TCREUR_Public/141016.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

                           E U R O P E

           Thursday, October 16, 2014, Vol. 15, No. 205

                            Headlines

A U S T R I A

HYPO ALPE-ADRIA: BayernLB to File Complaint Over Special Law


C Y P R U S

AQUA SOL: Put Under Receivership by Bank of Cyprus


I C E L A N D

ARION BANK: S&P Revises Outlook to Pos. & Affirms 'BB+' Ratings


I R E L A N D

AVOCA CLO IV: Moody's Lowers Rating on Class E Notes to 'Caa1'


I T A L Y

FIAT SPA: Completed Merger No Impact on Fitch's 'BB-' IDR
LUCCHINI SPA: Wants JSW Steel to Raise Offer for Piombino Assets
ZEPHYROS FINANCE: Fitch Lowers Rating on Class A2 Notes to 'BBsf'


N E T H E R L A N D S

BELFIUS BANK: Moody's Assigns D+ Bank Financial Strength Rating
DRYDEN XXVII: S&P Affirms 'BB+' Rating on Class E Notes


R U S S I A

CB KEDR: Fitch Lowers Issuer Default Rating to 'B-'; Outlook Neg.


S L O V A K   R E P U B L I C

BRUSNO SPA: Banska Bystrica Court Puts Business Into Bankruptcy


S P A I N

BBVA CONSUMO 6: S&P Assigns 'B' Rating to Class B Notes
CAIXA PENEDES 2: Moody's Confirms 'B3' Rating on Class C Notes
FTPYME TDA 4: Moody's Cuts Rating on EUR66MM B Notes to 'Caa1'


U K R A I N E

INDUSTRIALBANK: Fitch Withdraws 'CCC/C' Issuer Default Ratings
KYIV CITY: S&P Raises Long-Term ICR to 'CCC'; Outlook Stable


U N I T E D   K I N G D O M

AMDIPHARM MERCURY: S&P Assigns 'B' CCR; Outlook Positive
FOLKESTONE INVICTA: On Course to Clear CVA in Early 2015
ULSTER ORCHESTRA: Facing Insolvency in November


                            *********


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A U S T R I A
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HYPO ALPE-ADRIA: BayernLB to File Complaint Over Special Law
------------------------------------------------------------
Oliver Suess at Bloomberg News reports that Bayerische Landesbank
will file a complaint at the constitutional court in Vienna over
a special law that wiped out loans it had given to nationalized
Austrian lender Hypo Alpe-Adria-Bank International AG.

According to Bloomberg, BayernLB said in an e-mailed statement on
Oct. 15 that it will inform about details of the complaint at a
press conference in Munich today, Oct. 16, with Bavarian Finance
Minister Markus Soeder, Chief Executive Officer Johannes-Joerg
Riegler and Bavarian Savings Banks President Ulrich Netzer.

Austrian Chancellor Werner Faymann said he hopes Austria will
prevail in court, Bloomberg relates.

Austria broke new ground in Europe this year with a law that
imposed losses on holders of EUR890 million (US$1.1 billion) of
Hypo Alpe's state-guaranteed debt, Bloomberg recounts.  The same
law also voided EUR800 million of loans owed to Munich-based
BayernLB, which acquired a majority stake in the lender in 2007,
Bloomberg notes.  Hypo Alpe was nationalized by the Austrian
government in 2009 to save it from collapse, Bloomberg relays.

BayernLB, as cited by Bloomberg, said in June that the measure
amounted to expropriation and that it would take "all necessary
measures" to protect its position.

Hypo Alpe, which almost collapsed under the weight of bad loans
in the former Yugoslavia, is in the process of selling its
profitable units and converting the rest into a wind-down
vehicle, or "bad bank," that won't have to adhere to stricter
bank capital rules, Bloomberg discloses.

                      About Hypo Alpe-Adria

Hypo Alpe-Adria International AG is a subsidiary of BayernLB.  It
is active in banking and leasing.  In banking, HGAA serves both
corporate and retail customers and offers services ranging from
traditional lending through savings and deposits to complex
investment products and asset management services.

Hypo Alpe has received EUR1.75 billion in aid in emergency
capital from the Austrian government.  European Union Competition
Commissioner Joaquin Almunia said in March 2013 that Hypo faced
possible closure for failing to adequately restructure.
The European Commission approved Hypo's recapitalization in
December 2013, but made it conditional on the management
presenting a thorough plan to overhaul the group.  The Austrian
finance ministry, which effectively runs Hypo Alpe, submitted a
restructuring plan to the Commission on Feb. 5.



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C Y P R U S
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AQUA SOL: Put Under Receivership by Bank of Cyprus
--------------------------------------------------
Angelos Anastasiou at Cyprus Mail reports that Aqua Sol, owner
and administrator of 15 hotels in Cyprus, Rhodes and Crete, along
with its nine subsidiaries has been placed under receivership for
its failure to comply with its contractual obligations with the
Bank of Cyprus.

Aqua Sol had been extended total credit of EUR99 million, of
which EUR23 million were in arrears, and approximately EUR9
million over 90 days past, and the company was deemed a "high-
risk" borrower as its loans were restructured on an annual basis,
Cyprus Mail says, citing a June 2013 BoC internal report leaked
to the press.

According to Cyprus Mail, the report also said Aqua Sol kept
minimal deposits with BoC relative to its turnover.

Cyprus Mail relates that an announcement by the appointed
receiver, Eleftherios Philippou, stated "The Company Aqua Sol
Hotels Public Company Limited and various associated companies
have been lawfully placed, as from October 13, 2014, under
Receivership, based on the provisions of Floating Charges issued
by the Companies in favor of Bank of Cyprus Public Company Ltd."

In addition to property collateral, in 2009, Aqua Sol had issued
EUR70 million worth of company securities as collateral to the
BoC, which allowed the bank to place the company under
administration in case of non-payment, Cyprus Mail notes.

Mr. Philippou, Cyprus Mail discloses, plans to continue the
operation of Aqua Sol's and its subsidiaries -- Yuleba,
Promitheus Investments, Solterra Developers & Constructions,
Raphael Panayis Properties, Polyphimos Hotels, Nike Hotels,
M.Y.P. Investments, M. Panayis Investments, and Ectoras
Properties.



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I C E L A N D
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ARION BANK: S&P Revises Outlook to Pos. & Affirms 'BB+' Ratings
---------------------------------------------------------------
Standard & Poor's Ratings Services said it revised its outlooks
on three commercial banks in Iceland--Arion Bank, Islandsbanki
hf, and Landsbankinn hf. -- to positive from stable.  S&P
affirmed its 'BB+/B' long- and short-term counterparty credit
ratings on these banks.  In addition, S&P affirmed the 'BB-/B'
ratings on Housing Financing Fund Ibudalanasjodur (HFF); the
outlook remains stable.

The outlook revisions for Iceland's three dominant commercial
banks reflect S&P's view of improving economic conditions in the
country.  Standard & Poor's forecasts annual real GDP growth of
about 3% for the next two years.  S&P expects imbalances to
decline further over the next year as the banking system finishes
restructuring its debt and as leverage in the economy continues
to decline.  S&P believes that loan losses as share of loans
should decline toward 50 basis points in 2015 (even though first-
half 2014 numbers indicate a quicker drop), and that the three
banks' other asset quality metrics will continue to improve.  As
a result, S&P believes that Iceland's banking system, in the near
term, will have built up enough capacity to limit the impact from
any residual risks from the financial crisis that broke out in
2008.  For these reasons, S&P has revised its view of the
economic risk trend in the Icelandic banking sector to positive
from stable.

S&P's positive outlooks on the three banks largely reflect its
view that the banking sector is improving and S&P's positive
outlook on Iceland.  On July 18, 2014, S&P revised the outlook on
the sovereign to positive due to strong growth and declining
government debt.  The long-term rating of 'BBB-' is one notch
higher than S&P's ratings on the banks.  The ratings on the
sovereign, and as well S&P's view of the banking sector, continue
to be constrained by the risks associated with the government's
eventual removal of capital controls.  However, in S&P's base-
case scenario, it assumes that the authorities would approach the
removal prudently to minimize the impact on the economy and
exchange rate.

The positive outlooks on the three commercial banks share a
similar rationale.  However, S&P believes that Landsbankinn and
Islandsbanki, due to their larger capital bases, could benefit
from greater ratings uplift if we would upgrade the sovereign and
revise S&P's assessment of risks related to economic imbalances
in the banking sector to intermediate from high.

The three dominant banks are approaching the end of a long period
of restructuring since their creation in 2008.  The revaluations
of their loan books are now largely complete, as are the large-
scale write-downs and clean-up of much of their portfolios.  S&P
expects the banks to continue to maintain strong balance sheets,
with very high leverage ratios and strong to very strong risk-
adjusted capital (RAC) ratios, by Standard & Poor's measure,
underpinned by high regulatory requirements.  In addition, S&P do
not expect a further adjustment to the structure of the domestic
banking market, which is more or less divided equally among the
three domestic banks, with each having a relatively similar share
of the major business lines.

For HFF, S&P affirmed the ratings and kept the outlook at stable
because it does not believe that the improvements in the domestic
economy will raise its credit quality.

S&P sees a diminished public-policy role for HFF following the
recommendations of the project committee on the organization of
Iceland's housing system.  S&P assesses HFF's role for the
government as important and the link with the government as
integral, under its criteria for rating government-related
entities (GREs).  Therefore, S&P believes there is a high
likelihood that the government of Iceland would provide timely
and sufficient extraordinary support to HFF in the event of
financial distress.

