/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/140828.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 Thursday, August 28, 2014, Vol. 15, No. 170 Headlines C Z E C H R E P U B L I C SAZKA AS: Ex-CEO Ales Husak Assigns Claim to Hungarian Company F I N L A N D METSA BOARD: S&P Revises Outlook to Positive & Affirms 'B+' CCR G E R M A N Y DEUTSCHE PFANDBRIEFBANK: Moody's Hikes Sub. Debt Rating to 'B3' G R E E C E FREESEAS INC: Regains Compliance with Nasdaq's Equity Rule I C E L A N D LANDSBANKI ISLANDS: De Nederlandsche Bank Sells Remaining Claims I R E L A N D ALLIED IRISH: Posts EUR411 Million Profit in H1 2014 PERMANENT TSB: DBRS Says 1st Half 2014 Financial Results Improve L U X E M B O U R G SLS CAPITAL: HSBC Intends to Fight Keydata Fraud Lawsuit R U S S I A UC RUSAL: Returns to Profit After Debt Restructuring UCL RAIL: S&P Withdraws 'BB+' Long-Term Corporate Credit Rating S P A I N IM PRESTAMOS FONDOS: Moody's Cuts Cl. A Notes Rating to 'B2(sf)' U K R A I N E UKREXIMBANK JSC: Fitch Cuts Long-Term Local Currency IDR to 'CCC' U N I T E D K I N G D O M MOY PARK: S&P Assigns 'B' Corp. Credit Rating; Outlook Positive PASTA REALE: In Administration; 169 Jobs Affected ********* =========================== C Z E C H R E P U B L I C =========================== SAZKA AS: Ex-CEO Ales Husak Assigns Claim to Hungarian Company -------------------------------------------------------------- CTK reports that public broadcaster Czech Television on Aug. 25 said Ales Husak, former CEO of Sazka, has assigned his alleged claim to severance pay worth more than CZK70 million to a Hungarian company. Sazka got into insolvency in 2011 and its lottery business was later bought by investment groups PPF and KKCG, CTK recounts. Mr. Husak was dismissed in June 2011 but under a managerial contract, he was to be paid severance pay of over CZK70 million, CTK discloses. Sazka's insolvency administrator did not, however, recognize Mr. Husak's claim, CTK says. The dispute may end in court, CTK notes. Sazka AS is the Czech Republic's biggest betting firm. ============= F I N L A N D ============= METSA BOARD: S&P Revises Outlook to Positive & Affirms 'B+' CCR --------------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on Finland-based forest and paper products company Metsa Board Corp. to positive from stable. At the same time, S&P affirmed its 'B+/B' long- and short-term corporate credit ratings on Metsa Board. S&P also affirmed its 'B+' issue rating on Metsa Board's senior unsecured debt. The recovery rating is unchanged at '4', indicating S&P's expectation of average (30%-50%) recovery in the event of a payment default. The outlook revision primarily reflects S&P's expectation that Metsa Board could improve its profitability and cash flow generation in the coming 12 months and that such an improvement would lead to a sustainably stronger business risk profile. This stems from S&P's view of the continuing stability of the company's core paperboard operations and growth in new products and markets. As a result, S&P has revised its assessment of Metsa Board's business risk profile upward, to fair from weak, leading to an anchor of 'bb-' compared with 'b+' previously. S&P's assessment of Metsa Board's business risk profile as fair reflects its view of the company's track record of stability and improving performance in its core paperboard business, which S&P expects will continue, supported by a clear and credible strategy. Since 2012, after years of major restructuring, Metsa Board has focused on folding boxboard and white-top kraftliner, both used in the packaging of consumer products such as food, cosmetics, and cigarettes. Metsa Board's key competitive advantage is its proximity to fresh fiber, a key raw material in the manufacture of folding boxboard and kraftliner, and its well- developed asset base. S&P views as positive the company's strategy to increase sales volumes outside Europe, notably in the U.S. where folding boxboard is less common. There is also relatively stable demand for packaging-related products and solid growth opportunities in emerging markets. However, S&P notes that about 25% of Metsa Board's sales consist of other products, such as office, magazine, and specialty paper, which are experiencing a structural demand decline and pricing pressure. These products therefore weigh on overall profitability. However, given the growth in paperboard, S&P believes profitability could improve in the coming years. S&P still regards Metsa Board's financial risk profile as aggressive, despite some strengthening owing to recent refinancing and low investment levels. This is primarily due to uncertainty regarding Metsa Board's role in a new pulp mill planned by associated company Metsa Fibre. The mill is expected to cost about EUR1.1 billion, with construction potentially starting in 2015. Metsa Board owns about 25% of Metsa Fibre and will announce its role in the new mill after it's been decided whether the project will go ahead. In addition, S&P sees a risk that Metsa Fibre would not be able to pay dividends during the investment phase, which amount to about EUR25 million for Metsa Board in 2014. S&P also understands that Metsa Board might consider expanding its capacity in folding boxboard in the coming years. While positive for growth prospects in the long term, S&P believes that such an investment could constrain Metsa Board's credit metrics during the investment phase. The positive outlook indicates that S&P could raise the long-term rating on Metsa Board to 'BB-', if it sees further sustainable improvements in profitability over the next six to 12 months. An upgrade could also materialize as a result of more clarity regarding Metsa Board's and Metsa Group's investment plans, and the effect of such plans on Metsa Board's financial risk profile. S&P may raise the ratings if Metsa Board maintains FFO to debt higher than 20% and debt to EBITDA lower than 4x, while increasing its profitability. This could lead to an improvement of the SACP to 'bb-' from 'b+' and, in turn, a one-notch upgrade to 'BB-'. S&P could also upgrade Metsa Board if S&P revised its assessment of the GCP to 'bb', even though Metsa Board's SACP remains at 'b+'. This could result from more clarity regarding the timing and funding of the new pulp mill, as well as from continued solid performance of the group's other business units, such as the timber and tissue operations. S&P may revise the outlook to stable if both Metsa Group and Metsa Board's operational performance weakened, while the expansionary investments went ahead, causing the GCP and SACP to remain at 'bb-' and 'b+' respectively. ============= G E R M A N Y ============= DEUTSCHE PFANDBRIEFBANK: Moody's Hikes Sub. Debt Rating to 'B3' --------------------------------------------------------------- Moody's Investors Service has upgraded the rating for senior subordinated debt of Deutsche Pfandbriefbank AG (pbb) to B3 from Caa1, and affirmed the long- and short-term debt and deposit ratings at Baa2/Prime-2. The rating actions were prompted by the raising of pbb's standalone baseline credit assessment (BCA) to b2 from b3, within the E+ standalone bank financial strength ratings (BFSR) category. At the same time, Moody's affirmed the E+ BFSR and changed the outlook to stable from negative. The outlook on the B3 senior subordinated debt rating has been changed to stable from negative, whilst the outlook on the Baa2 senior debt and deposit ratings remains negative. The raising of pbb's standalone credit assessment was driven by the gradual progress in pbb's efforts to improve recurring profitability and write new business, which has positive implications for its commercial banking franchise. The senior unsecured debt and deposit ratings now benefit from six notches of systemic support uplift, versus seven notches previously. The small reduction in the support Moody's factors into these ratings takes into account (1) the prospects for a weakening of government support, due to the targeted change of ownership for pbb in 2015; as well as (2) the limitations to future support post introduction of a more restrictive bank resolution regime in Germany. However, Moody's expects that the demonstrated high (implicit) commitment of the German government, as the sole owner of pbb, will continue until the time of its privatization. That said, Moody's does not rule out the potential for support from a future owner replacing (some of) the current support assumptions. Ratings Rationale Standalone Profile Benefits From Gradual Earnings Recovery Moody's raised the BCA to b2 and changed the outlook to stable on the E+ BFSR to reflect the gradual improvement of pbb's intrinsic earnings power. This improvement is illustrated by rising recurring revenues and reduced costs, as per unaudited/reviewed accounts of pbb for the six months to June 2014. The cancellation of low-return servicing contracts with third parties in late 2013 helped pbb to cut costs by 20% year on year during the period, allowing for somewhat higher profits and more transparency of the bank's intrinsic earnings power. In addition, the mildly positive outlook on earnings due to further cost reductions in 2015 and growing net interest income is positive for pbb's still-weak commercial franchise. At the same time, the rating agency highlighted that pbb's earnings recovery remains fragile, which is partly due to unsustainably low risk charges and further expenses relating to franchise adjustments and regulatory requirements over the next few quarters. In addition, the standalone credit assessment remains constrained by the bank's modest economic capitalization and uncertainties stemming from the targeted privatization in 2015. Moody's reiterates that some of pbb's stronger financial metrics, including funding and liquidity, represent imperfect mitigants to the uncertainties posed by the targeted privatization, as the 2015 deadline implies considerable risk for bondholders. Upgrade of Subordinated Debt Mirrors Raising of Standalone Credit Assessment The upgrade of the rating for senior subordinated debt instruments to B3 from Caa1 follows the raising of pbb's standalone BCA to b2 from b3. The B3 senior subordinated debt rating is one notch below pbb's b2 standalone BCA and carries a stable outlook, which mirrors the stable outlook of the E+ BFSR. Small Revision of Support in Debt Ratings Reflects Weakening Support Prospects The affirmation of pbb's Baa2/Prime-2 senior unsecured debt and deposit ratings reflects the higher BCA and a small downward revision of Moody's assumptions for systemic support as the 2015 deadline for pbb's privatization is drawing closer. This reduced support assumption reflects Moody's view that, post privatization, support is unlikely to yield rating uplift of more than six notches, even if the acquirer displays a strong financial profile and commitment to supporting pbb. As reflected by the six notches of uplift, Moody's currently continues to factor in a very high probability of support from the German government (Aaa stable) into pbb's Baa2/Prime-2 long- and short-term debt and deposit ratings. This support assumption takes into account (1) the bank's full ownership by the German government; and (2) the bank's high systemic relevance as the second-largest covered bond issuer in Germany. Negative Outlook on Senior Debt Ratings Reflects Pressure from Weakening Support The approaching deadline for pbb's privatization in 2015 involves some uncertainty for bondholders, given that non-compliance with the European Commission's conditionality may have considerable consequences for pbb's future in its current set-up. Such uncertainty, combined with the expected restrictions on future government support under the Bank Recovery and Resolution Directive (BRRD) that policymakers are set to introduce in 2016 (or, in the case of Germany, as soon as 2015), implies continued pressures on debt ratings that benefit from high systemic support assumptions and respective rating uplift. Moody's added that the acquisition of pbb by a strong strategic investor with both the necessary financial strength and clear intention to support the bank could indicate some probability of parental support. Whilst a successful sale of pbb remains uncertain, such support may offset some of the pressure on the supported Baa2 ratings stemming from the weakening environment for government support. The rating agency does not rule out maintaining its assumptions of some systemic support even after pbb's privatization, especially if the government maintains a stake in (or otherwise exposure to) the bank. What Could Move the Ratings -- UP/DOWN Upwards pressure on the E+ BFSR is limited, as the recovery of pbb's earnings power and franchise remains fragile at this stage. However, further progress in cost reduction and key profitability metrics could lead to an upgrade. Other preconditions for a higher standalone BFSR include (1) further strengthening of pbb's business franchise as a specialized lender for commercial real- estate and public investment finance; (2) higher economic capitalization and/or demonstration that major portions of existing hybrid capital will remain available to the bank in the long term; and (3) maintained access to senior unsecured funding with long-term maturities. Upwards pressure on the group's senior debt and deposit ratings is unlikely, and would be subject to a significantly higher standalone BCA or explicit support from the German government (or another entity with a strong credit profile). Downwards pressure on the standalone E+ BFSR is considered unlikely, but could be triggered if (1) pbb fails to further improve its business franchise, in particular if cost-to-income dynamics worsen; (2) higher-than-anticipated credit losses in pbb's core business areas cause setbacks; and (3) the bank faces renewed capital pressures. Downwards pressure on the Baa2 ratings could result from any of the following (1) a downgrade of the BFSR; (2) any weakening of the prospects of future support for pbb, which could be due to pbb's acquisition by a weak or less committed owner, or by changing assumptions of future support post implementation of the BRRD. =========== G R E E C E =========== FREESEAS INC: Regains Compliance with Nasdaq's Equity Rule ---------------------------------------------------------- FreeSeas Inc. disclosed it received a letter from Nasdaq, dated Aug. 13, 2014, indicating that the Company has regained compliance with Marketplace