/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/140911.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, September 11, 2014, Vol. 15, No. 180 Headlines F R A N C E DELACHAUX S.A.: S&P Assigns 'B+' CCR; Outlook Stable I T A L Y UNICREDIT: Fitch Assigns 'BB-' Rating to 6.75% Tier 1 Notes L A T V I A LIEPAJAS METALURGS: KVV Group Bid to Acquire Biz for EUR107-Mil. N E T H E R L A N D S AVOCA CLO II: Moody's Affirms 'Caa3' Rating on Class D Notes E-MAC 2004-II: Fitch Raises Ratings on 7 Note Classes to CCC VISTAPRINT NV: Moody's Assigns 'Ba3' Corporate Family Rating X5 RETAIL: Moody's Revises 'B2' CFR Outlook to Positive R U S S I A IG SEISMIC: S&P Revises Outlook to Stable & Affirms 'B' CCR NEFTSERVICEHOLDING LLC: Moody's Assigns 'B1' Corp. Family Rating S L O V E N I A T-2: Awaits Decision on Commencement of Bankruptcy Proceedings T U R K E Y YUKSEL INSAAT: Moody's Withdraws 'Caa2' Corporate Family Rating U K R A I N E AKTIV BANK: Declared Insolvent by Central Bank U N I T E D K I N G D O M BRADFORD BULLS: Owes Creditors GBP2MM a Year After Liquidation IRON MOUNTAIN: Moody's Assigns Ba1 Rating to New GBP350MM Notes IRON MOUNTAIN: S&P Assigns 'B+' Rating to GBP350MM Sr. Notes JOHNSTON PRESS: Moody's Assigns 'B3' Corporate Family Rating OATLANDS: In Administration; Business as Usual SCOMI OILTOOLS: In Liquidation, Total Debts Reach GBP14.68 Mil. X X X X X X X X * MENA Sovereign Ratings Remain Wide But Stable, Fitch Says ********* =========== F R A N C E =========== DELACHAUX S.A.: S&P Assigns 'B+' CCR; Outlook Stable ---------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B+' long-term corporate credit rating to Delachaux S.A., a France-based manufacturer of rail-fastening equipment. The outlook is stable. At the same time, S&P assigned its 'B+' long-term issue rating to Delachaux's proposed EUR765 million senior secured term loan maturing in 2021, consisting of a term loan and a credit facility issued by Sodelho SAS. The recovery rating is '4', indicating S&P's expectation of average (30%-50%) recovery in the event of a payment default. The ratings on Delachaux are constrained by S&P's view of the company's high leverage. S&P believes that over the next two or three years, Delachaux's Standard & Poor's-adjusted debt-to- EBITDA ratio will remain between 7x and 8x, which S&P classifies as "highly leveraged" according to its criteria. Following the planned refinancing, S&P expects the company's debt to consist of a senior secured bank loan of EUR688 million, maturing in 2021, and a EUR170 million subordinated non-cash-paying preferred equity certificate (PEC) that S&P treats as debt under its criteria, down from EUR437 million before the refinancing. If the company is unable to refinance its debt, S&P's adjusted leverage ratios would be roughly unchanged because the current capital structure also consists of a term loan and PECs, but with a different split. S&P views the refinancing as moderately aggressive, since the amount of secured debt will increase on account of structurally subordinated debt. The existing term loan is not due until 2018. S&P forecasts that its ratio of adjusted funds from operations (FFO) to debt for Delachaux will stay slightly higher than 7% and debt to EBITDA at 7x-8x for the next three years, consistent with the 'B+' rating. S&P believes Delachaux's low capital intensity supports its ability to generate robust operating cash flow. Excluding the PEC, S&P anticipates that, in 2014, adjusted FFO to debt would be about 9%, and that adjusted debt to EBITDA would be just below 6x. S&P views the company's business risk profile as "satisfactory," reflecting Delachaux's leading global positions in its niche markets of rail-fastening and welding systems, which accounted for 59% of its sales in 2013. Delachaux also produces conductor systems through its subsidiary Conductix (30% of sales), as well as chromium metal (11%). S&P also notes a high share of revenues related to maintenance and repair in the rail segment, which represents about 60% of that segment's revenue and supports the group's overall revenue stability. Delachaux's profitability underpins our business risk profile assessment, given the relatively low volatility of profits and a stable EBITDA margin that averaged 14%-15% over the past three years. In S&P's view, the margin's resilience is backed by the group's large variable cost base, which accounts for about 70% of total costs. Additional supportive factors include the group's broad geographic diversification, with Europe accounting for approximately 40% of sales in 2013 (10% of this in France), North America 25%, and Asia-Pacific 27%. At the same time, S&P notes the group's limited scale, with EUR129 million in EBITDA generated in 2013, and its concentration on the rail segment. In addition, chromium metal production depends on volatile raw material prices, which can lead to working capital outflows if those prices rise. S&P also notes a contraction in sales over 2013, which was due to lower demand. The group's revenue declined by 6% (or by about 3% on a like-for- like basis) in 2013, after a 6% decrease in sales at the rail division and an 18% drop at the metal division, chiefly because of a fall in raw material prices. S&P sees reputation risk as one of the key threats for Delachaux, given that safety is a critical feature for rail products. However, the group does not currently face any significant claim related to this and has a strong historical track record. The stable outlook reflects S&P's expectation that Delachaux will maintain an adjusted debt-to-EBITDA ratio of about 7x-8x, and adjusted FFO to debt higher than 6%. The stable outlook also reflects S&P's anticipation that the company will demonstrate a steady operating performance in 2014, after a slight decline in reported revenue and net income for 2013. A positive rating action is unlikely at present, given the company's "highly leveraged" financial risk profile. S&P could lower the rating on Delachaux in the event of severe underperformance compared with S&P's base case that resulted in a significant deterioration of credit metrics. If the company were to use the proceeds from the ongoing refinancing for anything other than reducing the amount of PECs, this would create pressure on the rating. A larger-than-expected dividend or other shareholder distribution, leading to an increase in adjusted debt, could also trigger a downgrade. ========= I T A L Y ========= UNICREDIT: Fitch Assigns 'BB-' Rating to 6.75% Tier 1 Notes ----------------------------------------------------------- Fitch Ratings has assigned UniCredit's (BBB+/Negative/F2/bbb+) EUR1 billion 6.75% Tier 1 capital notes a 'BB-' final rating. The rating is in line with the expected rating assigned on Aug. 28, 2014. KEY RATING DRIVERS The notes are CRD IV-compliant, deeply subordinated additional Tier 1 fixed-rate resettable debt securities, with a call option after seven years. The notes are subject to write-down if UniCredit's consolidated or unconsolidated common equity tier 1 (CET1) ratio falls below 5.125% (end-1H14 consolidated CET1 ratio was 10.12% on a fully-loaded basis), and coupon payments may be cancelled at the full discretion of the issuer. In accordance with Fitch's criteria for 'Assessing and Rating Bank Subordinated and Hybrid Securities', the rating of the notes is notched off