S&P currently expects HFF's operations to gradually wind down, as
called for by the housing policy proposals put forward by the
project committee appointed by Iceland's Minister of Social
Affairs and Housing.  S&P understands that these proposals are to
address limiting losses at HFF and promoting the development of
an active rental market.

                             OUTLOOK

Commercial banks

The positive outlooks on Arion Bank, Islandsbanki, and
Landsbankinn reflect S&P's view that their stand-alone credit
profiles (SACP) will likely improve alongside improvements in the
Icelandic economy.  As S&P sees a positive trend for economic
risk in the Icelandic banking sector, it would expect to upgrade
the banks, each with nearly one-third of the domestic market for
residential and commercial lending, if our view of the sector
continued to improve.

Arion Bank

S&P anticipates that Arion Bank's RAC ratio will increase toward
11%-12% as it reduces risk-weighted assets and as earnings
generation remains sound.  S&P expects the restructuring of the
loan portfolio to be close to an end and further impairments to
be limited.  In addition, S&P expects the funding and liquidity
profile to remain broadly in place, with the bank gradually
increasing its wholesale issuance, mainly through a mix of senior
unsecured and long-term covered bonds.

S&P could upgrade the bank if our assessment of risks for the
Icelandic sovereign and the Icelandic banking sector continue to
improve.  S&P could consider revising upward its assessment of
funding and liquidity if risks associated with nonresident
deposits were to be resolved.  This would improve the bank's
financial flexibility and keep its funding metrics and ample
liquidity strong.

S&P could revise the outlook to stable if the bank doesn't
execute its plan to dispose of legacy assets as S&P expects,
lowering its expectations for the RAC ratio.  Although unlikely,
an unexpected substantial increase in provisioning in the legacy
loan book and securities portfolio could also lead to such a
revision.  A situation where the sector does not continue to
improve or slides into a reversal could also lead to an outlook
revision to stable.

Islandsbanki

S&P anticipates that Islandsbanki will improve its capital ratios
and asset quality metrics over the next two years, and make
further progress in reducing the legacy equity and real estate
risks on its balance sheet.

S&P could take a positive rating action if the bank made a
strategic decision to maintain capital commensurate with a RAC
ratio securely above 15%, or if economic improvements in Iceland
led S&P to reduce its risk weights for Icelandic exposures.  The
latter would better align the bank's internal capital targets
with a higher assessment of capital and earnings.

S&P could revise the outlook to stable if the asset quality of
the bank's loan portfolio required significant additional
provisioning or if valuation risks unexpectedly arose in the
legacy loan book and securities portfolio.  However, due to
improvements in Iceland and conservative assumptions in S&P's
capital and earnings forecast, it views a downgrade as unlikely
in the near term.  A situation where the sector does not continue
to improve or slides into a reversal could also lead to an
outlook revision to stable.

Landsbankinn

S&P anticipates that Landsbankinn will improve its capital ratios
and narrow the gap with peers regarding asset quality metrics
over the next two years.  S&P also anticipates that the
preliminary agreement will extend the repayment profile of legacy
bonds of the defunct Landsbanki Islands hf.

S&P could take a positive rating action if the bank's capital
improved beyond S&P's present forecast and it reported
sustainably stronger revenues or lower credit losses than it
expects.  S&P notes that Landsbankinn's capital would improve
significantly above our 15% threshold for very strong capital if
S&P revised upward its economic risk assessment for Iceland.

S&P could revise the outlook to stable if the asset quality of
the bank's loan portfolio required significant additional
provisioning or if valuation risks unexpectedly arose in the
legacy loan book and securities portfolio.  However, S&P has used
conservative loss assumptions in its capital and earnings
forecast, so S&P views a downgrade as unlikely at present.  A
situation where the sector does not continue to improve or slides
into a reversal could also lead to an outlook revision to stable.

Housing Financing Fund (HFF)

The stable outlook reflects S&P's expectation that HFF's SACP
remains unchanged, and that the likelihood of the government of
Iceland providing timely and sufficient extraordinary support to
HFF in the event of financial distress remains high.

S&P could lower the ratings if it revised the SACP downward, for
example as a result of further significant loan losses or policy-
induced write-downs without timely compensation from the state.

S&P could raise the ratings if HFF was to significantly reinforce
its currently very weak capital adequacy, for example through a
capital increase.

On July 18, 2014, S&P revised the outlook on the long-term
sovereign ratings of Iceland to positive.  However, under S&P's
criteria for rating government-related entities, the ratings on
HFF do not change if we raise the long-term local currency
sovereign credit rating on Iceland by one or more notches, all
else being equal.

BICRA SCORE SNAPSHOT*
Iceland                          To                From

BICRA Group                      7                 7

Economic risk                   7                 7
   Economic resilience           High risk         High risk
   Economic imbalances           High risk         High risk
   Credit risk in the economy    High risk         High risk
  Trend                          Positive          Stable

Industry risk                   6                 6
   Institutional framework       High risk         High risk
   Competitive dynamics          Intermediate risk Intermediate
                                                   risk
   Systemwide funding            High risk         High risk
  Trend                          Stable            Stable

*Banking Industry Country Risk Assessment (BICRA) economic risk
and industry risk scores are on a scale from 1 (lowest risk) to
10 (highest risk).

RATINGS

Ratings Affirmed; Outlook Action
                               To                From
Arion Bank
Islandsbanki hf
Landsbankinn hf.
  Counterparty Credit Rating   BB+/Positive/B    BB+/Stable/B

Housing Financing Fund Ibudalanasjodur
  Counterparty Credit Rating   BB-/Stable/B      BB-/Stable/B

NB: This list does not include all the ratings affected.



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AVOCA CLO IV: Moody's Lowers Rating on Class E Notes to 'Caa1'
--------------------------------------------------------------
Moody's Investors Service announced that it has taken the rating
actions on the ratings of the following notes issued by Avoca CLO
IV plc:

EUR31,000,000 Class B Senior Secured Deferrable Floating Rate
Notes due 2022, Upgraded to Aaa (sf); previously on Jan 17, 2014
Upgraded to Aa1 (sf)

EUR27,000,000 Class C1 Senior Secured Deferrable Floating Rate
Notes due 2022, Upgraded to Aa3 (sf); previously on Jan 17, 2014
Upgraded to A2 (sf)

EUR5,000,000 Class C2 Senior Secured Deferrable Fixed Rate Notes
due 2022, Upgraded to Aa3 (sf); previously on Jan 17, 2014
Upgraded to A2 (sf)

EUR20,500,000 Class E Senior Secured Deferrable Floating Rate
Notes due 2022, Downgraded to Caa1 (sf); previously on Jan 17,
2014 Downgraded to B2 (sf)

Moody's also affirmed the ratings on the following notes issued
by Avoca CLO IV plc:

EUR54,000,000 (current outstanding balance EUR6.72M) Class A1A
Senior Secured Floating Rate Notes due 2022, Affirmed Aaa (sf);
previously on Jan 17, 2014 Affirmed Aaa (sf)

EUR255,000,000 (current outstanding balance EUR54.05M) Class A1B
Senior Secured Floating Rate Notes due 2022, Affirmed Aaa (sf);
previously on Jan 17, 2014 Affirmed Aaa (sf)

EUR6,000,000 Class A2 Senior Secured Floating Rate Notes due
2022, Affirmed Aaa (sf); previously on Jan 17, 2014 Affirmed Aaa
(sf)

EUR20,500,000 Class D Senior Secured Deferrable Floating Rate
Notes due 2022, Affirmed Ba1 (sf); previously on Jan 17, 2014
Affirmed Ba1 (sf)

Avoca CLO IV plc, issued in January 2006, is a Collateralised
Loan Obligation ("CLO") backed by a portfolio of mostly leveraged
senior secured European loans managed by Avoca Capital Holdings.
This transaction ended its reinvestment period in February 2012.

Ratings Rationale

The upgrades to the ratings on the Class B, C1 and C2 notes are
primarily a result of the improvement of their over-
collateralization ("OC") ratios following the August 2014 payment
date, when Class A1A and A1B amortized by EUR 12.2M and EUR
51.9M, respectively, or 22.6% and 20.4% of their original
balances, respectively. The downgrade to the rating on the Class
E notes is due to its increased sensitivity to the deterioration
of the credit quality of the underlying assets given the decrease
in granularity of the collateral pool.

As of the trustee's August 2014 report, Class A, Class B, Class
C, Class D and Class E had OC ratios of 254.2%, 173.6%, 130.79%,
112.95% and 99.39% compared with 178.92%, 144.66%, 120.78%,
109.24% and 99.70% respectively, as of the trustee's June 2014
report.

The key model inputs Moody's uses, 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 EUR167.3M, defaulted par of
EUR8.7M, a weighted average default probability of 20.9%
(consistent with a WARF of 3.148), a weighted average recovery
rate upon default of 50% for a Aaa liability target rating, a
diversity score of 20 and a weighted average spread of 3.91%.

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 7.16% of obligors in Spain, whose LCC is A1 and
7.45% in Italy, whose LCC is A2, 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 1.84% for the Class A1A, A1B, A2 and
Class B notes and 1.15% for the Class C1 and C2 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 100% of the portfolio
exposed to first-lien senior secured 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:

This transaction is subject to a high level of macroeconomic
uncertainty, which could negatively affect the ratings on the
note, 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 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.

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.

Around 27.8% of the collateral pool consists of debt obligations
whose credit quality Moody's has assessed by using credit
estimates.

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.