Rule 5550(b)(1) which requires a minimum of US$2.5 million stockholders' equity for continued listing on The Nasdaq Capital Market. The determination by NASDAQ that the Company has complied with the Rule was based on FreeSeas' Form 6-K filing of its interim financial statements for the period ended June 30, 2014, which evidenced stockholders' equity of US$37,563,000, resulting from the May 2014 US$25 million public offering and settlement of debt with US$15 million of debt forgiveness. The Nasdaq letter indicated that since the Company achieved compliance with the Rule, the matter is now closed. About FreeSeas Inc. Headquartered in Athens, Greece, FreeSeas Inc., formerly known as Adventure Holdings S.A., was incorporated in the Marshall Islands on April 23, 2004, for the purpose of being the ultimate holding company of ship-owning companies. The management of FreeSeas' vessels is performed by Free Bulkers S.A., a Marshall Islands company that is controlled by Ion G. Varouxakis, the Company's Chairman, President and CEO, and one of the Company's principal shareholders. The Company's fleet consists of six Handysize vessels and one Handymax vessel that carry a variety of drybulk commodities, including iron ore, grain and coal, which are referred to as "major bulks," as well as bauxite, phosphate, fertilizers, steel products, cement, sugar and rice, or "minor bulks." As of Oct. 12, 2012, the aggregate dwt of the Company's operational fleet is approximately 197,200 dwt and the average age of its fleet is 15 years. FreeSeas Inc. reported a net loss of US$48.70 million in 2013, a net loss of US$30.88 million in 2012 and a net loss of US$88.19 million in 2011. As of June 30, 2014, the Company had US$75.36 million in total assets, US$37.80 million in total liabilities and US$37.56 million in total stockholders' equity. RBSM LLP, in New York, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2013. The independent auditors noted that the Company has incurred recurring operating losses and has a working capital deficiency. In addition, the Company has failed to meet scheduled payment obligations under its loan facilities and has not complied with certain covenants included in its loan agreements. Furthermore, the vast majority of the Company's assets are considered to be highly illiquid and if the Company were forced to liquidate, the amount realized by the Company could be substantially lower that the carrying value of these assets. These conditions among others raise substantial doubt about the Company's ability to continue as a going concern. ============= I C E L A N D ============= LANDSBANKI ISLANDS: De Nederlandsche Bank Sells Remaining Claims ---------------------------------------------------------------- De Nederlandsche Bank (DNB) on Aug. 27 disclosed that it has entered into an agreement with Deutsche Bank for the sale of its remaining claim on the insolvent Icelandic bank Landsbanki. The decision to sell was taken in close consultation with the Ministry of Finance. As a result of the sale, the EUR 1.636 billion compensation which DNB paid out under the deposit guarantee scheme to depositors of Icesave has been recovered in full. DNB is no longer a creditor of Landsbanki. Claims on the Landsbanki estate are tradable. Earlier this year, a large number of British local authorities with claims on Landsbanki decided to sell them. DNB's claim on Landsbanki arose when a total of EUR1.636 billion was paid out to Dutch depositors. Of this amount, the Dutch State furnished EUR 1.428 billion and the Dutch banks EUR 208 million. Added to the past repayments by Landsbanki's bankruptcy receivers, with the completion of the sale of the remaining claim the amount paid out in 2008-09 under the Deposit Guarantee Scheme has been fully recovered. Had the claim been held, complete repayment from bankruptcy assets, according to current expectations, would not have taken place until 2018. Over the intervening years, some EUR932 million has been collected by DNB in distributions from the Landsbanki estate. The Minister of Finance on Aug. 27 informed Parliament by letter about the sale of the remaining claim. The Minister has indicated that he will continue the dialogue with other Dutch creditors of former Landsbanki. The Dutch branch of Landsbanki, operating under the name of Icesave, ran into problems in October 2008 as Landsbanki and other Icelandic banks faced mounting financial difficulties and eventually collapsed. Dutch savers were subsequently compensated for the loss of deposits up to EUR100.000 under the deposit guarantee schemes of the Netherlands and Iceland. Landsbanki Islands hf, also commonly known as Landsbankinn in Iceland, is an Icelandic bank. The bank offered online savings accounts under the "Icesave" brand. On October 7, 2008, the Icelandic Financial Supervisory Authority took control of Landsbanki and two other major banks. Landsbanki filed for Chapter 15 protection on Dec. 9, 2008 (Bankr. S.D. N.Y. Case No.: 08-14921). Gary S. Lee, Esq., at Morrison & Foerster LLP, represents the Debtor. When it filed for protection from its creditors, it listed assets and debts of more than US$1 billion each. ============= I R E L A N D ============= ALLIED IRISH: Posts EUR411 Million Profit in H1 2014 ---------------------------------------------------- Allied Irish posted EUR411 million profit on EUR807 million of net interest income for the half year ended June 30, 2014, as compared with a loss of EUR758 million on EUR595 million of net interest income for the half year ended June 30, 2013. At June 30, 2014, Allied Irish had EUR110.6 million in total assets, EUR99.4 million in total liabilities and EUR11.2 million in shareholders' equity. "AIB has achieved its stated aim of returning to sustainable profitability on a post provision basis in 2014 with our half year results reflecting strong improvements in margins, funding position and capital ratios. The Group has demonstrated its capacity to support economic recovery with loan approvals, including the UK, of c.EUR5.6bn, up 33% year on year. Our mortgage arrears and overall levels of impaired loans are reducing and our performance in the first half of the year saw a material reduction in provision charges. As the Irish economy and the bank recovers, we remain focused on growth and maximising value for the Irish State, as 99.8% shareholder, and all other stakeholders over time." Full details on AIB's H1 2014 financial performance including all relevant disclosures and notes to financial statements is available for free at http://bankrupt.com/misc/ALLIED_H12014.pdf About Allied Irish Banks Allied Irish Banks, p.l.c. -- http://www.aibgroup.com/-- is a major commercial bank based in Ireland. It has an extensive branch network across the country, a head office in Dublin and a capital markets operation based in the International Financial Services Centre in Dublin. AIB also has retail and corporate businesses in the UK, offices in Europe and a subsidiary company in the Isle of Man and Jersey (Channel Islands). Since the onset of the global and Irish financial crisis, AIB's relationship with the Irish Government has changed significantly. As at Dec. 31, 2010, the Government, through the National Pension Reserve Fund Commission ("NPRFC"), held 49.9% of the ordinary shares of the Company (the share of the voting rights at shareholders' general meetings), 10,489,899,564 convertible non- voting ("CNV") shares and 3.5 billion 2009 Preference Shares. On April 8, 2011, the NPRFC converted the total outstanding amount of CNV shares into 10,489,899,564 ordinary shares of AIB, thereby increasing its holding to 92.8% of the ordinary share capital. In addition to its shareholders' interests, the Government's relationship with AIB is reflected through formal and informal oversight by the Minister and the Department of Finance and the Central Bank of Ireland, representation on the Board of Directors (three non-executive directors are Government nominees), participation in NAMA, and otherwise. Allied Irish incurred a loss of EUR1.59 billion for the year ended Dec. 31, 2013, a loss of EUR3.55 billion in 2012 and a net loss of US$2.32 billion in 2011. PERMANENT TSB: DBRS Says 1st Half 2014 Financial Results Improve ---------------------------------------------------------------- DBRS Ratings Limited views the 1H14 results of Permanent tsb Group Holdings plc (PTSB or the Bank) as showing signs of improvement, taking into account the significant challenges still faced by the Bank. In 1H14, PTSB reported an underlying loss, excluding exceptional items, of EUR171 million, an improvement of 62% year-on-year (YoY), driven principally by lower impairment charges. Following higher prior year charges associated with changes in provisioning methodology, as well as reduced early and late arrears and improving economic conditions within Ireland, PTSB reported a 65% decrease in impairment charges, to EUR 148 million. Particular improvements were evident in both the Republic of Ireland residential mortgage book, and commercial real estate book, which experienced impairment charge decreases of 46% and 74% respectively. PTSB, however, continued to report a pre-provision, pre-tax loss in 1H14, of EUR22 million, as higher costs associated with regulatory spend and legacy legal and compliance issues offset the increased operating income, which was principally driven by ELG fees (Eligible Liabilities Guarantee scheme). On a net basis, PTSB reported a loss for the period of EUR200 million, compared to EUR141 million in 1H13 as EUR327 million of exceptional gains related to the wind-up of the pension scheme were not repeated in 1H14. Positively though, PTSB reported a 6 basis points (bps) YoY improvement in net interest margin (NIM), excluding ELG fees, to 0.88% in 1H14, driven by the Bank's progress in reducing the cost of funding and broadening its retail and corporate deposit base, whilst reducing its reliance on wholesale and ECB funding. In 1H14, customer deposits increased 5% from end-2013, to EUR17.6 billion (excluding the EUR2.9 billion of term deposits placed by a Government institution) and as a result ECB funding reduced by 16% YoY to EUR5.8 billion, or 17% of the Bank's total funding. PTSB's wholesale funding use also decreased 5% in 1H14, to EUR7.5 billion. The level of non-performing loans (defined as loans which are greater than 90 days in arrears, or impaired) remained very weak in 1H14, albeit flat from end-2013, at EUR8.5 billion or 26% of gross loans. PTSB, has however, made progress in reducing the number of customers in arrears over 90 days, with the total number down 14% since end-2013. Although still under pressure, DBRS expects asset quality to improve, helped both by the Bank's arrears management programme and the ongoing economic recoveries in Ireland and the UK. Under the transitional rules that became effective as of Jan. 1, 2014, the Basel III Common Equity Tier 1 capital ratio stood at 12.7% at end-1H14, down from 13.1% at end-2013. The reduction reflects the loss recorded during the six months to end-1H14, which was partly offset by a 5% decrease in RWAs, to EUR 16.1 billion. Although capital level ratios remain relatively high at present, DBRS is mindful that the Bank continues to report losses, whilst also being subject to ongoing restructuring, and the ECB's upcoming Asset Quality Review. Depending on its stringency, this review could result in additional capital being required. DBRS rates PTSB at BB (low), with a Negative trend, for Non- Guaranteed Long-Term Debt & Deposits. =================== L U X E M B O U R G =================== SLS CAPITAL: HSBC Intends to Fight Keydata Fraud Lawsuit -------------------------------------------------------- Caroline Binham at The Financial Times reports that HSBC has vowed to fight a US$250 million lawsuit that alleges it aided and abetted a "major international fraud". In what could be the most prominent lawsuit to emanate from the Keydata scandal, in which thousands of UK investors lost money when the investment company collapsed in 2009, the bank's US subsidiary is accused of failing to spot a series of red flags in the run-up to the liquidation of SLS Capital, a Luxembourg- domiciled vehicle that issued bonds that Keydata investors bought, the FT discloses. HSBC said that it would respond formally to the allegations by filing a motion to dismiss the complaint, which was filed in a New York court on Aug. 22 by SLS's liquidator, the FT relates. The complaint was backed by a group of 900 Keydata investors who lost money, known as KSLIT, the FT states. The bank declined to comment further on the allegations; it is accused of playing "a critical role in the eventual demise of SLS" and "failing to prevent" a fire sale of SLS's portfolio, which specialized in dealing in life insurance policies in the secondary market, the FT notes. According to the FT, while the bank did not sell nor market the bonds, SLS's complaint states that HSBC was the custodian of the life policies that underpinned the bonds. The complaint alleges that the bank did little to correct misleading marketing material that held out the bank as the bonds' trustee, and that it did not properly investigate claims that Keydata was an alleged Ponzi scheme, the FT relays. =========== R U S S I A =========== UC RUSAL: Returns to Profit After Debt Restructuring ---------------------------------------------------- Sonali Paul at Reuters reports that Russia's United Company Rusal Plc returned to profit for the first time in five quarters on Wednesay and gave a bullish outlook for aluminium prices, driven by growing demand from carmakers and supply cuts outside China. The company emerged from the red thanks to higher aluminium prices, cost cuts and smelter closures and forecast further gains, as it sees a global supply deficit more than doubling in the second half of the year to 1.5 million tonnes, Reuters relates. Rusal last week completed a crucial restructuring of US$5.15 billion in debt and has no payments due until January 2016, Reuters recounts. The deal gives it flexibility to pre-pay debt when cash flows are strong and pay less when London Metal Exchange prices fall, Reuters notes. For the June quarter, Rusal's recurring net profit -- adjusted net profit plus its share of Norilsk Nickel's earnings -- jumped to US$129 million from a US$203 million loss a year earlier as it cut costs, Reuters discloses. Rusal owns 28% of Norilsk. Revenue fell 10% to US$2.26 billion from a year earlier