TCREUR_Public/141008.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

                           E U R O P E

          Wednesday, October 8, 2014, Vol. 15, No. 199



BANK OF CYPRUS: Ackermann Set to Become Non-Executive Chairman


INA BETEILIGUNGS: Moody's Assigns Ba2 Corp. Family Rating
STYROLUTION GROUP: Moody's Assigns '(P)B2' Rating to EUR1BB Loan
TELE COLUMBUS: Moody's Assigns '(P)B2' CFR; Outlook Stable
TELE COLUMBUS: S&P Assigns 'B+' Prelim. Corp. Credit Rating


GREECE: Wants to Retain Access to Bailout Funds Next Year


* IRELAND: Number "Zombie" Companies Rises to 154,000, R3 Says


TEMIRBANK JSC: S&P Lowers ST Counterparty Credit Rating to 'C'


BBVA RMBS 11: Moody's Raises Rating on EUR77MM C Notes to 'Ba3'
CAIXA PENEDES PYMES 1: Fitch Cuts Rating on Cl. C Notes to 'CCC'
LA SEDA DE BARCELONA: Packaging Unit Attracts Three Bids


CAPE VIEWER: Noble Chartering Selected as Sole Bidder

U N I T E D   K I N G D O M

ARROW GLOBAL: S&P Alters Ratings Outlook to Neg on Capquest Deal
CO-OPERATIVE GROUP: FCA Approves Governance Structure Overhaul
* UK: New Employment Law Ruling May Spur Scottish Bankruptcies


* S&P Takes Various Rating Actions on EU Synthetic CDO Deals



BANK OF CYPRUS: Ackermann Set to Become Non-Executive Chairman
Martin Arnold at The Financial Times reports that Josef Ackermann
is set to become non-executive chairman of Bank of Cyprus in an
overhaul of its board of directors proposed by some of its
biggest shareholders including Wilbur Ross, the US private equity

The former Deutsche Bank chief executive leads a new slate of
directors being put forward to replace the existing board, which
is expected to resign at an annual shareholder meeting on
Nov. 20, the FT discloses.

The proposal comes only a year after Bank of Cyprus was saved
from collapse by an international rescue after the country was
buffeted by the Greek debt crisis, the FT notes.

In July, the Mediterranean country's biggest lender bolstered its
balance sheet by selling EUR1 billion of shares to investors
including Mr. Ross and the European Bank for Reconstruction and
Development, the FT recounts.

Mr. Ross, who represents a group of North American investors
owning 17% of the bank, has teamed up with Tyrus Capital, a
Monaco-based hedge fund that owns close to 5%, to propose the new
board members, the FT relates.

Other people put forward to join Bank of Cyprus's board as
non-executive directors include Arne Berggren, a former Swedbank
executive nominated by the EBRD, and Michael Spanos, a former
director of the Central Bank of Cyprus, the FT says.

According to the FT, Mr. Ross is planning to become vice-chairman
of the bank alongside Vladimir Strzhalkovskiy, a former KGB agent
who has been the bank's vice-chairman since last year's
international rescue.

Next month, Bank of Cyprus shares are due to restart trading more
than a year after they were suspended, the FT states.  The lender
is in talks with the London Stock Exchange and EuronextNYSE about
moving its secondary listing from Greece to the UK or the
Netherlands next year, according to the FT.

One of the biggest challenges facing Bank of Cyprus is the
European Central Bank's stress test and asset quality review of
the continent's largest lenders, for which results are due to be
published on Oct. 26, the FT says.

Bank of Cyprus is a major Cypriot financial institution.  In
terms of market capitalization of 350 million in March 2013, it
is the country's biggest bank.  As of September 2012, the bank
held a 26.7% share of the Cypriot deposit market and a 22.5%
share of the Cypriot loan market, making it the largest bank in
Cyprus.  The Bank of Cyprus Group employs 11,326 staff worldwide.

                         *     *     *

As reported by the Troubled Company Reporter-Europe on July 8,
2014, Fitch Ratings upgraded Bank of Cyprus Public Company Ltd.'s
(BoC) Long-term Issuer Default Ratings (IDR) to 'CC' from 'RD'
and Hellenic Bank Public Company Limited's (HB) Long-term IDR to
'CCC' from 'RD'.  Fitch also upgraded the two banks' Short-
term IDR to 'C' from 'RD'.  At the same time, the agency affirmed
BoC's Viability Rating (VR) at 'cc' and HB's VR at 'ccc'.  Fitch
said the upgrades of BoC's and HB's IDRs follow the lifting of
legal restrictions imposed by the Central Bank of Cyprus on the
free movement of capital within Cyprus on May 30, 2014.  In
particular, capital controls on bank deposits within the country
no longer apply.


INA BETEILIGUNGS: Moody's Assigns Ba2 Corp. Family Rating
Moody's Investor Service has assigned a Ba2 rating to the
proposed senior secured term loan issued by INA
Beteiligungsgesellschaft mbH. Concurrently, based on the proposed
changes to the borrower group in the new loan agreement, Moody's
withdrew the corporate family rating (CFR) of Ba3 and probability
of default rating (PDR) of Ba3-PD it had on Schaeffler AG and
assigned a Ba3 CFR and Ba3-PD PDR to INA Beteiligungsgesellschaft
mbH ("Schaeffler"). Moody's also affirmed Schaeffler's and its
guaranteed subsidiaries senior secured debt ratings of Ba2,
senior unsecured debt ratings of B1 and junior (secured PIK
notes) debt ratings at B1. The outlook on all ratings is stable.

Rating Rationale for Instruments Ratings

The Ba2 rating on the proposed senior secured term loan reflects
the loan's effective pari passu ranking with outstanding senior
secured bonds, even though the loan will not rely further on
credit support from the 34.2% stake that Schaeffler AG has in
Continental AG. For the time being and to ensure pari passu
treatment with outstanding senior secured bonds, a guarantee
issued from Schaeffler AG will support the new term loan.

Moody's, however, notes that Schaeffler may ask senior
bondholders to consent to a release of the Schaeffler AG parent
guarantee. Once bondholders have agreed to this release, the
guarantee will also fall away from the new term loan. When this
event occurs, both senior term loan holders and senior bond
holders will no longer have access to any Continental shares.
Even though the loss of access effectively leads to some
deterioration of the senior lenders' position, the senior ratings
(i.e., Ba2 secured and B1 unsecured) should remain unchanged,
although with diminished headroom at their respective rating
categories. These ratings should not change provided Schaeffler's
CFR continues to be strongly positioned at Ba3.

At the same time, an event leading to the guarantee falling away
would improve the position of the junior lenders, as they would
become the sole beneficiaries of the value of the shares in
Continental. Through the guarantee from Schaeffler Verwaltungs
GmbH, the junior bondholders would benefit from the 46% stake in
Continental as underlying credit support that would no longer be
shared with senior lenders, even though for the time being only
11.8% had been pledged. Market capitalization of Continental is
currently around EUR30 billion, i.e. Schaeffler Verwaltungs GmbH
share in Continental has a value of approximately EUR14 billion.
The guarantee fall-away event may hence put positive pressure on
the B1 rating on the junior bonds.

