TCREUR_Public/140829.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, August 29, 2014, Vol. 15, No. 171



TRUVO NV: S&P Lowers CCR to 'CCC-' on Debt-Restructuring


MITTELDEUTSCHE FAHRRADWERKE: Hero Cycles to Acquire 89% Stake
TREVERIA SILO: JLL Appointed to Sell Portfolio


KAPUVARI HUS: Tender Offer Called for Assets


* ICELAND: Corporate Insolvencies Down 22% in Last 12 Months


* IVOR CALLELY: Allied Bank Appoints Receiver Over Assets
RED KETTLE: Goes Into Liquidation on Trading Difficulties


EURASIAN NATURAL: Moody's Lowers Corporate Family Rating to 'B3'


BANCO ESPIRITO: German Creditors to Block Tranquilidade Sale


* ROMANIA: Corporate Insolvencies Drop 13.37% in First 7 Months


BELY VETER: Files for Bankruptcy in Ulyanovsk Court
IBA-MOSCOW: Moody's Changes B3 Deposit Rating Outlook to Positive
PETROPAVLOVSK PLC: Nears Refinancing Deal with Bondholders


NATIONAL ELECTRIC VEHICLE: Files for Bankruptcy Protection

U N I T E D   K I N G D O M

COUNTYROUTE PLC: S&P Cuts Rating on GBP5.5MM Bank Loan to 'CCC+'
HEALTHCARE SUPPORT: Moody's Cuts Rating on Sr. Sec. Bonds to Ba3
QUINTILLION ASSET: Directors Banned For a Total of 28 Years


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



TRUVO NV: S&P Lowers CCR to 'CCC-' on Debt-Restructuring
Standard & Poor's Ratings Services lowered its long-term
corporate credit rating on Belgium-based publisher of classified
directories Truvo N.V. to 'CCC-' from 'CCC'.  The outlook is

At the same time, S&P lowered to 'CCC-' from 'CCC' the issue
rating on Truvo's EUR170 million senior secured term loan A due
2015.  The recovery rating on this instrument remains unchanged
at '4', indicating S&P's expectation of average (30%-50%)
recovery in the event of a payment default.

In addition, S&P lowered to 'C' from 'CC' the issue rating on
Truvo's EUR113 million second-lien term loan B due 2015, and on
holding company Talon PIKco N.V.'s EUR71 million payment-in-kind
(PIK) notes due 2019.  The recovery rating on these instruments
remains unchanged at '6', indicating S&P's expectation of
negligible (0%-10%) recovery in the event of a payment default.

The downgrades reflect S&P's view that Truvo's current capital
structure is unsustainable in the long term, which, combined with
S&P's expectations of further weakening of liquidity, create a
material risk of potential orderly debt-restructuring measures
that could be implemented within the next six months.  The group
has appointed a financial advisor to help consider options on
refinancing, restructuring and exit strategies, as required by
its 2013 consent request.  S&P understands that a potential
restructuring would not impact the operating business activities.

A continuing slide in the group's earnings, despite recent debt
repayments, has resulted in a very high leverage, which S&P
believes will hinder a potential timely refinancing of its EUR170
million senior secured term loan A due in May 2015.

S&P estimates that Truvo's Standard & Poor's-adjusted debt-to-
EBITDA ratio will be 17.4x by Dec. 31, 2014.  S&P's estimate
includes the EUR71 million in PIK notes at Truvo's holding
company, Talon PIKco N.V. (Talon), which S&P fully consolidates
in Truvo's accounts.  Also by year-end 2014, S&P forecasts EBITDA
interest coverage of 1.3x and EBITDA cash interest coverage of
2.5x.  S&P expects free operating cash flow to come in at
negative EUR10 million for financial 2014.

In addition, S&P believes Truvo faces a possible covenant breach
in the coming quarters.  This, combined with Truvo's high
leverage and a tough operating environment, could also lead
management to implement credit-dilutive debt restructuring

S&P's assessment of Truvo's "vulnerable" business risk profile
reflects the significant risk of a continued structural decline
in the print directories sector, as well as increased competition
as small business advertising expands across a greater number of
online marketing channels.

S&P considers that Truvo has material exposure to metropolitan
markets, representing a further rating constraint that could
exacerbate the impact of the structural shift from traditional
classified directories to online services.  S&P sees increased
challenges for the company in containing the pressure on margins,
which will likely result in Truvo transitioning to the highly
fragmented, intensely competitive, and rapidly evolving online
market.  In its online business, S&P believes Truvo will have
significantly less pricing power compared with its former leading
or incumbent position in the traditional classified directories
business.  S&P believes Truvo will have to establish its
competitive edge in the online market.

S&P's base-case assumptions for Truvo for financial 2014 are:

   -- Ongoing macroeconomic uncertainties and structural changes.

