---

        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 25, 2014, Vol. 15, No. 190

                            Headlines

B U L G A R I A

CORPORATE COMMERCIAL: Insolvency Ungrounded, Financier Says


F R A N C E

AIR FRANCE-KLM: Pilot Strike Causes Severe Financial Damage


G E R M A N Y

NETZOPTIKER: Files for Insolvency; Prov. Liquidator Appointed
WAGNER & CO: Sanderink Acquires Wagner Solar Unit


I R E L A N D

AVOCA CLO XII: Moody's Assigns 'B2' Rating to Class F Notes
CARLYLE GLOBAL: Moody's Assigns '(P)B2' Rating to Class E Notes
CARLYLE GLOBAL 2014-3: Fitch Assigns 'B-' Rating to Class E Notes
EPIC PLC: Fitch Affirms 'CCCsf' Ratings on 2 Note Classes
FLY LEASING: S&P Assigns 'BB' Rating to Senior Unsecured Notes

SORRENTO PARK: Moody's Assigns '(P)B2' Rating to Class E Notes


N E T H E R L A N D S

EURO GALAXY: Moody's Raises Rating on Class E Notes to 'Ba1'
JUBILEE CLO 2014-XIV: Moody's Assigns (P)B2 Rating to Cl. F Notes
LEVERAGED FINANCE: Moody's Lifts Rating on Class III Notes to Ba1


R O M A N I A

ROMANIA: 10 Biggest Firms Entering Insolvency Turnover EUR660MM


R U S S I A

HOME CREDIT: Moody's Cuts LT Deposit Rating to 'B1'; Outlook Neg.
VOSTOCHNY EXPRESS: Moody's Lowers Deposit & Debt Rating to 'B2'


S P A I N

CODERE SA: Enters Into Debt Restructuring Deal with Creditors


U N I T E D   K I N G D O M

CENTROSOLAR GROUP: Creditors, Mgt Board Withdraws Insolvency Plan
CP MORGAN: Owners Face Disqualification Following Liquidation
DIXONS RETAIL: Moody's Withdraws B1 Corporate Family Rating
GALTRES FESTIVAL: Police Probe Amid Administration
JAGUAR LAND: Moody's Affirms 'Ba2' Corporate Family Rating

LAKESIDE 1: S&P Assigns Preliminary 'B-' CCR; Outlook Stable
PCI PHARMA: S&P Retains 'B' CCR Following US$21-Mil. Loan Add-On
PHONES 4U: Six Stores in North Wales to Close
TURBO FINANCE: Moody's Assigns 'Ba1' Rating to Class C Notes
WELLMAN GROUP: MBO Buys Businesses; 52 Jobs Saved

* UK: Restaurant Insolvencies up 15% as Costs Rise


                            *********



===============
B U L G A R I A
===============


CORPORATE COMMERCIAL: Insolvency Ungrounded, Financier Says
-----------------------------------------------------------
Novinite.com reports that financier Emil Harsev said there is not
a single reason requiring Corporate Commercial Bank (Corpbank or
KTB) to be declared insolvent.

Novinite.com relates that Mr. Harsev, who is part of the
Initiative Committee for Solution to the KTB Crisis, told public
broadcaster BNR that the losses would affect the state,
customers, and depositors at the same time.

"Losses will be incommensurable to all projected expenses to
rescue the bank," he argued, Novinite.com relays.

In Mr. Harsev's view, all the figures received by the team
carrying out the special supervision of Corpbank show the
stabilization of the bank is possible and effort should be put
forth toward that goal, according to Novinite.com.

Commenting on the actions of the Bulgarian National Bank (BNB),
which imposed conservatorship on KTB in June after a bank run
depleting its liquidity, he blamed the institution for failing to
take the vital decisions that would help KTB, but would also
require responsibility and would carry financial risks,
Novinite.com relates.

"I suppose they are waiting to be granted support from a
Parliament, from a future government with a permanent mandate,"
Novinite.com quotes Mr. Harsev as saying.

Bulgaria is currently ruled by a caretaker government and has no
Parliament after the elected cabinet resigned on July 23 and the
National Assembly was dissolved on August 6, Novinite.com notes.

"This is having a negative impact. I don't know why they are not
taking this decision which could for instance solve the issue
with one of the two banks," the financier, as cited by
Novinite.com, said, referring to Corpbank on the one hand and its
subsidiary, Victoria (formerly Credit Agricole Bulgaria).

"We are talking about a certain amount of money which the
Bulgarian Development Bank has got" and which it should have "no
problem" to transfer to KTB, Mr. Harsev said.

"This would improve the stand of KTB and would immediately put
the smaller commercial bank, Victoria, back on track, with its
customers able to access their money immediately. The BNB-
appointed auditors themselves support that conclusion as well,"
he stressed, Novinite.com relays.

Mr. Harsev made his point as experts were set to gather at the
Bulgarian Industrial Association, where bank experts, trade-union
officials and employers had agreed to discuss the situation at
KTB, with National Ombudsman Konstantin Penchev also attending,
adds Novinite.com.



===========
F R A N C E
===========


AIR FRANCE-KLM: Pilot Strike Causes Severe Financial Damage
-----------------------------------------------------------
Nicola Clark at The New York Times reports that more than a week
into the strike by French pilots against Air France-KLM, the two
sides are stuck in a holding pattern.

According to The New York Times, the only certainty seems to be
that the dispute is doing severe financial damage to the airline,
making it increasingly likely that neither party will eventually
come away as a winner in any meaningful sense.

With the cost of the pilots' walkout now approaching EUR20
million, or US$26 million, per day, investors and politicians can
only wonder whether the opposing sides' shared commitment to the
airline's survival will prove strong enough to avert disaster,
The New York Times discloses.

"No airline is immortal," The New York Times quotes
Alexandre de Juniac, the Air France-KLM chief executive, as
saying in a TV interview on Sept. 22.

After nearly three years of slashing operating costs, a total of
about EUR2 billion, and squeezing wherever possible to extract
more productivity from a staff thinned by 8,000 job cuts,
Air France-KLM had succeeded in reducing its debt and nearly
tripling the group's annual cash flow to EUR1.3 billion at the
end of 2013, The New York Times relates.

Until this month, the prospect of restoring the group to even
modest profit -- after nearly a decade of losses -- appeared
within reach, The New York Times notes.  And plans were moving
forward to invest more than EUR1 billion in the growth of the
group's modest, no-frills subsidiary, Transavia, in hopes of
building it into a leading European budget carrier, The New York
Times states.

"These efforts are being destroyed in just a few days," a visibly
dejected Mr. de Juniac, as cited by The New York Times, said in
the TV interview.  "I do have to say it is really sad."

The pilots' union sees things otherwise, The New York Times
relays.  Union President Jean-Louis Barber, according to the
report, has called for the company to abandon the Transavia plan,
which the union sees as a threat to French pilot jobs.  Mr.
Barber vowed Monday to continue the strike "for as long as
management does not change its philosophy," the report added.

Air France is the French flag carrier headquartered in Tremblay-
en-France.  It is a subsidiary of the Air France-KLM Group and a
founding member of the SkyTeam global airline alliance.



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


NETZOPTIKER: Files for Insolvency; Prov. Liquidator Appointed
-------------------------------------------------------------
DACH unquote reports that Netzoptiker has filed for insolvency
with the German Handelsregister.

A filing at Handelsregister, Germany's version of Companies
House, states that a provisional liquidator has been appointed,
DACH unquote discloses.

Netzoptiker is a Limburg-based mail order glasses company backed
by Rocket Internet and Omnes Capital.  Founded in late 2006,
Netzoptiker sells glasses and contact lenses at a 60% discount on
products bought on the high street, as it saves on both store-
front costs and personnel.

Rocket Internet holds a 42% stake in the online store, DACH
unquote says, citing Handelsregister.


WAGNER & CO: Sanderink Acquires Wagner Solar Unit
-------------------------------------------------
pv magazine reports that Wagner & Co. Solartechnik GmbH has won a
new lease on life following its acquisition by Dutch group
Sanderink, which has taken over the company's photovoltaic,
thermal and assembly systems.

The Wagner Solar brand name will continue under Sanderink's
ownership, the report says.

"This is a huge success because it was hard work in the difficult
current market environment to find an investor who could provide
sustainable future prospects for Wagner Solar," the report quotes
Jan Markus Plathner, the company's court-appointed insolvency
administrator, as saying. "Only by the willingness on all sides
to make concessions, we were able to implement this restructuring
strategy and thus obtain the majority of jobs at the sites in
Coelbe and Kirchhain."

pv magazine relates that Mr. Plathner managed to continue the
company's operation with the support of customers, financial
partners and staff following its insolvency while seeking new
investors.

Sanderink, headed by Gerard Sanderink, owns an internationally
active group of companies operating in the fields of software,
infrastructure, environmental technology and renewable energy,
the report discloses.

Wagner and its approximately 80 employees will remain in Coelbe
and Kirchhain in the German state of Hesse following its
restructuring, pv magazine says.

pv magazine notes that Brigitte van Egten, director of the
Netherlands' Dutch Solar Systems, will head Wagner. Andreas Knoch
will serve as head of sales and technology while Michael Fina
will oversee purchasing, production and logistics, according to
pv magazine.

"We are very pleased to have come to such successful conclusion
after a hard struggle," Ms. van Egten, as cited by pv magazine,
said, adding that she had long had a good business relationship
with Wagner & Co. and was therefore "absolutely convinced of the
high quality of the products."

The parties did not offer details of the acquisition, the report
adds.

As reported in the Troubled Company Reporter-Europe on May 2,
2014, pv-magazine.com said German solar company Wagner & Co.
Solartechnik GmbH filed for insolvency amidst the continuing
crisis gripping the country's beleaguered PV sector.  The solar
installation supplier has suffered continuing losses in
the face of Germany's shrinking market, the report related.

Established in Marburg in 1979 and now based in nearby Coelbe,
Wagner & Co. has operated as a system provider of solar
installations, offering holistically sustainable solutions in the
areas of solar power, solar heating and pellet heating systems
for homes and buildings. The company is also active in France,
Britain, Italy, Spain and North America through subsidiaries and
partnerships.  Wagner is likewise a leading solar thermal
collector manufacturer in Europe.



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


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

EUR240,000,000 Class A Senior Secured Floating Rate Notes due
2027, Definitive Rating Assigned Aaa (sf)

EUR43,000,000 Class B Senior Secured Floating Rate Notes due
2027, Definitive Rating Assigned Aa2 (sf)

EUR27,000,000 Class C Deferrable Mezzanine Floating Rate Notes
due 2027, Definitive Rating Assigned A2 (sf)

EUR19,000,000 Class D Deferrable Mezzanine Floating Rate Notes
due 2027, Definitive Rating Assigned Baa2 (sf)

EUR26,000,000 Class E Deferrable Junior Floating Rate Notes due
2027, Definitive Rating Assigned Ba2 (sf)

EUR13,000,000 Class F Deferrable Junior Floating Rate Notes due
2027, Definitive Rating Assigned B2 (sf)

Ratings Rationale

Moody's definitive rating of the rated notes addresses the
expected loss posed to noteholders by legal final maturity of the
notes in 2027. The ratings reflect the risks due to defaults on
the underlying portfolio of loans given the characteristics and
eligibility criteria of the constituent assets, the relevant
portfolio tests and covenants as well as the transaction's
capital and legal structure. Furthermore, Moody's is of the
opinion that the collateral manager, Avoca Capital Holdings
("Avoca Capital"), has sufficient experience and operational
capacity and is capable of managing this CLO.