UniCredit's creditworthiness as represented by its Viability Rating (VR), currently at 'bbb+'. The notching reflects the notes' higher expected loss severity relative to senior unsecured creditors (two notches) and higher non- performance risk (three notches). The 5.125% trigger only refers to a write-down of the notes and Fitch believes that the Italian regulator would demand coupon deferral well before UniCredit hits the 5.125% threshold. Fitch has assigned 50% equity credit to the securities. This reflects the agency's view that the 5.125% trigger is a low threshold and not so distant to the bank's non-viability, which limits the instrument's "going concern" characteristics. It also reflects the notes' full coupon flexibility, their permanent nature and the subordination to all senior creditors. RATING SENSITIVITIES As the notes are notched from UniCredit's VR, the rating of the notes is broadly sensitive to the same factors as those that would affect UniCredit's VR. The notes' rating is also sensitive to any change in notching that could arise if Fitch changes its assessment of the probability of the notes' non-performance risk relative to the risk captured in UniCredit's VR. =========== L A T V I A =========== LIEPAJAS METALURGS: KVV Group Bid to Acquire Biz for EUR107-Mil. ---------------------------------------------------------------- Aija Braslina at Reuters reports that Ukraine's KVV Group has offered to buy Latvia's insolvent steelmaker Liepajas Metalurgs for EUR107 million (US$138 million). Liepajas Metalurgs, the only producer of rolled steel in the Baltic countries, filed for bankruptcy last year, blaming weak demand in Europe, Reuters recounts. According to Reuters, Haralds Velmers, the insolvency administrator of Liepajas Metalurgs, said in a statement that KVV Group has provided a clear plan for re-launching the plant's operations. KVV Group is going to pay the sum over 10 years, Reuters discloses. Latvia's government, which had to repay EUR74 million under a loan guarantee to Italian bank UniCredit after the company could not cover its liabilities, has welcomed the offer, Reuters relates. About Liepajas Metalurgs Liepajas Metalurgs is a Latvian metallurgical company. The Liepaja Court commenced Liepajas metalurgs' insolvency process on Nov. 12 last year. Haralds Velmers was appointed insolvency administrator. Over 1,500 Liepajas metalurgs workers have been laid off so far. Liepajas metalurgs halted production last spring. ===================== N E T H E R L A N D S ===================== AVOCA CLO II: Moody's Affirms 'Caa3' Rating on Class D Notes ------------------------------------------------------------ Moody's Investors Service announced that it has upgraded the ratings on the following notes issued by Avoca CLO II B.V.: EUR27 million Class B Senior Secured Deferrable Floating Rate Notes due 2020, Upgraded to Aa1 (sf); previously on Oct 22, 2013 Upgraded to A2 (sf) Moody's downgraded the ratings on the following notes issued by Avoca CLO II B.V.: EUR15.7 million Class C-1 Senior Secured Deferrable Floating Rate Notes due 2020, Downgraded to B3 (sf); previously on Oct 22, 2013 Upgraded to Ba3 (sf) EUR7.5 million Class C-2 Senior Secured Deferrable Fixed Rate Notes due 2020, Downgraded to B3 (sf); previously on Oct 22, 2013 Upgraded to Ba3 (sf) Moody's also affirmed the ratings on the following notes issued by Avoca CLO II B.V.: EUR21 million (currently EUR15M outstanding) Class A-2 Senior Secured Floating Rate Notes due 2020, Affirmed Aaa (sf); previously on Oct 22, 2013 Upgraded to Aaa (sf) EUR5 million Class D Senior Secured Deferrable Floating Rate Notes due 2020, Affirmed Caa3 (sf); previously on Oct 22, 2013 Affirmed Caa3 (sf) Avoca CLO II B.V., issued in November 2004, is a Collateralised Loan Obligation ("CLO") backed by a portfolio of high yield senior secured European and US loans, managed by Avoca Capital Holdings Limited. This transaction ended its reinvestment period in January 2010. Ratings Rationale According to Moody's, the upgrade of the notes is primarily a result of continued deleveraging of the Class A notes and subsequent increase in the overcollateralization (the "OC ratios"). Moody's notes that as of the July 2014 payment date report, the Class A1 notes have repaid in full and the class A2 notes have amortized by approximately EUR6 million (or 29% of its original balance). As a result of this deleveraging, the OC ratios of the senior notes have significantly increased. As per the latest trustee report dated July 2014, the Class A and Class B OC ratios are 457.48% and 163.25%, respectively, versus January 2014 levels of 164.29% and 125.19%. The downgrade of the Class C notes results primarily from a decline in a number of key portfolio metrics. The credit quality of the pool has worsened as reflected in the average credit rating of the portfolio (measured by the weighted average rating factor, or WARF). As per the July 2014 trustee report, the WARF was 3092 compared to 2873 in August 2013. Over the same period, securities rated Caa1 or lower by Moody's, increased from 2.7% to 4.4%, the reported diversity score reduced from 13.63 to 9.45 and the weighted average spread decreased from 3.90% to 3.58%. The defaulted par, as percentage of the total par, has also increased which has lead to a modest decrease in the Class C OC ratio over the last year. As of the July 2014 trustee report, the Class C OC ratios was 105.14%, versus August 2013 level of 106.34%. The key model inputs Moody's uses in its analysis, such as par, weighted average rating factor, diversity score and the weighted average recovery rate, are based on its published methodology and could differ from the trustee's reported numbers. In its base case, Moody's analyzed the underlying collateral pool as having a performing par and principal proceeds balance of approximately EUR64.3 million, defaulted par of EUR12.1 million, a weighted average default probability of 19.8% (consistent with a WARF of 3475 with a weighted average life of 2.75 years), a weighted average recovery rate upon default of 50% for a Aaa liability target rating, a diversity score of 9 and a weighted average spread of 3.58%. The default probability derives from the credit quality of the collateral pool and Moody's expectation of the remaining life of the collateral pool. The estimated average recovery rate on future defaults is based primarily on the seniority of the assets in the collateral pool. For a Aaa liability target rating, Moody's assumed that 100% of the portfolio exposed to senior secured corporate assets would recover 50% upon default. In each case, historical and market performance and a collateral manager's latitude to trade collateral are also relevant factors. Moody's incorporates these default and recovery characteristics of the collateral pool into its cash flow model analysis, subjecting them to stresses as a function of the target rating of each CLO liability it is analyzing. Methodology Underlying the Rating Action: The principal methodology used in this rating was "Moody's Global Approach to Rating Collateralized Loan Obligations" published in February 2014. Factors that would lead to an upgrade or downgrade of the rating: In addition to the base-case analysis, Moody's conducted sensitivity analyses on the key parameters for the rated notes, for which it assumed a lower credit