   -- Negative 8% revenue growth mainly owing to the group's
      decreasing print business.

   -- Declining underlying profit margins despite the company's
      achievement to cut costs, leading to adjusted EBITDA of
      about EUR22 million.

   -- Capital expenditure of EUR14.5 million (mainly used for
      developing the online business).

   -- Cash funds from operations (FFO) of about EUR9 million and
      free operating cash flow (FOCF) of about negative EUR10
      million in 2014.

Based on these assumptions, S&P expects:

   -- The ratio of adjusted debt to EBITDA to jump to 17.4x in
      2014 from 13.1x in 2013.

   -- EBITDA cash interest coverage to drop to 2.5x in 2014 from
      3.1x in 2013.

The negative outlook primarily reflects S&P's opinion of Truvo's
increased short-term liquidity and refinancing risks, in the
context of a challenging operating environment, high leverage,
and what S&P sees as an unsustainable capital structure.  S&P
sees an increased risk that management may implement credit-
dilutive debt restructuring measures over the next six months,
although S&P' is not currently aware that Truvo has taken any
such steps.

A revision of the outlook to stable and potential rating upside
depend on Truvo maintaining at least 15% covenant headroom and
stabilizing its revenues, EBITDA, and free cash flow, while
successfully addressing the 2015 debt maturities.  At this stage,
S&P views this scenario as remote.


MITTELDEUTSCHE FAHRRADWERKE: Hero Cycles to Acquire 89% Stake
Bike Europe reports that India's Hero Cycles has offered to take
up as much as an 89% ownership stake in troubled MIFA
Mitteldeutsche Fahrradwerke AG under a restructuring worth in
excess of EUR32 million -- a deal that would stave off bankruptcy
for the listed German bike-maker and force existing investors to
bear the brunt of its near collapse.

According to Bike Europe, under the three-pronged restructuring
and recapitalization proposed by OPM Global B.V. -- the
Dutch-registered vehicle through which Punjab-based Hero Cycles
is negotiating -- shareholders would see their holdings fall to
1/100th of their current levels.  Meanwhile, investors in the
company's EUR25 million bond would absorb a reduction in
principal of three-fifths, with Hero Cycles making an equivalent
EUR15 million cash injection to stabilize MIFA's finances ahead
of a proposed debt-for-equity swap that would leave the
self-proclaimed world's largest maker with a minimum 60% stake,
Bike Europe notes.

TREVERIA SILO: JLL Appointed to Sell Portfolio
Mark Wilding at Property Week reports that JLL has been appointed
to sell 127 properties in the Treveria Silo E portfolio, which
went into insolvency at the start of 2013.


KAPUVARI HUS: Tender Offer Called for Assets
MTI-Econews reports that the liquidator of Kapuvari Haus said on
Wednesday, August 27, another tender is being called for the
company's assets after the winner of the previous tender failed
to meet a payment deadline.

According to MTI-Econews, the local press reported that a
Saudi Arabian investor won the previous tender with an offer of
HUF650 million.

The assets have been under liquidation since the autumn of 2012,
MTI-Econews notes.

Kapuvari Haus is a meat plant in Kapuvar, Hungary.


* ICELAND: Corporate Insolvencies Down 22% in Last 12 Months
Statistics Iceland reports that corporate insolvencies over the
last 12 months, from August 2013 to July 2014, decreased by 22%
compared to the prior 12 months.

According to Statistics Iceland, there were 845 corporate
insolvencies in that period.

The highest number of insolvencies was in wholesale and retail
trade, repair of motor vehicles and motorcycles and in
construction, both categories had 156 insolvencies, Statistics
Iceland discloses.


* IVOR CALLELY: Allied Bank Appoints Receiver Over Assets
Irish Independent reports that Allied Irish Bank has appointed a
receiver over property assets owned by jailed politician Ivor

The bank made the move to take control of the assets after the
disgraced former junior minister was imprisoned last month for
fiddling expenses, according to Irish Independent.

Ernst & Young director Marcus Purcell was appointed receiver over
a number of Callely assets.

The report notes that the former Dublin Fianna Fail TD and
senator borrowed heavily from AIB during the boom, using
investment properties as security for the loans.  On one day
alone in March 2007, he and his wife Jennifer re-mortgaged five
investment properties with the bank, the report relates.

The values of these properties subsequently collapsed and they
remain well below boom-time levels, the report discloses.

In total, his name has appeared on AIB mortgage documents for
eight different properties on Dublin's northside, the report

The report notes that residents in one of Callely's investment
properties, a terraced house in Dublin's East Wall, confirmed
they had been made aware AIB now controlled the property.

The report notes that it is thought the money borrowed by Mr.
Callely from AIB in 2007 was used to fund his involvement in a
property deal in Clontarf.

