  Lviv has repeatedly missed
repayments on a loan from Ukraine's Ministry of Finance that the
city had guaranteed.  Although the city is trying to resolve this
problem, it weighs on S&P's assessment of Lviv's financial
management, which it views as weak in an international context.
Lviv's material contingent liabilities related to its municipal
utilities also constrain the city's creditworthiness.

On the positive side, S&P believes Lviv has a fairly sound
financial performance and modest debt.

OUTLOOK

The stable outlook reflects that on Ukraine.

S&P might take a positive rating action on Lviv if it took a
similar action on Ukraine and if Lviv's other rating factors
developed in line with its base-case scenario.

A negative rating action on Lviv would follow a negative action
on Ukraine.

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

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

RATINGS LIST

Ratings Affirmed; Outlook Action
                                  To             From
Lviv (City of)
Issuer Credit Rating             CCC/Stable/--  CCC/Negative/--
Ukraine National Scale           uaB-/--/--



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


HARBOURMASTER CLO 3: Fitch Cuts Ratings on 3 Note Classes to 'D'
----------------------------------------------------------------
Fitch Ratings has downgraded and withdrawn Harbourmaster CLO 3
Ltd's notes, as follows:

Class A (ISIN XS0152283692): Paid in full

Class B-1 (ISIN XS0152285630): downgraded to 'Dsf' from 'CCsf'
and withdrawn

Class B-2 (ISIN XS0152285804): downgraded to 'Dsf' from 'CCsf'
and withdrawn

Class C (ISIN XS0152286281): downgraded to 'Dsf' from 'CCsf' and
withdrawn

Harbourmaster CLO 3 Limited was a securitization of mainly
European senior secured loans and structured finance securities.
Unlike typical European CLOs this transaction allowed the manager
to purchase up to 20% of investment-grade rated asset-backed
securities.  At closing a total note issuance of EUR438 million
was used to invest in a target portfolio of EUR430 million.  The
portfolio was managed by Blackstone/GSO Debt Funds Management
Europe Ltd.

KEY RATING DRIVERS

Harbourmaster 3 reached its legal final maturity on July 15,
2014. While the class A notes were paid in full, there were
insufficient funds to redeem the class B-1, class B-2 and class C
notes in full.  As a result, Fitch has downgraded all three
classes to 'Dsf' and withdrawn the ratings.  The class B-1 notes
were redeemed to 51.5% and class B-2 notes were redeemed to 52%
of their principal balance at maturity and the class C did not
receive any principal distributions.

The class B tranche, which was originally rated 'Asf', defaulted
primarily due to low credit enhancement.  At issuance in 2002,
the class B notes had 5.6% credit enhancement, compared with CLO
2.0 'Asf' rated tranches, which typically have between 22% and
23%. The class B notes were downgraded to 'BBsf' in 2008 with the
revision of Fitch's criteria to increase default probabilities
and correlations, among other changes.  At the same time, the
class C note was downgraded to 'Bsf' from 'BBBsf'.  While the
transaction allowed the manager to invest up to 20% in
investment-grade ABS at the time of the downgrade in 2008, ABS
assets only represented 4%.

Although the reinvestment period ended in October 2007, the
manager was allowed to invest unscheduled principal until October
2011.  Reinvestment of unscheduled principal is a common feature
of European CLOs pre and post crisis.  As a result of the
widespread amend and extend activity in leveraged loans following
the financial crisis, the transaction only started to
significantly delever in 2011.  For example, the portfolio par
amount relative to the initial target par as of October 2011 was
still 88%.  As a consequence, the proportion of assets with loan
maturities after the transaction legal final increased and stood
at 17% as of July 2010.

Fitch notes that, until 2013, an equity distribution was made on
all but one quarterly payment dates.

RATING SENSITIVITIES

The transaction has terminated.  No sensitivities were applied.


HARVEST CLO IX: Fitch Assigns 'B-sf' Rating to Class F Notes
------------------------------------------------------------
Fitch Ratings has assigned Harvest CLO IX Limited's notes final
ratings, as follows:

Class A: 'AAAsf'; Outlook Stable
Class B: 'AAsf'; Outlook Stable
Class C: 'Asf'; Outlook Stable
Class D: 'BBBsf'; Outlook Stable
Class E: 'BBsf'; Outlook Stable
Class F: 'B-sf'; Outlook Stable
Subordinated notes: not rated

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

KEY RATING DRIVERS

Payment Frequency Switch

The notes pay quarterly, while the portfolio assets can reset to
semi-annual.  The transaction has an interest-smoothing account,
but no liquidity facility.  A liquidity stress for the non-
deferrable class A and B notes, stemming from a large proportion
of assets resetting to semi-annual in any one quarter, is
addressed by switching the payment frequency on the notes to
semi-annual, subject to certain conditions.