quality in the portfolio to address refinancing risk. Loans to European corporates rated B3 or lower and maturing between 2014 and 2015 make up approximately 9.45% of the portfolio, which could make refinancing difficult. Moody's ran a model in which it raised the base case WARF to 3738 by forcing ratings on 50% of the refinancing exposures to Ca; the model generated outputs that were within one notch of the base- case results. This transaction is subject to a high level of macroeconomic uncertainty, which could negatively affect the ratings on the note, in light of 1) uncertainty about credit conditions in the general economy and 2) the concentration of lowly- rated debt maturing between 2014 and 2015, which may create challenges for issuers to refinance. CLO notes' performance may also be impacted either positively or negatively by 1) the manager's investment strategy and behavior and 2) divergence in the legal interpretation of CDO documentation by different transactional parties due to because of embedded ambiguities. Additional uncertainty about performance is due to the following: 1) Portfolio amortization: The main source of uncertainty in this transaction is the pace of amortization of the underlying portfolio, which can vary significantly depending on market conditions and have a significant impact on the notes' ratings. Amortization could accelerate as a consequence of high loan prepayment levels or collateral sales by the collateral manager or be delayed by an increase in loan amend-and-extend restructurings. Fast amortization would usually benefit the ratings of the notes beginning with the notes having the highest prepayment priority. 2) Recovery of defaulted assets: Market value fluctuations in trustee-reported defaulted assets and those Moody's assumes have defaulted can result in volatility in the deal's over- collateralization levels. Further, the timing of recoveries and the manager's decision whether to work out or sell defaulted assets can also result in additional uncertainty. Moody's analyzed defaulted recoveries assuming the lower of the market price or the recovery rate to account for potential volatility in market prices. Recoveries higher than Moody's expectations would have a positive impact on the notes' ratings. 3) Around 40% of the collateral pool consists of debt obligations whose credit quality Moody's has been assessed by using credit estimates. 4) Lack of portfolio granularity: The performance of the portfolio depends to a large extent on the credit conditions of a few large obligors, especially when they default. Because of the deal's low diversity score and lack of granularity, Moody's supplemented its typical Binomial Expansion Technique analysis with a simulated default distribution using Moody's CDOROMTM software. In addition to the quantitative factors that Moody's explicitly modelled, qualitative factors are part of the rating committee's considerations. These qualitative factors include the structural protections in the transaction, its recent performance given the market environment, the legal environment, specific documentation features, the collateral manager's track record and the potential for selection bias in the portfolio. All information available to rating committees, including macroeconomic forecasts, input from other Moody's analytical groups, market factors, and judgments regarding the nature and severity of credit stress on the transactions, can influence the final rating decision E-MAC 2004-II: Fitch Raises Ratings on 7 Note Classes to CCC ------------------------------------------------------------ Fitch Ratings has upgraded the class E notes of E-MAC 2004-II, 2005-I, 2005-III, 2006-II, 2006-III, 2007-I, and 2007-III, seven Dutch prime RMBS transactions comprising loans originated predominantly by GMAC. The rating actions follow those taken on August 20, 2014 and are a result of a further review of the transaction documentation in relation to the redemption of the class E notes of the E-MAC NL series. All other factors taken into consideration in the last review of the ratings are still valid and relevant and for this reason, rating actions are only being taken on the uncollateralized class E notes. KEY RATING DRIVERS Redemption of Uncollateralized Tranches The class E notes in E-MAC 2004-II, 2005-I, 2005-III, 2006-II, 2007-I and 2007-III are uncollateralized tranches that were used at transaction close to establish the respective reserve funds. The repayment of the class E principal ranks at the junior end of the waterfall after the replenishment of the respective reserve funds and payments of subordinated extension interest. However, according to the transaction documentation, funds released from the reserve at final maturity can only be used for the redemption of the class E notes, bypassing the unpaid subordinated extension interest deficiency ledger. The more seasoned transactions in the series (EMAC 2004-II, 2005- I and 2005-III) feature non-amortizing reserve funds which are equal to the outstanding class E balances, while the latter deals' reserves will amortize to a target amount, subject to certain triggers being met. The amortization of the reserve funds of EMAC 2006-II, 2006-III, 2007-I and 2007-III has led to the pay down of their class E notes by 54%, 59%, 55% and 62% of their initial balances. The reserve fund for each of the 2006 and 2007 vintage transactions is larger than the current class E note balance. This provides an additional cushion to cover for potential losses arising from the sale of properties in addition to the excess spread generated by the structures. Consequently, higher recovery estimates (RE) of 90% have been assigned to the class E notes of EMAC 2006-II, 2006-III, 2007-I and 2007-III. Reserve funds remain at their targets for all transactions except E-MAC 2007-I, which has been drawn as a result of noticeably higher levels of loan enforcements and losses in the prior quarter. Given the limited loss expectations in these transactions and the stabilized Dutch housing market, Fitch does not expect reserve fund drawings across the series in the coming periods. The replenishment of the reserve fund for E-MAC 2007-I is expected on the upcoming payment dates using available excess spread. Consequently, each of the class E notes has been upgraded to 'CCCsf'. RATING SENSITIVITIES If arrears and associated foreclosures and losses exceed Fitch's expectations, the class E notes could be susceptible to downgrades. The rating actions are as follows: E-MAC 2004-II: Class E (XS0207264077): upgraded to 'CCCsf' from 'CCsf', RE 75% E-MAC 2005-I Class E (XS0216707314): upgraded to 'CCCsf' from 'CCsf', RE 75% E-MAC 2005-III Class E (XS0236787056): upgraded to 'CCCsf' from 'CCsf', RE 75% E-MAC 2006-II Class E (XS0256040162): upgraded to 'CCCsf' from 'CCsf', RE 90% E-MAC 2006-III Class E (XS0275099322): upgraded to 'CCCsf' from 'CCsf', RE 90% E-MAC 2007-I Class E (XS0292260675): upgraded to 'CCCsf' from 'CCsf', RE 90% E-MAC 2007-III Class E (XS0307683531): upgraded to 'CCCsf' from 'CCsf', RE 90% VISTAPRINT NV: Moody's Assigns 'Ba3' Corporate Family Rating ------------------------------------------------------------ Moody's Investors Service assigned a Ba3 corporate family rating to Vistaprint N.V. in conjunction with the company launching a US$1.1 billion debt financing, comprised of an US$850 