Rating Rationale For CFR

Schaeffler's Ba3 corporate family rating is supported by the
group's solid business profile evidenced by (i) leading market
positions in the bearings and automotive component and systems
market with number one to three positions across the wide ranging
product portfolio in a relatively consolidated industry; (ii) its
leading mechanical engineering technology platform supporting a
competitive cost structure and the development of innovative
products; (iii) a well diversified customer base, especially in
the Industrial division but also to the extent possible in the
consolidated automotive industry, and with a sizable aftermarket
business accounting for around one quarter of revenues.

The rating also benefits from (iv) Schaeffler's proven business
model with a good track record of operating performance and
margin levels well above the automotive supplier industry average
as well as (v) a good innovative power evidenced by a high number
of patents, founded on a notable amount of R&D expenses of above
5% of revenues per year.

Considering the scale and strong business profile, the Ba3 CFR is
predominantly constrained by very high combined indebtedness,
with reported senior and junior debt totaling almost EUR10
billion, resulting in a fairly high leverage (Moody's adjusted
debt/EBITDA of 4.6x for the last-12-months to June 2014). This is
further exacerbated by the fact that absent of any external
deleveraging transaction, leverage is unlikely to materially
improve just from internally generated cash flows. Another
constraint for the CFR is the organizational and legal complexity
and evolving structure of Schaeffler in its current state.

Schaeffler's CFR is currently strongly positioned. It could be
upgraded should Schaeffler be able to (i) generate sustainably
positive free cash flows and (ii) improve Moody's adjusted
debt/EBITDA to 4.0x (4.6x for the last-12-months to June 2014)
either from internally generated cash flows or from proceeds
received from assets sales or equity increases.

The Ba3 CFR could come under pressure in case of a significant
weakening of Schaeffler's operating performance, as indicated by
Moody's adjusted EBITA margins below 10% (12.9% for the last-12-
months to June 2014), or Moody's adjusted debt/EBITDA above 5.0x,
assuming no material deterioration of economic environment.
Material negative free cash flow and weakening liquidity, for
instance owing to tightening headroom under its financial
covenants, could also lead to a downgrade.

The principal methodology used in these ratings was Global
Automotive Supplier Industry published in May 2013. Other
methodologies used include Loss Given Default for Speculative-
Grade Non-Financial Companies in the U.S., Canada and EMEA
published in June 2009.

STYROLUTION GROUP: Moody's Assigns '(P)B2' Rating to EUR1BB Loan
Moody's Investors Service has assigned a provisional (P)B2 rating
to the proposed EUR1.05 billion equivalent term loan of
Styrolution Group GmbH (Styrolution, or the company) and its
subsidiary, Styrolution US Holding LLC who is a co-borrower under
the facility. Moody's also affirmed the corporate family rating
(CFR) of Styrolution at B2, the probability of default rating
(PDR) at B2-PD and the instrument ratings on the EUR480 million
of senior secured guaranteed notes due 2016 at B2. The outlook on
all ratings for is stable.

Moody's expects that Styrolution will use the proceeds of the
proposed new term loan, along with additional second lien debt
and cash on hand to (1) redeem the outstanding secured notes
maturing in 2016 (rated B2); (2) on-lend to Ineos Styrolution
Holding GmbH to fund its EUR1.1 billion purchase of BASF (SE)'s
(A1 stable) 50% stake in Styrolution Holding GmbH, an
intermediate parent company of Styrolution; (3) pay fees and
expenses. The company has issued a conditional redemption notice
for the outstanding notes maturing in 2016. If its refinancing
condition is met the notes will be redeemed at a price of
102.859% on or before December 2, 2014.

Ineos' acquisition of BASF's equity in the venture is subject to
approval by the appropriate antitrust authorities and the company
expects it to close in the fourth quarter 2014. Debt proceeds
will be held in escrow until Ineos' acquisition is completed,
with EUR480 million to be released to repay the existing secured
notes in December.

Moody's issues provisional ratings in advance of the final sale
of securities. Upon closing of the transaction and a conclusive
review of the final documentation, Moody's will endeavor to
assign definitive ratings. A definitive rating may differ from a
provisional rating.

Ratings Rationale

The affirmation of Styrolution's ratings follows the company's
announcement that it has reduced the size of the proposed term
loan to EUR1.05 billion equivalent, in combination with expected
additional second lien debt, compared to the previous EUR1.6
billion term loan proposal. It has also abandoned the proposal to
pay a EUR100 million dividend to Ineos Industries (unrated).

The CFR assumes that the company will issue additional second
lien debt. If this takes place, the (P)B2 rating of the EUR1.05
billion term loan could be upgraded, consistent with Moody's loss
given default methodology.

Styrolution's B2 CFR continues to reflect the (1) company's weak
Moody's adjusted EBITDA margins and high leverage expected at
7.5% and approximately 4.5x respectively, pro forma the
refinancing, with Moody's not expecting leverage to fall until
2015; (2) challenging and competitive trading environment in
Europe and in the Asian polystyrene and ABS markets; (3) exposure
to feedstock price volatility; (4) lack of product
diversification; and (5) heightened substitution threat for its
polystyrene and ABS products.

However, Styrolution benefits from a (1) leading global market
share position in the styrenics market based on capacity,
combined with a global operational footprint; (2) cost leadership
position with an improved cost position due to cost reductions
associated with their restructuring program; (3) diversified end-
market exposure across packaging, household, automotive,
construction and electronics applications; and (4) certainty of
supply of key raw materials, in large part as a result of supply
agreements with its shareholder.

Moody's assumes a group recovery of 50%, resulting in a PDR of
B2-PD, in line with the CFR, as is typical for covenant light
structures. The provisional (P)B2 rating on the new EUR1.05
billion equivalent secured term loan, in line with the CFR,
reflects that it will be secured by substantially the same
security as the existing secured notes and the absence of any
unsecured financial debt. It will also be guaranteed by material
operating subsidiaries representing approximately 95% of 2013
EBITDA. It will have standard incurrence covenants including
those on restricted payments, debt incurrence and liens but no
financial covenants. The term loan will also have a cash sweep
that is subject to ratchets based on certain reductions in
leverage being achieved.

Moody's expects positive free cash flow over the next 12 months
despite the increased interest burden from up to EUR1.0 billion
in additional debt and there are no significant debt maturities,
absent drawings on the securitization facility, until the 2021
maturity of the term loan. However, the company is prone to large
intra-year working capital swings, which are predominantly a
function of feedstock prices and in this regard availability of
benzene continues to be tight.

Rating Outlook

The stable outlook reflects Moody's view that Styrolution will
continue to operate at satisfactory margin levels, reduce
leverage going forward and maintain an adequate liquidity

What Could Change The Rating -- UP

Positive pressure on the rating could materialise if Styrolution
were to (1) sustainably achieve a Moody's-adjusted EBITDA margin
of around 7%; (2) generate a sustained positive FCF/debt ratio of
around 8%; (3) improve its liquidity profile through increased
cash balances; and (4) improve its leverage profile such that its
Moody's-adjusted debt/EBITDA ratio is solidly below 4.0x.