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FIAT SPA: Completed Merger No Impact on Fitch's 'BB-' IDR
---------------------------------------------------------
Fitch Ratings says Fiat S.p.A's completed merger with Fiat
Investments NV has no impact on its ratings and Outlook.  Fiat's
Long-term Issuer Default Rating (IDR) and senior unsecured rating
are 'BB-' and its Short-term IDR is 'B'.  The Outlook is Stable.

Fiat has merged with and into its 100%-owned direct subsidiary
Fiat Investments NV, which has been renamed Fiat Chrysler
Automobiles N.V. (FCA).  FCA has become the new holding company
of the group and owns 100% of Fiat Group Automobiles S.P.A. and
100% of Fiat North America LLC, which in turn, owns 100% of
Chrysler Group LLC.

The transaction has no impact on the ratings as it does not
directly impact the group's operational profile, capital
structure and key credit metrics.  In addition, debt issued and
guaranteed by Fiat will now be guaranteed by FCA.

KEY RATING DRIVERS

Chrysler Ring-Fencing
Existing covenants in Chrysler's financing documentation limits
FCA's access to Chrysler's cash and financial benefits that
Chrysler bring to FCA.  This prevents Fitch rating FCA on a fully
consolidated basis.  FCA can only receive dividends up to USD500m
plus 50% of cumulative net income since Jan. 1, 2012, net of
USD1.9bn paid in Jan. 2014.  Chrysler can, however, grant
intercompany loans to FCA on an arm's length basis.

Full access to Chrysler's cash can be achieved with the
refinancing of Chrysler's credit agreements and bonds maturing in
2019 and 2021 with unrestricted conditions.  This refinancing is
unlikely to take place before 2015 and 2016, respectively, as the
bonds' make-whole clause would make a buy-back expensive for
Chrysler.

Ambitious Business Plan

FCA's five-year business plan presented in May 2014 targets a 52%
sales increase by 2018, notably by expanding its geographical
commercial footprint, expanding its product portfolio and by a
refocused effort on its premium brands.  FCA expects to produce
the models for its luxury and premium brands in its underutilized
factories in Italy, to avoid plant closure and to cut losses.
FCA expects to increase EBIT margin to between 6.6%-7.4% in 2018,
from 4.1% in 2013 and less than the 4% expected by Fitch in 2014.

This plan makes strategic sense but will be costly as it entails
an acceleration of capex and R&D and carries substantial
execution risk.  Some of the group's brands are still perceived
quite poorly and it can take time to increase sales sufficiently
to maintain existing capacity in Europe.  However, increasing
sales at Maserati and Jeep are positive signals.

Pressure on Earnings

"We expect further losses in Europe in 2014 and 2015 and a
sharply declining contribution from the usually very profitable
Latin American market.  This should be mitigated by Chrysler's
solid performance and by that of other divisions, including its
luxury brands.  However, from a cash-flow perspective, improving
funds from operations (FFO) will be absorbed by rising investment
to make up for the cuts made in past years," said Fitch.  Fitch
projects free cash flow (FCF) to remain negative through at least
2016.

Healthy Liquidity

FCA ex-Chrysler reported EUR7.3bn in cash and equivalents at end-
1H14, excluding Fitch's EUR1.4bn adjustments for minimum
operational cash and EUR2.1bn of undrawn credit lines.  This
largely covers EUR5bn of debt maturing in 2014 and negative FCF.
Chrysler also reported EUR8.3bn in cash and marketable securities
adjusted for operational needs and EUR1bn of undrawn credit
lines, comfortably covering EUR0.1bn of debt maturing in 2014.

RATING SENSITIVITIES

Positive: Future developments that could lead to positive rating
actions include:

   -- Positive FCF and higher margins at FCA auto mass market, on
      a sustained basis

   -- Full access to Chrysler's cash, without weakening the
      group's capital structure in parallel

Negative: Future developments that could lead to negative rating
actions include:

   -- Falling revenue and operating margins, including group EBIT
      margin below 2%, mounting liquidity issues, including
      refinancing risks, consolidated FFO-net adjusted leverage
      above 2.5x (2013: 1.8x, 2014E: 2.4x) and no sign of FCF
      turning positive by end-2016

   -- Evidence of significant financial support to Chrysler to
      the detriment of existing FCA bondholders


LUCCHINI SPA: Wants JSW Steel to Raise Offer for Piombino Assets
----------------------------------------------------------------
Reuters reports that Lucchini SpA said on Tuesday it planned to
ask India's JSW Steel to raise its offer of less than US$100
million for the troubled Italian company's core assets in
Piombino on the Tuscan coast.

Lucchini was previously owned by Russia's Severstal but it was
declared insolvent in 2012 and placed under special
administration, Reuters recounts.  JSW so far has made the only
binding offer, Reuters notes.

According to Reuters, Italian media reported on Tuesday that
Algerian family-owned conglomerate Cevital was ready to offer
US$300 million for the assets and commit to building two electric
arc furnaces in Piombino.

JSW's plan is to use Piombino as a processing facility, bringing
the steel in from elsewhere rather than producing it locally,
Reuters discloses.  Italian labor unions are opposed to such a
piecemeal sale because it would mean job losses, Reuters relays.

"We will ask the Commissioner to evaluate every offer and not
just the most advanced one.  We understand Cevital would keep
steelmaking alive in Piombino, whereas JSW would not," Reuters
quotes Gianni Venturi, national co-ordinator for Italian union
FIOM CGIL, as saying.

Lucchini SpA is Italy's second biggest steel producer.


ZEPHYROS FINANCE: Fitch Lowers Rating on Class A2 Notes to 'BBsf'
-----------------------------------------------------------------
Fitch Ratings has downgraded Zephyros Finance S.r.l.'s (Zephyros)
class A2 and affirmed class A1 notes as:

Class A1 (IT0004395635): affirmed at 'AAAsf'; Outlook Stable
Class A2 (IT0004395643): downgraded to 'BBsf' from 'BBBsf';
Outlook Negative

The downgrade of the class A2 notes reflects increased obligor
concentration and the transaction's weakened performance,
demonstrated by rising delinquency and default rates as well as
by the recent decline in recoveries.

Zephyros is a securitization of receivables arising from mixed
finance lease contracts (real estate, equipment, industrial
vehicles, autos) originated in Italy by Commercio e Finanza
S.p.A. Leasing e Factoring (CFLF), owned by Cassa di Risparmio di
Ferrara S.p.A. (Carife).  Both CFLF and Carife are under the Bank
of Italy's special administration.  The deal closed in 2008 and
had a 15-month revolving period that ended in Oct. 2009.  As of
Aug. 1, 2014, the total performing and delinquent loans amounted
to EUR59.7 million (15.7% of its initial securitized balance).

KEY RATING DRIVERS

Increased Obligor Concentration

The increasing share of real estate leases (99% of the performing
and delinquent portfolio as of August 1, 2014) due to on-going
amortization of the shorter leases has significantly reduced the
portfolio's diversification, increasing the vulnerability to
defaults of large obligors.  This increase in concentration has
been reflected in Fitch's rating default rate assumptions.

According to Fitch's calculations on the loan by loan data
provided by CFLF, the largest obligor and the top 20 obligors
accounted for 2.7% and 27.8%, respectively, of the performing and
delinquent portfolio as of Aug. 1, 2014.  Obligors representing
more than 0.5% accounted for 55.2%.

Poor Deal Performance

Despite the six years' seasoning of the transaction, new period
defaults remain high.  As of Aug. 1, 2014, the cumulative default
rate increased to 22.1% (from 20.1% in Nov. 2013) while the 90
plus days delinquencies stood at 7.3% (up from 5.2%).

Fitch has assumed in its analysis a five-year annual average
probability of default (PD) expectation of 8.5% (based on a 180
days past due (dpd) default definition).  This corresponds to a
remaining base case default expectation of 38.6% on the
outstanding performing and delinquent portfolio. Life-time base
case default expectations are unchanged at 25%.

Deleveraging of the rated notes is expected to be slow, mainly
due to the long amortization of the remaining assets.  Based on
the loan by loan data provided by CFLF, Fitch has estimated a
weighted average remaining term of about seven years for the
performing and delinquent lease contracts.

High gross excess spread that helped to constrain the principal
deficiency ledger (PDL) until Nov. 2013 has been gradually
reducing over the last three quarters.  This was mainly due to a
reduction in recovery proceeds, despite the significant amount of
outstanding defaulted assets (EUR95.4m as at Aug. 1, 2014).
Fitch has taken account of this reduction in its analysis by
revising its life-time base case recovery expectations down to
15% (from 20%).

The annualized gross excess spread, including recoveries,
decreased to 4.7% in Aug. 2014 from 11% in Nov. 2013.  As a
result, the un-provisioned PDL increased to EUR40.2 million in
Aug. 2014 (42.2% of the unrated class J notes) from EUR32.9
million in Nov. 2013.

Residual Value Exposure

The current exposure to residual value (RV) is EUR16.7 million
(28% of the performing and delinquent collateral).  Fitch did not
give credit to RV in its analysis.  This is because, should the
originator default, there is uncertainty under the Italian law on
whether the transfer of the RV payments collected after the
default of the originator would be effective and enforceable
against the originator's insolvency receiver.  The credit
enhancement (CE) -- excluding RV -- available to the rated notes
has only marginally increased to 43.7% (in Aug. 2014) from 42.6%
(in Nov. 2013).

Likewise, claims represented by proceeds from the sale of the
underlying leased assets that have not yet arisen at the time of
the originator default might not be effective and enforceable
against the insolvency receiver of the originator.  This
uncertainty is reflected in Fitch's recovery assumptions.