as it cut aluminium output, Reuters relays. United Co. Rusal is the world's largest aluminium producer. UCL RAIL: S&P Withdraws 'BB+' Long-Term Corporate Credit Rating --------------------------------------------------------------- Standard & Poor's Ratings Services said that it affirmed its 'BB+' long-term corporate credit rating and its 'ruAA+' Russia national scale rating on privately held Russian transportation and logistics company UCL Rail B.V. S&P subsequently withdrew the ratings at the company's request. The outlook was stable at the time of the withdrawal. The affirmation reflected S&P's assessment of UCL's business risk profile as "fair" and its financial risk profile as "intermediate," at the time of the rating withdrawal. The business risk profile assessment incorporated S&P's view of industry and country risk, as defined by its criteria. S&P assess the railroad and package express industry risk as "low" and the country risk UCL Rail faces in Russia, where it is headquartered and primarily operates, as "high." S&P's "fair" assessment also reflected its view of the company's fairly diversified fleet and customer base and its leading market share. The assessment was constrained by S&P's view of UCL Rail's moderate number of long-term contracts in its overall contract portfolio; the standardized nature of its service, which means it often competes mostly on price (although S&P understands that this is gradually changing as the company is increasingly offering more complex logistics services); and the high age of the company's railcar fleet. S&P's view of UCL Rail's financial risk profile as "intermediate" incorporated the company's sound free operating cash flow generation ability, its commitment to deleverage, and S&P's base- case expectation that UCL Rail will prevent a further decline in EBITDA over the next year. A lower debt burden as a result of amortizing payments will further help UCL Rail to sustain its leverage measures and improve its cash flow ratios. S&P forecasts the FFO-to-debt ratio to sustainably improve to at least 30% over the next year -- a level S&P considers commensurate with the rating. UCL Rail is not currently planning any significant growth-related activities, and S&P's base-case scenario also assumed no fleet changes or dividend payout in 2014. S&P assessed UCL's liquidity as "adequate," as defined by its criteria. S&P's assessment was based on the expectation that UCL Rail's cash on hand, committed long-term open credit lines, and internal cash flows would cover its liquidity needs (primarily debt amortization and capital expenditure) by more than 1.2x in the following 12 months. ========= S P A I N ========= IM PRESTAMOS FONDOS: Moody's Cuts Cl. A Notes Rating to 'B2(sf)' ---------------------------------------------------------------- Moody's Investors Service announced that it has taken the following rating actions on the notes issued by IM Prestamos Fondos Cedulas, FTA, and the liquidity facility available to this issuer: EUR344,100,000 (current balance EUR99.0 million) Class A Notes, Upgraded to B1 (sf) ; previously on March 21, 2013 Downgraded to B2(sf) and Remained on Review for Possible Downgrade EUR30,000,000 (currently undrawn) Liquidity Facility, Upgraded to A3 (sf); previously on March 21, 2013 Downgraded to Baa1 (sf) and Remained on Review for Possible Downgrade EUR6,900,000 (current balance EUR1.4 million) Class B Notes, Affirmed Caa3 (sf); previously on March 21, 2013 Downgraded to Caa3(sf) EUR900,000 Class C Notes, Affirmed Caa3 (sf); previously on March 21, 2013 Downgraded to Caa3 (sf) This transaction is a static cash CBO of portions of subordinated loans funding the reserve funds of four (at closing fourteen) Spanish multi-issuer covered bonds (SMICBs), which can be considered as a securitization of a pool of Cedulas. Each SMICB is backed by a group of Cedulas which are bought by a Fund, which in turn issues SMICBs. Cedulas holders are secured by the issuer's entire mortgage book. The subordinated loans backing the IM Prestamos transaction represent the first loss pieces in the respective SMICB structures (or structured Cedulas). Therefore this transaction is exposed to the risk of several Spanish financial institutions defaulting under their mortgage covered bonds (Cedulas). The liquidity facility may be drawn to fund the difference between interest accrued and due on the subordinated loans of the 4 SMICBs and interest actually received on these loans. The amount drawn under this facility is thus a function of (i) number and value of underlying delinquent and defaulted Cedulas, (ii) level of short term EURIBOR and (iii) time taken for final realization of recoveries on defaulted Cedulas. While the liquidity facility is currently not drawn, Moody's analysis assumes that a portion of it will be drawn at some time during the remaining life of this transaction. Moody's notes that as per the July 2014 payment report, there are coupon arrears of about EUR40,000 on the Class C notes. Ratings Rationale Moodys said the rating action is a result of stability and improvement in the credit quality of some of the issuers of Cedulas which make up the SMICBs. As a result, Moody's loss expectations for the majority of underlying covered bonds within the SMICBs have stabilized and reduced over the past year. Moody's considers that should a Cedulas issuer default, it is likely that the reserve funds that form the underlying portfolio of IM Prestamos would require to be drawn upon to make good the potential shortfall suffered by the underlying Cedulas holders. The extent of such potential shortfall is dependent on the level of over collateralization and quality of the issuer's underlying mortgage pool. Moody's analysis indicates that in the light of such potential shortfalls, the credit quality of the reserve funds of the four SMICBs that form the portfolio of IM Prestamos Fondos Cedulas, FTA is presently more consistent with ratings in a Caa1(sf)-B1(sf) range compared to a Caa2 (sf)-B2 (sf) range in March 2013, a B1(sf)- Ba3(sf) range in Nov 2011, and a Ba3(sf)- Ba1(sf) range in April 2011. The credit quality of the reserve funds of these four SMICBs is substantially driven by high recovery rate assumptions on the underlying Cedulas. The ratings of the liquidity facility available to IM Prestamos Fondos Cedulas, FTA and the issued notes are therefore sensitive to these recovery rate assumptions. In addition, the credit quality of the liquidity facility is affected by the estimated level of draw-down, with higher draw- downs resulting in declining credit quality. As stated earlier, draw-down is affected by (i) number and value of delinquent and defaulted Cedulas, (ii) short-term EURIBOR rates and (iii) time taken for realization of final recoveries on defaulted Cedulas. Moody's base case scenario assumes that the liquidity facility is drawn down to the extent of EUR 4 million. This level of draw down reflects (i) some of the current underlying pool of Cedulas being delinquent or in default, (ii) ongoing short-term EURIBOR at about two times current levels, and (iii) a two year period between Cedulas default and final recoveries. The rating of the liquidity facility is compliant with "Moody's Approach to Counterparty