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

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

In addition to the six classes of notes rated by Moody's, the
Issuer has issued EUR 47 million of subordinated notes. Moody's
has not assigned rating to this class of notes.

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

Avoca Capital acquired and holds 50% of the outstanding shares in
the Issuer. The remaining 50% of the Issuer's outstanding shares
are held by a charitable trust. However, in a typical CLO
transaction 100% of the Issuer's shares would be held by a
charitable trust. As a result, certain structural mitigants have
been put in place to ensure that Avoca CLO XII will remain
bankruptcy remote from Avoca Capital (for example, covenants to
maintain a majority of independent directors in Avoca CLO XII,
prohibition on Avoca Capital from acquiring more shares in Avoca
CLO XII, covenants to maintain that Avoca CLO XII and Avoca
Capital are operated as separate businesses, and a share charge
given by Avoca Capital over its shares in the Issuer securing its
observance of such covenants).

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

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

Loss and Cash Flow Analysis:

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

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

Par amount: EUR400,000,000

Diversity Score: 34

Weighted Average Rating Factor (WARF): 2750

Weighted Average Spread (WAS): 3.75%

Weighted Average Recovery Rate (WARR): 44.5%

Weighted Average Life (WAL): 8 years.

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

Stress Scenarios:

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

Percentage Change in WARF: WARF + 15% (to 3163 from 2750)

Ratings Impact in Rating Notches:

Class A Senior Secured Floating Rate Notes: 0

Class B Senior Secured Floating Rate Notes: -1

Class C Senior Secured Deferrable Floating Rate Notes: -2

Class D Senior Secured Deferrable Floating Rate Notes: -1

Class E Senior Secured Deferrable Floating Rate Notes: -1

Class F Senior Secured Deferrable Floating Rate Notes: 0

Percentage Change in WARF: WARF +30% (to 3575 from 2750)

Ratings Impact in Rating Notches:

Class A Senior Secured Floating Rate Notes: -1

Class B Senior Secured Floating Rate Notes: -3

Class C Senior Secured Deferrable Floating Rate Notes: -3

Class D Senior Secured Deferrable Floating Rate Notes: -2

Class E Senior Secured Deferrable Floating Rate Notes: -1

Class F Senior Secured Deferrable Floating Rate Notes: -2

Methodology Underlying the Rating Action:

Further details regarding Moody's analysis of this transaction
may be found in the upcoming new-issue report, available soon on
Moodys.com.

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

Other Factors used in this rating are described in "Bankruptcy
Remoteness Criteria for Special Purpose Entities in Structured
Finance Transactions" published in May 2013.


CARLYLE GLOBAL: Moody's Assigns '(P)B2' Rating to Class E Notes
---------------------------------------------------------------
Moody's Investors Service announced that it has assigned the
following provisional ratings to notes to be issued by Carlyle
Global Market Strategies Euro CLO 2014-3 Limited (the "Issuer" or
"Carlyle CLO"):

EUR257,250,000 Class A-1A Senior Secured Floating Rate Notes due
2027, Assigned (P)Aaa (sf)

EUR5,250,000 Class A-1B Senior Secured Fixed Rate Notes due
2027, Assigned (P)Aaa (sf)

EUR39,750,000 Class A-2A Senior Secured Floating Rate Notes due
2027, Assigned (P)Aa2 (sf)

EUR11,500,000 Class A-2B Senior Secured Fixed Rate Notes due
2027, Assigned (P)Aa2 (sf)

EUR25,750,000 Class B Senior Secured Deferrable Floating Rate
Notes due 2027, Assigned (P)A2 (sf)

EUR23,500,000 Class C Senior Secured Deferrable Floating Rate
Notes due 2027, Assigned (P)Baa2 (sf)

EUR30,500,000 Class D Senior Secured Deferrable Floating Rate
Notes due 2027, Assigned (P)Ba2 (sf)

EUR12,250,000 Class E Senior Secured Deferrable Floating Rate
Notes due 2027, Assigned (P)B2 (sf)

Moody's issues provisional ratings in advance of the final sale
of financial instruments, but these ratings only represent
Moody's preliminary credit opinions. Upon a conclusive review of
a transaction and associated documentation, Moody's will endeavor
to assign definitive ratings. A definitive rating (if any) may
differ from a provisional rating.

Ratings Rationale

Moody's provisional rating of the rated notes addresses the
expected loss posed to noteholders by the legal final maturity of
the notes in 2027. The provisional ratings reflect the risks due
to defaults on the underlying portfolio of loans given the
characteristics and eligibility criteria of the constituent
assets, the relevant portfolio tests and covenants as well as the
transaction's capital and legal structure. Furthermore, Moody's
is of the opinion that the collateral manager, CELF Advisors LLP
("CELF"), has sufficient experience and operational capacity and
is capable of managing this CLO.

Carlyle CLO is a managed cash flow CLO. At least 90% of the
portfolio must consist of senior secured loans and senior secured
floating rate notes and up to 10% of the portfolio may consist of
unsecured loans, second-lien loans, mezzanine obligations, high
yield bonds and other floating rate bonds. The bond bucket gives
the flexibility to Carlyle CLO to hold bonds if Volcker Rule is
changed. The portfolio is expected to be 70% ramped up as of the
closing date and to be comprised predominantly of corporate loans
to obligors domiciled in Western Europe.

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

In addition to the six classes of notes rated by Moody's, the
Issuer will issue EUR 44.25m of subordinated notes, which will
not be rated.

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

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

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

Loss and Cash Flow Analysis:

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

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

Par amount: EUR437,500,000

Diversity Score: 36

Weighted Average Rating Factor (WARF): 2750

Weighted Average Spread (WAS): 4.05%

Weighted Average Recovery Rate (WARR): 42%

Weighted Average Life (WAL): 8 years.

Moody's has analyzed the potential impact associated with
sovereign related risk of peripheral European countries. As part
of the base case, Moody's has addressed the potential exposure to
obligors domiciled in countries with local currency country risk
ceiling of A1 or below. Following the effective date, and given
the portfolio constraints and the current sovereign ratings in
Europe, such exposure may not exceed 10% of the total portfolio.
As a result and in conjunction with the current foreign
government bond ratings of the eligible countries, as a worst
case scenario, a maximum 10% of the pool would be domiciled in
countries with A3 local currency country ceiling. The remainder
of the pool will be domiciled in countries which currently have a
local currency country ceiling of Aaa.

Stress Scenarios:

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

Percentage Change in WARF: WARF + 15% (to 3163 from 2750)

Ratings Impact in Rating Notches:

Class A-1 Senior Secured Floating/Fixed Rate Notes: 0

Class A-2 Senior Secured Floating/Fixed Rate Notes: -2

Class B Senior Secured Deferrable Floating Rate Notes: -2

Class C Senior Secured Deferrable Floating Rate Notes: -2

Class D Senior Secured Deferrable Floating Rate Notes: -1

Class E Senior Secured Deferrable Floating Rate Notes: 0

Percentage Change in WARF: WARF +30% (to 3575 from 2750)

Class A-1 Senior Secured Floating/Fixed Rate Notes: -1

Class A-2 Senior Secured Floating/Fixed Rate Notes: -3

Class B Senior Secured Deferrable Floating Rate Notes: -3

Class C Senior Secured Deferrable Floating Rate Notes: -2

Class D Senior Secured Deferrable Floating Rate Notes: -2

Class E Senior Secured Deferrable Floating Rate Notes: -2


CARLYLE GLOBAL 2014-3: Fitch Assigns 'B-' Rating to Class E Notes
-----------------------------------------------------------------
Fitch Ratings has assigned Carlyle Global Market Strategies Euro
CLO 2014-3 Limited's notes expected ratings as follows:

Class A-1A: 'AAA(EXP)sf'; Outlook Stable
Class A-1B: 'AAA(EXP)sf'; Outlook Stable
Class A-2A: 'AA(EXP)sf'; Outlook Stable
Class A-2B: 'AA(EXP)sf'; Outlook Stable
Class B: 'A(EXP)sf'; Outlook Stable
Class C: 'BBB(EXP)sf'; Outlook Stable
Class D: 'BB(EXP)sf'; Outlook Stable
Class E: 'B-(EXP) sf'; Outlook Stable

Subordinated notes: not rated

The assignment of final ratings is contingent on the receipt of
final documents conforming to information already reviewed.

Carlyle Global Market Strategies Euro CLO 2014-3 Limited is an
arbitrage cash flow collateralized loan obligation (CLO).

KEY RATING DRIVERS

Portfolio Credit Quality

Fitch expects the average credit quality of obligors to be in the
'B'/'B-' category.  Fitch has public ratings or credit opinions
on all obligors in the identified portfolio.  The covenanted
maximum Fitch weighted average rating factor (WARF) for assigning
expected ratings is 34.0.  The WARF of the identified portfolio,
which represents 76% of the target par amount, is 33.33.

High Expected Recoveries

At least 90% of the portfolio will comprise senior secured
obligations.  Recovery prospects for these assets are typically
more favorable than for second-lien, unsecured and mezzanine
assets.  Fitch has assigned Recovery Ratings to all obligations
in the identified portfolio.  The covenanted minimum weighted
average recovery rate (WARR) for assigning expected ratings is
67.0%.  The WARR of the identified portfolio is 69.7%.

Limited Interest Rate Risk

Interest rate risk is naturally hedged for most of the portfolio,
as floating rate liabilities and assets represent 4% and between
0% and 10% of the target par amount, respectively.  As the fixed
notes are junior in the transaction's structure, the proportion
of fixed-rate liabilities increases as the class A-1 notes
amortize. Fitch therefore modeled both a 10% and a 0% fixed-rate
bucket in its analysis.

Limited FX Risk

Perfect asset swaps are used to mitigate any currency risk on
non-euro-denominated assets.  The transaction is permitted to
invest up to 30% of the portfolio in non-euro-denominated assets,
provided suitable asset swaps can be entered into.

TRANSACTION SUMMARY

Net proceeds from the notes will be used to purchase a EUR437.5m
portfolio of mainly European leveraged loans and bonds.  The
portfolio will be managed by CELF Advisors LLP (part of The
Carlyle Group LP).  The transaction features a four-year re-
investment period scheduled to end in 2018.

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

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

RATING SENSITIVITIES

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

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


EPIC PLC: Fitch Affirms 'CCCsf' Ratings on 2 Note Classes
---------------------------------------------------------
Fitch Ratings has affirmed Epic (Brodie) plc's commercial
mortgage-backed floating-rate notes, due 2016, as follows:

EUR34.6 million class A: affirmed at 'AA-sf'; Outlook Stable
EUR17.3 million class B: affirmed at 'Asf'; Outlook Stable
EUR11.7 million class C: affirmed at 'BBBsf'; Outlook Stable
EUR13.8 million class D: affirmed at 'BBsf; Outlook Stable
EUR11.7 million class E: affirmed at 'Bsf'; Outlook Stable
EUR12 million class F: affirmed at 'CCCsf'; Recovery Estimate 90%
EUR6.4 million class G: affirmed at 'CCCsf'; Recovery Estimate 0%

Epic Brodie is a fully funded synthetic CMBS transaction
originated by Royal Bank of Scotland (RBS, rated A/Negative/F1),
referencing one remaining loan backed by six commercial real
estate assets in Germany.