Mr. Callely and three businesses associates also borrowed EUR10
million from Investec in connection with that plan, with the aim
of building 44 seafront apartments, the report relays.  However,
the report discloses that the project ran into planning
difficulties and ended up being shelved.

Investec issued legal proceedings against Mr. Callely, who
consented to a judgment for EUR11 million in July last year, the
report notes.


The report relays that the lender has also initiated further
legal proceedings against Mr. Callely and his wife.  These relate
to property matters, but the details of what is involved have yet
to be disclosed.

Last month, the report notes the 56-year-old was jailed for five
months at Dublin Circuit Court after he pleaded guilty to four
counts of using bogus invoices to claim mobile phone expenses
from the Oireachtas between 2007 and 2009.  He is serving the
sentence at Wheatfield Prison.

Callely served as a junior minister for health and later
transport between 2002 and 2005.

RED KETTLE: Goes Into Liquidation on Trading Difficulties
Ciaran Hanna at reports that Fianna Fail
Spokesperson on Arts and Culture, Sean O Fearghail, has expressed
his disappointment at the liquidation of Waterford's Red Kettle
Theatre Company.

It was confirmed that the company had gone into liquidation due
to trading difficulties and a statement issued by the board on
August 14, according to  The statement said Red
Kettle is no longer a viable enterprise.

The statement said the move is due to "the cumulative effect of
recent and severe cuts to funding and grant aid, set against a
background of six years of economic erosion," with Waterford
being especially hard hit, the report notes.

It is understood some full-time and part-time jobs will go as a
result of the closure, the report adds.


EURASIAN NATURAL: Moody's Lowers Corporate Family Rating to 'B3'
Moody's Investors Service has downgraded the corporate family
rating (CFR) of Eurasian Natural Resources Corporation Ltd (ENRC
Limited, formerly ENRC Plc) to B3, its Baseline Credit Assessment
('BCA') to b3, and its probability of default rating (PDR) to B3-
PD, all with negative outlook. Moody's will subsequently withdraw
these ratings due to the recent corporate reorganization of the
group following the successfully completed takeover offer on ENRC
Limited in October 2013, with Eurasian Resources Group S.a r.l.
(ERG Sarl) established as the new parent company and reporting
entity of the now delisted ENRC group.

Moody's has also downgraded by two notches the provisional rating
on ENRC Limited's US$3 billion euro medium-term note (EMTN)
program to (P)Caa1 (LGD4), with negative outlook.

Moody's has concurrently assigned a new CFR of B3 and a new B3-
PD, all with negative outlook, to ERG Sarl, the new holding
company and owner of ENRC Ltd. ERG Sarl is considered by the
rating agency as a Government-Related Issuer ('GRI'), given the
Government of Kazakhstan is a main shareholder with a 40% stake.
As such, ERG Sarl's CFR reflects also the application of Moody's
rating methodology for GRIs. In accordance with this methodology,
the B3 CFR of ERG Sarl reflects the combination of the following

  Baseline Credit Assessment ('BCA') of b3, which reflects the
  company's stand alone credit quality;

  The local currency issuer rating of the Government of
  Kazakhstan of Baa2 with positive outlook;

  Default Dependence: Very High;

  Support: Low.


BANCO ESPIRITO: German Creditors to Block Tranquilidade Sale
Peter Wise at The Financial Times reports that a group of German
creditors is attempting to block the planned sale of
Tranquilidade, a Portuguese insurance company, in a move that
could disrupt the disposal of assets belonging to the collapsed
Espirito Santo business empire.

The attempt to stop the sale of Tranquilidade to Apollo Global
Management, a US private equity fund manager, in a deal worth
about EUR200 million could mark the beginning of other legal
challenges to attempted disposals by the failed business group,
the FT says.

When Banco Espirito Santo was split into "good" and "bad" banks
this month as part of a EUR4.9 billion bailout, Tranquilidade
came under the ownership of Novo Banco, the "good" bank, the FT

Apollo has since been in exclusive talks with Novo Banco to
acquire Tranquilidade in a deal that is expected to be finalized
shortly, the FT discloses.  But the group of about 10 German
creditors say such a disposal would be illegal and would
"seriously damage their legitimate interests", according to the

The group is comprised of creditors of Espirito Santo Financial
Group-Portugal (ESFP), which indirectly owns 45% of
Tranquilidade, the FT relays.  Together, the creditors hold 12%
of a EUR70 million bond issued by ESFP, which is due to be
redeemed in May 2016, the FT states.

Lawyers representing the German creditors have written to Novo
Banco saying they will take legal action to annul the transaction
if the planned sale to Apollo goes ahead, the FT relates.

Novo Banco, as cited by the FT, said talks on the planned sale of
Tranquilidade were continuing, but made no comment on any
potential legal challenge.

Before BES was bailed out, the Bank of Portugal determined that
Tranquilidade shares should be pledged to BES as a guarantee that
Espirito Santo Financial Group (ESFG) would repay group debt that
it had sold to BES's retail clients, the FT recounts.