European Investment Fund Guarantee

The class A1 notes benefit from an irrevocable and unconditional
guarantee by the European Investment Fund (AAA/Stable/F1+) with
respect to interest and principal.  The class A1 notes rating is
therefore supported by a floor at the rating of the guarantor.

RATING SENSITIVITIES

The class A1 notes' rating is linked to the European Investment
Fund rating.  A downgrade of the European Investment Fund will
result in a downgrade of the class A1 notes' rating.

The class A2 notes are able to withstand a 25% reduction in the
loan-level recovery rates without its rating being affected,
whereas a 25% increase to the probability of default of each
obligor in the pool would result in a downgrade of one notch.



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


BELFIUS BANK: Moody's Assigns D+ Bank Financial Strength Rating
---------------------------------------------------------------
Moody's Investors Service has assigned a definitive Aaa long-term
rating to the covered bonds (Series no. 1, Tranche no. 1) issued
by Belfius Bank SA/NV (the issuer, deposits Baa1 negative, bank
financial strength rating D+/adjusted baseline credit assessment
ba1) under its public sector covered bond program (Belgian public
pandbrieven program).

Ratings Rationale

A covered bond benefits from (1) the issuer's promise to pay
interest and principal on the bonds; and (2) following a CB
anchor event, the economic benefit of a collateral pool (the
cover pool). The rating therefore reflect the following factors:

(1) The credit strength of the issuer and a CB anchor of SUR plus
one notch. The covered bonds are full recourse to the issuer.

(2) Following a CB anchor event, the value of the cover pool, if
the issuer defaults. The stressed level of losses on the cover
pool assets following a CB anchor event (cover pool losses) for
this transaction is 25.5%.

Moody's considered the following factors in its analysis of the
cover pool's value:

a) The credit quality of the assets backing the covered bonds.
The public-sector covered bonds are backed by claims against
Belgian public-sector entities. The collateral score for the
cover pool is 14.4%.

b) The Belgian legal framework for covered bonds. Notable aspects
are:

(i) Segregation of the cover pool assets through the constitution
of a special estate, which would not form part of the general
insolvency estate, if the issuer becomes insolvent. Also, issuer
insolvency would not trigger the acceleration of the covered
bonds.

(ii) A liquidity test that requires the issuer to always maintain
sufficient liquid assets to meet all unconditional payments on
the covered bonds (including principal, interest and other costs)
over a six-month period.

(iii) An amortization test that requires the issuer to ensure
that the cover pool assets provide sufficient revenues to cover
(1) the payment of principal and interest on the covered bonds;
and (2) the obligations towards other creditors that are (or can
be) identified in the issuance documentation.

(iv) A cover pool monitor that is responsible for verifying that
the issuer meets all legal requirements.

c) The exposure to market risk, which is 17.6% for this cover
pool.

d) The over-collateralization (OC) in the cover pool is 32%, of
which Belfius Bank provides 5% on a "committed" basis (see Key
Rating Assumptions/Factors, below).

The TPI assigned to this transaction is Probable-High. Moody's
TPI framework does not constrain the rating.

At present, the total value of the assets included in the cover
pool, comprising 31,497 loans to public sector entities in
Belgium, is approximately EUR1.65 billion.

Key Rating Assumptions/Factors

Moody's determines covered bond ratings using a two-step process:
an expected loss analysis and a TPI framework analysis.

EXPECTED LOSS: Moody's uses its Covered Bond Model (COBOL) to
determine a rating based on the expected loss on the bond. COBOL
determines expected loss as (1) a function of the probability
that the issuer will cease making payments under the covered
bonds (a CB anchor event); and (2) the stressed losses on the
cover pool assets following a CB anchor event.

The CB anchor for this program is SUR plus one notch given the
debt ratio is between 5% and 10% and the uplift of the issuer's
SUR over the adjusted BCA is three notches.

The cover pool losses for this program are 25.5%. This is an
estimate of the losses Moody's currently models following a CB
anchor event. Moody's splits cover pool losses between market
risk of 17.6% and collateral risk of 7.9%. Market risk measures
losses stemming from refinancing risk and risks related to
interest-rate and currency mismatches (these losses may also
include certain legal risks). Collateral risk measures losses
resulting directly from cover pool assets' credit quality.
Moody's derives collateral risk from the collateral score, which
for this program is currently 14.4%.

The over-collateralization in the cover pool is 32%, of which the
issuer provides 5% on a "committed" basis. The minimum OC level
consistent with the Aaa rating target is 30%.

TPI FRAMEWORK: Moody's assigns a "timely payment indicator"
(TPI), which measures the likelihood of timely payments to
covered bondholders following a CB anchor event. The TPI
framework limits the covered bond rating to a certain number of
notches above the CB anchor.

Factors that would lead to a downgrade of the rating:

The CB anchor is the main determinant of a covered bond program's
rating robustness. A change in the level of the CB anchor could
lead to a downgrade of the covered bonds. The TPI Leeway measures
the number of notches by which Moody's might lower the CB anchor
before the rating agency downgrades the covered bonds because of
TPI framework constraints.

Based on the current TPI of "Probable-High", the TPI Leeway for
this program is zero notches. This implies that Moody's might
downgrade the covered bonds because of a TPI cap, if it lowers
the Belfius Bank's CB anchor all other variables being equal.

A multiple-notch downgrade of the covered bonds might occur in
certain limited circumstances, such as (1) a sovereign downgrade
negatively affecting both the issuer's senior unsecured rating
and the TPI; (2) a multiple-notch downgrade of the issuer; or (3)
a material reduction of the value of the cover pool.

Rating Methodology

The principal methodology used in this rating was "Moody's
Approach to Rating Covered Bonds" published in March 2014.


DRYDEN XXVII: S&P Affirms 'BB+' Rating on Class E Notes
-------------------------------------------------------
Standard & Poor's Ratings Services affirmed its credit ratings on
Dryden XXVII Euro CLO 2013 B.V.'s EUR415 million (including the
EUR166 million tap issuance) fixed- and floating-rate class A-1A,
A-1B, B-1A, B-1B, C-1A, C-1B, D, and E notes.

Dryden XXVII Euro CLO 2013 has increased its issuance of all
rated classes of notes by 66.7% (EUR166 million) to EUR415
million from a previous total notional amount of EUR249 million.
At closing, Dryden XXVII Euro CLO 2013 issued an unrated
subordinated class of notes, which has also increased to EUR87
million (by 70.3% of its initial balance) from EUR51 million.
The transaction will use the net proceeds of the tap issuance
(EUR197.7 million) to purchase EUR192.7 million of collateral
assets, increasing the portfolio notional balance to EUR485
million from an initial target par amount of EUR292 million.

The transaction documents allow for the additional issuance of
notes subject to certain conditions.  These include a limit of
100% of the original aggregate principal amount of the notes, a
proportionate increase among each rated class of notes,
maintenance and improvement of the coverage tests, and identical
terms with the previously issued notes.  The subordinated
collateral management fee has decreased to 0.32% from 0.35%.
Otherwise, the reinvestment period, portfolio profile tests, and
collateral quality tests remain unchanged.  The available credit
enhancement for all of the rated classes of notes has also
remained the same as at closing on May 9, 2013.

S&P's ratings reflect its assessment of the collateral
portfolio's credit quality, which has a weighted-average 'B+'
rating.  S&P's ratings also reflect the available credit
enhancement for the rated notes through the subordination of cash
flows payable to the subordinated notes.  S&P subjected the
capital structure to a cash flow analysis to determine the break-
even default rate for each rated class of notes.

S&P's credit, cash flow, and counterparty analysis, indicates
that the available credit enhancement for all classes of notes is
commensurate with their currently assigned ratings.  S&P has
therefore affirmed its ratings on all classes of notes in this
transaction.

Dryden XXVII Euro CLO 2013 is a European cash flow corporate loan
collateralized loan obligation (CLO) securitization of a
revolving pool, comprising euro-denominated senior secured loans
and bonds issued by European borrowers. Pramerica Investment
Management Ltd. acts as collateral manager.

RATINGS LIST

Dryden XXVII Euro CLO 2013 B.V.
EUR502 Million Fixed- And Floating-Rate Notes
(Including A EUR202 Million Tap Issuance)

Class                 Rating

Ratings Affirmed

A-1A                  AAA (sf)
A-1B                  AAA (sf)
B-1A                  AA (sf)
B-1B                  AA (sf)
C-1A                  A (sf)
C-1B                  A (sf)
D                     BBB (sf)
E                     BB+ (sf)



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


CB KEDR: Fitch Lowers Issuer Default Rating to 'B-'; Outlook Neg.
-----------------------------------------------------------------
Fitch Ratings has downgraded Russian bank JSC CB Kedr's (Kedr)
Long-term Issuer Default Ratings (IDRs) to 'B-' from 'B'.  The
Outlook is Negative.

KEY RATING DRIVERS: IDRs, VIABILITY RATING (VR) AND NATIONAL
RATING

The downgrade reflects the significant deterioration in Kedr's
credit profile since our last review in April 2014.  Worsened
profitability and asset quality caused capital to erode by 13% in
1H14.  Fitch estimates that if the bank continues to generate
losses at the same pace as in 1H14 and shareholders have not
provided it with new equity, it would use up its capital buffer
in about half a year.  Liquidity is less of a risk and the
ratings continue to benefit from a granular customer deposit base
and limited wholesale debt.