KEY RATING DRIVERS

The affirmation reflects the stable performance of the collateral
and Fitch's unchanged view on the projected recoveries derived
from the sole remaining loan in the reference portfolio.

Most performance metrics on the EUR106.2 million Terry loan have
remained stable or improved slightly over the last year.
Reported net income over the last 12 months improved slightly to
EUR9.4 million from EUR9.3 million although the debt yield of
8.8% is still considered low for these types of assets and their
locations.  Recent new lettings have resulted in a slight
increase in occupancy to 97.5% currently from 95.5% in July 2013,
which explains the improvement of net income and weighted average
lease term, calculated by Fitch at approximately four years.

Despite the increase in rental income, the loan's interest
coverage ratio (ICR) has deteriorated significantly, having
fallen to 1.82x on a secured loan basis, down from more than 8x
in the same period last year.  This is due to 2% default interest
payable on the loan following failure to repay at its extended
loan maturity in January 2014.  The amortization via excess cash
sweep has therefore been reduced by around 80% and while Fitch
would expect default interest received by the swap counterparty
to eventually reduce losses, confirmation from the cash manager
on this point has not been received.

Savills have been appointed to assist in the sale of the six
remaining retail assets.  Fitch expects these remaining
properties to be sold prior to the legal final maturity date in
January 2016. The transaction documents provide deadlines for
determining how much loss, if any, is to be absorbed by
noteholders if all assets are not sold prior to legal final
maturity.

The first step requires an independent valuation of the reference
portfolio, which could then be challenged by the trustee acting
on behalf of a majority of noteholders.  The trustee could then
instruct another independent appraisal.  At the calculation date
prior to legal final maturity, the trustee then proposes the most
favorable outcome to be used in finalizing the credit protection
payment amount.

RATING SENSITIVITIES

Asset disposals at values well below market indications could
lead to a revision of recovery prospects, especially for class E
and F notes.

Estimated 'Bsf' proceeds are around EUR100m.


FLY LEASING: S&P Assigns 'BB' Rating to Senior Unsecured Notes
--------------------------------------------------------------
Standard & Poor's Ratings Services said that it has assigned its
'BB' issue-level rating to Fly Leasing Ltd.'s senior unsecured
notes, with a recovery rating of '3', indicating S&P's
expectation that lenders would receive meaningful (50% to 70%)
recovery of principal in the event of a payment default.  The
company will use proceeds for general corporate purposes.

S&P's ratings on Bermuda-based aircraft lessor Fly Leasing
reflect its view of the company's position as a mid-tier provider
of aircraft operating leases, a substantial portion of encumbered
assets, and its complicated ownership structure.  Standard &
Poor's characterizes the company's business risk profile as
"fair," its financial risk profile as "significant," and its
liquidity as "adequate" under S&P's criteria.

The outlook is stable, reflecting S&P's expectation that Fly's
credit metrics will remain relatively consistent, with increased
earnings and cash flow offsetting incremental debt to fund the
acquisition of aircraft.  S&P expects funds from operations (FFO)
to debt of about 8% and debt to capital in the mid-70% area.  S&P
could raise the ratings if aircraft lease rates improved
significantly from current levels, due to stronger demand,
resulting in FFO/debt increasing to at least 10% for a sustained
period.  S&P could lower the ratings if lease rates deteriorate
or the company adds significant debt, causing FFO/debt to decline
to about 5% or lower for a sustained period.

RATING LIST

Fly Leasing Ltd.
Corporate credit rating                BB/Stable/--

New Ratings
Fly Leasing Ltd.
Senior unsecured notes                BB
  Recovery rating                      3


SORRENTO PARK: Moody's Assigns '(P)B2' Rating to Class E Notes
--------------------------------------------------------------
Moody's Investors Service announced that it has assigned the
following provisional ratings to notes to be issued by Sorrento
Park CLO Limited:

Issuer: Sorrento Park CLO Limited

EUR290,000,000 Class A-1A Senior Secured Floating Rate Notes due
2027, Assigned (P)Aaa (sf)

EUR5,000,000 Class A-1B Senior Secured Fixed Rate Notes due
2027, Assigned (P)Aaa (sf)

EUR28,750,000 Class A-2A Senior Secured Floating Rate Notes due
2027, Assigned (P)Aa2 (sf)

EUR30,000,000 Class A-2B Senior Secured Fixed Rate Notes due
2027, Assigned (P)Aa2 (sf)

EUR30,000,000 Class B Senior Secured Deferrable Floating Rate
Notes due 2027, Assigned (P)A2 (sf)

EUR28,750,000 Class C Senior Secured Deferrable Floating Rate
Notes due 2027, Assigned (P)Baa2 (sf)

EUR30,000,000 Class D Senior Secured Deferrable Floating Rate
Notes due 2027, Assigned (P)Ba2 (sf)

EUR17,500,000 Class E Senior Secured Deferrable Floating Rate
Notes due 2027, Assigned (P)B2 (sf)

Moody's issues provisional ratings in advance of the final sale
of financial instruments, but these ratings only represent
Moody's preliminary credit opinions. Upon a conclusive review of
a transaction and associated documentation, Moody's will endeavor
to assign definitive ratings. A definitive rating (if any) may
differ from a provisional rating.

Ratings Rationale

Moody's provisional rating of the rated notes addresses the
expected loss posed to noteholders by legal final maturity of the
notes in 2027. The provisional ratings reflect the risks due to
defaults on the underlying portfolio of loans given the
characteristics and eligibility criteria of the constituent
assets, the relevant portfolio tests and covenants as well as the
transaction's capital and legal structure. Furthermore, Moody's
is of the opinion that the collateral manager, Blackstone / GSO
Debt Funds Management Europe Limited, has sufficient experience
and operational capacity and is capable of managing this CLO.

Sorrento Park CLO Limited is a managed cash flow CLO. At least
90% of the portfolio must consist of secured senior obligations
and up to 10% of the portfolio may consist of unsecured senior
loans, second lien loans, mezzanine obligations, high yield bonds
and/or first lien last out loans. The portfolio is expected to be
60% ramped up as of the closing date and to be comprised
predominantly of corporate loans to obligors domiciled in Western
Europe. This initial portfolio will be acquired by way of
participations which are required to be elevated as soon as
reasonably practicable. The remainder of the portfolio will be
acquired during the six month ramp-up period in compliance with
the portfolio guidelines.

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

In addition to the eight classes of notes rated by Moody's, the
Issuer will issue EUR57,000,000 of subordinated notes. Moody's
has not assigned rating to this class of notes.

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

Loss and Cash Flow Analysis:

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

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

Par Amount: EUR500,000,000

Diversity Score: 34

Weighted Average Rating Factor (WARF): 2750

Weighted Average Spread (WAS): 4.00%

Weighted Average Coupon (WAC): 5.75%

Weighted Average Recovery Rate (WARR): 41.5%

Weighted Average Life (WAL): 8 years.

Stress Scenarios:

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

Percentage Change in WARF: WARF + 15% (to 3163 from 2750)

Ratings Impact in Rating Notches:

Class A-1A Senior Secured Floating Rate Notes: 0

Class A-1B Senior Secured Fixed Rate Notes: 0

Class A-2A Senior Secured Floating Rate Notes: -1

Class A-2B Senior Secured Fixed Rate Notes: -1

Class B Senior Secured Deferrable Floating Rate Notes: -2

Class C Senior Secured Deferrable Floating Rate Notes: -1

Class D Senior Secured Deferrable Floating Rate Notes: 0

Class E Senior Secured Deferrable Floating Rate Notes: 0

Percentage Change in WARF: WARF +30% (to 3575 from 2750)

Ratings Impact in Rating Notches:

Class A-1A Senior Secured Floating Rate Notes: -1

Class A-1B Senior Secured Fixed Rate Notes: -1

Class A-2A Senior Secured Floating Rate Notes: -3

Class A-2B Senior Secured Fixed Rate Notes: -3

Class B Senior Secured Deferrable Floating Rate Notes: -3

Class C Senior Secured Deferrable Floating Rate Notes: -2

Class D Senior Secured Deferrable Floating Rate Notes: -1

Class E Senior Secured Deferrable Floating Rate Notes: -2

Methodology Underlying the Rating Action:

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

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

The rated notes' performance is subject to uncertainty. The
notes' performance is sensitive to the performance of the
underlying portfolio, which in turn depends on economic and
credit conditions that may change. Blackstone / GSO Debt Funds
Management Europe Limited' investment decisions and management of
the transaction will also affect the notes' performance.



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


EURO GALAXY: Moody's Raises Rating on Class E Notes to 'Ba1'
------------------------------------------------------------
Moody's Investors Service announced that it has taken rating
actions on the following classes of notes issued by Euro Galaxy
CLO B.V.:

Euro 88,000,000 (current outstanding balance EUR45.2) Class A-1
Senior Floating Rate Notes due 2021, Upgraded to Aaa (sf);
previously on Aug 25, 2011 Upgraded to Aa1 (sf)

Euro 178,500,000 (current outstanding balance EUR91.7) Class A-2
Senior Floating Rate Delayed Draw Notes due 2021, Upgraded to Aaa
(sf); previously on Aug 25, 2011 Upgraded to Aa1 (sf)

Euro 16,000,000 Class B-1 Senior Floating Rate Notes due 2021,
Upgraded to Aaa (sf); previously on Aug 25, 2011 Upgraded to A1
(sf)

Euro 12,000,000 Class B-2 Senior Fixed Rate Notes due 2021,
Upgraded to Aaa (sf); previously on Aug 25, 2011 Upgraded to A1
(sf)

Euro 24,500,000 Class C Deferrable Interest Floating Rate Notes
due 2021, Upgraded to Aa3 (sf); previously on Aug 25, 2011
Upgraded to Baa2 (sf)

Euro 14,000,000 Class D Deferrable Interest Floating Rate Notes
due 2021, Upgraded to Baa2 (sf); previously on Aug 25, 2011
Upgraded to Ba2 (sf)

Euro 13,500,000 Class E Deferrable Interest Floating Rate Notes
due 2021, Upgraded to Ba1 (sf); previously on Aug 25, 2011
Upgraded to Ba3 (sf)

Euro 14,000,000 (current outstanding balance EUR7.6) Class P
Combination Notes due 2021, Upgraded to Aaa (sf); previously on
Aug 25, 2011 Upgraded to A1 (sf)

Euro Galaxy CLO B.V., issued in September 2006, is a single
currency Collateralised Loan Obligation ("CLO") backed by a
portfolio of mostly high yield European loans. The portfolio is
managed by PineBridge Investments. The reinvestment period ended
in October 2012. It is predominantly composed of senior secured
loans.

Ratings Rationale

According to Moody's, the upgrades of the notes result from the
significant deleveraging of the Class A notes and the subsequent
increase in the overcollateralization ratios ("OC ratios") of the
rated notes. Class A notes have paid down by EUR77.6 million
(29.1% of its closing balance) since September 2013.