According to the FT, the German creditors say they "strongly
disagree with the legal validity of the pledge."

                About Banco Espirito Santo

Banco Espirito Santo is a private Portuguese bank based in
Lisbon.  It is 20% owned by Espirito Santo Financial Group.

In August 2014, Banco Espirito Santo had been split into "good"
and "bad" banks as part of a EUR4.9 billion rescue of the
distressed Portuguese lender that protects taxpayers and senior
creditors but leaves shareholders and junior bondholders holding
only toxic assets.  A total of EUR4.9 billion in fresh capital is
being injected into this "good bank", which will subsequently be
offered for sale.  It has been renamed "Novo Banco", meaning new
bank, and will include all BES's branches, workers, deposits and
healthy credit portfolios.

In August 2014, Espirito Santo Financial Portugal, a unit fully
owned by Espirito Santo Financial Group, filed under Portuguese
corporate insolvency and recovery code.

In August 2014, Espirieto Santo Financiere SA, another entity of
troubled Portuguese conglomerate Espirito Santo International SA,
filed for creditor protection in Luxembourg.

In July 2014, Portuguese conglomerate Espirito Santo
International SA filed for creditor protection in a Luxembourg
court, saying it is unable to meet its debt obligations.


* ROMANIA: Corporate Insolvencies Drop 13.37% in First 7 Months
Irina Popescu at Romania Insider reports that the number of
companies that entered insolvency in the first seven months of
2014 dropped by 13.37% year-on-year, to 15,124, according to data
from National Trade Registry (ONRC).

Romania Insider relates that the largest decreases in the number
of insolvencies were recorded in Giurgiu -- down 69.49%,
Mehedinti -- down 67.25% and Vaslui -- down 66.77%. In the same
period, Alba, Caras-Severin and Prahova registered the largest
increases. At a national level, 15 counties registered increases
in the number of insolvencies, with rates between 1.71% and
75.82%, while the rest recorded decreases between 6.28% and
69.49%, according to the report.

Bucharest recorded the highest number of insolvencies in the
first seven months of this year -- 2,421, followed by Bihor --
1,029 and Prahova -- 603, Romania Insider relays.  The lowest
number of insolvency cases were recorded in Calarasi, Neamt and
Giurgiu, the report adds.

A total of 1.1 million companies were active in Romania at the
end of July this year, the report adds.


BELY VETER: Files for Bankruptcy in Ulyanovsk Court
ROS, citing Kommersant newspaper, reports that Bely Veter has
applied for its own bankruptcy in the Ulyanovsk Region
Arbitration Court.

According to ROS, the company's debt totals RUB7.2 billion
(approximately US$199.22 million), of which RUB4 billion
(approximately US$110.68 million) is a debt to suppliers and
contractors, RUB3.1 billion (approximately US$85.78 million) is
loans, and RUB3.6 million (approximately US$99,613) is wage

Bely Veter claims that it cannot repay debts because of low sales
margin and high operating expenses, ROS relays.

Since the beginning of 2014, suppliers and creditors have filed
over 50 lawsuits demanding Bely Veter to repay debts, ROS
relates.  The biggest claim worth RUB456.9 million (approximately
US$12.64 million) was made by diHouse, an Apple distributor, ROS
notes.  The Russian representative office of Sony, Sony
Electronics CJSC, demands a repayment of a RUB100.1 million
(approximately US$2.77 million) debt, according to ROS.

Infoline Analytics General Director Mikhail Burmistrov commented
that Bely Veter got into too much debt in a bid to expand its
network and was hit by weak consumer demand, ROS recounts.

Bely Veter is a Russian electronics retailer.

IBA-MOSCOW: Moody's Changes B3 Deposit Rating Outlook to Positive
Moody's Investors Service has changed to positive from stable the
outlook on IBA-Moscow's B3 long-term local- and foreign-currency
deposit ratings and affirmed the ratings. Concurrently, IBA-
Moscow's standalone bank financial strength rating (BFSR) was
upgraded to E+, equivalent to a baseline credit assessment (BCA)
of b3, from E (formerly equivalent to caa1). The outlook on the
bank's BFSR is stable. The bank's Not-Prime short-term local- and
foreign-currency deposit ratings were also affirmed; the short-
term ratings carry no specific outlook.

Moody's assessment is primarily based on IBA-Moscow's audited
financial statements for 2013, prepared under IFRS.

Ratings Rationale

Standalone Ratings

The rating outlook change to positive from stable is driven by
IBA-Moscow's sustained progress in strengthening its credit
profile. The rating action reflects the bank's (1) improved asset
quality metrics; and (2) improving capital adequacy following the
recent Tier 1 capital contribution from the parent --
International Bank of Azerbaijan (IBA, deposits Ba3 positive;
BFSR E+ stable/BCA b3).