Instrument Ratings" published in March 2014. Methodology Underlying the Rating Action: The principal methodology used in this rating was "Moody's Approach to Rating Corporate Synthetic Collateralized Debt Obligations" published in November 2013. Factors that Would Lead to an Upgrade or Downgrade of the rating: In addition to the base case run, Moody's undertook a number of sensitivity runs assuming higher draw down amounts for the liquidity facility. The model output for an EUR5 million draw down was 1.5 notches worse compared to the base case, whereas it was 3 notches worse than base case for a draw down amount of EUR6 million. The model outputs for the notes and the liquidity facility were affected by less than half a notch and up to a notch and a half respectively for an increased correlation of c 60% between the underlying assets in the transaction portfolio. Except for the increased correlation of c 60% used in the sensitivity run for the notes, underlying Cedulas default probabilities and recovery rates used in Moody's model are in line with the covered bond rating methodology assumptions. Moody's notes that this transaction is subject to a high level of macroeconomic uncertainty, which could negatively impact the ratings of the notes and liquidity facility as evidenced by 1) uncertainties of credit conditions in the general economy especially as 100% of the portfolio is exposed to obligors located in Spain 2) fluctuations in EURIBOR and 3) amount and timing of final recoveries on defaulted Cedulas. Realization of lower than expected recoveries would negatively impact the ratings of the notes and the liquidity facility. In addition to the quantitative factors that are explicitly modeled, qualitative factors are part of the rating committee considerations. These qualitative factors include the structural protections in each transaction, the recent deal performance in the current market environment, the legal environment, specific documentation features, the collateral manager's track record, and the potential for selection bias in the portfolio. All information available to rating committees, including macroeconomic forecasts, input from other Moody's analytical groups, market factors, and judgments regarding the nature and severity of credit stress on the transactions, may influence the final rating decision. ============= U K R A I N E ============= UKREXIMBANK JSC: Fitch Cuts Long-Term Local Currency IDR to 'CCC' ----------------------------------------------------------------- Fitch Ratings has downgraded the Long-term local currency Issuer Default Ratings (IDRs) of Ukraine's JSC The State Export-Import Bank of Ukraine (Ukreximbank) and JSC State Savings Bank of Ukraine (Oschadbank) to 'CCC' from 'B-' and placed PJSC CB PrivatBank's (Privat) Long-term local currency IDR of 'B-' on Rating Watch Negative (RWN). At the same time, Fitch has affirmed the 'B-' Long-term local currency IDRs of Joint Stock Commercial Industrial & Investment Bank (PJSC Prominvestbank, PIB), Public Joint Stock Company UkrSibbank, Ukrsotsbank (Ukrsots), PJSC VTB Bank (VTBU), ProCredit Bank (Ukraine) (PCBU), PJSCCB Pravex-Bank (Pravex), PJSC Credit Agricole Bank (CAB) and PJSC Alfa-Bank (ABU). The Long-term foreign currency IDRs of all 11 banks have been affirmed at 'CCC'. KEY RATING DRIVERS The rating actions follow Fitch's downgrade of Ukraine's Long- term local currency IDR to 'CCC' from 'B-' and the affirmation of the sovereign's Long-term foreign currency IDR at 'CCC'. The Country Ceiling was also affirmed at 'CCC'. The downgrades of the Long-term local currency IDRs of state- owned Ukreximbank and Oschadbank and the affirmation of their Long-term foreign currency IDRs -- all at 'CCC' -- reflect the reduced ability of the Ukrainian authorities to provide support in local as well as foreign currency, in case of need, as indicated by the sovereign's 'CCC' Long-term IDRs. However, Fitch still believes the authorities' propensity to provide support to Oschadbank and Ukreximbank would be quite high, based on their 100%-state ownership, policy roles, high systemic importance, and the track record of capital support for the banks under different governments. Privat's ratings are driven by its standalone credit strength as reflected in its Viability Rating (VR) of 'b-'. According to Fitch's criteria the sovereign rating often acts as an effective cap on the maximum level of the bank's ratings in a jurisdiction. For the bank's VR to be rated above the sovereign Fitch would expect it to demonstrate strong resilience to deteriorating trends in the operating environment in terms of asset quality, liquidity, performance and capitalization, while also having limited direct correlation with the sovereign profile. Following the sovereign rating action, Fitch has therefore placed Privat's VR of 'b-', 'B-' Long-term local currency IDR and National Long- term Rating on RWN and intends to reassess the impact of the sovereign action on Privat's ratings and resolve the RWN by the end of this year. The 'CCC' Long-term foreign-currency IDRs and, where assigned, foreign currency senior debt ratings, of Privat and the eight foreign-owned banks -- PIB, UkrSibbank, Ukrsots, VTBU, PCBU, Pravex, CAB and ABU -- reflects the constraint of Ukraine's Country Ceiling (CCC). Ukraine's Country Ceiling reflects the heightened risk of capital and/or exchange controls being tightened, to the extent that these would materially constrain or impede the private sector's ability to repay foreign-currency obligations. Limited capital controls introduced in February 2014 do not prevent external debt service. The one-notch uplift of the Long-term local currency IDRs above the sovereign rating in the eight foreign-owned banks -- Prominvestbank, UkrSibbank, Ukrsots, VTBU, PCBU, Pravex, CAB and ABU -- reflects the strength of the shareholder support to these entities. The Negative Outlooks reflect country risks, and in particular the risk, in extreme scenarios, of restrictions being placed on banks' ability to service their local currency obligations. The IDRs, Support Ratings and senior debt ratings of the eight foreign-owned banks factor in the likelihood of support the banks may receive from their majority shareholders. However, the Country Ceiling limits the extent to which support from the majority foreign shareholders of these banks can be factored into most of these ratings. PIB is 98.6%-owned by Russian state-owned Vnesheconombank (VEB, BBB/Negative); UkrSibbank is 85%-owned by BNP Paribas (A+/Stable); VTBU is more than 99%-owned by Russia's JSC Bank VTB; PCBU is controlled (60% of voting stock) by ProCredit Holding AG & Co. KGaA. (BBB/Stable); and CAB is fully owned by Credit Agricole S.A. (A/Stable). Ukrsots is 99.41%-owned by UniCredit S.p.A. (UniCredit, BBB+/Negative) through its Vienna subsidiary UniCredit Bank Austria AG (A/Negative), although its potential sale has recently been announced. UniCredit targets Ukrsots' sale as soon as the opportunity arises, although it may take time given the currently difficult operating environment in Ukraine. Fitch believes that UniCredit will likely have a high propensity to provide support to Ukrsots prior to any sale. Pravex is currently fully owned by Intesa Sanpaolo