As a result, the OC ratios for all classes of notes have
increased. As per the latest trustee report dated July 2014, the
Class A/B, the Class C, the Class D and the Class E
overcollateralization ratios are reported at 144.64%, 125.92%,
117.26% and 109.96%, respectively, compared to 129.65%, 117.75%,
111.89% and 106.76% in September 2013.

The rating on the combination notes address the repayment of the
rated balance on or before the legal final maturity. For the
Class P, the rated balance at any time is equal to the principal
amount of the combination note on the issue date minus the sum of
all payments made from the issue date to such date, of either
interest or principal. The rated balance will not necessarily
correspond to the outstanding notional amount reported by the
trustee. The rated balance of the Class P notes is currently
overcollateralized by the Class B-2 notes.

The credit quality of the collateral pool has marginally improved
as reflected in the average credit rating of the portfolio
(measured by the weighted average rating factor, or WARF). As of
the trustee's July 2014 report, the WARF was 2784, compared with
2863 in September 2013. The reported diversity score reduced to
33 in July 2014 from 37 in September 2013.

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
pool with performing par and principal proceeds balance of
EUR213.8 million, and defaulted par of EUR5.9 million, a weighted
average default probability of 18.65% (consistent with a WARF of
2782 and a weighted average life of 4.08 years), a weighted
average recovery rate upon default of 48.65% for a Aaa liability
target rating, a diversity score of 32 and a weighted average
spread of 3.98%.

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 96.15% of the portfolio exposed to senior
secured corporate assets would recover 50% upon default, while
the non first-lien loan corporate assets would recover 15%. In
each case, historical and market performance and a collateral
manager's latitude to trade collateral are also relevant factors.
Moody's incorporates these default and recovery characteristics
of the collateral pool into its cash flow model analysis,
subjecting them to stresses as a function of the target rating of
each CLO liability it is analyzing.

Methodology Underlying the Rating Action:

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

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

In addition to the base-case analysis, Moody's conducted
sensitivity analyses on the key parameters for the rated notes,
for which it assumed lower credit quality in the portfolio to
address refinancing risk. Loans to European corporates rated B3
or lower and maturing between 2014 and 2015 make up approximately
3.22% of the portfolio, which could make refinancing difficult,
the model generated outputs that are in line with the ratings.

This transaction is subject to a high level of macroeconomic
uncertainty, which could negatively affect the ratings on the
notes, in light of uncertainty about credit conditions in the
general economy. CLO notes' performance may also be impacted
either positively or negatively by 1) the manager's investment
strategy and behavior and 2) divergence in the legal
interpretation of CDO documentation by different transactional
parties due to because of embedded ambiguities.

Additional uncertainty about performance is due to the following:

1) Portfolio amortization: The main source of uncertainty in this
transaction is the pace of amortization of the underlying
portfolio, which can vary significantly depending on market
conditions and have a significant impact on the notes' ratings.
Amortization could accelerate as a consequence of high loan
prepayment levels or collateral sales the collateral manager or
be delayed by an increase in loan amend-and-extend
restructurings. Fast amortization would usually benefit the
ratings of the notes beginning with the notes having the highest
prepayment priority.

2) Around 16.12% of the collateral pool consists of debt
obligations whose credit quality Moody's has assessed by using
credit estimates.

3) Recoveries on defaulted assets: Market value fluctuations in
trustee-reported defaulted assets and those Moody's assumes have
defaulted can result in volatility in the deal's over-
collateralization levels. Further, the timing of recoveries and
the manager's decision whether to work out or sell defaulted
assets can also result in additional uncertainty. Moody's
analyzed defaulted recoveries assuming the lower of the market
price or the recovery rate to account for potential volatility in
market prices. Recoveries higher than Moody's expectations would
have a positive impact on the notes' ratings.

In addition to the quantitative factors that Moody's explicitly
modelled, qualitative factors are part of the rating committee's
considerations. These qualitative factors include the structural
protections in the transaction, its recent performance given the
market environment, the legal environment, specific documentation
features, the collateral manager's track record and the potential
for selection bias in the portfolio. All information available to
rating committees, including macroeconomic forecasts, input from
other Moody's analytical groups, market factors, and judgments
regarding the nature and severity of credit stress on the
transactions, can influence the final rating decision.


JUBILEE CLO 2014-XIV: Moody's Assigns (P)B2 Rating to Cl. F Notes
-----------------------------------------------------------------
Moody's Investors Service announced that it has assigned the
following provisional ratings to notes to be issued by
Jubilee CLO 2014-XIV B.V.:

EUR319,500,000 Class A-1 Senior Secured Floating Rate Notes due
2028, Assigned (P)Aaa (sf)

EUR5,000,000 Class A-2 Senior Secured Fixed Rate Notes due 2028,
Assigned (P)Aaa (sf)

EUR51,200,000 Class B-1 Senior Secured Floating Rate Notes due
2028, Assigned (P)Aa2 (sf)

EUR12,800,000 Class B-2 Senior Secured Fixed Rate Notes due
2028, Assigned (P)Aa2 (sf)

EUR34,400,000 Class C Deferrable Mezzanine Floating Rate Notes
due 2028, Assigned (P)A2 (sf)

EUR28,400,000 Class D Deferrable Mezzanine Floating Rate Notes
due 2028, Assigned (P)Baa2 (sf)

EUR38,500,000 Class E Deferrable Junior Floating Rate Notes due
2028, Assigned (P)Ba2 (sf)

EUR18,900,000 Class F Deferrable Junior Floating Rate Notes due
2028, Assigned (P)B2 (sf)

Moody's issues provisional ratings in advance of the final sale
of financial instruments, but these ratings only represent
Moody's preliminary credit opinions. Upon a conclusive review of
a transaction and associated documentation, Moody's will endeavor
to assign definitive ratings. A definitive rating (if any) may
differ from a provisional rating.

Ratings Rationale

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

Jubilee CLO is a managed cash flow CLO. At least 90% of the
portfolio must consist of senior secured loans and senior secured
floating rate notes and up to 10% of the portfolio may consist of
unsecured loans, second-lien loans, mezzanine obligations and
high yield bonds. The bond bucket gives the flexibility to
Jubilee CLO to hold bonds if Volcker Rule is changed. The
portfolio is expected to be approximately 70% ramped up as of the
closing date and to be comprised predominantly of corporate loans
to obligors domiciled in Western Europe.

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

In addition to the eight classes of notes rated by Moody's, the
Issuer will issue EUR58.0 million of subordinated notes, which
will not be rated.

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

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

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

Loss and Cash Flow Analysis:

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

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

Par amount: EUR550,000,000

Diversity Score: 39

Weighted Average Rating Factor (WARF): 2720

Weighted Average Spread (WAS): 3.80%

Weighted Average Recovery Rate (WARR): 44%

Weighted Average Life (WAL): 8 years.

Moody's has analyzed the potential impact associated with
sovereign related risk of peripheral European countries. As part
of the base case, Moody's has addressed the potential exposure to
obligors domiciled in countries with local currency country risk
ceiling of A1 or below. Following the effective date, and given
the portfolio constraints and the current sovereign ratings in
Europe, such exposure may not exceed 10% of the total portfolio.
As a result and in conjunction with the current foreign
government bond ratings of the eligible countries, as a worst
case scenario, a maximum 5% of the pool would be domiciled in
countries with A3 and Baa3 local currency country ceiling each.
The remainder of the pool will be domiciled in countries which
currently have a local currency country ceiling of Aaa. Given
this portfolio composition, the model was run with different
target par amounts depending on the target rating of each class
as further described in the methodology. The portfolio haircuts
are a function of the exposure size to peripheral countries and
the target ratings of the rated notes and amount to 0.75% for the
Class A notes, 0.50% for the Class B notes, 0.38% for the Class C
notes and 0% for Classes D, E and F.

Stress Scenarios:

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

Percentage Change in WARF: WARF + 15% (to 3128 from 2720)

Ratings Impact in Rating Notches:

Class A-1 Senior Secured Floating Rate Notes: 0

Class A-2 Senior Secured Fixed Rate Notes: 0

Class B-1 Senior Secured Floating Rate Notes: -1

Class B-2 Senior Secured Fixed Rate Notes: -1

Class C Deferrable Mezzanine Floating Rate Notes: -1

Class D Deferrable Mezzanine Floating Rate Notes: -1

Class E Deferrable Junior Floating Rate Notes: 0

Class F Deferrable Junior Floating Rate Notes: 0

Percentage Change in WARF: WARF +30% (to 3536 from 2720)

Class A-1 Senior Secured Floating Rate Notes: 0

Class A-2 Senior Secured Fixed Rate Notes: 0

Class B-1 Senior Secured Floating Rate Notes: -2

Class B-2 Senior Secured Fixed Rate Notes: -2

Class C Deferrable Mezzanine Floating Rate Notes: -2

Class D Deferrable Mezzanine Floating Rate Notes: -2

Class E Deferrable Junior Floating Rate Notes: -1

Class F Deferrable Junior Floating Rate Notes: -1


EUR7.2M Class IV Mezzanine Floating Rate Notes due 2020, Affirmed
B2 (sf); previously on Oct 24, 2011 Upgraded to B2 (sf)


LEVERAGED FINANCE: Moody's Lifts Rating on Class III Notes to Ba1
-----------------------------------------------------------------
Moody's Investors Service has upgraded the ratings on the
following notes issued by Leveraged Finance Europe Capital II
B.V.:

EUR38.5M Class II Senior Floating Rate Notes due 2020, Upgraded
to Aa3 (sf); previously on Oct 24, 2011 Upgraded to A3 (sf)

EUR10.7M Class III Mezzanine Floating Rate Notes due 2020,
Upgraded to Ba1 (sf); previously on Oct 24, 2011 Upgraded to Ba2
(sf)

Moody's has affirmed the ratings on the following notes:

EUR7.1M Class I-A Senior Floating Rate Notes due 2020, Affirmed
Aaa (sf); previously on Oct 24, 2011 Upgraded to Aaa (sf)

EUR101.8M Class I-B Senior Floating Rate Notes due 2020,
Affirmed Aaa (sf); previously on Oct 24, 2011 Upgraded to Aaa
(sf)

EUR7.2M Class IV Mezzanine Floating Rate Notes due 2020,
Affirmed B2 (sf); previously on Oct 24, 2011 Upgraded to B2 (sf)

EUR2.3M Class R Combination Notes due 2020, Affirmed Ba1 (sf);
previously on Oct 24, 2011 Upgraded to Ba1 (sf)

Leveraged Finance Europe Capital II B.V., issued in September
2003, is a collateralized loan obligation (CLO) backed by a
portfolio of mostly high-yield senior secured European loans. The
portfolio is managed by BNP Paribas Asset Management. The
transaction's reinvestment period ended in March 2012.

Ratings Rationale

The rating actions on the notes are primarily a result of
deleveraging. The Class I notes have paid down by approximately
EUR82.8 million (76.0% of closing balance) in the last 3 payment
dates over the past 12 months and EUR103.2 million (95.0%) since
closing. As a result of the deleveraging, over-collateralization
(OC) has increased. As of the trustee's August 2014 report, the
Class I/II had an over-collateralization ratio of 122.1%,
compared with 112.3% 12 months ago, and the Class III an over-
collateralization ratio of 111.1%, compared with 104.2%. The
latest OC ratios are based on the July 2014 report and do not
reflect the latest payment date on the 02 September 2014.