Low Weighted Average Spread

The asset manager has indicated the expected minimum weighted
average spread test will be 3.7% as of the closing date.  This
would be the lowest of all CLOs 2.0 rated by Fitch to date.

Limited Interest Rate Risk

Unhedged fixed rate assets cannot exceed 5% of the portfolio,
while the liabilities pay floating rate.  Consequently, the
impact of unhedged interest rate risk caused by the exposure to
these assets is small.

Trading Gain Release

The portfolio manager may designate trading gains as interest
proceeds, providing the portfolio balance remains above the
reinvestment target par balance and the class F
overcollateralization test remains above its value at the
effective date.

'B'/'B-' Portfolio Credit Quality

Fitch expects the average credit quality of obligors to be in the
'B'/'B-' range.  Fitch has credit opinions on 97.4% of the
indicative portfolio and has a public rating on the remaining
entities.

High Recovery Expectations

At least 90% of the portfolio will comprise senior secured loans.
Recovery prospects for these assets are typically more favorable
than for second-lien, unsecured, and mezzanine assets.  Fitch has
assigned Recovery Ratings to 99 of the 100 assets in the
indicative portfolio.

TRANSACTION SUMMARY

Net proceeds from the note issue will be used to purchase a
EUR507m portfolio of mostly European leveraged loans.  The
portfolio will be managed by 3i Debt Management Investments
Limited.  The transaction will have a four-year re-investment
period scheduled to end in 2018.

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

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

RATING SENSITIVITIES

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

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



===============
X X X X X X X X
===============


* BOOK REVIEW: Alfred L. Malabre, Jr.'s Lost Prophets
-----------------------------------------------------
Author: Alfred L. Malabre, Jr.
Publisher: Beard Books
Softcover: 256 pages
List Price: $34.95
Review by Henry Berry
Order your personal copy today at http://is.gd/KNTLyr

Alfred Malabre's personal perspective on the U.S. economy over
the past four decades is firmly grounded in his experience and
knowledge. Economics Editor of The Wall Street Journal from 1969
to 1993 and author of its weekly "Outlook" column, Malabre was in
a singular position to follow the U.S. economy in recent decades,
have access to the major academic and political figures
responsible for economic affairs, and get behind the crucial
economic stories of the day. He brings to this critical overview
of the economy both a lively, often provocative, commentary on
the picture of the turns of the economy. To this he adds sharp
analysis and cogent explanation.

In general, Malabre does not put much stock in economists. "In
sum, the profession's record in the half century since Keynes and
White sat down at Bretton Woods [after World War II] provokes
176dismay." Following this sour note, he refers to the belief of
a noted fellow economist that the Nobel Prize in this field
should be discontinued. In doing so, he also points out that the
Nobel for economics was not one originally endowed by Alfred
Nobel, but was one added at a later date funded by the central
bank of Sweden apparently in an effort to give the profession of
economists the prestige and notice of medicine, science,
literature and other Nobel categories.

Malabre's view of economists is widespread, although rarely
expressed in economic circles. It derives from the plain fact
that modern economists, even hugely influential ones such as John
Meynard Keynes, are wrong as many times as they are right. Their
economic theories have proved incomplete or shortsighted, if not
basically wrong-headed. For example, Malabre thinks of the
leading economist Milton Friedman and his "monetarist colleagues"
as "super salespeople, successfully merchandising.an economic
medicine that promised far more than it could deliver" from about
the 1960s through the Reagan years of the 1980s. But the author
not only cites how the economy has again and again disproved the
theories and exposed the irrelevance of wrong-headedness of the
policy recommendations of the most influential economists of the
day. Malabre also lays out abundant economic data and describes
contemporary marketplace and social activities to show how the
economy performs almost independently of the best analyses and
ideas of economists.

Malabre does not engage in his critiques of noted economists and
prevailing economic ideas of recent decades as an end in itself.
What emerges in all of his consistent, clear-eyed, unideological
analysis and commentary is his own broad, seasoned view of
economics-namely, the predominance of the business cycle. He
compares this with human nature, which is after all the substance
of economics often overlooked by professional and academic
economists with their focus on monetary policy, exchange rates,
inflation, and such. "The business cycle, like human nature, is
here to stay" is the lesson Malabre aims to impart to readers
interested in understanding the fundamental, abiding nature of
economics. In Lost Prophets, in language that is accessible and
jargon-free, this author, who has observed, written about, and
explained economics from all angles for several decades,
persuasively makes this point.

In addition to holding a top position at The Wall Street Journal,
Malabre is also the author of the books, Understanding the New
Economy and Beyond Our Means, which received the George S. Eccles
Prize from the Columbia Business School as the best economics
book of 1987.


                            *********

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 * * *