The Negative Outlook reflects the weak performance, with the bank
relying on external support in order not to run through its
capital, as well as contingent risks of potential claims from the
Depositary Insurance Agency (DIA) with respect to certain assets
recovered from a failed bank immediately before its failure in
March 2014.

Kedr lost 13% of its equity in 1H14, as it became loss making on
a pre-impairment basis and impairment charges also increased due
to weaker asset quality.  As a result, Kedr's Fitch Core Capital
(FCC) ratio dropped to a modest 9.1% at end-1H14 from 11.3% at
end-2013.  Kedr's regulatory core Tier 1 capital ratio also
decreased to a low 6.8% at end-9M14 from 7.7% at end-2013 (with
the required minimum of 5%), allowing the bank to withstand
additional losses of a modest 2.7% of gross loans.  Kedr's
regulatory total and Tier 1 capital ratios did not change
significantly for 9M14 due to RUB250 million perpetual
subordinated debt raised in 1Q14.

If the bank's performance does not improve and the shareholders
do not provide new equity or merge it with another bank (they
also own several banks, of which the largest is OJSC Bank ROST),
Kedr may soon exhaust its capital buffer.  According to
management, shareholders have no short-term plans to recapitalize
Kedr, although the bank's management aims to improve the capital
position via the disposal of non-core investment property and
further deleveraging of the balance sheet.

In May 2014, KEDR's ownership structure changed for the third
time in three years, when the bank was acquired by a group of
entities closely related to Bank ROST and their ultimate
beneficiary, Mr. Oleg Karchev, who is also a co-owner of one of
the largest Russian IT distributors.  ROST banking group
(combined assets at about RUB127 billion) consists of seven
Russian banks, four of which are expected to be merged by end-
2014, while Kedr, according to management, will likely be merged
into it by end-2015.

Asset quality is weak.  Non-performing loans (NPLs; loans 90 days
overdue) were at 7.2% of total loans and 1.2x covered with
reserves at end-1H14 (5.3%, 1.4x at end-2013).  Larger borrowers
seem of reasonable quality, albeit there are three loans (totally
amounted to 38% of end-1H14 FCC), which appeared after the
acquisition by ROST group, which raise concerns due to them being
weakly secured and/or issued to companies with a limited track
record/weak financial standing.  Additional asset quality risks
stem from loan exposure to the construction and real estate
sectors (a significant 0.7x FCC at end-1H14) and non-core assets
(a high 0.8x FCC), mostly represented by a large plot of land in
the Moscow region, albeit reasonably valued and attractively
located.

The contingent risks related to assets (0.6x of FCC at end-1H14)
recovered from another bank shortly before its license was
withdrawn.  In Fitch's view, there is a risk that the
transactions that led to the recovery of Kedr's exposure could be
challenged by the DIA, which is overseeing the resolution of the
affected bank, potentially leading to their reversal and thus
moderate recovery prospects through bankruptcy.  This in turn may
undermine Kedr's capitalization unless it is promptly rectified
by the shareholders.  However, management is confident that the
transactions were legitimate and the DIA has not yet appealed
them.

Liquidity is reasonable, supported by highly granular retail
funding (93% of total liabilities at end-1H14) and a comfortable
buffer of liquid assets, sufficient to withstand an 18% outflow
of customer accounts at end-1H14.  However, roughly one-third of
Kedr's liquid assets are placed in Bank ROST, whose liquidity
position looks tighter based on regulatory accounts.

RATING SENSITIVITIES: IDRs, VR AND NATIONAL RATING

The ratings would be downgraded in case of further asset quality
deterioration and/or losses eroding capital base and if
shareholders are hesitant to provide new equity and/or merge it
with a better capitalized bank.  A downgrade could also occur if
the transactions with the defaulted bank become reversed,
potentially requiring recapitalization of Kedr.

The Outlook could be revised to Stable if performance notably
improves, contingent risks related to the defaulted bank subside
and there is no significant deterioration of the credit risk
profile.  Disposal of non-core assets, a strengthening of
capitalization and a significant improvement of performance would
also be credit positive.

KEY RATING DRIVERS AND RATING SENSITIVITIES: SUPPORT RATING AND
SUPPORT RATING FLOOR (SRF)

Kedr's SRF of 'No Floor' and Support Rating of '5' reflect its
limited systemic importance, as a result of which extraordinary
support from the Russian authorities cannot be relied upon, in
Fitch's view.  The potential for support from private
shareholders is also not factored into the ratings, as it cannot
be reliably assessed.  Fitch does not expect any revision of the
bank's SRF or Support Rating in the foreseeable future.

The rating actions are:

Long-term foreign and local currency IDR: downgraded to 'B-' from
'B'; Outlook Negative

Short-term foreign currency IDR: affirmed at 'B'

National Long-term Rating: downgraded to 'BB-(rus)' from 'BBB-
(rus)'; Outlook Negative

Viability Rating: downgraded to 'b-' from 'b'

Support Rating: affirmed at '5'

Support Rating Floor: affirmed at 'NF'



=============================
S L O V A K   R E P U B L I C
=============================


BRUSNO SPA: Banska Bystrica Court Puts Business Into Bankruptcy
---------------------------------------------------------------
TASR reports that even though 93% of creditors of the Brusno spa
voted for adopting a restructuring plan last week, a session of
the Banska Bystrica District Court rejected the plan and placed
the spa into bankruptcy.

"The restructuring plan approved by creditors counted on
satisfying individual groups of secured creditors to the tune of
100 percent of their claims," owner and director of the spa
Stefan Hrcka told the TASR newswire.

"The spa is now ahead of a shutdown and mass lay-offs, however.
According to the trustee, creditors may lose more than EUR20
million that had been guaranteed by the restructuring plan."

According to TASR, Mr. Hrcka said that the judge's decision will
affect employment in the region and poses a real danger to
tourism in the area near Banska Bystrica.

"The spa will use all possible appeals to prevent the decline
from taking place and in order to save jobs in the region,"
Mr. Hrcka, as cited by TASR, said, adding that the spa will be
running in its normal regimen until the situation is resolved.

Bruno spa is located in the Banska Bystrica region.



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


BBVA CONSUMO 6: S&P Assigns 'B' Rating to Class B Notes
-------------------------------------------------------
Standard & Poor's Ratings Services has assigned credit ratings to
BBVA Consumo 6, Fondo de Titulizacion de Activos' class A and B
notes.  At closing, BBVA Consumo 6 also issued an unrated
subordinated loan.

The transaction securitizes a portfolio of Spanish consumer loans
that Banco Bilbao Vizcaya Argentaria, S.A. (BBVA) originated.
The issuer used the notes issuance proceeds to purchase the
loans, and the subordinated loan proceeds to fund the reserve
fund required amount.  Under the transaction documents, the
issuer can purchase further eligible receivables during the first
15 months of the revolving period, as long as no early
amortization events occur.

S&P's analysis indicates that the available credit enhancement
for the class A and B notes is sufficient to withstand the credit
and cash flow stresses that S&P applies at the assigned rating
levels.

                         RATING RATIONALE

Sector Outlook

S&P's base-case scenario for Spain indicates that GDP will grow
to 1.3% by year-end 2014, and 1.8% in 2015.  S&P expects
unemployment to decrease to 24.2% by year-end 2014, and 23% in
2015.  S&P considers these metrics to be key determinants of
portfolio performance.  S&P sets its credit assumptions to
reflect its economic outlook.  Although GDP prospects are
positive, unemployment remains high, so S&P's view on the
consumer loan sector's fundamentals remains negative.

Operational Risk

BBVA is a leading Spanish bank.  It is a well-established
originator with a good track record in the Spanish securitization
market.  In addition to originating the loans, BBVA services the
loans.  It is also the paying agent and treasury and principal
account provider.

S&P's ratings on the class A and B notes reflect its assessment
of the bank's origination policies, as well as S&P's evaluation
of its ability to fulfill its role as servicer under the
transaction documents.

Credit Risk

S&P has used performance data from BBVA's loan portfolio and from
previous transactions to analyze credit risk.  S&P expects to see
about 12% of defaults in the securitized pool.  Compared with its
rated predecessor, BBVA Consumo 5, Fondo de Titulizacion de
Activos, we have increased our baseline default expectations by
1% due to a weakening in the portfolio's composition.  A larger
portion of BBVA Consumo 6's loans were granted for unspecified
general consumption, rather than for vehicle acquisition.  In
addition, a smaller portion of the borrowers are permanently
employed.  S&P has analyzed credit risk by applying its European
consumer finance criteria.

Counterparty Risk

S&P considers that the transaction's documented replacement
mechanisms adequately mitigate its counterparty risk exposure to
BBVA as bank account provider up to a 'A' rating level under
S&P's current counterparty criteria.  The transaction is exposed
to the risk of cash collections becoming commingled in BBVA's
account. Under the documentation, BBVA transfers the collected
funds in two business days to the treasury account, which is held
with BBVA in the issuer's name.  According to S&P's current
counterparty criteria, the two-day time limit fully mitigates
commingling risk.

Legal Risk

S&P considers the issuer to be bankruptcy-remote, in line with
its European legal criteria and Spanish law.  S&P has received
legal confirmation that the sale of the assets would survive if
the seller were to become insolvent.

Cash Flow Analysis

S&P has assessed the transaction's documented payment structure.
S&P derived its credit and cash flow assumptions by applying its
European consumer finance criteria.  Credit enhancement for the
rated tranches arises from a combination of subordination, a
reserve fund, and potential excess spread.  The class A notes
also benefit from a trigger based on the amount of doubtful loans
(defined under the documentation as loans in arrears over 18
months) to defer the class B notes' interest in order to speed up
the payment of the class A notes' principal.