Moody's notes that IBA-Moscow's standalone E+ BFSR remains
constrained by: (1) the bank's limited local market franchise;
(2) high loan book concentration, including high exposure to the
construction and real estate sectors; (3) high level of
restructured loans; and (4) high dependence on the parent's
related business projects and funding. At the same time, Moody's
notes that IBA-Moscow's standalone ratings are supported by the
bank's adequate liquidity profile and moderate profitability.

Moody's notes that in July 2014 International Bank of Azerbaijan
approved a RUB1.25 billion capital injection into IBA-Moscow's
equity. The proceeds have been allocated to IBA-Moscow's
statutory fund, while the Central Bank of Russia's registration
of the equity issue is scheduled for October. This contribution
is the largest in the past five years and will increase Tier 1
capital by 63% by year-end 2014 compared to year-end 2013.

In Moody's opinion, IBA-Moscow's asset quality remains challenged
by a relatively high -- albeit decreasing -- level of
restructured loans; under audited IFRS statements restructured
loans as a proportion of gross loans fell to 19% at 31 December
2013 (year-end 2012: 30%; year-end 2011: 42%). Moody's
understands that these loans have been granted for long-term
investment projects, and are funded and guaranteed by
International Bank of Azerbaijan.

IBA-Moscow's high credit concentration represents a key risk. As
reported in audited IFRS statements at year-end 2013, the bank's
aggregate exposure to the 23 largest customers amounted to 42% of
total gross loans or 567% of its Tier 1 capital, although more
than half of them is guaranteed by the parent. In Moody's
opinion, these concentration levels render the bank vulnerable to
the financial performance of a limited number of borrowers in
risky market segments.

Moody's says that a significant portion of the bank's funding is
parent-related, accounting for approximately 23% of IBA-Moscow's
total liabilities as at 30 June 2014 (year-end 2013: 27%; year-
end 2012: 38%) while customer accounts represented 58% of total
liabilities (year-end 2013: 43%, year-end 2012: 33%). Moody's
notes that in recent years IBA-Moscow notably decreased its
dependence on parental funding and its main strategy is to
further diversify funding sources.

In 2013, IBA-Moscow recognized a net income of RUB238 million
which translates into 0.77% return on average assets (ROAA) and
8.91% return on equity (ROE). Profitability has been influenced
by (1) pressured net interest margin (NIM); (2) deteriorated cost
efficiency; and (3) moderate cost of risk. Moody's notes that NIM
has been under pressure because it has been outpaced by the
increase in cost of funds.

Supported Ratings

Moody's assessment of a high probability of parental support from
International Bank of Azerbaijan results in no rating uplift, as
the parent's standalone BCA of b3 is at the same level as IBA-
Moscow's standalone BCA.

What Could Move The Ratings Up/Down

IBA-Moscow's ratings, which carry a positive outlook, will likely
be upgraded concurrently with the upgrade of the bank's parent,
International Bank of Azerbaijan, whose ratings also carry
positive outlook. The outlook on IBA-Moscow's ratings could be
changed to stable following a similar change of outlook on the
parent bank's ratings, or if the bank's sustainable positive
trend in financial performance were to reverse.

Principal Methodologies

The principal methodology used in this rating was Global Banks
published in July 2014.

Headquartered in Moscow, Russia, IBA-Moscow is a 100% subsidiary
of International Bank of Azerbaijan. IBA-Moscow reported total
audited IFRS assets of RUB33.4 billion, total shareholders'
equity of RUB2.8 billion and a net income of RUB238 million for
year-end 2013.

PETROPAVLOVSK PLC: Nears Refinancing Deal with Bondholders
Thomas Biesheuvel at Bloomberg News reports that Petropavlovsk
Plc is "much closer" to agreeing a deal with bondholders as the
producer of Russian gold seeks to refinance almost a US$1 billion
of debt.

The company identified most of its bondholders after last month
saying its banks agreed in principle to refinance debt, Bloomberg

According to Bloomberg, Petropavlovsk, which lost 80% of its
market value last year, has said that it expected to breach
so-called debt covenants and would be unable to repay US$310.5
million of bonds in early 2015 without a refinancing.

Petropavlovsk on Aug. 28 posted a first-half loss of US$54
million, narrowing from a loss of US$666.1 million a year
earlier, Bloomberg relays.

Petropavlovsk seeks to reduce net debt to US$850 million by the
end of the year from US$924 million, Bloomberg discloses.

Petropavlovsk PLC is a London-listed mining and exploration
company with its principal assets located in Russia.


NATIONAL ELECTRIC VEHICLE: Files for Bankruptcy Protection
Deutsche Presse-Agentur reports that National Electric Vehicle
Sweden (NEVS), the Chinese-backed consortium that owns Saab, said
on Aug. 28 it had filed for bankruptcy protection.