What Could Change The Rating -- DOWN

Conversely, negative pressure on the ratings would emerge if
Styrolution's liquidity profile and credit metrics deteriorate as
a result of a weakening of its operational performance.
Quantitatively, Moody's would also consider downgrading
Styrolution if (1) the company's Moody's-adjusted EBITDA margin
falls sustainably below 5%; (2) its Moody's-adjusted FCF turns
negative over the next 12 months; (3) the company experiences a
significant decrease in cash balances; or (4) its debt/EBITDA
ratio is above 5.0x for an extended period of time.

Principal Methodology

The principal methodology used in this rating was Global Chemical
Industry Rating Methodology published in December 2013. Other
methodologies used include Loss Given Default for Speculative-
Grade Non-Financial Companies in the U.S., Canada and EMEA
published in June 2009.

Styrolution Group GmbH, based in Frankfurt, Germany, is a leading
global styrenics supplier (based on revenues), especially in
Europe and North America. Styrolution is focused on the
production and sale of polystyrene, acrylonitrile butadiene
styrene (ABS), styrene monomer, and other styrenic specialities.
The group is a joint venture between BASF (SE) and Ineos
Industries. The joint venture became fully operational as a new
independent company on October 1, 2011 and, in June 2014, Ineos
signed an agreement to purchase BASF's stake. For financial year-
end December 2013, Styrolution's revenues and Moody's-adjusted
EBITDA were EUR5.8 billion and EUR404 million respectively.

TELE COLUMBUS: Moody's Assigns '(P)B2' CFR; Outlook Stable
Moody's Investors Service assigned a first-time (P)B2 corporate
family rating (CFR) to Tele Columbus AG. At the same time Moody's
assigned a (P)B2 rating to the company's EUR500 million senior
credit facilities, consisting of a EUR375 million A facility due
2020, a EUR75 million B/Capex facility due 2019 and a EUR50
million RCF, initially due in 2019 with extension option. The
rating outlook is stable.

Tele Columbus has announced its intention to file an IPO and list
its shares on the Frankfurt stock exchange by the end of 2014,
raising at least EUR300 million in primary proceeds. Proceeds
will be used to reduce debt and the rated facilities will replace
Tele Columbus's existing third-party debt financing.

All ratings assigned are provisional pending a conclusive review
of final documentation and closing of the IPO and subsequent
refinancing transactions as currently envisaged, including a
minimum of EUR300 million in primary proceeds. Drawings under the
facility will only be possible post or contemporaneously with the
IPO. Following closing of the IPO Moody's will endeavor to assign
definitive ratings. Moody's notes that a definitive rating may
differ from a provisional rating.

Ratings Rationale

The (P)B2 CFR rating for Tele Columbus reflects: (i) the
relatively small scale and scope of the company's operations;
(ii) its still significant post-IPO leverage evidenced by a
debt/EBITDA ratio (Moody's definition) of around 4.9x on a 2014
expected pro forma basis; (iii) the company's history over the
last few years that was characterized by financial stress,
restructuring and strategic uncertainty; (iv) the challenge to
reignite growth in its "homes connected" base after years of
decline; (v) dependence on third-party network provision, in
particular for signal provision in the portion of Tele Columbus's
network where the company is only a Level 4 provider; (vi)
pricing pressure and competition from larger telecoms players
(Kabel Deutschland AG, Deutsche Telekom AG) especially for larger
housing association contracts and (vii) increased competition in
the provision of premium TV programming from both established
(Sky Deutschland) and new (OTT providers like Maxdome or Netflix,
Inc.) operators.

More positively the rating acknowledges (i) the company's
significantly increased financial and operational flexibility
expected post IPO, (ii) its credible and clearly defined
strategy; (iii) Tele Columbus's solid and entrenched market
position, especially in its core Eastern Germany territories;
(iv) the favorable operating conditions for cable companies in
Germany based on the technological advantages of HFC networks in
the provision of broadband services; (v) the state-of-the-art
quality of the fully-owned and upgraded portion of the company's
network; (vi) signs that housing association relations are
stabilizing and will provide the basis for successful up- and
cross-selling and (vii) good cost control which has allowed for
increased EBITDA generation over the last couple of years,
notwithstanding lackluster top-line growth.

Tele Columbus is the third largest German cable operator (based
on the number of subscribers) with strong regional positions in
Eastern Germany and a presence in a number of regions in Western
Germany. The company's networks are connected to 1.7 million
homes, of which just over half are fully upgraded to two-way
communication, deploying the Docsis 3.0 standard. Tele Columbus
offers basic cable television services (CATV), premium TV
services and, where the network is upgraded, Internet and
telephony services. As of 30 June 2014, the company had 1.3
million unique subscribers and its ratio of revenue generating
units (RGUs) to unique subscribers stood at 1.4 times.
Approximately 97% of Tele Columbus's contracts are entered into
as part of concession agreements for multi dwelling units (MDUs).

Historically, Tele Columbus was mainly an operator of Level 4
(L4) cable systems, i.e. providing the in-house wiring, which
transports signals delivered by Level 3 (L3) operators such as
Kabel Deutschland (now owned by Baa1, Stable rated Vodafone Group
plc) from a transfer point outside the customer's dwelling unit
to the wall outlet inside. However, over the last few years, Tele
Columbus has undertaken steps to create an integrated L3/L4
network, which allows for significant savings in signal fees and
the provision of broadband services in the upgraded sections of
the network.

Moody's expects Tele Columbus's liquidity provision to be
adequate for its near term operational needs. Liquidity provision
will rely substantially on the EUR50 million revolving credit
facility and continued access to the B facility (capex facility)
as well as cash on balance sheet of EUR25 million (pro forma for
the IPO and closing of the refinancing transaction). The RCF is
expected to be undrawn at closing, but might be utilized from
time to time for working capital and general purposes. While
there are some extraordinary working capital outflows expected
for 2014, going forward working capital flows should be fairly
neutral on a year-on-year basis. Tele Columbus has no scheduled
repayments under the facilities before their final maturity date.
The facilities will be subject to maintenance covenants, which
stipulate a ratio of net Debt/EBITDA (as defined by the
facilities agreement) of 5.5x prior to December 2015, stepping
down to 5x prior to December 2016 and to 4.5x thereafter while an
interest cover ratio of 4x must be maintained at all times.

Tele Columbus's capital structure will consist of the rated
credit facilities and common equity. The credit facilities will
receive upstream guarantees from group companies representing at
least 80% of Tele Columbus's EBITDA. Security for the rated debt
is limited to share pledges. The rated credit facilities
(facility A, facility B (capex) and RCF) rank pari passu amongst
each other. For the purposes of Moody's Loss-Given-Default
methodology Moody's has -- in the absence of asset security --
ranked the credit facilities first together with Tele Columbus's
trade payables, lease rejections claims and pension obligations.
Moody's has also used a 65% recovery rate, which is typically
applied for all bank loan structures. Consequently the credit
facilities have been assigned a (P)B2 rating, which is at the
level of Tele Columbus's CFR.