million bank credit facility, rated Ba2 (US$690 million revolving facility and US$160 million Term Loan A), and a US$250 million senior unsecured notes issue, rated B2. Vistaprint was also assigned a Ba3-PD probability of default rating, a speculative grade liquidity rating of SGL-2 (indicating good liquidity), and a stable ratings outlook. This is the first time Moody's has rated Vistaprint. The following summarizes Moody's ratings and the rating actions for Vistaprint: Issuer: Vistaprint N.V. Corporate Family Rating: Assigned Ba3 Probability of Default Rating: Assigned Ba3-PD Speculative Grade Liquidity Rating, Assigned SGL-2 Outlook: Assigned Stable Secured Revolving Credit Facility: Assigned Ba2 (LGD3) Senior Unsecured Notes: Assigned B2 (LGD5) The rating presumes that the final structure and documentation of the transaction conforms with preliminary information provided to Moody's. Ratings Rationale Vistaprint's Ba3 corporate family rating is based primarily on the company's solid growth prospects stemming from its unique on-line order entry, design and manufacturing scheduling capabilities and the significant size of its micro business target market, and moderate debt-to-EBITDA leverage between 3.0x -- 3.5x. The rating is constrained by a lack of forward visibility of activity levels, execution risks as the company revises its go-to-market strategy and stemming from its acquisition-driven strategy, and risks that demand for key print products will decline. Rating Outlook The outlook is stable because Moody's expects Vistaprint to grow its top line and operate with modest leverage of between 3.0x to 3.5x. What Could Change the Rating -- UP Should Vistaprint be expected to operate with debt-to-EBITDA of less than 2.75x on a sustained basis with free cash flow to debt above 10%, and with solid liquidity and industry fundamentals, positive ratings pressure would develop. What Could Change the Rating -- DOWN Downward ratings pressure would develop were Vistaprint's debt- to-EBITDA leverage expected to exceed 3.5x or free cash flow to debt fall below 5% (both on a sustained-basis), or should margins contract or organic revenue growth stagnate. The principal methodology used in this rating was the Global Business & Consumer Service Industry Rating Methodology published in October 2010. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Corporate Profile Vistaprint N.V., incorporated in the Netherlands, with executive offices in Paris and with annual revenues of $1.2 billion, provides printed marketing products that are ordered and designed through an internet interface, to micro businesses in North America, Europe and Asia. X5 RETAIL: Moody's Revises 'B2' CFR Outlook to Positive ------------------------------------------------------- Moody's Investors Service has changed to positive from stable the outlook on the B2 corporate family rating (CFR) and the B2-PD probability of default rating (PDR) of X5 Retail Group N.V.(X5). Moody's has also affirmed all the ratings. Ratings Rationale The rating action reflects X5's consistently improving operating performance since 4Q 2013 as a result of the company's ongoing efforts to turnaround the business model and achieve the post- merger integration of various formats. In particular, for the first six months of 2014, X5's net retail sales grew by 15%, primarily supported by improving like-for-like sales growth, which turned positive in 4Q 2013 (3.9%) and reached 7.2% in H1 2014. Moody's expects that X5's net sales will increase in full- year 2014 by around 15%, visibly surpassing 2012-13 results (8% and 9% respectively). The improving sales growth trend, if sustained, should support the company's deleveraging strategy and improve its overall financial profile, with adjusted debt/EBITDA gradually reducing towards 4.5x in 2014-15, from 4.8x as of the 12 months ended June 30, 2014. In addition, X5 has managed to strengthen its liquidity position, improving the maturity profile of its debt portfolio. The company's refinancing requirements of around RUB21 billion (US$0.6 billion) of its debt due in the next 12 months are fully covered by increasing cash flows from operations and RUB6 billion (US$160 million) of cash available as of end-June 2014. X5 will only rely on external financing to fund its extensive capex spending, which is however supported by US$1.9 billion of the existing multi-year undrawn funds under long-term committed facilities. The rating action also takes into account X5's strong business profile given (1) its large size and leading market position in the Russian food retail market; (2) the still robust fundamentals of the Russian food retail market, despite moderating consumption on the back of slower economic growth and increasing competition; and (3) the company's low exposure to changes in consumer demand driven by fashion or product renewal risks, as around 90% of turnover is generated from food. Nevertheless, Moody's recognizes execution risks associated with the extensive business transformation program, while significant investment requirements for a major rebranding and renovation of Pyaterochka stores may potentially delay the deleveraging process. Moody's also acknowledges the ongoing geopolitical tensions, including a series of sanctions introduced by both Western countries and Russia. At the same time, Moody's does not expect that the current sanctions -- including a ban on imports of a range of products from the EU, the US, Canada and Australia, introduced by the Russian government in July 2014 -- will have a material negative impact on X5's operating and financial results. Rationale for Positive Outlook The positive outlook on the ratings reflects the potential for the upgrade of X5's ratings over the next 12-18 months based on Moody's expectation that the company will deliver on its operating targets, including sustainable like-for-like sales growth, which should translate into gradual deleveraging, with adjusted debt/EBITDA trending towards 4.5x in 2014-15. Nevertheless an upgrade will remain subject to the macro-economic factors and the risk that the more severe than currently expected negative effect of geopolitical tensions could delay the upgrade prospects. What Could Change the Ratings Up/Down Upward rating pressure could result if X5 were to improve its financial profile, so that (1) adjusted total debt/EBITDA trends towards 4.5x and adjusted EBITA/interest coverage increases above 2.0x on a sustained basis; and (2) the company maintains an adequate liquidity profile. Downward pressure could be exerted on the ratings if X5's leverage measured as adjusted debt/EBITDA trends above 5.5x and adjusted EBITA/interest decreases to below 1.5x, on a sustained basis. Concerns about the company's liquidity, including access to its bank facilities and covenants compliance, could put negative pressure on the rating. Principal Methodology The principal methodology used in this rating was Global Retail Industry published in June 2011. Domiciled in the Netherlands, X5 Retail Group N.V. is one of the leading multi-format Russian retailers, operating a chain of food retail stores. As of June 30, 2014, the company operated 4,779 stores (2.3 million square meters of net selling space), under the brand names "Pyaterochka", "Perekrestok", "Karusel", "Perekrestok-Express" and others in more than 62 major Russian