The ratings on the combination notes address the repayment of the
rated balance on or before the legal final maturity. For the
Class R, the rated balance at any time is equal to the principal
amount of the combination note on the issue date minus the sum of
all payments made from the issue date to such date, of either
interest or principal. The rated balance will not necessarily
correspond to the outstanding notional amount reported by the
trustee.

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 EUR65,1 million,
defaulted par of EUR10.7 million, a weighted average default
probability of 24.2% over 3.5 years (consistent with a 10 year
WARF of 3768), a weighted average recovery rate upon default of
49.2% for a Aaa liability target rating, a diversity score of 19
and a weighted average spread of 3.77%.

In its base case, Moody's addresses the exposure to obligors
domiciled in countries with local currency country risk bond
ceilings (LCCs) of A1 or lower. Given that the portfolio has
exposures to 14.5% of obligors in Spain, whose LCC is A1, Moody's
ran the model with different par amounts depending on the target
rating of each class of notes, in accordance with Section 4.2.11
and Appendix 14 of the methodology. The portfolio haircuts are a
function of the exposure to peripheral countries and the target
ratings of the rated notes, and amount to 1.8% for the Class I-A
and Class I notes, and 1.1% for the Class II notes.

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 a recovery of 50% of the 97.7% of the portfolio
exposed to first-lien senior secured corporate assets upon
default and of 15% of the remaining non-first-lien loan corporate
assets 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 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
6.8% of the portfolio, which could make refinancing difficult.
Moody's ran a model in which it raised the base case WARF to
3,927 by forcing ratings on 25% 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 especially as 14.5% of the portfolio is exposed
to obligors located in Spain and 2) the exposure to 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 because of embedded ambiguities.

Additional uncertainty about performance is due to the following:

   * 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.

   * Around 57% of the collateral pool consists of debt
obligations whose credit quality Moody's has assessed by using
credit estimates.

   * 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.

   * Long-dated assets: The presence of assets that mature beyond
the CLO's legal maturity date exposes the deal to liquidation
risk on those assets. Moody's assumes that, at transaction
maturity, the liquidation value of such an asset will depend on
the nature of the asset as well as the extent to which the
asset's maturity lags that of the liabilities. Liquidation values
higher than Moody's expectations would have a positive impact on
the notes' ratings.

In addition to the quantitative factors that Moody's explicitly
modelled, qualitative factors are part of the rating committee's
considerations. These qualitative factors include the structural
protections in the transaction, its recent performance given the
market environment, the legal environment, specific documentation
features, the collateral manager's track record and the potential
for selection bias in the portfolio. All information available to
rating committees, including macroeconomic forecasts, input from
other Moody's analytical groups, market factors, and judgments
regarding the nature and severity of credit stress on the
transactions, can influence the final rating decision.



=============
R O M A N I A
=============


ROMANIA: 10 Biggest Firms Entering Insolvency Turnover EUR660MM
---------------------------------------------------------------
ACTMedia News Agency reports that the biggest 10 companies which
entered insolvency in the first six months of 2014 in Romania
have had a cumulated EUR660 million in turnover and 16-year
average activity span, according to a research by the risk
assessment company Coface Romania.

The news agency relates that the biggest company which became
insolvent in the first half-year is Planoil, which dealt with the
fuels' distribution, with EUR138 million in turnover and 13 years
of activity, followed by two large companies belonging to the
same group, of Braila, in the meat industry sector -- Vegetal and
Marex, with cumulated businesses of over EUR230 million.

According to the news agency, the next places by the turnover are
occupied by Pro Meat Fresh (Afumati, Ilfov County), EUR56 million
in turnover, 14 years of activity; Avicola Crevedia, EUR53
million in turnover and 23 years of activity; Synergy Invest,
EUR45 million and 6 years of activity; Electrocentrale Galati,
EUR42 million and 10 years of activity; Carpat Air, EUR33 million
and 21 years of activity; Selina Bihor, EUR32 million in turnover
and 20 years of activity; and Agroli Group, EUR30 million in
turnover and 9 years of activity.

The news agency relates that Iancu Guda, manager with Coface
Romania, said in the first half-year of 2014, Bucharest and the
West Region were the only regions with increases of insolvencies'
number.



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


HOME CREDIT: Moody's Cuts LT Deposit Rating to 'B1'; Outlook Neg.
-----------------------------------------------------------------
Moody's Investors Service has downgraded to B1 from Ba3 the long-
term foreign and local-currency deposit ratings, and local-
currency senior debt ratings of Home Credit and Finance Bank,
driven by (1) its rapidly deteriorating asset quality against the
background of weak performance in Russia's (Baa1 negative)
consumer lending market; and (2) net losses posted in H1 2014
that stemmed from recently high provisioning charges against
problem loans.

Concurrently, Moody's downgraded the bank's standalone bank
financial strength rating (BFSR) to E+ from D-, which now
corresponds to a baseline credit assessment (BCA) of b1. The
bank's foreign-currency subordinated debt rating was downgraded
to B2 from B1. The bank's Not Prime short-term foreign and local-
currency ratings were affirmed. The outlook on all the bank's
long-term debt and deposit ratings is negative and the BFSR has a
stable outlook.

Moody's assessment of Home Credit and Finance Bank's ratings is
largely based on the issuer's audited financial statements for
2013, its unaudited financial statements for H1 2014, prepared
under IFRS as well as information received from the bank.

Ratings Rationale

The rating action reflects Moody's expectation that (1) the
bank's asset quality might deteriorate further over next 12-18
months, putting pressure on the bank's profitability; and (2)
pressure on the bank's capitalization will develop because
additional provisioning charges will persist.

Home Credit and Finance Bank's asset quality has been materially
deteriorating against the background of general weakening in the
quality of retail portfolios of Russian banks in H1 2014. This
deterioration is driven by (1) the rapid growth of household
indebtedness in recent years; and (2) the country's currently
weak macroeconomic outlook, which suppresses the population's net
income and hence debt-servicing capacity. The bank's problem
loans that are overdue by more than 90 days increased to 16.1% of
its total loan portfolio in H1 from 11.7% reported at year-end
2013 and 6.5% posted at year-end 2012.

As a result of the aforementioned pressures, Home Credit and
Finance Bank's cost of risk increased to 17.3% in H1 2014 (year-
end 2013: 16.2% and year-end 2012: 9.4%). Given the increase in
the cost of risk, the bank reported a substantial decline in its
profitability metrics, with return on average assets of -2.3% in
H1 2014 (year-end 2013: 3.2%). As the consumer market and
household incomes remain subdued, Moody's expects a further
increase in full-year 2014 cost of risk, leading to additional
loan loss provisions. Although the bank's capital levels are
still adequate given its risk profile as a consumer lender (its
capital adequacy ratio was 23.7% in H1 2014, which was in line
with 2013 levels), Moody's expects the provisioning charges to
pressurize the bank's capital over next 6-to-12 months.

Moody's does not expect Home Credit and Finance Bank's losses to
be remediated in 2014, because any major reduction in credit
costs is unlikely to materialize in the short-to-medium term,
despite the bank's efforts to tighten its underwriting standards
and cut costs. The rating agency notes that pressure will be
exerted on Home Credit and Finance Bank's revenue generation
capacity as a result of the contraction of the loan portfolio
together with the diminishing proportion of performing loans and
increasing funding costs.

What Could Move the Ratings Up/Down

The downgrade of Home Credit and Finance Bank's long-term ratings
implies that upward rating pressure is limited. The outlook on
the long-term ratings could be changed to stable if the bank
improves its profitability and asset quality metrics, while
maintaining adequate capital levels.

Downward pressure could be exerted on Home Credit and Finance
Bank's ratings as a result of any of the following: (1) increased
pressure on its profitability caused, in turn, by further asset
quality erosion; and (2) a further deterioration in the bank's
capitalization.

Principal Methodology

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

Headquartered in Moscow, Russia, Home Credit and Finance Bank
reported total assets of RUB333 billion ($9.9 billion) and net
loss of RUB4.0 billion ($119 million), according to unaudited
IFRS at end-H1 2014. Retail loans comprise the bulk of Home
Credit and Finance Bank's total loans, with unsecured consumer
loans (cash and point-of-sale loans) and credit card loans
dominating the loan book (83% and 16% of the total, respectively,
according to IFRS as of June 30, 2014).


VOSTOCHNY EXPRESS: Moody's Lowers Deposit & Debt Rating to 'B2'
---------------------------------------------------------------
Moody's Investors Service has downgraded the long-term local- and
foreign-currency deposit ratings of Vostochny Express Bank to B2
from B1; the bank's local-currency senior unsecured debt rating
was also downgraded to B2 from B1. The outlook on the bank's
long-term debt and deposit ratings is negative. Concurrently,
Moody's affirmed Vostochny Express Bank's E+ standalone bank
financial strength rating (BFSR) with stable outlook, but the
BFSR is now equivalent to a baseline credit assessment (BCA) of
b2, as opposed to b1 BCA previously. The bank's Not Prime short-
term local-currency and foreign-currency deposit ratings were
also affirmed.

Moody's assessment of Vostochny Express Bank's ratings is largely
based on its unaudited financial statements for the first six
months of 2014 prepared under IFRS and reviewed by the auditors,
as well as information received from the bank.

Ratings Rationale

The downgrade of Vostochny Express Bank's ratings reflects (1) a
substantial deterioration of the bank's asset quality and
profitability because of the heightened risks in the bank's loan
portfolio; and (2) the bank's relatively low reserve coverage of
non-performing loans (NPLs) which, coupled with pressure on
capital exerted by the net loss posted in the first six months of
2014, weaken the bank's loss-absorption capacity.

Retail loans comprise the bulk of Vostochny Express Bank's total
loans, with unsecured consumer loans and credit card loans
dominating the loan book (68% and 18% of the total, respectively,
according to IFRS as of 30 June 2014). Similar to other
specialist consumer lenders in Russia, the bank displays asset-
quality erosion against the background of general deterioration
in the quality of unsecured retail loans in the local market.
This deterioration is driven by (1) the rapid growth of household
indebtedness in recent years; and (2) the country's currently
weak macroeconomic outlook which suppresses the population's net
income and hence debt-servicing capacity. As of 30 June 2014, the
share of Vostochny Express Bank's retail loans overdue by more
than 90 days soared to 22.25% of the bank's total retail loans
from 13.95% reported at year-end 2013, and the bank's credit
costs (expressed as provisioning charges as a percentage of
average gross loans) increased to 19.0% (annualized) in the first
six months of 2014 from 13.5% reported at year-end 2013.

The high credit charges faced by Vostochny Express Bank led to a
substantial net IFRS loss of RUB3.4 billion ($102 million) in the
first half of 2014, which translated into negative annualized
return on average equity (ROAE) of 26% (in 2013, the ROAE was
marginally positive at 2.95%). Moody's does not expect the losses
incurred year-to-date to be recovered in the second half of 2014,
because any major reduction in credit costs is unlikely to
materialize in the short-to-medium term. Furthermore, the bank's
revenue generation will be suppressed by the decreased proportion
of performing loans and an increase in funding costs.