The stable rating outlook reflects the solid positioning in the
B2 category and Moody's expectation that Tele Columbus can
execute on its stated strategy and manage its growth capex so
that leverage does not deteriorate materially from its 2014 pro
forma -- expected starting level (Moody's defined debt/EBITDA of
around 4.9x). Evidence of continued operating progress including
a return to growth in the "homes connected" base together with a
debt/EBITDA ratio moving to and then being maintained below 4.5 x
could result in upgrade pressure. Downward pressure for the
rating could ensue, if strategy execution fails e.g. RGU per
subscriber and ARPU growth stall and/or the deterioration in the
"homes connected" base continues, leading to a more than
temporary deterioration in the debt/EBITDA leverage ratio to
above 5.5x.

The principal methodology used in this rating was Global Pay
Television - Cable and Direct-to-Home Satellite Operators
published in April 2013. Other methodologies used include Loss
Given Default for Speculative-Grade Non-Financial Companies in
the U.S., Canada and EMEA published in June 2009.

Tele Columbus AG is a holding company, which through its
subsidiaries offers basic cable television services (CATV),
premium TV services and, where the network is upgraded, Internet
and telephony services in Germany where it is the third largest
cable operator. The company is based in Berlin, Germany and
reported revenue of Euro 208 million for the 2013 financial year.

TELE COLUMBUS: S&P Assigns 'B+' Prelim. Corp. Credit Rating
Standard & Poor's Ratings Services assigned its 'B+' long-term
preliminary corporate credit rating to German cable operator Tele

The rating will remain preliminary until the planned IPO and
EUR300 million equity injection are executed and the EUR375
million term loan, EUR75 million capital expenditure facility,
and EUR50 million revolving credit facility (RCF) are put in
place, replacing all current outstanding debt.

The corporate credit rating is constrained by Tele Columbus'
still significant reliance on third-party cable TV networks and a
partial upgrade to the highest industry standards. The company's
limited scale and diversity also constrain the rating, as do huge
investment outlays and significant execution risks as the company
seeks to accelerate its transition away from basic cable TV
offerings toward the model of its successful European and German
peers. If it manages to do so, the transition should help support
customer retention, increase bundle penetration, and lift its
average revenues per user (ARPU) through upselling activity.

The sheer level of investments that are involved in the various
projects related to this transformation, spanning technical
upgrades, own network extension, and commercial initiatives,
generate a risk, including a timing uncertainty, which could
materially affect overall performances in a very competitive

S&P said: "In our view, there is a risk that, at renewal dates,
its housing association direct customers would churn to larger
and on average more advanced cable providers Kabel Deutschland or
Unitymedia, or to Deutsche Telekom's asymmetric digital
subscriber line (ADSL) offerings, if Tele Columbus cannot then
offer upgraded and converged services.

"However, the long-term nature of its housing-association
contracts provides the company some visibility and leeway to
deploy its investment plan. We also acknowledge that the company
has been able to significantly raise its broadband market share
against incumbent Deutsche Telekom in the recent past and that it
boasts leading local cable market shares in Eastern Germany,
testifying for the company's successful commercial achievements
within its own and upgraded footprint, and also reflecting the
technical edge of an upgraded cable offer over inferior ADSL

"The stable outlook assumes the company will maintain its high
operating efficiency in the next year, successfully renegotiate
maturing housing association contracts, and continue to deliver
on its operational targets, which should be illustrated by
positive revenue growth and improving EBITDA margins. In
addition, we anticipate FOCF will improve from negative territory
in 2015 to about breakeven in 2016, adjusted debt to EBITDA to
remain below 4x, and liquidity to remain adequate."


GREECE: Wants to Retain Access to Bailout Funds Next Year
Nikos Chrysoloras and Marcus Bensasson at Bloomberg News report
that Greece's creditors insist the country should retain access
to bailout funds next year even as the government seeks an
almost-balanced budget for the first time in decades.

The country's budget deficit will shrink to EUR338 million
(US$424 million) next year, or 0.2% of gross domestic product,
from EUR1.41 billion, or 0.8% of GDP, this year, Bloomberg says,
citing the 2015 draft budget, which was submitted to parliament
on Oct. 6.  According to Bloomberg, the plan shows that the
primary surplus, which is the budget before interest payments,
will rise to EUR5.42 billion in 2015, or 2.9% of GDP, from
EUR3.6 billion this year.

According to Bloomberg, two officials with knowledge of the
matter said that Greece's improving public finances haven't
convinced its euro-area partners to accept Prime Minister
Antonis Samaras's plan for a clean bailout exit at the end of

The Mediterranean nation returned to bond markets in April, when
it sold debt for the first time in four years, and Samaras has
repeatedly said that Greece will be able to cover its financing
needs in the markets after the euro-area program expires in
December, Bloomberg recounts.  Mr. Samaras has said that the
country would potentially forgo some remaining tranches from the
International Monetary Fund if necessary, Bloomberg notes.

The people, as cited by Bloomberg, said Greece's creditors would
prefer to keep some form of credible backstop in case market
conditions worsen.  One of the people said the prevailing view
among officials from the European Commission, the European
Central Bank and the IMF, who monitor Greece's compliance with
the terms of its bailout, is that the country's market access
remains fragile, Bloomberg relays.

The bailout loans, which have kept Greece afloat since 2010, came
with strict conditions of belt tightening that triggered a social
backlash and exacerbated a recession that left more than a
quarter of the workforce without a job, Bloomberg discloses.
Access to bailout funds next year would also come with strings
attached, Bloomberg states.


* IRELAND: Number "Zombie" Companies Rises to 154,000, R3 Says
--------------------------------------------------------------, citing research by insolvency trade body
R3, who are the trade body for Insolvency Professionals in the
UK, the number of businesses just paying the interest on their
debts -- a key characteristic of "zombie businesses" -- has
jumped from 103,000 in November 2013 to 154,000.  The figure is
the highest number of businesses in this position in eighteen
months, notes.

Zombie companies are described as those which can only service
the interest they owe, but not the debt itself, according to  But rather than a return of the "zombie
business" phenomenon, insolvency practitioners suspect that late
payment and over-trading problems associated with economic
recovery are behind the rise, notes.

"Zombie businesses" emerged after the 2009 recession when
thousands of businesses that might have been expected to fail
were kept afloat by a combination of low interest rates, lenient
creditors, and a sluggish recovery,
recounts.  This issue was raised by Tom Kavanagh, Partner at
Deloitte Restructuring Services, at the Corporate Restructuring
Summit where he highlighted concerns that many Irish SME's who
may have struggled through the recession will now become
progressively weaker as the economy begins to pick up, relates.

The business most at risk are those that don't get paid quickly
enough and those with lack of access to new finance, states.

Giles Frampton, president of R3, as cited by, said: "Making the minimum payments on debts
or renegotiating payment terms with creditors can free up some
extra cash and buy some time, but it's not a long-term solution.
Healthy cash flow is critical" he added: "An improving economy
will have pulled businesses back from the very edge, but
thousands of businesses are still in a potentially difficult
situation."  "Just paying the interest on debts or constantly
renegotiating with creditors could leave businesses in limbo:
they will be in business but with little chance of growth, like
the archetypal 'zombie' company."


TEMIRBANK JSC: S&P Lowers ST Counterparty Credit Rating to 'C'
Standard & Poor's Ratings Services said it had lowered its short-
term counterparty credit rating on Kazakhstan-based Temirbank JSC
to 'C' from 'B'.  S&P affirmed its 'B-' long-term counterparty
credit rating. The outlook is stable.