cities. In 2013, X5 generated around US$17 billion of revenues and US$2 billion of adjusted EBITDA. =========== R U S S I A =========== IG SEISMIC: S&P Revises Outlook to Stable & Affirms 'B' CCR ----------------------------------------------------------- Standard & Poor's Ratings Services said it has revised its outlook on Cyprus-headquartered seismic group IG Seismic Services PLC (IGSS) and Russia-domiciled core subsidiary GEOTECH Seismic Services to stable from positive. At the same time, S&P affirmed its 'B' long-term corporate credit ratings on IGSS and GEOTECH Seismic Services. S&P also lowered its Russia national scale rating on GEOTECH Seismic Services to 'ruA-' from 'ruA'. The outlook revision reflects S&P's view that IGSS faces weaker prospects to increase its profits and deleverage because of the now higher seismic market uncertainty in Russia, where it operates. Russia's economy is slowing, and IGSS' key clients -- Russian oil and gas companies -- have limited access to international capital markets. Therefore, S&P don't rule out delays in some long-term oil and gas projects, pressure on IGSS' prices, or reduced demand for more complex and more expensive seismic works. Although S&P don't expect any reduction in the company's EBITDA or profits in the near term, it thinks their growth potential is decreasing. S&P views IGSS' financial risk profile as "highly leveraged," and continues to see this as the main constraint on the current rating. "We assess the company's business risk profile as "weak." The Russian seismic industry is a niche market with high seasonality and volatility, in our view. IGSS is a fairly small company compared with its customers, which in our view limits its pricing power. On the upside, international players have a relatively limited presence in Russia. IGSS has leading positions in this small market, with more advanced technologies than local competitors owing to support from its minority shareholder, Schlumberger. Moreover, the share of long-term contracts in the company's portfolio is increasing, which provides more visibility on future cash flows," S&P said. S&P thinks the Russian seismic market will post only modest growth in the coming years, while the use of more complex and advanced technologies could decrease. S&P believes that the EU and U.S. sanctions on technology transfers in the oil and gas sector will have only a limited immediate impact directly on IGSS' credit quality because the company mostly works on conventional onshore fields that are not covered by the sanctions. Moreover, S&P understands that IGSS has renewed its data processing and interpretation software that Schlumberger provided before the announcement of sanctions, limiting the transfer of these technologies. S&P also thinks that the roughly US$70 million in debt raised by UCE Syntech Holdings (Syntech) -- ultimately controlled by IGSS' core shareholder, Mr. Nikolay Levitsky, to buy out the shares in IGSS it did not already own in early 2014 -- has no recourse to IGSS. Therefore, S&P do not include this debt in its calculations of the company's credit metrics and liquidity. Under S&P's base case, it assumes these: -- Only modest growth in the Russian seismic market in the next few years, with potentially lower use of more complex and advanced technologies that could somewhat limit the company's margins and free operating cash flow (FOCF); -- No large-scale acquisitions or shareholder distributions over the next few years. -- Continued prudent working capital management. -- Capital expenditures at about $80 million annually. -- Exclusion of Syntech-related debt, which S&P regards as having no recourse to the company. Based on these assumptions, S&P arrives at these credit measures: -- Debt to EBITDA of about 3x in 2014, gradually declining thereafter. -- Funds from operations (FFO) to debt exceeding 20% over S&P's 2014-2015 forecast horizon. -- Neutral or slightly positive FOCF. S&P continues to view GEOTECH Seismic Services as a core subsidiary of IGSS under its criteria. S&P considers that it is an integral part of IGSS' business, generating a large chunk of total EBITDA. S&P therefore continues to equalize its rating on the subsidiary with that on IGSS. The stable outlook reflects S&P's view that demand and prices in the Russian seismic market will remain broadly stable over the next few years. S&P expects IGSS to maintain generally stable EBITDA and debt, with slightly positive FOCF and manageable liquidity. Over the next couple of years, rating upside could stem from a strengthening financial risk profile, if IGSS generates robust positive FOCF and uses it for deleveraging under potentially improving conditions in Russia's seismic market. The company's cash flow generation capacity would depend on Russian oil companies' budgeted capital expenditures and their access to international capital markets. For an upgrade, S&P would also anticipate no deterioration in the group's liquidity, no significant contingent liabilities for IGSS as a result of the Syntech buyout offer, and no aggressive shifts in its strategy and financial policy, notably with regard to shareholder distributions. Rating downside could arise from substantial deterioration in the Russian seismic market or pronounced weakening in IGSS' liquidity, which S&P don't currently expect in its base case. NEFTSERVICEHOLDING LLC: Moody's Assigns 'B1' Corp. Family Rating ---------------------------------------------------------------- Moody's Investors Service has assigned a B1 corporate family rating (CFR) and a B1-PD probability of default rating (PDR) to Neftserviceholding LLC (NSH), a Russian independent oilfield services (OFS) company with operations in Russia, Kazakhstan and Uzbekistan. The outlook on the ratings is stable. This is the first time Moody's has assigned ratings to NSH. Ratings Rationale The B1 rating primarily reflects (1) NSH's small scale of operations by global standards; (2) its position as a niche player in the highly competitive and fragmented drilling and well servicing segments, as well as in the geophysics segment, which is dominated by a few large players; (3) limited customer diversification, with most revenues coming from OAO Lukoil (Baa2 stable) and its joint ventures (JVs), albeit gradually improving through actively developing relationships with other Russian oil companies such as Gazprom Neft JSC (Baa2 negative) and OJSC Oil Company Rosneft (Baa1 negative), as well as with Chinese state oil companies, former Lukoil's partners in Kazakh JVs, such as China National Petroleum Corporation (Aa3 stable) and China Petroleum and Chemical Corporation (Aa3 stable); and (4) the company's exposure to the Commonwealth of Independent States (CIS) region with a challenging political, regulatory and operating environment, further exacerbated by the ongoing geo- political uncertainties related to the conflict between Russia and Ukraine. The B1 rating also takes into account NSH's concentrated ownership structure, with over 90% of the company controlled by the investment holding, Perm Financial and Industrial Group (PFIG, not rated). PFIG has unrestricted access to the company's profits and cash flows, however, the risks related to the corporate governance and potential excessive shareholder distributions are partly compensated by a track record of a prudent and supportive