National Electric Vehicle Sweden (NEVS) took over the ailing
carmaker in 2012, dpa recounts.

"Negotiations we have with two global vehicle manufacturers are
still progressing, but are complex and have taken more time than
we predicted," dpa quotes NEVS president Mattias Bergman as
saying in a statement.  "We intend to fully pay our debts to our

The district court in Vanersborg, where the application was
filed, will review the application, dpa discloses.  If approved,
the court will appoint an administrator to review NEVS and its
business plans, dpa notes.

Production at the company's main plant in Trollhattan, in western
Sweden, was halted in May over cash flow problems, dpa relates.

By filing for reorganization, NEVS hopes to postpone demands to
pay suppliers or creditors that have filed complaints to the
Swedish Enforcement Authority, dpa states.

If the authority orders NEVS to sell assets to pay creditors, the
consortium fears that talks with the foreign manufacturers could
fail, according to dpa.

National Electric Vehicle Sweden AB is a Swedish holding company.
Nevs is majority owned by British Virgin Islands-registered, Hong
Kong-based, National Modern Energy Holdings Ltd., an energy
company with operations in China, Macau, and Hong Kong.

U N I T E D   K I N G D O M

COUNTYROUTE PLC: S&P Cuts Rating on GBP5.5MM Bank Loan to 'CCC+'
Standard & Poor's Ratings Services lowered to 'CCC+' from 'B-'
its long-term issue rating on the GBP5.5 million subordinated
secured mezzanine bank loan, due 2026, issued by U.K.-based
concessionaire CountyRoute (A130) PLC.

At the same time, S&P removed the issue rating on the
subordinated loan from CreditWatch, where it placed it with
negative implications on April 23, 2013.  The outlook is

In addition, S&P revised to stable from negative its outlook on
the GBP88 million senior secured bank loan, due 2026, also issued
by CountyRoute.  S&P affirmed its 'B+' long-term issue rating on
this instrument.

The senior secured bank loan and the subordinated secured
mezzanine loan each have a recovery rating of '1', reflecting
S&P's expectation of a very high (90%-10%) recovery of principal
in the event of a payment default.

The rating actions follow S&P's analysis of the most recently
approved financial model provided by CountyRoute, which is dated
March 2014.  This model incorporates a number of improvements and
in particular, now accurately reflects the impact of the
distribution and junior debt lockup covenants on project
liquidity.  This model demonstrates that, despite currently
strong traffic growth on the road, both shareholder distributions
and junior debt service are currently being prevented.  As a
result, since Jan. 2014, junior debt service has been met using
the junior debt service reserve.  This had a balance of
GBP575,000 in Dec. 2013 and a projected balance of GBP292,000 in
Sept. 2014.  Unless the junior debt service lockup is lifted, S&P
forecasts that the junior debt service reserve account will be
fully drawn by Sept. 2015.

The junior debt lockup covenant requires a minimum senior annual
debt service coverage ratio (ADSCR) of 1.125x on a two-year
forward- and six month-backward looking basis.  Under S&P's base-
case scenario, it forecasts a minimum ADSCR of 1.05x in 2024.  In
addition, the senior ADSCR falls to 1.08x in March 2016.
According to S&P's modeling, traffic growth over the next two
years will need to average at least 4% per year in order to
improve the minimum ADSCR in 2016 sufficiently to enable junior
debt service to restart in time to prevent the junior debt
deferring the payment of interest and principal.  Positively, as
no cash distributions have been made in the past 12 months,
CountyRoute has a current surplus cash balance of GBP3.3 million.
S&P understands that an agreement will be put in place to ensure
that, irrespective of whether the lockup is released in the
future, this cash will remain in the project until the peak of
major maintenance expenditure has passed.  Assuming that the
current lockup continues, S&P forecasts that the surplus cash
balance will exceed GBP11 million by 2018.  This cash is
sufficient to ensure that, despite further future weak projected
ADSCRs, S&P believes that the project is likely to be able to
meet the expected peak in major maintenance costs in the period
from 2020 to 2025.

Traffic growth over the past 12 months has been robust.  For the
12 months ending July 2014, traffic growth on the northern
section of the road increased by 3.7% and 6.5% for the southern
section. Much of the growth for this period was concentrated on
the southern section and occurred in March 2014, reflecting the
conclusion of works on contiguous roads in the area.
Accordingly, despite strong recent growth, S&P has amended its
base-case traffic forecast for the next two years to 2.5% per
year from its previous forecast of 1.5% for heavy goods vehicles
and 1.3% for other vehicles.  S&P's forecast for major
maintenance expenditure remains unchanged.