Vostochny Express Bank's loss-absorption capacity is weighed down
by insufficient loan loss reserves, which -- at June 30, 2014 --
covered only 92% of loans overdue by more than 90 days (whereas
for the majority of Russian peers this coverage ratio exceeds
100%). Moody's expect that -- absent new capital injections --
the bank's Basel I Tier 1 and total capital adequacy ratios of
12.8% and 17.4%, respectively, as reported at 30 June 2014, will
decline as a result of the need for further sizeable provisioning
charges. Vostochny Express Bank has initiated a placement of both
Tier 1 and Tier 2 capital instruments. However, Moody's notes the
challenges faced by banks to attract new capital in the currently
unfavorable economic environment in Russia. Furthermore, a
placement of Tier 2 capital instruments may prove expensive, thus
further inflating the bank's funding costs.

What Could Move the Ratings Down / Up

Further downward pressure might develop on Vostochny Express
Bank's ratings as a result of (1) failure to recover and sustain
profitability; and/or (2) failure to match any further asset
quality erosion with an adequate increase in capitalization
and/or loan loss reserves.

Vostochny Express Bank's B2 deposit and debt ratings are unlikely
to be upgraded in the next 12 to 18 months given the sustained
deterioration of the bank's major financial metrics. The rating
agency might revise the outlook on the bank's deposit and debt
ratings to stable from negative if it observes a sustainable
stabilization of the bank's asset quality, profitability and
capital adequacy parameters.

Principal Methodology

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

Headquartered in the City of Khabarovsk in Russia's Far East
region, Vostochny Express Bank reported total assets of RUB217
billion (US$6.4 billion) and total equity of RUB24.8 billion
(US$733 million) under its unaudited IFRS as at June 30, 2014.



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


CODERE SA: Enters Into Debt Restructuring Deal with Creditors
-------------------------------------------------------------
Katie Linsell and Julie Miecamp at Bloomberg News report that
after more than a year of negotiations, Codere SA has reached an
agreement with creditors to restructure EUR1.1 billion
(US$1.4 billion) of debt and avoid insolvency.

According to Bloomberg, the company will use the U.K. courts and
seek a scheme-of-arrangement to implement the deal, which gives
bondholders control of the company in exchange for debt.  Codere
said in a statement that the deal also includes issuing EUR675
million of new notes and EUR253 million of new loans, Bloomberg
relates.

The statement said that Codere, which debuted on the Madrid
stockmarket in 2007, will be delisted as part of the agreement,
Bloomberg relays.

The company had until Sept. 24 to reach an accord or start
insolvency proceedings, Bloomberg states.

The agreement allows Codere to avoid creditor protection,
Bloomberg notes.

                         About Codere S.A.

Codere SA is a Madrid-based gaming company.  It operates betting
shops and race tracks from Italy to Argentina.  The firm sought
preliminary creditor protection on Jan. 2 after reporting seven
consecutive quarters of losses



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


CENTROSOLAR GROUP: Creditors, Mgt Board Withdraws Insolvency Plan
-----------------------------------------------------------------
After extensive discussions, the Creditors' Committee and
Management Board of Centrosolar Group AG on Sept. 12, 2014
decided to withdraw the proposed insolvency plan, the company
reports in an ad hoc-announcement.

The decision was taken because following the creditors' meeting
on Sept. 9, 2014, at which the vote on the insolvency plan was
postponed, it emerged that it has become unlikely the insolvency
plan can be implemented in the short term due to conflicts of
interest among the creditors.

Hence, the management of Centrosolar Group AG and its main
participation Centrosolar America, Inc. (not in administration)
have declared their opposition to pursuing the plan any further.

It is anticipated that the non-subordinated creditors will
receive a cash payment from the liquidation of all assets, and no
shares.  The shares of Centrosolar Group AG will be withdrawn
from the market as soon as possible, reads the ad hoc-
announcement.


CP MORGAN: Owners Face Disqualification Following Liquidation
-------------------------------------------------------------
Clare Weir at Belfast Telegraph reports that Ciaran Peter Morgan
and his father Peter Francis Morgan have been disqualified as
directors after CP Morgan Contracts Ltd., the firm that they ran,
went into liquidation.

Ciaran Peter has been disqualified for four years and Peter
Francis accepted a three-year disqualification in respect of
their conduct as directors of CP Morgan Contracts, Belfast
Telegraph relates.

The company carried on business as a ground works company
readying sites for building work from Aughnagon Road, Newry, and
went into liquidation in March 2011 with debts of around
GBP230,712, Belfast Telegraph relays.

The pair were said to have allowed the company to fail to repay
GBP14,057 in taxes for the year 2010/11 and GBP55,152 in
corporation tax, Belfast Telegraph discloses.

According to Belfast Telegraph, they failed to file accounts for
the years ended June 30, 2007, and June 30, 2009, and failed to
file annual returns for the years ended June 14, 2009, and
June 14, 2010 in time.

CP Morgan Contracts Ltd. was a construction company.


DIXONS RETAIL: Moody's Withdraws B1 Corporate Family Rating
-----------------------------------------------------------
Moody's Investors Service has withdrawn the B1 corporate family
rating and B1-PD probability of default rating of Dixons Retail
plc.

Ratings Rationale

Moody's has withdrawn the ratings following the completion of the
all-share merger with Carphone Warehouse Group Plc. and
subsequent redemption of the company's outstanding guaranteed
notes.

Headquartered in Hemel Hempstead, England, Dixons Retail plc is
one of Europe's leading specialist consumer electrical retailers
with a store portfolio of 944 stores and total revenues of
GBP7.2 billion as of the financial year ending April 30, 2014.


GALTRES FESTIVAL: Police Probe Amid Administration
--------------------------------------------------
Yorkshire Post reports that police have confirmed they are
considering whether any crime has been committed following
concerns thousands of pounds are owed to traders after this
year's Galtres Festival.

In a statement on its website, Galtres Festival Trading Ltd
confirmed it has now been placed in administration and a meeting
of creditors is being organized to formalize voluntary
liquidation, according to Yorkshire Post.

The report notes that concerns have been made by stallholders and
traders that following last month's Galtres Festival at Duncombe
Park, Helsmley, they have been left thousands of pounds out of
pocket after not being paid.

The report notes that North Yorkshire Police said: "We can
confirm that a complaint has been made and officers are working
to establish whether any criminal offences have been committed."

The report relates that an unnamed spokesperson for Galtres
Festival Trading Ltd said, "The festival has not succeeded in
attracting sufficient numbers of attendees to meet its costs."

The statement added: "We are deeply sorry to those individuals
and businesses affected by this situation. We know hardship is
being experienced as a result by several traders, staff,
suppliers, contractors and others.

"We welcome the investigations into the festival business, which
we are confident will exonerate us and allow us to move on," the
statement said, the report relates.

However, it said a decision had been taken to currently "press
ahead with plans" for next year, the report adds.


JAGUAR LAND: Moody's Affirms 'Ba2' Corporate Family Rating
----------------------------------------------------------
Moody's Investors Service has affirmed the Ba2 corporate family
rating (CFR), Ba2-PD probability of default rating and Ba2 senior
unsecured rating of Jaguar Land Rover Automotive Plc (JLR) and
changed the outlook to positive from stable.

"The outlook change to positive reflects JLR's continued solid
operational performance in its key markets, and Moody's
expectations that upcoming model launches together with the
company's expansion plans in China have the potential to support
future growth of both the Land Rover and Jaguar brands," says
Yasmina Serghini-Douvin, Moody's lead analyst for Jaguar Land
Rover. "The rating action also recognizes a degree of support
from the Tata Group," Mrs Serghini-Douvin added.

"If JLR is able to demonstrate its ability to sustain a robust
sales growth over time and has the capacity to fund a large part
of its upcoming large capital spending needs with internally
generated cash flows whilst keeping its financial policy broadly
unchanged then Moody's could upgrade the ratings within 12 to 18
months," Mrs. Serghini-Douvin added.

Ratings Rationale

Rationale for the Change in Outlook to Positive

The positive outlook reflects our view that JLR has delivered a
robust operational performance in the first eight months of the
calendar year 2014 as evidenced by sales up 13% with a
particularly solid performance of Land Rover at +13% followed by
Jaguar at +11%. The company has also recently presented two new
models, the Discovery Sport and Jaguar XE, which we believe have
the potential to support sales growth going forward.

JLR's rating position is further supported by presently solid
financial ratios: on a Moody's-adjusted basis, the company's
debt/EBITDA ratio was 0.95x, its EBITA/Interest Expense was 9.0x
and its retained cash flow (RCF)/debt was 86.0% in the 12 months
to 30 June 2014.

However Moody's cautions that, whilst the company's credit
metrics currently meet our guidelines for a rating upgrade, they
are likely to deteriorate from their current levels in the next
12 to 18 months, because of the expected rise in capital spending
which JLR will spend to fund future product launches, investments
in research and development and capacity expansion projects in
emerging markets for example, notably its joint venture in China.
Moody's nevertheless believes that, should JLR be able to fund a
substantial part of its upcoming large capital spending with its
internally generated cash flows whilst maintaining its financial
policy broadly unchanged, including modest dividends paid to its
ultimate parent Tata Motors Limited (TML), then that would
strengthen the company's position in its rating category. In this
regard, in the first quarter of the current financial year ending
31 March 2015, JLR covered its higher capital spending with its
cash flow from operations.

Moreover, Moody's notes that the rating of JLR's ultimate parent
TML was recently upgraded to Ba2 stable from Ba3 stable. TML's
upgrade was one of several rating actions taken by Moody's on
Tata Group companies. The decision to upgrade multiple ratings of
Tata Group companies reflects Moody's expectation of Tata Group
parental and systemic support in the case of need, which has been
exhibited both in the form of extraordinary financial support
from Tata Sons (unrated), the ultimate parent, and ongoing
support through their close association with the Tata brand.

In this context, Moody's understand that JLR has also benefited
in the past from a direct support from the broader Tata Group,
even though the rating agency notes that the support materialized
at a time when JLR was in a substantially weaker financial
situation than it is.

Furthermore, Moody's will continue to factor in its rating of JLR
the company's critical importance to TML which the rating agency
views as having a weaker credit quality than JLR because of its
weaker business in India. In 2013/14, JLR generated more than 80%
of TML's consolidated revenue and about 95% of its reported
EBITDA. On this basis, Moody's believes that JLR's ratings are
capped at a maximum of one notch above the CFR assigned to TML.

What Could Change the Rating - Up

Moody's could consider upgrading JLR's ratings over time should
the company deliver a robust operational performance on a
sustainable basis such that it appears on track to achieve (1) an
adjusted EBITA margin above 7.5%; (2) a Moody's-adjusted leverage
ratio of 1.5x or lower; (3) a free cash flow around break-even
and (4) it maintains a solid liquidity profile. Although Moody's
believes that JLR could deviate from these guidelines in the
financial year ending 31 March 2016 as a result of its expected
high capital spending, Moody's would expect that to be temporary.