approach of the holding towards NSH and its other investments. Therefore, as NSH has recently embarked on an ambitious development program, Moody's expects that PFIG will shift to more conservative cash distributions from the company. More positively, NSH's rating acknowledges (1) the company's geographically diversified production base across hydrocarbon- rich countries in the CIS region, which benefit from strong long- term industry fundamentals; (2) diversification into a range of services at different stages of field development, albeit with a growing focus on drilling; (3) a high quality modern fleet, which provides NSH with a competitive advantage against larger peers and allows for better efficiencies, evidenced by the company's solid track record of profitable double-digits sales growth over the past few years and historical adjusted EBITDA margin of around 19%. Moody's also expects that, despite an ambitious expansion program launched in 2014, NSH will adhere to its historically conservative financial profile, and Moody's expects that adjusted debt/EBITDA will not be exceeding 2.5x in the foreseeable future. Moody's also expects NSH to maintain sufficient liquidity, considering limited refinancing requirements in the next 12-18 months, as well as the company's prudent approach towards capex which will remain highly flexible and subject to financing availability. Rationale for the Stable Outlook The stable outlook on the ratings reflects Moody's expectation that the company will continue to deliver on its growth strategy as planned while maintaining robust operating performance and adhering to conservative financial and liquidity management policies, with adjusted debt/EBITDA not exceeding 2.5x. Moody's also does not expect at this point material impact on operating performance from the current geopolitical tensions. On the back of start-up costs from new contracts, Moody's expects that the leverage at year-end 2014 will increase from the sound 1.1x of year-end 2013. What Could Change the Rating Up/Down Over time Moody's could consider upgrading NSH's rating if the company were to (1) continue to successfully grow its business and improve customer diversification as planned and focusing on smooth organic expansion with balanced capex program; (2) deliver robust operational performance; (3) maintain a leverage (measured as adjusted debt/EBITDA) below 2.0x on sustained basis; and (4) build a track-record of maintaining a solid liquidity profile. Moody's would consider downgrading the ratings if (1) NSH's leverage materially increases above expected levels, either as a result of more aggressive debt-financed capex and shareholder distributions or owing to lower profitability, such that adjusted debt/EBITDA exceeds 2.5x on sustained basis; (2) the company's operating performance deteriorates as a result of the loss of a major customer or negative market developments, including the potential adverse impact of the increasing geopolitical risks on exploration and production activity in the region. Any concerns about the company's liquidity could also put negative pressure on the ratings. Principal Methodology The principal methodology used in this rating was Global Oilfield Services Rating Methodology published in December 2009. Neftserviceholding LLC (NSH) is a Russian independent oilfield services (OFS) company with presence in the Caspian region of Kazakhstan and Uzbekistan and in most important Russian oil and gas provinces. The company provides a range of OFS services with a growing focus on the drilling segment. Other segments include well servicing and workover, geophysics, and other non-core services. In 2013, NSH generated RUB22 billion (US$690 million) of revenues and RUB4 billion (US$130 million) of adjusted EBITDA. =============== S L O V E N I A =============== T-2: Awaits Decision on Commencement of Bankruptcy Proceedings -------------------------------------------------------------- Telecompaper, citing Sta, reports that the District Court in Ljubljana was set to decide yesterday, Sept. 10, on the date for the commencement of bankruptcy proceedings against T-2, as proposed by the Company for managing the bank assets. However, at T-2, they are convinced that bankruptcy will not occur, because in their opinion, the DUTB can repay the preferential rights only from the value of the pledged assets, Telecompaper relays. For its part, the DUTB claims T-2 is not fulfilling its obligations in receivership and has not reached the goals that were set out in the restructuring plan, Telecompaper discloses. T-2 is a Slovenian telecommunications operator. =========== T U R K E Y =========== YUKSEL INSAAT: Moody's Withdraws 'Caa2' Corporate Family Rating --------------------------------------------------------------- Moody's Investors Service has withdrawn the Caa2 Corporate Family Rating (CFR) and Caa2-PD Probability of Default Rating (PDR) of Yuksel Insaat A.S. (Yuksel). Concurrently, Moody's has also withdrawn its Caa2 rating on the US$200 million bond due November 2015. The ratings have been withdrawn pursuant to Moody's guidelines for the withdrawal of ratings, as insufficient information is available to Moody's to continue monitoring effectively the company's creditworthiness. Ratings Rationale Moody's has withdrawn the rating because of inadequate information to monitor the rating, due to the issuer's decision to cease participation in the rating process. Yuksel Insaat A.S. (Yuksel), which has corporate headquarters in Ankara, Turkey, is among the largest construction companies in the country. The company was established in 1963 by the Sazak and Sert families and maintains a visible footprint in Turkey, where more than half of its revenues are generated, but has expanded into the Middle East and North Africa (MENA) region as well as Central Asia over recent years to diversify its revenue streams. The company generated revenues of TRY1.8 billion (ca. $950 million) in its financial year 2013. ============= U K R A I N E ============= AKTIV BANK: Declared Insolvent by Central Bank ---------------------------------------------- According to Mena Report, the National Bank of Ukraine, the country's central bank, confirmed that Aktiv Bank has been declared insolvent. The NBU said the bank executed its operations without adequate assessment of the risk or quality of securities and failed to make timely payments to depositors and creditors, Mena Report relates. The NBU disclosed that after obtaining complaints from customers about the bank's failure to obtain its obligations, it initiated an unscheduled inspection on May 22, Mena Report relays. After the inspection found the bank had violated the requirements of NBU regulations and defaulted on payments, it was categorized as a troubled bank and put under NBU supervision, Mena Report discloses. Aktiv Bank is based in Kyiv. =========================== U N I T E D K I N G D O M =========================== BRADFORD BULLS: Owes Creditors GBP2MM a Year After Liquidation -------------------------------------------------------------- Rhys Thomas at Telegraph & Argus says that a new liquidator report revealed defunct company Bradford Bulls Holdings owes creditors GBP2 million a year on from when it went into liquidation. The figure -- GBP1.97 million to unsecured creditors and GBP31,000 to preferential creditors -- is revealed