S.p.A. (Intesa, BBB+/Stable), although its sale to CentraGas Holding, a company controlled by Ukrainian shareholders, was announced in early 2014 and is now awaiting the necessary regulatory approvals. Fitch believes that Intesa will provide any necessary support up until the completion of the bank's sale. The RWN on Ukrsots' and Pravex's local currency IDRs reflects Fitch's view that shareholder support will probably become less reliable if the banks are sold, in particular, to local shareholders. ABU's IDRs and senior debt ratings are driven by Fitch's view on potential support the bank may receive from other assets controlled by its main shareholders, including from its sister bank, Russia-based OJSC Alfa-Bank (AB; BBB-/Negative). However, the probability of support is limited due to the indirect relationship with other group assets and the mixed track record of support. For similar reasons to those for placing Privat's VR and local currency IDR on RWN, Fitch has also placed the 'b-' VRs of PCBU and CAB on RWN with a view to reassessing the impact of the sovereign rating action and deteriorating trends in the operating environment on the banks' stand-alone profiles. Fitch intends to resolve RWNs by the end of this year. The VRs of other banks are not affected by these ratings actions. With the exception of Privat's National Rating, which was placed on RWN to mirror the action on its local currency IDR, the banks' National Ratings are unaffected by today's ratings actions. Fitch will review these ratings in the near term and publish a relevant rating action commentary. Fitch has downgraded Privat's senior unsecured debt's Long-term rating and the Recovery Rating to 'CC' from 'CCC' and to 'RR5' from 'RR4', respectively. This reflects a marked increase in subordination for senior unsecured creditors, including bondholders, due to the sharp growth in the level of asset encumbrance in 1H14 following the bank's increased reliance on collateralized central bank borrowing. This, coupled with its high share of retail deposits (57% of Privat's non-equity funding at end-1H14, local GAAP) that rank senior to other creditors under Ukrainian law, leaves senior unsecured debt holders very deeply subordinated. This level of subordination could limit recoveries for senior unsecured creditors in a default scenario. At the same time, in Fitch's view, it would be highly unlikely, in case of default, for Privat to be forced into outright bankruptcy procedures and a fire sale of assets, due to its sizable market shares and systemic importance, which could to some extent reduce downside recovery risks for bondholders. RATING SENSITIVITIES The IDRs, debt ratings and VRs of all 11 banks, and the Support Rating Floors of Ukreximbank and Oschadbank are highly correlated with the sovereign credit profile. The ratings could be downgraded further in case of a further downgrade of the sovereign, or stabilize at their current levels if downward pressure on the sovereign ratings abates. The banks' IDRs and debt ratings could also be downgraded in case of restrictions being imposed on their ability to service their obligations. Fitch expects to resolve the RWN on Ukrsots' and Pravex's local currency IDRs once the sales, should they take place, are completed. If, in Fitch's view, support from new shareholders cannot be factored into the ratings, then the Long-term local currency IDRs of these two banks are likely to be downgraded to the level of their VRs (currently 'ccc'). The RWNs on the VRs of Privat, PCBU and CAB and Privat's local currency Long-term IDR are likely to be downgraded unless our review of the respective banks' exposure to the decline in the economic environment and direct exposure to the sovereign provides sufficient justification for these ratings to remain above the sovereign's. The rating actions are as follows: Ukreximbank: Long-term foreign currency IDR: affirmed at 'CCC' Long-term local currency IDR: downgraded to 'CCC' from 'B-' Senior unsecured debt of Biz Finance PLC: affirmed at 'CCC'/'RR4' Subordinated debt: 'C'/'RR5' not affected Short-term foreign currency IDR: affirmed at 'C' Support Rating: affirmed at '5' Support Rating Floor: affirmed at 'CCC' Viability Rating: 'ccc' not affected National Long-term rating: 'AA-(ukr)'; Outlook Stable, not affected Oschadbank: Long-term foreign currency IDR: affirmed at 'CCC' Long-term local currency IDR: downgraded to 'CCC' from 'B-' Senior unsecured debt of SSB No.1 PLC: affirmed at 'CCC'/'RR4' Short-term foreign currency IDR: affirmed at 'C' Support Rating: affirmed at '5' Support Rating Floor: affirmed at 'CCC' Viability Rating: 'ccc' not affected National Long-term rating: 'AA-(ukr)'; Outlook Stable, not affected PJSC CB PrivatBank: Long-term foreign currency IDR: affirmed at 'CCC' Long-term local currency IDR: 'B-', placed on RWN Senior unsecured debt of UK SPV Credit Finance plc: downgraded to 'CC'/'RR5' from 'CCC'/'RR4' Short-term foreign currency IDR: affirmed at 'C' Support Rating: affirmed at '5' Support Rating Floor: affirmed at 'No Floor' Viability Rating: 'b-', placed on RWN National Long-term rating: 'A-(ukr)'; placed on RWN PJSC UkrSibbank: Long-term foreign currency IDR: affirmed at 'CCC' Long-term local currency IDR: affirmed at 'B-', Outlook Negative Senior unsecured local currency debt: affirmed at 'B-'/'RR4'; 'AAA(ukr)' not affected Short-term foreign currency IDR: affirmed at 'C' Support Rating: affirmed at '5' Viability Rating: 'cc', not affected National Long-term rating: 'AAA(ukr)'; Outlook Stable, not affected Ukrsotsbank: Long-term foreign currency IDR: affirmed at 'CCC' Long-term local currency IDR: 'B-', maintained on RWN Senior unsecured local currency debt: 'B-'/ 'RR4' ', maintained on RWN; 'AAA(ukr)'/RWN not affected Short-term foreign currency IDR: affirmed at 'C' Support Rating: affirmed at '5' Viability Rating: 'ccc' not affected National Long-term rating: 'AAA(ukr)'/RWN not affected PJSC VTB Bank: Long-term foreign currency IDR: affirmed at 'CCC' Long-term local currency IDR: affirmed at 'B-', Outlook Negative Senior unsecured local currency debt: affirmed at 'B-'/ 'RR4'; 'AAA(ukr)' not affected Short-term foreign currency IDR: affirmed at 'C' Support Rating: affirmed at '5' Viability Rating: 'ccc' not affected National Long-term rating: 'AAA(ukr)'; Outlook Stable, not affected ProCredit Bank (Ukraine): Long-Term foreign currency IDR: affirmed at 'CCC' Long-term local currency IDR: affirmed at 'B-', Outlook Negative Senior unsecured local currency debt: affirmed at 'B-'/ 'RR4'; 'AAA(ukr)' not affected Short-term foreign currency IDR: affirmed at 'C' Short-term local currency IDR: affirmed at 'B' Support Rating: affirmed at '5' Viability Rating: 'b-', placed on RWN National Long-Term rating: 'AAA(ukr)';Outlook Stable, not affected Pravex: Long-term foreign currency IDR: affirmed at 'CCC' Long-term local currency IDR: 'B-', maintained on RWN Short-term foreign currency IDR: affirmed at 'C' Support Rating: affirmed at '5' Viability Rating: 'ccc' not affected National Long-term rating: 'AAA(ukr)'/RWN not affected CAB: Long-term foreign currency IDR: affirmed at 'CCC' Long-term local currency IDR: affirmed at 'B-', Outlook Negative Short-term foreign currency IDR: affirmed at 'C' Short-term local