What Could Change the Rating - Down

Conversely, JLR's ratings could come under pressure in the event
of a sustained deterioration in its key credit metrics, as
adjusted by Moody's, reflected by (1) debt/EBITDA rising well
above 2.0x; (2) EBITA margins falling below 6%; and (3) a
deterioration of JLR's negative free cash flow below negative
GBP600 million p.a. However, Moody's would tolerate a temporary
deviation (i.e. not exceeding 24 months) from these metrics
provided that the company continues its current financial policy
with no substantial increase in dividend payments to its
shareholder TML.

Moody's cautions that a potential downgrade of TML's CFR could
weigh on JLR's ratings or outlook especially if there is evidence
that TML's weaker credit quality could result in a higher
financial pressure on JLR.

Principal Methodology

The principal methodology used in this rating was Global
Automobile Manufacturer Industry published in June 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.

Headquartered in Gaydon, UK, Jaguar Land Rover Automotive Plc
manufactures and sells passenger vehicles under the Jaguar and
Land Rover brands. In the financial year ended March 31, 2014,
JLR sold 434,311 units and generated revenues of GBP19.4 billion.
JLR is ultimately/indirectly 100% owned by Tata Motors Limited,
which is India's largest automobile company, with a sales volume
of 1,009,776 units and revenues of around $38.9 billion in
2013/14.


LAKESIDE 1: S&P Assigns Preliminary 'B-' CCR; Outlook Stable
------------------------------------------------------------
Standard & Poor's Ratings Services said that it assigned its
preliminary 'B-' long-term corporate credit rating to Lakeside 1
Ltd., the holding company of U.K.-based regeneration services
provider and housing developer Keepmoat Ltd.  The outlook is
stable.

At the same time, S&P assigned its preliminary 'B+' issue rating
to the proposed GBP75 million super senior revolving credit
facility (RCF).  The preliminary recovery rating on the RCF is
'1', indicating S&P's expectation of very high (90%-100%)
recovery in the event of a payment default.

In addition, S&P assigned its preliminary 'B-' issue rating to
the group's proposed GBP260 million senior secured notes to be
issued by Keystone Financing PLC.  The preliminary recovery
rating on these notes is '4', indicating S&P's expectation of
average (30%-50%) recovery in the event of a payment default.

The final ratings will depend on S&P's receipt and satisfactory
review of all final transaction documentation.  The preliminary
ratings assume that the acquisition of Lakeside 1 Ltd. by TDR
Capital and Sun Capital Partners goes ahead as planned.
Accordingly, the preliminary ratings should not be construed as
evidence of final ratings.  If Standard & Poor's does not receive
final documentation within a reasonable time frame, or if final
documentation departs from materials reviewed, S&P reserves the
right to withdraw or revise its ratings.  Potential changes
include, but are not limited to, utilization of bond proceeds,
maturity, size and conditions of the bonds, financial and other
covenants, and security and ranking of the bonds.

The ratings on Lakeside 1 reflect S&P's assessment of the
operating company Keepmoat's business risk profile as "weak" and
its financial risk profile as "highly leveraged."

Keepmoat is one of the main providers of affordable housing
development and community regeneration services in the U.K.  It
operates via two segments: Regeneration, including refurbishment,
maintenance and related services for affordable and social
housing; and Homes (homebuilding), focusing on properties priced
in the lower quartile of the market and targeted at first-time
buyers.  On Sept. 9, Keepmoat announced its acquisition by
private equity funds TDR Capital and Sun Capital Partners.  The
acquisition is expected to complete by the end of Nov.

S&P's business risk assessment of "weak" reflects the company's
operations in cyclical and very fragmented markets, characterized
by low margins and low barriers to entry.  S&P also notes
Keepmoat's reliance on government spending and initiatives; the
majority of its customers are either public or non-profit
entities.  In addition, Keepmoat has some exposure to building
materials and other associated cost increases because its
contracts are mostly fixed-price.  That said, S&P understands
that these risks are partly mitigated by back-to-back contracts
with suppliers and subcontractors.

On the other hand, S&P notes Keepmoat's good position in the
housing regeneration market.  This is supported by its national
scale in the U.K. and its longstanding customer relationships
with local authorities and housing associations.  In S&P's view,
Keepmoat's integrated service offering also provides a key
competitive advantage over smaller players.  S&P understands that
multiyear contracts provide a certain degree of visibility over
revenues in the Regeneration segment, while S&P believes that
Keepmoat is more reliant on market price evolution in the Homes
segment.

"We anticipate that Lakeside 1's pro forma debt capital structure
after the acquisition will include a GBP260 million senior
secured bond, a GBP75 million RCF, and about GBP117 million of
preference shares that we will treat as debt in accordance with
our criteria. On this basis, we expect Lakeside 1's Standard &
Poor's-adjusted pro forma ratio of gross debt to EBITDA to be
about 6.3x, including some modest adjustments for operating
leases and assuming about GBP20 million drawn under the RCF for
letters of credit.  We do not include performance bonds issued by
insurance companies to Keepmoat's clients in our debt
calculation," S&P said.

S&P's base case scenario assumes:

   -- Overall mid-to-high-single-digit revenue growth in the next
      two years, supported by the improved economic outlook in
      the U.K.

   -- Strong market dynamics in the U.K. housing market,
      including still-insufficient housing supply and improved
      mortgage availability, to support volumes over the
      short-to-medium term in the Homes segment.

   -- In the Regeneration segment, growth to be driven by a
      moderate market share increase and stable demand from local
      authorities and housing associations.

   -- Gross profit to grow along with turnover, although S&P
      forecasts gross margins to slightly decrease, reflecting a
      changing turnover mix in the Regeneration segment and a
      less favorable geographic mix in the Homes segment.

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

   -- Overall stable EBITDA margins at about 6.5% including
      Standard & Poor's adjustments.  Overall, S&P views Lakeside
      1's margins as fairly low compared with its rated peers in
      both business services and homebuilding sectors.

   -- This mostly relates to Keepmoat's positioning in the
      affordable segment, with a notably low average selling
      price in the Homes segment.

   -- Funds from operations (FFO) cash interest coverage of about
      3.0x.

   -- Standard & Poor's-adjusted debt to EBITDA of about 6.3x
      over the next two years.

Lakeside 1's anchor -- the starting point in assigning an issuer
credit rating -- is 'b', reflecting the above factors, in
addition to the company's good FFO cash interest coverage
compared with similarly rated peers.  The preliminary rating
incorporates a one-notch downward adjustment for S&P's comparable
rating analysis -- this reflects some volatility in the cash-flow
base, linked to often unpredictable quarter-on-quarter
fluctuations in demand in Keepmoat's main markets.  S&P also
views the company's absolute cash-flow base as small, with free
operating cash flow (FOCF) of about GBP25 million per year in
S&P's forecasts.  In S&P's view, this provides only a limited
cushion to absorb the impact of any unexpected events, such as a
temporary spike in working capital. The negative comparable
rating analysis also reflects the limited track record in
operating performance and financial policy since the
restructuring in 2012.

S&P's assessment of the group's financial policy as "financial
sponsor-6" encapsulates the private equity ownership of TDR
Capital and Sun Capital and the overall high leverage in the
proposed capital structure.

The stable outlook on Keepmoat reflects S&P's expectation of a
progressive increase in revenue with broadly stable adjusted
EBITDA margins.  While S&P anticipates that the markets in which
Keepmoat operates will remain fragmented and competitive, S&P
considers that Keepmoat's broad service offering should be
supportive of its market position in the U.K. Regeneration and
Homes segments.  The outlook further assumes that Keepmoat's
liquidity will remain "adequate," as per S&P's criteria.  Over
the next 12 months, S&P anticipates that Keepmoat's FFO cash
interest coverage will remain above 2.0x.

In S&P's opinion, the most likely trigger for an upgrade would be
an improvement in the stability and size of FOCF.  In S&P's view,
this would most likely occur if Keepmoat sees its EBITDA base
materially increase, while being able to control working capital
expansions.

S&P could lower the ratings if Keepmoat's FOCF became
significantly negative, which, absent any external source of
funding, would weaken the company's liquidity position.  The most
likely trigger for this would be a substantial decrease in EBITDA
compared with S&P's current base case.  However, S&P do not
consider this scenario to be likely, given its base-case
assumptions.


PCI PHARMA: S&P Retains 'B' CCR Following US$21-Mil. Loan Add-On
----------------------------------------------------------------
Standard & Poor's Ratings Services said its 'B' corporate credit
rating on Philadelphia-based PCI Pharma Midco UK Ltd. is
unchanged following the proposed US$21 million add-on to its
first-lien term loan.

The 'B' issue-level rating on the first-lien facility is also
unchanged.  The recovery rating remains '3', reflecting S&P's
expectation for meaningful (50%-70%) recovery in the event of a
default.

The company will use proceeds of the add-on, cash on-hand, and
additional equity to acquire a U.K.-based clinical trial services
company, Biotec Worldwide Supplies Group Ltd.

RATINGS LIST

PCI Pharma Midco UK Ltd.
Corporate Credit Rating      B/Stable/--
First-lien term loan         B
  Recovery rating             3


PHONES 4U: Six Stores in North Wales to Close
---------------------------------------------
Owen Hughes at Daily Post reports that six of the seven Phones 4U
stores in North Wales are to close after deals to save them
failed.

On Sept. 22, administrators for the beleaguered mobile phone
retailer Phones 4u announced it was to close 362 stores, with the
loss of nearly 1,700 jobs, Daily Post relates.

On Sept. 23, the administrators released a list of the doomed
stores, Daily Post relays.  According to Daily Post, it includes
the shops in Wrexham, Rhyl, Colwyn Bay, Llandudno (high street),
Bangor and Caernarfon, with around 60 jobs to be lost.

The store at Parc Prestatyn will be saved with Vodafone taking
over while staff at the outlet within PC World/Currys at Mostyn
Champneys, Llandudno, will be retained, Daily Post discloses.

The store in Aberystwyth in mid-Wales will also close, Daily Post
notes.

The store closures come after Phones 4u went into administration
last week following network operator EE Ltd's decision not to
renew its contract with Phone 4U, Daily Post recounts.

Phones 4u was a large independent mobile phone retailer in the
United Kingdom.


TURBO FINANCE: Moody's Assigns 'Ba1' Rating to Class C Notes
------------------------------------------------------------
Moody's Investors Service has assigned the following definitive
ratings to the Notes issued by Turbo Finance 5 plc:

GBP371.6M Class A Floating Rate Asset Backed Notes due 2021,
Assigned Aaa (sf)

GBP37.7M Class B Floating Rate Asset Backed Notes due 2021,
Assigned Aa3 (sf)

GBP10.69M Class C Fixed Rate Asset Backed Notes due 2021,
Assigned Ba1 (sf)

Moody's has not assigned ratings to the subordinated Class D
Notes. The proceeds of the Class D Notes are applied to fund the
reserve fund in the transaction.

Ratings Rationale

The transaction is a revolving cash securitization of hire
purchase agreements (auto leases) extended to obligors in the
United Kingdom by MotoNovo Finance Ltd, a division of FirstRand
Bank Limited ("FRB": Baa1/P-2/under review for downgrade) acting
through its London Branch ("FRB London"). This is the fifth
public securitization transaction in the United Kingdom sponsored
by FRB London. The originator will also act as the servicer of
the portfolio during the life of the transaction.