S&P's analysis indicates that the class A and B notes' available
credit enhancement is sufficient to withstand the credit and cash
flow stresses that S&P applies at the assigned rating levels.

Sovereign Risk

To determine the rating for the transaction, S&P applied a
hypothetical sovereign default stress test to determine whether
the class A notes have sufficient credit and structural support
to withstand a sovereign default and so repay timely interest and
principal by legal final maturity.

"Our rating single-jurisdiction securitizations above the
sovereign foreign currency rating criteria (RAS criteria)
designate the country risk sensitivity for asset-backed
securities (ABS) as "moderate".  Under our RAS criteria, this
transaction's notes can therefore be rated four notches above the
sovereign rating, as they have sufficient credit enhancement to
pass a minimum of a "severe" stress.  However, our 'A (sf)'
rating on the class A notes is constrained by the rating derived
by applying our European consumer finance criteria, and is only
three notches above our long-term rating on the Kingdom of
Spain," S&P said.

Ratings Stability

In S&P's review, it has analyzed the effect of a moderate stress
on the credit variables and their ultimate effect on the ratings
on the notes.  S&P has run two scenarios and the results are in
line with its credit stability criteria

RATINGS LIST

Ratings Assigned

BBVA Consumo 6, Fondo de Titulizacion de Activos
EUR336 Million Asset-Backed Fixed-Rate Notes
Including A Subordinated Loan

Class           Rating          Amount
                              (mil. EUR)

A               A (sf)             255
B               B (sf)              45
Sub loan (RF)   NR                  36

NR--Not rated.


CAIXA PENEDES 2: Moody's Confirms 'B3' Rating on Class C Notes
--------------------------------------------------------------
Moody's Investors Service has upgraded the ratings of 5 notes,
confirmed the ratings of 2 notes and affirmed the rating of 2
notes in 3 Spanish residential mortgage-backed securities (RMBS)
transactions: AyT HIPOTECARIO MIXTO II, FTA, Caixa Penedes 2 TDA,
FTA, and IM Cajastur MBS 1, Fondo de Titulizacion de Activos.

The rating action concludes the review of 7 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.

For AyT HIPOTECARIO MIXTO II, FTA, 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 change.

-- 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 sufficiency 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.

-- Exposure to Counterparties

Moody's rating analysis also took into consideration the exposure
to key transaction counterparties. Including the roles of
servicer, account bank, and swap provider.

The conclusion of the rating review reflects the multi-servicer
exposure in AyT HIPOTECARIO MIXTO II, FTA; the exposure to Banco
Sabadell, S.A. who has integrated with Caixa Penedes 2 TDA, FTA
in 2013 acting as servicer in Caixa Penedes 2 TDA, FTA; and to
Liberbank as servicer in IM Cajastur MBS 1, Fondo de Titulizacion
de Activos. Moody's also note linkage to Banco Santander S.A.
(Spain) in IM Cajastur MBS 1, Fondo de Titulizacion de Activos,
where it plays a number of roles including the issuer account
bank holding the reserve fund which is currently 16.8% of note
balance.

Moody's also assessed the exposure to swap counterparties when
revising ratings. JPMorgan Chase Bank, NA is the swap
counterparty for AyT HIPOTECARIO MIXTO II, FTA and Caixa Penedes
2 TDA, FTA. Liberbank is the swap counterparty for IM Cajastur
MBS 1, Fondo de Titulizacion de Activos.

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
ratings:

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
counterparties.

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: AYT HIPOTECARIO MIXTO II FONDO DE TITULIZACION

EUR112.8M Class CH1 Notes, Affirmed A1 (sf); previously on
Mar 17, 2014 Upgraded to A1 (sf)

EUR12.7M Class CH2 Notes, Upgraded to Baa1 (sf); previously on
Mar 17, 2014 Baa3 (sf) Placed Under Review for Possible Upgrade

EUR367.8M Class PH1 Notes, Upgraded to A1 (sf); previously on
Mar 17, 2014 A3 (sf) Placed Under Review for Possible Upgrade

EUR16.7MClass PH2 Notes, Confirmed at Ba3 (sf); previously on
Mar 17, 2014 Ba3 (sf) Placed Under Review for Possible Upgrade

Issuer: CAIXA PENEDES 2 TDA FTA

EUR726.3M Class A Notes, Upgraded to A2 (sf); previously on
Mar 17, 2014 Baa1 (sf) Placed Under Review for Possible Upgrade

EUR7.2M Class B Notes, Upgraded to Ba1 (sf); previously on
Mar 17, 2014 Ba2 (sf) Placed Under Review for Possible Upgrade

EUR16.5M Class C Notes, Confirmed at B3 (sf); previously on
Mar 17, 2014 B3 (sf) Placed Under Review for Possible Upgrade

Issuer: IM CAJASTUR MBS 1, FTA

EUR492M Class A Notes, Affirmed A1 (sf); previously on Mar 17,
2014 Upgraded to A1 (sf)

EUR123M Class B Notes, Upgraded to Baa3 (sf); previously on
Mar 17, 2014 B1 (sf) Placed Under Review for Possible Upgrade


FTPYME TDA 4: Moody's Cuts Rating on EUR66MM B Notes to 'Caa1'
--------------------------------------------------------------
Moody's Investors Service has upgraded the ratings on nine notes,
downgraded the rating on one note and affirmed the rating on one
note in three Spanish asset-backed securities (ABS) transactions:
FTPYME TDA CAM 2, FTA; FTPYME TDA CAM 4, FTA; and FTPYME TDA CAM
7, FTA.

The rating action concludes the review of nine notes announced on
March 17, 2014, following the upgrade of the Spanish sovereign
rating to Baa2 from Baa3 and the resulting increase in 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.

All three transactions have been originated by Banco CAM (now
Banco Sabadell, S.A., Ba2/NP) between 2004 and 2008 and are
backed by loans to small and medium-sized enterprises extended to
obligors located in Spain.

Ratings Rationale

The rating action reflects (1) the increase in the Spanish local-
currency country ceiling to A1 and (2) sufficiency of credit
enhancement for the nine upgraded tranches. The downgrade of one
tranche in FTPYME TDA CAM 4 was due to the increase in defaulted
loans, which led to an increase of the unpaid principal
deficiency ledger and thus reduced credit enhancement available
to that tranche.

-- Reduced sovereign risk

Moody's upgraded the Spanish sovereign rating 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 nine notes. The credit enhancement of class B of
FTPYME TDA CAM 4 has, however, decreased following the increase
of the unpaid principal deficiency ledger in that transaction,
prompting a downgrade of that tranche.

-- Key collateral assumptions

Moody's has updated some of the key collateral assumptions as
part of this review. In particular, Moody's has revised its
volatility assumption given the reduced country risk. The
performance of the underlying asset portfolios remain broadly in
line with Moody's assumptions. Moody's also has a stable outlook
(http://www.moodys.com/viewresearchdoc.aspx?docid=PBS_SF373727)
on Spanish ABS and residential mortgage-backed securities
transactions.

In FTPYME TDA CAM 2, FTA, the unchanged default probability (DP)
on current balance of 20.0% (corresponding to a DP on the
original balance of 7.8%), together with a unchanged recovery
rate of 60.0% and an updated volatility of

56.9%, corresponds to an unchanged portfolio credit enhancement
of 23.0%.

In FTPYME TDA CAM 4, FTA, the unchanged DP on current balance of
23.0% (corresponding to a DP on the original balance of 21.1%),
together with a unchanged recovery rate of 52.5% and an updated
volatility of 53.7%, corresponds to an unchanged portfolio credit
enhancement of 26.0%.

In FTPYME TDA CAM 7, FTA, the unchanged DP on current balance of
23.5% (corresponding to a DP on the original balance of 34.8%),
together with a update recovery rate of 60.0% and an updated
volatility of 80.1%, corresponds to an unchanged portfolio credit
enhancement of 29.0%.

The quantitative analysis accounts for the sensitivity of the
ratings to increases in collateral assumptions. The increases
include stresses of 1.3x on the default probability and 1.2x on
the portfolio credit enhancement. In a sensitivity analysis,
ratings would typically reduce by no more than two to three
notches under the stressed assumptions. The results of this
analysis limited the potential upgrade of the ratings on the
class B notes in FTPYME TDA CAM 7, FTA.

-- Exposure to counterparties

Moody's rating analysis also took into consideration the exposure
to key transaction counterparties. In all three transactions,
Banco Sabadell acts as servicer. In FTPYME TDA CAM 2 and FTPYME
TDA CAM 4, Bank of Spain hosts the reinvestment account where the
collections are transferred by the servicer on a daily basis,
while Barclays Bank PLC (A2/P-1) holds the reinvestment account
in FTPYME TDA CAM 7. JPMorgan Securities plc ((P)Aa3/P-1) acts as
swap counterparty in FTPYME TDA CAM 2 and FTPYME TDA CAM 4, while
CECABANK S.A. (Ba3) acts as swap counterparty in FTPYME TDA CAM
7.

Principal Methodology

The principal methodology used in these ratings was "Moody's
Global Approach to Rating SME Balance Sheet Securitizations"
published in January 2014.