At the same time, S&P affirmed its 'kzBB' Kazakhstan national
scale rating on the bank.

"Also, we lowered our issue rating on Temirbank's nondeferrable
subordinated debt to 'CCC' from 'CCC+'," S&P said.

"We lowered the short-term rating to reflect the imminent risks
(operational and transitional risks) related to Temirbank's
pending merger with ForteBank and Alliance Bank.

The affirmation of the long-term rating reflects S&P's view of
several key developments in the first half of 2014 and stable
characteristics of bank's financial profile:

In May 2014, government fund Samruk-Kazyna sold its shares in
Temirbank to Bulat Utemuratov, a local businessman who also owns
80.9% of ForteBank and 16% of currently in default Alliance Bank.
As announced in August 2014, Alliance Bank's shareholders have
agreed on a nonbinding term sheet with the steering committee of
its creditors regarding the restructuring of approximately $1.2
billion of the bank's debt. This move will help ensure the bank's
recapitalization and pave the way for its pending consolidation
with Temirbank and ForteBank.

"We think that the legal consolidation of the three banks is
likely by the end of 2014. The restructuring process at Alliance
is subject to final approval by the steering committee of
creditors, and we have limited information on the financial terms
of the consolidation. Temirbank, which may cease to exist as a
legal entity upon merging, improved its financial profile in the
first half of 2014, with a profit of about Kazakhstani tenge
(KZT) 10 billion (Us$55 million) -- compared with losses in
2013 -- a stable risk-adjusted capital of roughly 7%, and
adequate liquidity," said S&P.

"Our base case accounts for Temirbank's positive stand-alone
developments as well as the potential pitfalls surrounding the
conditions of the merger with ForteBank and Alliance Bank.
Following our assessment of these uncertainties, we think that
our 'B-' long-term rating on the bank adequately reflects the
possible long-term risks and our 'C' short-term rating reflects
the more imminent ones (operational and transitional risks
related to merger)," said S&P.

S&P said: "Our stable outlook on Temirbank balances our
expectations that the bank will likely maintain its stand-alone
credit profile at the current level, notably with a profit in
2014 and still adequate funding and capital metrics, according to
our base-case expectations, against the risks related to the
likely merger with Alliance Bank and ForteBank.

"Because the bank's proposed merger has yet to receive final
approval and there are very few details are available, we think
that the impact of the transaction, if completed, on Temirbank's
creditworthiness remains uncertain.  We will monitor any possible
impact over the next few months.

"In our view, there is very limited likelihood of an upgrade in
the next 12 months given the execution risks of the merger.
Conversely, we could take a negative rating action if the bank
experienced pronounced liquidity deterioration, for example due
to deposit withdrawals, or if material operational and financial
risks emerge from the transaction with ForteBank and Alliance
Bank and weaken Temirbank's financial profile. In addition, a
sharp increase in credit costs that affect the bank's financial
results, causing the risk-adjusted capital ratio to drop below
5%, could led us to lower the long-term rating," said S&P.


BBVA RMBS 11: Moody's Raises Rating on EUR77MM C Notes to 'Ba3'
Moody's Investors Service has upgraded the ratings of 7 notes in

The rating action concludes the review of the notes placed on
review on March 17, 2014, following the upgrade of the Spanish
sovereign rating to Baa2 from Baa3 and the resulting increase of
the local-currency country ceiling to A1 from A3. The sovereign
rating upgrade reflected improvements in institutional strength
and reduced susceptibility to event risk associated with lower
government liquidity and banking sector risks.

Ratings Rationale

The rating action reflects (1) the increase in the Spanish local-
currency country ceiling to A1 and (2) sufficiency of credit
enhancement in the affected transactions.

The rating action also reflects the correction of a model input
error. In prior rating actions, the recovery rate input in the
model was inconsistent with the MILAN input, therefore the tail
of the asset loss distribution was generated incorrectly. The
model has now been adjusted, and the rating action reflects this

-- Reduced Sovereign Risk

The Spanish sovereign rating was upgraded to Baa2 in February
2014, which resulted in an increase in the local-currency country
ceiling to A1. The Spanish country ceiling, and therefore the
maximum rating that Moody's will assign to a domestic Spanish
issuer including structured finance transactions backed by
Spanish receivables, is A1 (sf).

The increase of credit enhancement combined with stable
performance and the reduction in sovereign risk has prompted the
upgrade of the notes.

-- Key collateral assumptions

The key collateral assumptions have not been updated as part of
this review. The performance of the underlying asset portfolios
remain in line with Moody's assumptions. Moody's also has a
stable outlook for Spanish ABS and RMBS transactions.

Sensitivity of the ratings to increases in key collateral
assumptions has been incorporated into the quantitative analysis.
The increases included stresses of 1.3x Expected Loss and 1.2x
Milan. Sensitivity analysis would typically expect to see the
ratings reduce by no more than two to three notches using these
stressed assumptions.

-- Exposure to Counterparties

Moody's rating analysis also took into consideration the exposure
to Banco Bilbao Vizcaya Argentaria, S.A. (Baa2/P-2) acting as
servicer and issuer account bank in the four transactions.

Principal Methodology

The principal methodology used in these ratings was "Moody's
Approach to Rating RMBS Using the MILAN Framework" published in
March 2014.

Factors that would lead to an upgrade or downgrade of the

Factors or circumstances that could lead to an upgrade of the
ratings include (1) further reduction in sovereign risk, (2)
performance of the underlying collateral that is better than
Moody's expected, (3) deleveraging of the capital structure and
(4) improvements in the credit quality of the transaction

Factors or circumstances that could lead to a downgrade of the
ratings include (1) an increase in sovereign risk, (2)
performance of the underlying collateral that is worse than
Moody's expects, (3) deterioration in the notes' available credit
enhancement and (4) deterioration in the credit quality of the
transaction counterparties.

List of Affected Ratings

Issuer: BBVA RMBS 5, FTA

EUR4675M A Notes, Upgraded to A2 (sf); previously on Mar 17,
2014 Baa2 (sf) Placed Under Review for Possible Upgrade

Issuer: BBVA RMBS 9, FTA

EUR1295M A Notes, Upgraded to A1 (sf); previously on Mar 17,
2014 A3 (sf) Placed Under Review for Possible Upgrade

Issuer: BBVA RMBS 10, FTA

EUR1376M A Notes, Upgraded to A1 (sf); previously on Mar 17,
2014 A3 (sf) Placed Under Review for Possible Upgrade

EUR224M B Notes, Upgraded to Baa3 (sf); previously on Mar 17,
2014 B1 (sf) Placed Under Review for Possible Upgrade

Issuer: BBVA RMBS 11, FTA

EUR1204M A Notes, Upgraded to A1 (sf); previously on Mar 17,
2014 Baa1 (sf) Placed Under Review for Possible Upgrade

EUR119M B Notes, Upgraded to Ba1 (sf); previously on Mar 17,
2014 Ba2 (sf) Placed Under Review for Possible Upgrade

EUR77M C Notes, Upgraded to Ba3 (sf); previously on Mar 17, 2014
B3 (sf) Placed Under Review for Possible Upgrade