in a report by liquidators the P&A Partnership, which produced the first annual progress report into the former Bradford Bulls Holdings as a statutory requirement one year on from liquidation, according to Telegraph & Argus. The report notes that Brendan Guilfoyle, joint liquidator, said the debt will never be met. Mr. Guilfoyle, the report relates, added that he did not know who the creditors were. "That money will never be seen. We have complied with a statutory requirement. The directors co-operated fully and we submitted our report," the report quoted Mr. Guilfoyle as saying. "There is nothing exceptional there -- it is much smaller than football," Mr. Guilfoyle said. The report notes that the GBP1.97 million is an increase from GBP1.3 million of debts the defunct Bulls company had when it plunged into administration, before then entering liquidation, last year. Telegraph & Argus relays that the liquidator's report covers July 1 last year to June 30 this year and includes figures of GBP1,258 for liquidators' expenses and disbursements, and GBP16,268 for the work done on the report. The total figure includes GBP558,480 yet to be claimed by Her Majesty's Revenue and Customs. Telegraph & Argus notes that the liquidator's report stated: "Pursuant to rule 11.7 of the Insolvency Rules 1986, I am required to give notice to creditors that the joint liquidators are unable to declare a dividend to creditors as the funds realised have been used in defraying the expenses of the liquidation." It finishes by stating: "The joint liquidators are required to provide creditors with an annual progress report within two months of the anniversary of the liquidation. Should the liquidation have been completed prior to the anniversary then a draft final report will be issued prior to the convening and holding of the final meeting of creditors." Last year, a progress report into the financial affairs of Bradford Bulls Holdings by the P&A Partnership shows the former company had moved into creditors voluntary liquidation after receiving GBP28,681 claims from preferential creditors and GBP1,120,667 from unsecured creditors, the report relays. The Telegraph & Argus reported last year that creditors of the former company include Revenue and Customs, Bradford Council, and Integrated Bradford LEP. Smaller Bradford businesses Panache cheerleading school, Direct Cleaning Bradford and Wakefield's County Catering Special Event were among others to lose out when the company collapsed, Telegraph & Argus adds. IRON MOUNTAIN: Moody's Assigns Ba1 Rating to New GBP350MM Notes --------------------------------------------------------------- Moody's Investors Service assigned a Ba1 rating to Iron Mountain Incorporated's proposed GBP350 million senior unsecured notes being issued by Iron Mountain's subsidiary, Iron Mountain Europe PLC. The company will use net proceeds to reduce borrowings under its revolving credit facility and for general corporate purposes. The proposed transactions are leverage neutral and Iron Mountain's Ba3 corporate family rating, existing ratings for its debt instruments and stable ratings outlook are not affected. Assignments: Issuer: Iron Mountain Europe PLC GBP350 million senior unsecured notes due 2022 -- Assigned, Ba1 (LGD2) Ratings Rationale Moody's analyst Raj Joshi said, "Iron Mountain's proposed notes issuance will replenish the company's liquidity ahead of an increase in shareholder distributions in connection with the company's conversion to a real estate investment trust and an increase in the payout ratio of ordinary dividends." The Ba3 corporate family rating continues to reflect Moody's expectation that Iron Mountain's total debt to EBITDA (incorporating Moody's standard analytical adjustments) will peak around mid 5x in the second half of 2014, before it gradually declines to 5x in 2016. On August 25, 2014, Iron Mountain also announced a new $400 million incremental term loan facility (not rated by Moody's) under which the company has the right to borrow funds on or prior to September 24, 2014. Moody's notes that in accordance with its Loss Given Default methodology, changes in Iron Mountain's capital structure, such as a reduction in subordinated debt cushion or increase in senior debt relative to total debt, could result in a downgrade of the company's existing senior and/or senior subordinated debt instrument ratings. Although Iron Mountain's corporate family rating will not be affected from changes in the mix of debt, Moody's could lower the ratings for Iron Mountain's debt instruments if the company elects to borrow substantially under the new incremental term loan facility and senior debt increases, or if senior subordinated notes that are callable in 2014 are redeemed consistent with the company's plans to reduce leverage over time. The principal methodology used in this rating was Global Business & Consumer Service Industry Rating Methodology published in October 2010. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Iron Mountain is an international provider of information storage and related services. Moody's expects Iron Mountain's consolidated revenues to exceed US$3.1 billion in 2014. IRON MOUNTAIN: S&P Assigns 'B+' Rating to GBP350MM Sr. Notes ------------------------------------------------------------ Standard & Poor's Ratings Services assigned print company Iron Mountain Europe PLC's proposed issuance of GBP350 million senior notes due 2022 a 'B+' issue-level rating, with a recovery rating of '4', indicating S&P's expectations for average (30%-50%) recovery for bondholders in the event of a payment default. The company is using the proceeds to repay indebtedness under the company's revolving credit facility and for general corporate purposes. S&P expects leverage will remain unchanged in the mid-5x area. The ratings on Iron Mountain Inc. reflect S&P's assessment of its "fair" business risk profile and "aggressive" financial risk profile. S&P downgraded the company on June 30, 2014, which reflected its view that the company would not rapidly deleverage to below 5x despite its conversion to a REIT. S&P views the company as having less financial flexibility, given its increased dividend distributions to shareholders in addition to its already high outlays for capital expenditures and acquisitions, which S&P expects the company will fund through a combination of equity and/or debt financing. RATINGS LIST Iron Mountain Inc. Corporate Credit Rating B+/Stable/-- New Rating Iron Mountain Europe PLC GBP350M notes due 2022 B+ Recovery Rating 4 JOHNSTON PRESS: Moody's Assigns 'B3' Corporate Family Rating ------------------------------------------------------------ Moody's Investors Service assigned a definitive B3 corporate family rating (CFR) to Johnston Press plc, and a definitive B3 rating to the GBP225 million equivalent senior secured notes due 2019 issued by Johnston Press Bond plc (a special purpose vehicle (SPV) formed solely for the issuance of the Notes; this SPV on- lends the note proceeds to Johnston Press plc). The ratings are in line with the provisional ratings originally assigned on May 9, 2014. Moody's has also assigned a B3-PD Probability of Default (PDR) to the company. The outlook on all ratings is stable. Ratings Rationale On June 23, 2014, Johnston Press successfully completed its debt refinancing (announced on 9 May 2014). Net proceeds