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

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

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

List of Affected Ratings

Issuer: FTPYME TDA CAM 2, FTA

EUR143.5M Series 1CA Notes, Upgraded to A1 (sf); previously on
Mar 17, 2014 A3 (sf) Placed Under Review for Possible Upgrade

EUR41.6M Series 2SA Notes, Upgraded to Baa1 (sf); previously on
Mar 17, 2014 Ba1 (sf) Placed Under Review for Possible Upgrade

EUR11.7M Series 3SA Notes, Affirmed Caa3 (sf); previously on
Mar 20, 2013 Confirmed at Caa3 (sf)

Issuer: FTPYME TDA CAM 4, FTA

EUR931.5M A2 Notes, Upgraded to A1 (sf); previously on Mar 17,
2014 A3 (sf) Placed Under Review for Possible Upgrade

EUR127M A3(CA) Notes, Upgraded to A1 (sf); previously on Mar 17,
2014 A3 (sf) Placed Under Review for Possible Upgrade

EUR66M B Notes, Downgraded to Caa1 (sf); previously on Mar 17,
2014 B3 (sf) Placed Under Review for Possible Upgrade

Issuer: FTPYME TDA CAM 7, FTA

EUR603.5M A1 Notes, Upgraded to A1 (sf); previously on Mar 17,
2014 Baa1 (sf) Placed Under Review for Possible Upgrade

EUR170M A2(CA) Notes, Upgraded to A1 (sf); previously on Mar 17,
2014 Baa1 (sf) Placed Under Review for Possible Upgrade

EUR123.5M A3 Notes, Upgraded to A1 (sf); previously on Mar 17,
2014 Baa1 (sf) Placed Under Review for Possible Upgrade

EUR63M B Notes, Upgraded to Baa1 (sf); previously on Mar 17,
2014 B1 (sf) Placed Under Review for Possible Upgrade

EUR40M C Notes, Upgraded to Ba3 (sf); previously on May 3, 2013
Upgraded to Caa2 (sf)



=============
U K R A I N E
=============


INDUSTRIALBANK: Fitch Withdraws 'CCC/C' Issuer Default Ratings
--------------------------------------------------------------
Fitch Ratings has withdrawn Ukraine-based Industrialbank's
ratings as the bank has chosen to stop participating in the
rating process.  The ratings have been withdrawn without
affirmation because the bank has not provided Fitch with
sufficient information to enable it to decide on appropriate
ratings.  Fitch will no longer provide ratings or analytical
coverage of Industrialbank.

The bank's 'CCC' rating reflected challenging operating
environment, weak asset quality and sizeable related-party
assets.

These ratings have been withdrawn without affirmation:

Long-term foreign currency IDR: 'CCC'
Short-term foreign currency IDR: 'C'
Support Rating: '5'
Support Rating Floor: 'No Floor'
Viability Rating: 'ccc'


KYIV CITY: S&P Raises Long-Term ICR to 'CCC'; Outlook Stable
------------------------------------------------------------
Standard & Poor's Ratings Services raised its long-term issuer
credit rating on the Ukrainian capital City of Kyiv and its issue
ratings on Kyiv's debt to 'CCC' from 'CC'.  The outlook is
stable.

At the same time, S&P removed the ratings from CreditWatch with
negative implications, where it had placed them on Sept. 24,
2014.

As defined in EU CRA Regulation 1060/2009 (EU CRA Regulation),
the ratings on Kyiv are subject to certain publication
restrictions set out in Art. 8a of the EU CRA Regulation,
including publication in accordance with a pre-established
calendar.  Under the EU CRA Regulation, deviations from the
announced calendar are allowed only in limited circumstances and
must be accompanied by a detailed explanation of the reasons for
the deviation.  In this case, the reason for the deviation is
Kyiv's announcement on Sept. 18, 2014, that it would be
restructuring its indebtedness, an eventuality that was averted
by its issuance of a Ukrainian hryvnia (UAH) 2.625 billion
domestic bond series H with 360 days maturity, all as more fully
described herein.

RATIONALE

The upgrade follows Kyiv's repayment of its UAH1.125 billion
domestic bond series B on Oct. 8, 2014, two days after the
scheduled payment date but still within the grace period, instead
of the restructuring Kyiv had previously announced.  The city
made the repayment after arranging refinancing through a newly-
issued UAH2.625 billion domestic bond series H with 360 days
maturity.  S&P therefore thinks the series C, D, and E bonds due
2014 will be repaid on time.

S&P thinks Kyiv's course of action is coordinated with and
supported by the central government.  Therefore, S&P's long-term
rating on Kyiv is now one notch above its 'ccc-' assessment of
its stand-alone credit profile (SACP) to reflect its expectation
of extraordinary government support to the city, which is the
only Eurobond issuer among Ukrainian local and regional
governments (LRGs).  In the SACP, S&P takes into account
Ukraine's very volatile and underfunded institutional framework
and weak economy. Moreover, S&P considers Kyiv to have very weak
financial flexibility, weak budgetary performance, a high debt
burden, and high contingent liabilities.  S&P's SACP assessment
also incorporates the combination of the city's weak liquidity
and very weak management, with limited transparency.

The city's fiscal flexibility remains severely constrained
because of limited discretion over revenue and its lack of
flexibility over its spending, as well as by S&P's view of
Ukraine's very volatile and underfunded public finance system.
The city's substantial investment requirements continue to
restrict its spending leeway.

In S&P's 2014-2016 forecast period, it expects only modest tax
revenue growth, fuelled mostly by inflation.  S&P thinks central
government grants will support the city, however.  The city's
consolidation efforts will likely lead to an operating surplus of
2.5%-3.5% of operating revenues in 2014-2016, which is close to
the 3.7% recorded in 2011-2013.  After a peak in investments
related to the Euro 2012 soccer event, S&P thinks the city will
likely slow its investment program in real terms and post
deficits after capital accounts of about 5% of total revenues in
2014-2016.

"In our base-case scenario, we assume Kyiv will implement certain
cost-containment measures, although in line with criteria we
regard its financial management as very weak.  This assessment
implies only emerging long-term planning, as well as weak
management of debt, liquidity, and weak oversight over the city's
government-related entities.  We have also factored in the
continuing administrative uncertainties regarding the
responsibilities of the mayor (who is elected) and the city's
head of state administration (who is appointed by Ukraine's
president)," S&P said.

"Under our base case, Kyiv's tax-supported debt will remain
exposed to foreign exchange risks and stay slightly below 60% of
operating revenues over our 2014-2015 outlook horizon.  Our
calculation of tax-supported debt includes direct debt, and debt
at Kyiv's government-related entities (including guaranteed loans
from multilateral lending institutions).  We do not include
central government loans that will come due only if the city's
revenues outperform the central government's targets.  Including
these loans, tax-supported debt would be about 75%.  In our view,
the city's new borrowing will mostly be to tackle refinancing
needs," S&P added.

Kyiv's economy is diversified and is Ukraine's wealthiest,
although wealth levels are low in a global context.  The city's
personal income levels are likely to remain twice as high as the
national average, by S&P's estimates.  S&P also thinks the
unemployment rate will continue to be the lowest in Ukraine.

Following Kyiv's efforts to evaluate and settle payables of its
utility companies, which provide services at artificially low
tariffs, and the provision of earmarked grants from the central
government, amounts of those payables have diminished and
stabilized somewhat.  The central government is responsible for
setting utility tariffs.  However, the still-large payables of
Kyiv's satellite companies represent a significant contingent
liability on Kyiv's budget.

Liquidity

S&P regards Kyiv's liquidity position as weak.  In S&P's opinion,
the city's cash position will likely remain very low and
volatile, while its access to external liquidity will remain
uncertain against its continuing exposure to material refinancing
risks in 2014 and 2015, with a $250 million Eurobond to be repaid
in 2015.

Nevertheless, while Kyiv's liquidity position is hampered by its
refinancing exposure, S&P thinks the central government will
support the city's refinancing efforts.  While the recent
refinancing of 2014 domestic bond maturities through the series H
bond has alleviated Kyiv's current pressure, it has increased its
refinancing risks for 2015.  In 2015, Kyiv faces large bullet
repayments, and its debt service will likely hit about 50% of
operating revenue.

S&P regards Kyiv's access to external liquidity as uncertain.
However, S&P notes that the city's liquidity has so far derived
some support from uninterrupted and timely access to short-term
liquidity loans from the government treasury, available for
interest payments (but not principal).

The weaknesses of Ukraine's banking sector are reflected in S&P's
Banking Industry Country Risk Assessment (BICRA), which
classifies Ukraine in group '10', the highest risk category.

OUTLOOK

The stable outlook reflects S&P's view of the balance between the
city's material refinancing risks against its expectation of the
central government's support for Kyiv's debt refinancing efforts
in 2015-2016.

S&P would consider a positive rating action on Kyiv only if it
took a positive rating action on Ukraine and if the city's
refinancing risks decreased materially, which is unlikely in
2015-2016, in S&P's view, because of large debt repayments that
are due.

A negative rating action on Kyiv would follow a negative action
on Ukraine.  S&P could also take a negative rating action on the
city -- even if the sovereign ratings remain unchanged -- if the
central government does not provide support to Kyiv, refinancing
for 2015-2016 maturities is at risk, or if the city again starts
considering debt restructuring.

In accordance with S&P's relevant policies and procedures, the
Rating Committee was composed of analysts that are qualified to
vote in the committee, with sufficient experience to convey the
appropriate level of knowledge and understanding of the
methodology applicable.  At the onset of the committee, the chair
confirmed that the information provided to the Rating Committee
by the primary analyst had been distributed in a timely manner
and was sufficient for Committee members to make an informed
decision.

After the primary analyst gave opening remarks and explained the
recommendation, the Committee discussed key rating factors and
critical issues in accordance with the relevant criteria.
Qualitative and quantitative risk factors were considered and
discussed, looking at track-record and forecasts.