CAIXA PENEDES PYMES 1: Fitch Cuts Rating on Cl. C Notes to 'CCC'
Fitch Ratings has downgraded two tranches of Caixa Penedes PYMES
1 TDA, FTA and affirmed Caixa Penedes FTGENCAT 1 TDA, FTA, as

Caixa Penedes PYMES 1 TDA, FTA

Class A notes (ISIN ES0357326000): affirmed at 'AAsf', Outlook
revised to Negative from Stable
Class B notes (ISIN ES0357326018): downgraded to 'BBsf' from
'BBBsf'; removed from RWN; Outlook Negative
Class C notes (ISIN ES0357326026): downgraded to 'CCCsf' from 'B-
sf'; RE25%; removed from RWN

Caixa Penedes FTGENCAT 1 TDA, FTA

Class A1 (ISIN ES0318559004): affirmed at 'AA+sf', Outlook Stable
Class A2 (CA) (ISIN ES0318559012): affirmed at 'AA+sf', Outlook
Class B (ISIN ES0318559020): affirmed at 'AAsf', Outlook revised
to Stable from Negative
Class C (ISIN ES0318559038): affirmed at 'BB+sf'; removed from
RWN; Outlook Negative

The transactions are granular cash flow securitization of a pool
of secured and unsecured loans granted to Spanish small- and
medium-sized enterprises by Caixa Penedes (now part of Banco Mare
Nostrum) and are now serviced by Banco de Sabadell. All ratings
are capped at 'AA+sf', which is the rating cap for Spanish
structured finance transactions.

Key Rating Drivers
Uncertain Recovery Proceeds Timing
The servicing agreement was transferred to Banco de Sabadell in
May 2013 from Caixa Penedes. After the closing of the agreement
there was a transition period for the business integration. Banco
de Sabadell has informed Fitch that the securitized loans have
been managed with the same standard of care and effort as any
other loans. Since the last review, recovery proceeds have only
slightly improved and Fitch is thus revising the recovery lag
assumption to 10 years from five years for both transactions.

Downgrade of Caixa Penedes PYMES 1
The downgrades of Caixa Penedes PYMES 1's class B and C notes
reflect the vulnerability of the notes to uncertain recovery
proceeds. The transaction has reported EUR210,000 of recoveries
over the past year. In addition, the transaction's performance
has deteriorated since the notes were placed on RWN, with an
additional EUR3.8 million of defaults reported between February
and August 2014. Cumulative defaults since closing were EUR45.4
million as of the August 2014 report, which represents 5.7% of
the initial portfolio balance, close to the interest deferral
trigger of 7% from the class C notes. Fitch considers that
interest deferral on the class C notes is likely to occur in the
next year if the trend in defaults continues. Interest deferral
on the class B notes is also possible as the trigger is 9% of
cumulative defaults over the initial balance.

The affirmation of the class A notes reflects that they benefit
from substantial credit enhancement. However, the Outlook on the
class A notes has been revised to Negative from Stable. The
reserve fund (RF) stood at EUR6.2 million as of August 2014 but
Fitch expects further drawings if current delinquent loans roll
into default and recoveries remain very low. Loans that are more
than 90 days in arrears currently stand at EUR8.5 million. In
case of a depletion of the RF, the class A notes would be exposed
to payment interruption risk upon the servicer's default.

Affirmation of Caixa Penedes FTGENCAT 1
The affirmation of the class A1 and A2 (CA) and B notes reflects
the increase in credit enhancement due to deleveraging. Since the
last review in April 2014, the class A notes have paid down by
EUR23.3 million, mainly due to high recent prepayments in the
portfolio, and the available credit protection increased to above
100% offsetting the deterioration in the portfolio. The credit
enhancement for the class B and C notes has also increased,
albeit to a lesser extent.

The affirmation of the class B notes and revision of the Outlook
to Stable reflects the substantial increase in credit enhancement
of 6%. The notes are less vulnerable to uncertain recovery

The class C notes have been affirmed and removed from RWN. While
Fitch's assumption on the recovery lag has been extended to 10
years, the increase in credit enhancement has offset the
additional negative carry assumed on the notes. The Negative
Outlook reflects the rating dependence on the ultimate sale and
value of the mortgaged collateral.

Payment Interruption Risk
The available RFs of both transactions remains sufficiently
funded to provide liquidity support to the structures in the
event of payment interruption as a result of a servicer default,
and can cover the senior notes' interest at a stressed index

Rating Sensitivities

The agency has incorporated a recovery stress test in its
analysis to determine the ratings' sensitivity to the lower
recovery prospects assuming no recoveries from unsecured loans.
The impact on the junior notes is one notch in both transactions.

LA SEDA DE BARCELONA: Packaging Unit Attracts Three Bids
According to Bloomberg News' Jim Silver, La Seda de Barcelona
said in a Spanish regulatory filing that bids for its packaging
unit were opened Sept. 29.

The company said that three bidders were selected for the second
round, in which they can improve their offers, Bloomberg relates.

La Seda de Barcelona is a Spanish plastics bottle maker.  The
Catalonia-based company makes bottles in Europe, Turkey and North

In June 2013, La Seda de Barcelona placed itself in voluntary
insolvency after failing to reach agreement with creditors to
restructure its debt.

In February 2014, La Seda de Barcelona entered the liquidation
phase following a ruling by a commercial court judge in
Barcelona, Spain.

In July 2014, a Barcelona judge approved a rescue plan drawn up
by the La Seda's court-appointed administrator.


CAPE VIEWER: Noble Chartering Selected as Sole Bidder
Reynolds Hutchins at Inside Business reports that Ukrainian cargo
ship Cape Viewer was auctioned on Oct. 6 on the steps of the
federal courthouse in downtown Norfolk.

According to Inside Business, the winner and sole bidder was
Noble Chartering Inc., which bid US$8.3 million for the ship.

The price is US$3 million lower than the vessel's estimated worth
on and US$800,000 less than the reported price
Mr. Baranskiy paid back in 2012, Inside Business notes.

Noble, a subsidiary of Hong Kong-based supply chain management
company Noble Group Ltd., was one of three companies that in
May filed claims against the Cape Viewer's original owner,
Viktor Baranskiy, Inside Business recounts.

According to U.S. federal court documents, in 2008 Mr. Baranskiy
attempted to file for bankruptcy in the early months of the
global economic collapse, Inside Business discloses.

Although it is a matter of some dispute, in 2008, it is believed
Mr. Baranskiy was a chief executive, or at least working behind
the scenes of a Ukrainian shipping line known as Industrial
Carriers Inc., or ICI, Inside Business notes.

At the time, ICI had entered into multiple futures contracts with
Swiss coal trader Flame S.A. and Singapore operator Glory Wealth
Shipping, Inside Business relays.

The two companies would be out a combined US$67.4 million if ICI
went bankrupt, so the pair began pursuing legal recourse, first
in London and later New York, Inside Business discloses.  But,
they had little luck.

"The two plaintiffs believed they were owed the money," Inside
Business quotes Norfolk maritime attorney Len Fleisig, who
represented Noble in the Oct. 6 auction, as saying.  "But they
couldn't go to the Ukraine to collect."