The portfolio of underlying assets consists of hire purchase
agreements granted to individuals and companies resident in the
United Kingdom collateralized by new and used vehicles. The
portfolio comprises receivables whereby the underlying obligor is
required to pay a monthly installment during the term of the
underlying contract. Certain hire purchase agreements in the
portfolio are also exposed to mandatory balloon payments,
although these make up a small portion of the portfolio and are
limited to a maximum 4% by the eligibility criteria. As of 30
June 2014, the portfolio consists of 61,548 hire purchase
contracts, with a weighted average seasoning of 8 months and a
weighted average remaining term of 45 months.

According to Moody's, the transaction benefits from credit
strengths such as a granular portfolio, relatively simple
waterfall and a 1.30% reserve fund which is fully funded at
closing and can amortize to a floor of 0.5% of the initial pool
balance. It is available to cover any liquidity shortfalls on
Classes A and B throughout the life of the transaction and can
serve as a credit enhancement following repayment of the Class A
and B Notes. In addition, the transaction benefits from an
initial weighted-average effective rate of approx. 14.8% (minimum
13% during the revolving period) on the assets and thus an
estimated approximate 10.5% of excess spread at closing.
Available excess spread can be trapped to cover defaults through
the waterfall mechanism present in the structure.

However, Moody's notes some credit weaknesses. As with all auto
hire purchase agreement transactions in the UK, the portfolio is
exposed to the risk of voluntary termination ("VT"). The obligor
has the option to return the vehicle to the originator if the
obligor has made payments equal to at least one half of the total
amount which would have been payable under the contract. Moody's
did not receive gross VT default data from the originator, but
only net VT default data (i.e. with recoveries included). In
addition, Moody's did not receive static recovery but only
dynamic recovery data for the entire portfolio. These aspects
were factored in Moody's overall analysis.

Furthermore, the Class C Notes do not benefit from the cash
reserve until Classes A and B are repaid, and are subordinated to
principal payments on Classes A and B as in the waterfall. Hence,
this increases the likelihood of interest deferral on the Class C
Notes. Moody's took this into account in its quantitative
analysis.

Moody's analysis focused, among other factors, on (i) an
evaluation of the underlying portfolio; (ii) historical
performance information; (iii) the credit enhancement provided by
subordination, by the excess spread and the reserve fund; (iv)
the liquidity support available in the transaction, by way of
principal to pay interest and the reserve fund; (v) the back-up
servicing arrangement of the transaction; (vi) the independent
cash manager and (vii) the legal and structural integrity of the
transaction.

Main Model Assumptions

Moody's assumed a mean default rate of 4.0% for the entire pool,
which takes into account both defaults arising from normal
payment defaults by the obligors and losses arising from the
exercise of the obligors' voluntary termination right. The fixed
recovery rate assumption is 45.0%. A portfolio credit enhancement
(PCE) of 14.5% and a coefficient of variation of 52.0%,
respectively, are used as the other main inputs for Moody's cash
flow model ABSROM. Whilst the historical default rate for older
vintages showed default rates higher than the assumed gross loss
level, Moody's has given benefit to the lower default rate
observed in more recent vintages as a result of updated
underwriting methods used by the originator. Commingling risk and
set-off risk is assessed to be commensurate with the ratings
assigned on the Notes.

Principal Methodology

The principal methodology used in this rating was "Moody's
Approach to Rating Auto Loan-Backed ABS" published in May 2013.

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

Factors that may cause an upgrade of the ratings include a
significant better than expected performance of the pool together
with an increase in credit enhancement of the Notes. Factors that
may cause a downgrade of the ratings include a significant
decline in the overall performance of the pool and a significant
deterioration of the credit profile of the originator.

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

Loss and Cashflow Analysis

In rating this transaction, Moody's used ABSROM to model the cash
flows and determine the loss for each tranche. The cash flow
model evaluates all default scenarios that are then weighted
considering the probabilities of the lognormal distribution
assumed for the portfolio default rate. In each default scenario,
the corresponding loss for each Class of the Notes is calculated
given the incoming cash flows from the assets and the outgoing
payments to third parties and noteholders. Therefore, the
expected loss or EL for each tranche is the sum product of (i)
the probability of occurrence of each default scenario; and (ii)
the loss derived from the cash flow model in each default
scenario for each tranche.

Stress Scenarios

Parameter sensitivities for this transaction have been calculated
in the following manner: Moody's tested 9 scenarios derived from
the combination of the mean default rate: 4.0% (base case), 4.25%
(base case +0.25%), 4.5% (base case + 0.5%) and recovery rate:
45% (base case), 40% (base case - 5%), 35% (base case - 10%). The
4.0% / 45% scenario would represent the base case assumptions
used in the initial rating process. At the time the rating was
assigned, the model output indicated that Class A would have
achieved Aa1 even if mean default was as high as 4.5% with a
recovery as low as 35% (all other factors unchanged). Under the
same assumptions, the Class B would have achieved A2 and the
Class C would have achieved Ba3. Parameter sensitivities provide
a quantitative, model-indicated calculation of the number of
notches that a Moody's-rated structured finance security may vary
if certain input parameters used in the initial rating process
differed. The analysis assumes that the deal has not aged. It is
not intended to measure how the rating of the security might
migrate over time, but rather, how the initial rating of the
tranches might differ as certain key parameters vary. Therefore,
Moody's analysis encompasses the assessment of stress scenarios.


WELLMAN GROUP: MBO Buys Businesses; 52 Jobs Saved
-------------------------------------------------
Insider Media reports that jobs have been saved by a management
buyout of a Black Country group of engineering companies which
had fallen into administration.

According to the report, restructuring specialists from Insolve
Plus held talks with a number of interested parties before
sealing a rescue deal for the Wellman businesses, which have a
history of manufacturing boilers going back to the 1860s.

Tony Hyams and Lloyd Hinton of the London insolvency firm were
appointed on Aug. 8, 2014, as joint administrators of Wellman
Thermal Systems Ltd and subsidiaries Wellman Thermal Services
Ltd, Wellman Boiler Hire Ltd and Wellman Furnaces and Process
Engineers Ltd, the report discloses.

Insider Media relates that after discussions with several
potential suitors, the business and assets of the companies were
sold to management saving 52 jobs in the process. The various
divisions are continuing to operate from their Oldbury location,
the report notes.

"The business was continued for four weeks whilst discussions
were held with a number of interested parties and ultimately the
best offer was from the existing management team," Insider Media
quotes a spokesman for Insolve as saying.

"Various Wellman companies have been operating on the site in
Oldbury for 152 years so it is welcome to have been able to
preserve jobs and maintain the history of the business especially
within the locality.

"The directors of the companies in administration are not
involved with the MBO although they are assisting them during the
first few weeks."

Wellman Group supplies boiler, furnace and process engineering
technology to multiple industry sectors.


* UK: Restaurant Insolvencies up 15% as Costs Rise
--------------------------------------------------
The number of restaurant insolvencies in the U.K. has jumped by
15% over the past 12 months to 747 restaurant business
insolvencies up from 648 in the previous year, restructuring and
insolvency team at Moore Stephens said. Overall business
insolvencies fell from 15,993 to 15,356, over the past 12 months.

Many had hoped that the UK economic recovery would lead to a
noticeable surge in consumer spending on eating out. However,
this has not materialised and factors such as increasing energy
and food prices have conspired to hit struggling restaurants
hard.

The tipping point for many individual restaurants has been the
extremely bad weather last winter, with heavy flooding through
key trading periods like Christmas, New Year and Valentine's Day
impacted trading for many restaurants.

Gas and electricity prices have increased by 6.9% over the past
year, and 5.8% per annum since the credit crunch (2008) -- with
energy prices felt most keenly at the lower end of the market.
Average food prices have also been increasing, by 4.5% per annum
since the financial crisis.

At the same time, consumer spending on eating out has increased
in real terms by only a small amount -- 0.8% over the past year
-- despite the rapid fall in unemployment.

Competition in the sector remains fierce, putting additional
pressure on margins as restaurant owners look to cut prices or
introduce more special offers.

Mike Finch, Partner in the Restructuring and Insolvency team,
said: "The fact that the weather can push so many restaurant
businesses into insolvency shows how fragile the finances can be
in this sector."

"Restaurants are being squeezed between rising costs and stagnant
consumer spending on eating out. Many have struggled through five
years of belt tightening by customers, which has seen cash
reserves run extremely low."

The minimum wage has increased over the last 12 months from
GBP6.19 to GBP6.31, although only a 2% rise it is another strain
upon some restaurants' bottom line.

Many smaller restaurant businesses used to be able to keep costs
down by avoiding paying National Insurance on tips they passed on
to staff as part of their wages, or by paying some staff at below
minimum wage.

Mike Finch continued: "That kind of cost cutting isn't
sustainable and it isn't legal, but some restaurant businesses
saw it as the only way to scrape by. However, HMRC is now looking
very closely at this sector to ensure tax and minimum wage
compliance."

With consumers still reluctant to increase spending on eating
out, restaurant groups are already having to plan for a possible
increase in interest rates that may push disposable income down.

"Restaurant owners should start to plan ahead for the inevitable
interest rate increases. These will certainly have a knock-on
effect for their businesses, and it is important to be prepared
for this eventuality."

The problems affecting restaurants are more concentrated in the
mid and lower end of the market rather than the high end of the
market.


                            *********

Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par.  Prices are
obtained by TCR editors from a variety of outside sources during
the prior week we think are reliable.  Those sources may not,
however, be complete or accurate.  The Monday Bond Pricing table
is compiled on the Friday prior to publication.  Prices reported
are not intended to reflect actual trades.  Prices for actual
trades are probably different.  Our objective is to share
information, not make markets in publicly traded securities.
Nothing in the TCR constitutes an offer or solicitation to buy or
sell any security of any kind.  It is likely that some entity
affiliated with a TCR editor holds some position in the issuers'
public debt and equity securities about which we report.

Each Tuesday edition of the TCR contains a list of companies with
insolvent balance sheets whose shares trade higher than US$3 per
share in public markets.  At first glance, this list may look
like the definitive compilation of stocks that are ideal to sell
short.  Don't be fooled.  Assets, for example, reported at
historical cost net of depreciation may understate the true value
of a firm's assets.  A company may establish reserves on its
balance sheet for liabilities that may never materialize.  The
prices at which equity securities trade in public market are
determined by more than a balance sheet solvency test.

Each Friday's edition of the TCR includes a review about a book
of interest to troubled company professionals.  All titles are
available at your local bookstore or through Amazon.com.  Go to
http://www.bankrupt.com/booksto order any title today.


                            *********


S U B S C R I P T I O N   I N F O R M A T I O N

Troubled Company Reporter-Europe is a daily newsletter co-
published by Bankruptcy Creditors' Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA.
Valerie U. Pascual, Marites O. Claro, Rousel Elaine T. Fernandez,
Joy A. Agravante, Ivy B. Magdadaro, and Peter A. Chapman,
Editors.

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

This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers.

Information contained herein is obtained from sources believed to
be reliable, but is not guaranteed.

The TCR Europe subscription rate is US$775 per half-year,
delivered via e-mail.  Additional e-mail subscriptions for
members of the same firm for the term of the initial subscription
or balance thereof are US$25 each.  For subscription information,
contact Peter Chapman at 215-945-7000 or Nina Novak at
202-241-8200.


                 * * * End of Transmission * * *