currency IDR: affirmed at 'B' Support Rating: affirmed at '5' Viability Rating: 'b-', placed on RWN National Long-term Rating: 'AAA(ukr)';Outlook Stable, not affected PJSC Alfa-Bank: Long-term foreign currency IDR: affirmed at 'CCC' Long-term local currency IDR: affirmed at 'B-', Outlook Negative Senior unsecured local currency debt: affirmed at 'B-'/'RR4'; 'BBB-(ukr)' not affected Upcoming senior unsecured local currency debt: affirmed at 'B- (EXP)'/'RR4'; 'BBB-(EXP)(ukr)' not affected Senior unsecured debt of Alfa Ukrfinance LLC: affirmed at 'CCC'/'RR4' Short-term foreign currency IDR: affirmed at 'C' Support Rating: affirmed at '5' Viability Rating: 'ccc' not affected National Long-term rating: 'BBB-(ukr)'; Outlook Stable, not affected PJSC Prominvestbank: Long-term foreign currency IDR: affirmed at 'CCC' Long-term local currency IDR: affirmed at 'B-', Outlook Negative Senior unsecured local currency debt rating: affirmed at 'B-'/ 'RR4'; 'AAA(ukr)' not affected Short-term foreign currency IDR: affirmed at 'C' Support Rating: affirmed at '5' Viability Rating: 'ccc' not affected National Long-term Rating: 'AAA(ukr)'; Outlook Stable, not affected =========================== U N I T E D K I N G D O M =========================== MOY PARK: S&P Assigns 'B' Corp. Credit Rating; Outlook Positive --------------------------------------------------------------- Standard & Poor's Ratings Services said that it assigned its final 'B' long-term corporate credit rating to U.K.-based poultry producer Moy Park Holdings Europe. The outlook is positive. At the same time, S&P assigned its final 'B' issue rating to the GBP200 million 6.25% senior unsecured notes issued by Moy Park (Bondco) PLC. The final recovery rating on the notes is '3', indicating S&P's expectation of meaningful (50%-70%) recovery prospects in the event of a payment default. The preliminary recovery rating was weaker at '4' because the issued notes are GBP50 million smaller than originally proposed. The issue rating on the notes is in line with the corporate credit rating at 'B'. The rating on Moy Park reflects S&P's assessments of the group's business risk profile as "weak" and financial risk profile as "significant." The combination of these assessments leads to an anchor of 'bb-' on Moy Park. Since the modifiers have no impact on the anchor, S&P's stand-alone credit profile (SACP) on Moy Park is at the same level of 'bb-'. S&P considers Moy Park to be "highly strategic" to its ultimate parent Marfrig Global Foods S.A., a view supported by Marfig Global Foods' use of proceeds at Moy Park to partially repay debt at the parent level. S&P therefore aligns the corporate credit rating on Moy Park with the 'b' group credit profile (GCP) on Marfrig Global Foods. Moy Park's "weak" business risk profile assessment reflects S&P's view of its limited product portfolio, with a focus on poultry; its low geographic diversification, with concentration in the U.K. and France; and EBITDA margins of about 7%, which S&P considers "below average" for the nonalcoholic beverage and packaged food sector. These risks are partly mitigated by stable growth rates in food retailing, especially in the U.K., which in S&P's opinion are likely to continue. S&P takes a positive view of Moy Park's market diversification into Continental Europe, along with its specialized pricing model for passing on feed prices, which S&P considers one of the biggest challenges facing the business. Moy Park is the second-largest poultry producer in the U.K. after Boparan Holdings Ltd., with a 25% share of the total U.K. poultry roduction market. Furthermore, Moy Park has leading shares of 46% in the ready-to-eat poultry segment and 52% in the chilled fresh coated poultry segment. S&P's assessment of Moy Park's "significant" financial risk profile reflects its base-case forecast of stable free operating cash flow of about GBP30 million-GBP35 million for the next 12-18 months, and the group's ability to maintain debt to EBITDA around 3x. S&P equalizes its SACP on Moy Park at the level of the 'b' GCP on Marfrig Global Foods, which itself is in line with S&P's 'B' long-term corporate credit rating on the parent company. The equalization of the SACP at the level of the GCP is in accordance with S&P's "Group Rating Methodology" criteria, published on Nov. 19, 2013. S&P rates Moy Park the same as the parent because of the subsidiary's strategic importance for Marfrig Global Foods' financial policy; for example, Marfrig Global Foods used funds from the recently issued GBP200 million bond to repay debt at the parent level. S&P's opinion that Moy Park is "highly strategic" to Marfrig Global Foods is based on the following considerations: -- S&P believes that Marfrig Global Foods is unlikely to sell Moy Park in its entirety in the near term. -- Both Moy Park and Marfrig Global Foods operate in the same line of business, although their geographical markets are different. -- Marfrig Holdings Europe B.V., which is Moy Park's immediate parent, has a strong, long-term commitment of support from group senior management, and S&P believes that incentives for providing such support exist both in good times and stressful conditions. The positive outlook on Moy Park is in line with the positive outlook on Marfrig Global Foods. An upgrade of Marfrig Global Foods could trigger an upgrade of Moy Park since S&P caps the rating on Moy Park at the level of the GCP. S&P could raise the rating on Marfrig -- triggering an upgrade of Moy Park -- if the group continues to deleverage by increasing its operating and free cash flow generation as it improves its working capital management. An upgrade of Moy Park is also contingent on the group maintaining positive free operating cash for the next 12-18 months, and debt to EBITDA within the 3x-4x range commensurate with the "significant" financial risk profile category. S&P could revise the outlook on Moy Park to stable if it revises that on Marfrig Global Foods to stable. PASTA REALE: In Administration; 169 Jobs Affected ------------------------------------------------- Crawley Observer reports that more than 160 people lost their jobs when Pasta Reale went into administration on Aug. 26. BDO LLP business restructuring partners, Matthew Tait -- matthew.tait@bdo.co.uk -- and Kim Rayment -- kim.rayment@bdo.co.uk -- were appointed Joint Administrators over Pasta Reale, Crawley Observer relates. BDO LLP confirmed 169 people had been made redundant, Crawley Observer discloses. According to Crawley Observer, the joint administrators are currently seeking a purchaser for the facilities and assets of the company. "The company experienced a gradual loss of custom over the past year and, as a result, has experienced a deterioration in its working capital position," Crawley Observer quotes Mr. Tait, BDO as saying. "Despite the best efforts of the company's directors and stakeholders in the past months, the directors were left with no option but to place the company into administration. "Going forward, we will seek to achieve a sale of the company's facilities and assets and maximize recoveries for creditors." Pasta Reale was a manufacturer of fresh pasta and filled pasta products. ********* 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 * * *