Instead, Mr. Fleisig said, the companies began to track down
Mr. Baranskiy's assets, Inside Business relays.

The search led them to Norfolk.

In November 2013, the Cape Viewer arrived in Hampton Roads and
was loaded with more than 104,606 tons of coal at the Norfolk
Southern terminal, Inside Business recounts.

The ship had been chartered by Noble Chartering Inc. to deliver
the cargo to Rotterdam, Mr. Fleisig, as cited by Inside Business,
said, "just in time for the winter heating season in north

But before the ship could aweigh anchor, attorneys representing
Flame appeared in federal court in Norfolk to ask the court to
issue an order of attachment, Inside Business relays.

The ship was seized, Inside Business recounts.

Mr. Baranskiy didn't back down though and for months fought to
free the ship in U.S. federal court, Inside Business relates.
But the claims mounted against him and even Noble threw its hat
into the ring, Inside Business notes.  On Sept. 4, in the middle
of a cross-examination, Mr. Baranskiy and his attorney Sergei
Kachura fled, Inside Business relays.

Without a defendant and with millions owed to Flame and Glory
Wealth, the Norfolk federal court ordered the Cape Viewer be sold
to repay Mr. Baranskiy's debts, Inside Business discloses.

U N I T E D   K I N G D O M

ARROW GLOBAL: S&P Alters Ratings Outlook to Neg on Capquest Deal
Standard & Poor's Ratings Services said it had revised its
outlook on U.K.-based purchaser of distressed consumer debt,
Arrow Global Group PLC, to negative from stable. The 'B+'
counterparty credit rating was affirmed.

The outlook revision follows Arrow Global's announcement on
Sept. 24, 2014, that it intends to acquire Capquest, also a
purchaser of distressed debt, for GBP158 million.  "In our view,
the acquisition will reduce the group's headroom in terms of
leverage metrics in the event of a material underperformance of
future collections. The outlook revision also reflects our view
of management's willingness to take on additional debt and weaken
Arrow Global's financial profile as a result of the fully debt-
financed acquisition. However, we note that, despite having a
somewhat shorter track record than its peers, Arrow Global has
demonstrated good operating performance and was able to reduce
leverage following its first GBP220 million bond issuance in
January 2013," said S&P.

S&P said: "We understand that the acquisition is subject to Arrow
Global's shareholders' approval. Following the acquisition,
Capquest will become part of Arrow Global's "restricted group,"
as defined in the documentation for the senior secured term
notes. Arrow Global expects to raise oe225 million in additional
debt, of which GBP158 million will finance the acquisition. It
will use the remainder to repay the existing drawings on its
revolving credit facility (RCF) and add cash to the balance
sheet. In the meantime, Arrow Global has secured bridge financing
from Goldman Sachs. The combination of Arrow Global and Capquest
will create a larger player in the U.K.'s debt purchase and
management industry in terms of the estimated remaining
collections (ERC), number of customer accounts, and debt-purchase
capacity. In terms of ERC, the combined entity will rank second
to Cabot and ahead of Lowell.

S&P expects the debt-financed acquisition to weaken Arrow
Global's debt-servicing and leverage credit metrics to levels
that remain commensurate with the 'B+' rating. However, in its
base-case scenario for Arrow Global, S&P assumes continued and
significant growth in total collections, which leaves limited
headroom should future collections materially underperform its
base-case forecast. For the combined business after the
acquisition, S&P forecasts:

  Deterioration of the ratio of gross debt to Standard & Poor's-
  adjusted EBITDA plus portfolio amortization (a noncash item) to
  about 3.5x in 2015, followed by improvement to about 3x in
  2016; and

  Weakening of the adjusted EBITDA coverage of gross cash
  interest expense to below 4.5x in 2015, before improving toward
  5x in 2016.

In S&P's view, these ratios are indicative of a stronger
financial profile than Cabot's over 2015-2016, but weaker than
that of Lowell.

At this stage, S&P does not assume any material potential benefit
of the acquisition for Arrow Global's business profile.

The long-term rating on Arrow Global reflects the group credit
profile (GCP) of the combined restricted group created by the
acquisition. S&P assesses the GCP at 'b+'. The rating on Arrow
Global, which is an intermediate nonoperating holding company,
also reflects S&P's view that there appear to be no material
barriers to cash flows to the holding company from the
subsidiaries in the restricted group.

S&P's recovery rating of '2' on Arrow Global's existing GBP220
million notes reflects its expectation of substantial recovery
(70%-90%) for noteholders in the event of a default, after
repayment of the RCF. S&P don't expect the issuance of additional
debt to materially affect the recovery prospects.

The negative outlook indicates the possibility of a downgrade if,
after the acquisition, growth in total collections is
insufficient to reduce Arrow Global's leverage over the following
12 to 18 months.  S&P assumes that the transaction will receive
shareholder approval, and the outlook therefore reflects its view
that Arrow Global's acquisition of Capquest will reduce the
group's headroom under its leverage metrics in the event of a
material underperformance of future collections. However, S&P's
base-case scenario is predicated on continued growth in total
collections, leading to improvements in cash flow coverage and
leverage metrics in 2015, after a weakening of credit metrics on
completion of the transaction.

S&P could lower the ratings if it no longer expects that Arrow
Global will steadily improve its leverage metrics in 2015, with
adjusted EBITDA interest coverage failing to recover to about
4.5x. S&P could also lower the ratings if it sees evidence of a
failure in Arrow Global's control framework, meaningful
unanticipated costs related to the proposed transaction, adverse
changes in the regulatory environment, or materially lower
collections than the company expects.

S&P could revise the outlook to stable if it saw evidence of
successful integration of Capquest that would enable the group to
start deleveraging, with the adjusted EBITDA interest coverage
ratio increasing toward 4.5x by year-end 2015 and likely to stay
above this level on a sustainable basis.

CO-OPERATIVE GROUP: FCA Approves Governance Structure Overhaul
Lauren Davidson and John Ficenec at The Telegraph report that the
Financial Conduct Authority on Oct. 1 approved a major overhaul
of Co-operative Group's governance structure and the Co-op Bank
launching a hard-hitting new advertising campaign.

The reforms, which were approved by an overwhelming majority of
the society's members at a special general meeting in August,
include a total clear out of the Co-op Group's board and a
reduction in the number of its directors from 18 to 11, The
Telegraph discloses.  Three of these will be nominated by
members, with the remainder being independent, The Telegraph

The approval of these reforms coincides with a push by the Co-op
Bank, which is about 20% owned by the Group, to restore trust in
its brand, with an advertising campaign highlighting the bank's
customer-led ethical policy, The Telegraph states.

The TV spot -- which was directed by Tony Kaye, the director of
American History X, with a score composed by Les Miserables
musician Anne Dudley -- was set to air for the first time on
Oct. 1, during Coronation Street on ITV and the Champions League
game on Sky Sports 1.

It shows a man having the words "Ethics & Values" tattooed on his
back, inspired to ink by the bank's ethical policy, The Telegraph
discloses.  "I belong to an organization that does things a
little differently," he says, over a backdrop of images of skulls
and bullets,

The bank, which has turned away more than GBP1 billion of
business that did not fit in with its ethical policy, said it
wants to attract customers to its services "for all the right
reasons", The Telegraph relays.