CountyRoute is a special-purpose, bankruptcy-remote entity wholly
owned by John Laing Infrastructure Ltd.  Under a 30-year
concession granted by Essex County Council in 1999, CountyRoute
operates the A130, a 15-kilometer road from Chelmsford to
Basildon in southeastern England.  The road's construction was
completed in 2003.  The present financing was executed in 2004 to
refinance the original debt package after actual traffic volumes
were 25% lower than the original forecast.

The ratings reflect the exposure of 60% of the project's revenues
to traffic risk through the shadow toll payment mechanism; the
uncertainty as to whether actual major maintenance costs over the
30-year concession may exceed those forecast currently; and the
project's aggressive financial structure, demonstrated by weak
senior ADSCRs.  Certain protections available to the senior debt,
such as a junior debt service lockup, increase the risk of
untimely service of the mezzanine debt, in our view.

The ratings are supported by the successful operation of the road
to date, with no penalty points or unavailability deductions; the
project's positive relationship with the council as offtaker; and
the positive experience of the project sponsor, John Laing
Infrastructure.  Furthermore, both tranches of debt benefit from
typical protections such as debt service reserve accounts and
distribution restrictions.

The stable outlook on the senior secured debt rating reflects
S&P's forecast of the project's strong liquidity as a result of
the ongoing junior debt and distribution lockup.  This liquidity
supports S&P's view that, despite weak projected ADSCR's, the
project will be able to meet its operational costs and senior
debt service requirements in full and on schedule.

S&P could take a negative rating action on the senior debt if
project liquidity were to materially weaken as a result of
reduced cash balances, for example if junior debt service were to
resume, or higher-than-expected operating and major maintenance
costs were incurred.

Although S&P views it as unlikely, it could take a positive
rating action on the senior debt if the project's financial
profile were to materially improve.  This would most likely
require a material reduction in major maintenance costs over the
remaining life of the project.

The negative outlook on the junior debt reflects S&P's forecast
that junior debt service will continue to be prevented by the
terms of the senior debt in the medium term.  S&P therefore
projects a deferral of junior debt service in 2015.

S&P could take a negative rating on the junior debt as deferral
approaches.  In accordance with S&P's criteria, it would consider
the junior debt to default after 12 months of a deferral.

S&P could take a positive rating action on the junior debt if it
forecasts that the junior debt service covenant will be lifted
prior to the first deferral in late 2015.  This could result from
faster-than-expected traffic growth or reduced major maintenance

HEALTHCARE SUPPORT: Moody's Cuts Rating on Sr. Sec. Bonds to Ba3
Moody's Investors Service, has downgraded to Ba3 from Ba1 the
ratings of the GBP197.8 million (plus GBP40million variation
bonds) of 2.187% index-linked guaranteed senior secured bonds due
2041 issued by Healthcare Support (Newcastle) Finance plc (the
"Issuer") and a GBP115.0 million index-linked guaranteed senior
secured loan facility due 2038 provided by the European
Investment Bank. The outlook on the ratings is developing. This
concludes the review of the ratings that was initiated on
May 30, 2014.

The Issuer is a special purpose vehicle formed in 2005 to raise
finance and on-lend it to Healthcare Support (Newcastle) Ltd
("ProjectCo"). ProjectCo entered into a 38 year agreement with
the Newcastle upon Tyne Hospitals NHS Trust (which became the
Newcastle upon Tyne Hospitals NHS Foundation Trust on June 1,
2006, the "Trust") to carry out (1) the construction of new
facilities at the Trust's Freeman Hospital and Royal Victoria
Infirmary sites; and (2) provide certain services during the term
of the concession (together, the "Project").

Ratings Rationale

The rating action reflects the risks posed to ProjectCo by the
continuing dispute between the project parties and the potential
occurrence of an event of default under the project agreement. A
Court judgment issued on July 28, 2014 clarifies the conditions
which need to be met to allow the Independent Tester to certify
Phase 8, which represents the majority of outstanding
construction works, as complete. However, the process of
certification is ongoing and some works on the final Phase 9 are
yet to commence.

"The rating action reflects that, whilst the Court judgment
represents positive progress to completion of the majority of
outstanding construction works, certification remains
outstanding. Conclusions to be reached by the Independent Tester
are uncertain and the dispute between the project parties may
nevertheless continue" says Adam Muckle, an Analyst in Moody's
Infrastructure Finance Group and lead analyst for Healthcare
Support (Newcastle) Finance plc.

Whilst all of the Project's clinical buildings have been
certified as complete, and consequently approximately 94% of the
maximum unitary payment is being paid by the Trust, certification
of Phase 8 (the "Clinical Office Block" or "COB") at the Royal
Victoria Infirmary site remains outstanding. The Trust has
claimed that the asset does not meet its design specifications in
a number of areas and the Independent Tester has hitherto
withheld certification of Phase 8 completion pending the
resolution of the disputes between the project parties. There are
minimal additional construction works which could be undertaken
to address the Trust's issues. Practical completion in relation
to Phase 9, demolition and landscaping, remains outstanding and
these works are unable to progress until the Trust has decanted
personnel from existing buildings into the COB.