of GBP140 million were received by the Company in connection with rights issue, and further to the announcement made by the Company on May 14, 2014, net proceeds of GBP220.5 million from the offering of GBP225 million 8.625% senior secured notes (due 2019) at an issue price of 98%, were released to the company from escrow. All amounts outstanding under the previous debt facilities were thereafter repaid and cancelled in full and the New Revolving Credit Facility of GBP25 million became available. The final terms of the Notes are in line with the drafts reviewed for the provisional ratings assignments. In line with Moody's expectation, at the closing of the refinancing transaction, Johnston Press' Gross debt/EBITDA (as adjusted by Moody's) has reduced to 4.8x on a 2013 pro-forma basis (compared with 6.2x at the end of FY2013; both excluding restructuring costs). The B3-PD PDR, in line with the CFR, reflects 50% expected family recovery rate, as customary for a debt structure containing bond and bank debt. The B3 CFR for Johnston Press, reflects the (1) fairly limited size and scope of the company's operations and vulnerability of the majority of its revenues to the cyclical nature of advertising spending; (2) high degree of reliance on declining print advertising revenues; (3) pressure on print circulation volumes for local and regional newspapers; (4) fact that the company operates in a competitive industry and the advent of new technologies, such as the provision of newspaper content on free internet sites, may put pressure on its advertising and newspaper sales revenue; and (5) execution risks associated with the transformational strategic plan. However, more positively the rating takes into account the (1) diversified revenue base of the group by sales category, geography and customer mix with market-leading positions for most of its product offerings; (2) expectation that going forward print advertising will decline at a slower pace and that Johnston Press will be able to increase cover prices to protect its circulation revenues; (3) strong efforts to grow digital advertising revenues; (4) turnaround transformation strategy implementation showing positive results in the initial years; resulting in good cost control and higher operating margin than peers; and (5) good free cash flow generation expected from 2015 onwards (2014 will be affected by restructuring related outflows), which should help Johnston Press in de-leveraging but Moody's-adjusted gross debt/ EBITDA will nevertheless carry the impact of movements in IAS 19 pension deficit. The principal methodology used in these ratings was the Global Publishing Industry published in December 2011. Other methodologies used include Loss Given Default for Speculative- Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Please Johnston Press plc is a leading UK multimedia company that publishes 13 paid for daily newspapers including The Scotsman, The Yorkshire Post and The News (Portsmouth), 196 paid for weeklies, 39 free newspapers and 10 lifestyle magazines. The company has 185 local and e-commerce websites with complementary mobile sites and owns a number of tablet and Smartphone apps. OATLANDS: In Administration; Business as Usual ---------------------------------------------- Guernsey Press reports that visitor attraction Oatlands has gone into administration after a "difficult few months". According to Guernsey Press, the Royal Court granted the administration order to help preserve the businesses on the site. "It is business as usual for the tenants on the site and we encourage the public to continue supporting this popular attraction," Guernsey Press quotes Jamie Toynton from administrator Grant Thornton, who will help manage the site while its future is decided, as saying. Oatlands tenants are being contacted by the administrator, but their business will be unaffected by this appointment which will be concerned with operation of the company owning the site and not with the day-to-day trading, Guernsey Press notes. SCOMI OILTOOLS: In Liquidation, Total Debts Reach GBP14.68 Mil. --------------------------------------------------------------- Sea Ship News reports that Scomi Oiltools (Europe) Limited (SOEL) is now in the hands of a court appointed liquidator. The company ceased business operations in May 2012, according to Sea Ship News. The report notes that its total debts reached GBP14.68 million. Parent firm Malaysia's Scomi Group said in a release that its intention is to focus on the eastern hemisphere and there was unlikely to be any further European engagement, the report discloses. Scomi Oiltools (Europe) Limited (SOEL) is a Scottish subsidiary of Malaysia's Scomi Group. The principal activity of SOEL was the provision of oilfield equipment, supplies and services. =============== X X X X X X X X =============== * MENA Sovereign Ratings Remain Wide But Stable, Fitch Says ----------------------------------------------------------- Fitch Ratings says in a new report that the divergence between the sovereign ratings of energy exporters and importers in the Middle East and North Africa (MENA) remains wide but stable. Economic performance of energy exporters is forecast to remain strong, due to high levels of government spending and robust non- oil growth. Performance in energy importers is expected to pick up from a weak base, owing to external support, an improving global economic outlook and, in some cases, a lessening of political instability. Fitch's forecasts, which it has extended to 2016 in the new report, show fiscal challenges across the region. For energy exporters, surpluses are forecast to decline in line with falling oil prices -- Fitch expects Brent crude to average USD95/b in 2016 compared to USD108/b in 2014. Some of the region's energy importers have among the largest fiscal deficits of all Fitch- rated sovereigns. Tackling sources of fiscal rigidities, such as large subsidy bills, would be rating positive. Fitch considers progress in Morocco (BBB-/Stable), and more recently Egypt (B- /Stable), as encouraging. Fitch views geopolitical risk as elevated compared with other regions. The recent emergence of ISIS in Iraq and Syria poses risks to several MENA sovereigns. The potential for worsening spill over from events in Syria is reflected in the Negative Outlook for Lebanon (B/Negative). Domestic political transitions also remain a source of uncertainty and undermine the environment for economic reform and performance. Progress has been made in Egypt and Tunisia (BB-/Negative), although the risks in the latter remain captured in the Negative Outlook. Israel (A/Positive) is the only country in the region with a Positive Outlook. It has made significant progress in fiscal consolidation in recent years, lowering the debt/GDP ratio. The budgetary impact of the recent conflict in Gaza, which occurred at a time of slowing growth, is likely to complicate further near-term deficit reduction. Fitch has cut its projections for Israel's growth and raised them for the budget deficit for 2014 and 2015. The ratings of MENA energy importers range from 'BBB-' (Morocco) to 'B-' (Egypt). Energy exporters' ratings range from 'BBB' in Bahrain to 'AA' in Abu Dhabi, Kuwait and Saudi Arabia. ********* 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. 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