The bank aims to avoid investing in companies involved in animal
testing, the arms trade or sweatshop labor, among other areas
that it considers unethical according to its standards, The
Telegraph says.

According to The Telegraph, Niall Booker, chief executive of the
Co-operative Bank, said the ad campaign is "the start of
reinvesting in the brand and what makes us different."

"We understand that the difficulties the bank has faced in the
last year are bound to test customers' beliefs, but now the bank
is stronger we want to reassure them that we have not forgotten
the values and ethics that set us apart and remain a key part of
our success in the future," The Telegraph quotes Mr. Booker as

                   About Co-operative Group

Founded in 183, The Co-operative Group is UK's largest mutual
business owned by nearly 8 million members.  The consumer
cooperative organization is widely known as "The Co-op."  It has
a diverse range of retail businesses, which include food,
financial services, funeral care, legal services and online
electricals.  It operates 4,500 retail outlets, employs about
87,000 people, and has an GBP11 billion annual turnover.

In May 2013, the Group mulled the sale of a GBP2 billion loan
portfolio after Moody's downgraded the rating on the Group's
banking arm to "junk" status and raised concerns that the
division needed a government bail-out.  This was also around the
time Euan Sutherland took over Peter Marks as chief executive.
Euan Sutherland eventually resigned in March 2014, saying that
the mutual is "ungovernable."

On Aug. 30, 2014, members approved board reforms.  About 80% of
member representatives voted to replace the existing board with a
plc-style body dominated by independent directors.  With this new
development, the number of board members is expected to be
decreased by 50%.

In 2014, the Group sold its pharmacy unit, The Co-operative
Pharmacy, to Bestway Group for GBP620 million; and its farming
business, Co-operative Farms, to Wellcome Trust for GBP249
million -- all in an effort to reduce debt.

The Group posted a GBP2.5 billion (US$4.2 billion) loss in 2013,
with debts aggregating GBP1.4 billion at the end of last year.

* UK: New Employment Law Ruling May Spur Scottish Bankruptcies
Lianna Brinded at International Business Times reports that the
Confederation of British Industry Scotland has warned that the
European Court of Justice's new employment law ruling, which
allows workers to receive regular overtime, commission and bonus
payments during paid leave, could bankrupt businesses across the

According to IBT, the business lobby group said the law, which up
until now only meant employers had to stump up basic pay as part
of holiday entitlement, will cause firms to fold as companies
won't be able to survive under the extra billions of pounds in

"In Scotland and across the UK we could see job losses, we could
see major infrastructure projects come to a stop, we could see
the loss of overtime and really it stops confidence in Scotland
and in the UK," IBT quotes Andrew Palmer of CBI Scotland as

"We've got to keep on this inward investment and looking for
investment to come here."


* S&P Takes Various Rating Actions on EU Synthetic CDO Deals
After running its month-end SROC (synthetic rated
overcollateralization) figures, Standard & Poor's Ratings
Services on Oct. 6, 2014, took various credit rating actions on
11 European synthetic collateralized debt obligation (CDO)

Specifically, S&P has:

-- Raised its rating on one tranche;

-- Raised and removed from CreditWatch positive its ratings on
    four tranches;

-- Placed on CreditWatch positive its ratings on four tranches;

-- Lowered its rating to 'D (sf)' on one tranche; and

-- Affirmed its rating on one tranche.

The issuers rated are:

  Ashwell Rated S.A.
  Astir B.V.
  C.L.E.A.R. PLC
  Omega Capital Investments PLC
  Sceptre Capital B.V.
  Xelo Plc
  Selecta CDO Ltd.

A table showing the specific ratings is available at the S&P site

The rating actions are part of S&P's regular monthly review of
European synthetic CDOs. The actions incorporate, among other
things, the effect of recent rating migration within reference
portfolios and recent credit events on corporate entities.


The SROC (synthetic rated overcollateralization; see "What Is
SROC?" below) has fallen below 100% during the August 2014 month-
end run. This indicates to us that the current credit enhancement
may not be sufficient to maintain the current tranche rating.


The SROC has risen above 100% during the August 2014 month-end
run. This indicates to S&P that the current credit enhancement is
sufficient to maintain the current tranche rating.


The tranche's current SROC exceeds 100%, which indicates to S&P
that the tranche's credit enhancement is greater than that
required to maintain the current rating. Additionally, S&P's
analysis indicates that the current SROC would be greater than
100% at a higher rating level than currently assigned.


S&P has run SROC for the current portfolio and have projected
SROC 90 days into the future, while assuming no asset rating

S&P has lowered its ratings to the level at which SROC is above
or equal to 100%. However, if the SROC is below 100% at a certain
rating level but greater than 100% in the projected 90-day run,
S&P may leave the rating on CreditWatch negative at the revised
rating level.


S&P has raised its ratings to the level at which SROC exceeds
100% and meets its minimum cushion requirement. For further
details of
its upgrade guidelines, see "Revised Methodologies And
Assumptions For Global Synthetic CDO Surveillance," published on
Sept. 30, 2010.


S&P has affirmed our ratings on those tranches for which credit
enhancement is, in its opinion, still at a level commensurate
with its current ratings.


S&P has lowered its ratings to 'CC' where losses in a portfolio
have already exceeded the available credit enhancement or where,
in its opinion, it is highly likely that this will occur once S&P
knows final valuations. S&P has done so as it considers that it
is highly likely that the noteholders will not receive their full


S&P has lowered its ratings to 'D' where it has received
confirmation that losses from credit events in the underlying
portfolio have exceeded the available credit enhancement and
partially reduced the notes principal amount.

This means the noteholders did not receive interest based on the
full notional of the notes. The rating lowered to 'D (sf)' will
remain at 'D (sf)' for a period of 30 days before the withdrawal
becomes effective.


For all of S&P's European synthetic CDO transactions, S&P applies
its corporate CDO criteria (see "Update To Global Methodologies
And Assumptions For Corporate Cash Flow And Synthetic CDOs,"
published on Aug. 1, 2014. Therefore, S&P has run its analysis on
CDO Evaluator model 6.0.1, which includes the top obligor
and industry test SROCs.

In addition to the obligor and industry tests, and the Monte
Carlo default simulation results, S&P ma consider certain factors
such as credit stability and rating sensitivity to modeling
parameters when assigning ratings to CDO tranches. S&P assesses
these factors case-by-case and may adjust the ratings to a rating
level that is different to that indicated by the quantitative
results alone.


One of the main steps in S&P's rating analysis is the review of
the credit quality of the portfolio referenced assets. SROC is
one of the tools S&P uses when surveilling its ratings on
synthetic CDO tranches with reference portfolios.

SROC is a measure of the degree by which the credit enhancement
(or attachment point) of a tranche exceeds the stressed loss rate
assumed for a given rating scenario. SROC helps capture what we
consider to be the major influences on portfolio performance:
Credit events, asset rating migration, asset amortization, and
time to maturity. It is a comparable measure across different
tranches of the same rating.


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

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

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


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

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

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

This material is copyrighted and any commercial use, resale or
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

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