In May 2014 the building contractor, Laing O'Rourke Construction
Limited ("LOR"), commenced legal action against the Trust and
ProjectCo to clarify the requirements for project works to be
certified complete. The Court issued its judgment on July 28,
2014 and subsequently ProjectCo has written to the Independent
Tester requesting it to apply the judgment in relation to its
assessment of Phase 8. ProjectCo expects this process to be
concluded by the end of August 2014.

Moody's understands that ProjectCo is having ongoing dialogue
with the majority creditors, jointly Syncora Guarantee (U.K.)
Ltd. ("Syncora") and the EIB, in relation to the dispute and the

The Ba3 ratings are constrained by the failure by all parties to
reach an agreement with respect to completion of Phases 8 and 9,
which exposes ProjectCo to risk of termination of the project
agreement by the Trust.

However the ratings reflect as positives the successful
construction completion of the vast majority of the construction
works under the PFI contract and the creditor protections
included within the financing structure including step-in rights.

The Bonds and the EIB Loan are unconditionally and irrevocably
guaranteed for payment of scheduled principal and interest by
Syncora. Syncora's rating was withdrawn on 8 November 2012 and
therefore the ratings of the Bonds and the EIB Loan reflect the
standalone credit quality of the Issuer.

What Could Change the Rating Up/Down

Moody's could upgrade the ratings if an agreement was reached
between the Trust and other key project parties to deal with
residual construction matters and to sufficiently extend the
longstop dates for remaining construction works, as necessary.

Conversely, Moody's could downgrade the ratings if the project
agreement longstop date is breached without significant progress
on resolving the outstanding dispute such that the risk of the
Trust terminating the project agreement increases.

The principal methodology used in this rating was Operating Risk
in Privately-Financed Public Infrastructure (PFI/PPP/P3) Projects
published in December 2007.

The Issuer and ProjectCo are wholly owned by Healthcare Support
(Newcastle) Holdings Ltd which in turn is owned 20% by Interserve
PFI 2003 Ltd (50.5% owned by Interserve's pension fund with the
remaining 49.5% owned by Dalmore Capital (Para 1) Limited), and
80% by Equion Health (Newcastle) Ltd, which is itself owned
18.75% by John Laing Infrastructure Fund ("JLIF") and 81.25% by
Innisfree Nominees Ltd.

QUINTILLION ASSET: Directors Banned For a Total of 28 Years
Three directors of Quintillion Asset Management have been
disqualified from acting as directors for a total of 28 years for
making unauthorised investments from client pension funds and
inappropriate investments on behalf of clients, resulting in
liabilities of over GBP2.4million.

The disqualifications follow an investigation by the Insolvency
Service after Quintillion Asset went in to liquidation in 2012.
Quintillion provides financial investment advice and investment

Anton David Taylor, 46, of London; Simon Mark Silva-Peake, 41, of
Essex; and David Frederick Taylor, 69, of Cumbria are
disqualified from acting as directors for 6 to 11 years.

All three directors have given undertakings to the Secretary of
State for Business, Innovation & Skills which prevent them from
becoming directly or indirectly involved in the promotion,
formation or management of a limited company for the duration of
their bans.

Mr. Frederick Taylor's disqualification of 6 years commenced on
June 9, while Messrs. Anton Taylor's and Siva-Peake's
disqualifications of 11 years each start on August 28.

Commenting on the disqualifications, Ken Beasley, of the
Insolvency Service's Public Interest Unit said:  "Investors who
believed that the company was providing professional investment
advice to safeguard their pensions have lost significant sums of
money. The company's actions in making high risk investments
against the wishes of clients were unacceptable and the directors
bear that responsibility.

"By failing to preserve the company's accounting records the
directors also showed a fundamental disregard for their duties as
directors of a limited company.

"The disqualifications demonstrate that The Insolvency Service
will use its enforcement powers to remove irresponsible and
culpable directors from operating with the benefit of limited
liability in the business environment."

Investigators found that the disqualified directors were
responsible for transferring pension funds of at least
GBP659,270 in breach of agreements with clients. A further
GBP2million was transferred from client funds to investment
schemes that were inappropriate to client risk profiles.

The directors' failure to deliver up the company's accounting
records meant that investigators' were unable to account for
unauthorized transfers of client' funds or establish who within
the company was responsible for, or had knowledge of, transfers
of client monies.


* 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

Lost Prophets -- An Insider's History of the Modern Economists

Order your personal copy today at
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
dismay." 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 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
164economics-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  Go to 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,

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

This material is copyrighted and any commercial use, resale or
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Information contained herein is obtained from sources believed to
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members of the same firm for the term of the initial subscription
or balance thereof are US$25 each.  For subscription information,
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                 * * * End of Transmission * * *