The committee's assessment of the key rating factors is reflected
in the Ratings Score Snapshot above.

The chair ensured every voting member was given the opportunity
to articulate his/her opinion.  The chair or designee reviewed
the draft report to ensure consistency with the Committee
decision. The views and the decision of the rating committee are
summarized in the above rationale and outlook.  The weighting of
all rating factors is described in the methodology used in this
rating action.

RATINGS LIST

Upgraded; CreditWatch Action
                               To                 From
Kyiv (City of)
Issuer Credit Rating          CCC/Stable/--      CC/Watch Neg/--
Senior Unsecured              CCC                CC/Watch Neg

Kyiv Finance PLC
Senior Unsecured              CCC                CC/Watch Neg



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


AMDIPHARM MERCURY: S&P Assigns 'B' CCR; Outlook Positive
--------------------------------------------------------
Standard & Poor's Rating Services said that it assigned its 'B'
long-term corporate credit rating to U.K.-based producer of
branded off-patented pharmaceutical products Amdipharm Mercury
Debtco Ltd. (AMCO).  The outlook is positive.

S&P also assigned a 'B+' issue rating and '2' recovery rating to
AMCO's existing senior secured bank facilities.  At the same
time, these ratings were placed on CreditWatch with negative
implications.

S&P also assigned a 'B' issue rating and '3' recovery rating to
AMCO's proposed senior secured bank facilities.

S&P derives the 'B' rating on AMCO from its anchor of 'b', which
is based on S&P's assessment of the company's "fair" business
risk profile and "highly leveraged" financial risk profile.  No
modifiers impact the rating outcome.

Private equity group Cinven has owned AMCO since 2012.  Since
then, AMCO has been able to increase its EBITDA via strong
organic growth and acquisitions that have enabled fast
deleveraging to levels close to reported net leverage of 3x in
2014.  To capitalize on this performance, the company is paying a
one-time dividend of about GBP420 million to its shareholders
financed via new debt.  At the same time, the company intends to
amend pricing on its existing debt.

"Under our base-case, we estimate that AMCO's Standard & Poor's-
adjusted debt-to-EBITDA ratio will remain about 5x on average
over the next three years.  Our estimate includes financial debt
of GBP960 million-GBP850 million and EBITDA of GBP140 million-
GBP190 million over the next three years.  This should cover
annual interest payments of about GBP50 million by about 3x.  We
estimate that AMCO should be able to generate free operating cash
flow of at least GBP70 million per year.  We also estimate that
the contractual cash sweep embedded in the capital structure,
together with management's stated aim of using surplus cash to
repay debt, could lead to a relatively fast reduction of cash-
interest-paying debt.  This assumes no alternative use for the
cash, such as further acquisitions, above our base case," S&P
said.

S&P views as the main strength of AMCO's business risk profile
its focus on marketing branded off-patented pharmaceutical
products, which have been on the market for a long time and are
therefore well tested, but are too small to attract competition
from big generic pharmaceutical companies.

At the same time, S&P views as the main weaknesses AMCO's smaller
revenue base compared with other global generic pharmaceutical
companies, and limited R&D capabilities, as well as its strategy
of focusing on acquiring assets rather than in-house development.
Despite its growing size, AMCO remains a relatively small player
in the global pharmaceuticals market compared with other generic
players such as Teva Pharmaceutical Industries or Actavis, and
ranks below the top 10 global generic pharmaceutical companies.
Due to limited internal R&D, the combined group's business model
relies on acquiring new assets.  In S&P's view, this exposes the
group to a potential lack of suitable assets.  AMCO outsources
all its manufacturing, which benefits its margins and cash flow
generation, but means that AMCO relies significantly on third
parties.  The increasing diversity of the supplier base and
embedded U.K.-based quality function partially mitigates the
latter, though.

In addition, AMCO derives more than half its revenues from the
U.K., a level of concentration that S&P considers to be a
negative in its assessment of its geographic diversity, as it
exposes the company to one reimbursement system and potential
negative changes in the pricing of its main products.

S&P views positively AMCO's focus on niche, well-established,
off-patent products that benefit from highly recurrent revenues
as a result of a prescribing pattern and a level of sales that
shield the company from intense competition.  In addition, these
products benefit from relatively high barriers to entry in
development and manufacturing.  Furthermore, AMCO's portfolio
benefits from a stable pricing environment, which enables it to
maximize value in its drug portfolio.  This, combined with cost
efficiencies and synergies from the combined infrastructure from
the business that the company has acquired as part of its growth
strategy, is reflected in robust operating margins.

"Our business risk assessment also incorporates our view of "low"
country risk and "low" industry risk.  Our low country risk
assessment includes AMCO's concentration of revenues from Western
Europe, which has a very low regional risk.  This is partly
mitigated, however, by its exposure to regions that we consider
to have high regional risk, such as Southern Europe, Asia-
Pacific, and Africa.  Our industry risk assessment for the
company reflects low single-digit growth in the underlying
industry due to benefits accrued from favorable demographic and
economic trends.  In developed economies, long-term demand is
fuelled by lifestyle changes and the growing number of older
people, who consume a disproportionate share of drugs.  An
expanding middle class aids growth in developing economies, which
account for an increasingly significant portion of global
pharmaceutical sales," S&P noted.

In S&P's base case, it assumes:

   -- GDP growth in 2015 and 2016 of 2.5% and 2.2% in the U.K.,
      1.8% and 2% in the EU, and 3.8% and 3.9% globally.

   -- Relatively minimal impact from global economic cycles,
      given that the pharmaceutical industry is noncyclical in
      nature.

   -- Double-digit revenue growth in 2015 driven by the launch of
      new products and the impact of acquisitions EBITDA to grow
      to GBP140 million-GBP190 million over the next two years,
      reflecting top-line growth and operating efficiencies.

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

   -- Debt to EBITDA about 5x on average over the next three
      years.

   -- FFO cash interest cover about 3x on average over the next
      three years.

The positive outlook reflects S&P's view that AMCO will continue
to diversify its revenue stream, including benefits from add-on,
midsize acquisitions, and grow its EBITDA close to GBP200 million
over the next 12-18 months.  S&P thinks AMCO is already
establishing a track record of assimilating sizable acquisitions
and reducing debt relatively quickly, thanks to its strong cash-
generating capacity.  In doing so, S&P anticipates that the group
will pursue a financing strategy that enables it to maintain
debt-protection metrics that are commensurate with a higher
rating. Specifically, S&P would view FFO cash interest cover
maintained at about 3x and debt to EBITDA approaching 5x on
average over the next three years as commensurate with a higher
rating.

S&P could raise the rating if the company establishes a track
record following the recent dividend recap of maintaining a
capital structure that would enable it to maintain debt
protection metrics that correspond to a higher rating.  This
would correspond with delivering financial policy that does not
deviate significantly from 5x reported net leverage over the
medium term.

Conversely, given the group's operating fundamentals, negative
rating actions would most likely be prompted by decisions from
the company to change its deleveraging plans in favor of faster
cash absorption through acquisitions or shareholder returns.

S&P sees downside from the company's operating performance as
less likely, but it could be triggered if operating margins
deteriorate significantly.  This could occur if there were a
change to the reimbursement system in its main countries of
operation, such as the U.K., if competition around its main
products increased, or if the company was not able to launch new
products or continue a strategy of small bolt-on acquisitions to
ensure an inflow of new products coming to the market.


FOLKESTONE INVICTA: On Course to Clear CVA in Early 2015
--------------------------------------------------------
Steve Tervet at Kent Online reports that newly appointed
Folkestone Invicta chairman Jim Pellatt admits "all of my
Christmases will have come at once" when the club are finally
debt-free at the start of next year.

Mr. Pellatt has helped steer the club through a five-year Company
Voluntary Arrangement (CVA) and to the verge of financial
stability, Kent Online relates.

Folkestone were given a clean bill of health by the Football
Association's financial regulation officer last week and they're
on course to clear the CVA in early 2015, Kent Online relays.

That thumbs-up from the sport's national governing body has ended
the speculation sparked by Mr. Pellatt's predecessor, Mark
Jenner, regarding the club's financial dealings, Kent Online
notes.

Mr. Jenner, who quit as Invicta chairman in August, made
allegations relating to the payment of player wages but the FA's
compliance review endorsed the way Mr. Pellatt has been running
the club, Kent Online recounts.

The club's board has formally accepted the FA's report, which is
confidential, but they're clear in all 'crucial' aspects, Kent
Online states.

Paying off the CVA will allow manager Neil Cugley to strengthen
his squad in the latter part of the season -- and that's not far
away now, Kent Online says.

Mr. Pellatt, as cited by Kent Online, said: "We will definitely
pay it off on time and when we do, we'll be debt-free.  We're up
to date with our VAT, our income tax and national insurance.

"For me, it'll be like all my Christmases have come at once.  It
was only 11 or 12 months ago that I was still negotiating with
the Inland Revenue to keep the wolves at bay.

"Now we can say we're financially stable."

Folkestone Invicta F.C. is a football club based in the town of
Folkestone, Kent, England.


ULSTER ORCHESTRA: Facing Insolvency in November
-----------------------------------------------
Michael Quinn at Classical Music reports that the Ulster
Orchestra is facing insolvency and 'will cease to exist' by the
middle of November if emergency funding is not found, the
Northern Ireland MLA Basil McCrea has claimed.

According to the report, the claim was made in a meeting of the
region's legislative Culture, Arts and Leisure Committee on
October 9, with McCrea quoting 'reliable sources' that the
orchestra will become insolvent by November 15.  Classical Music
relates that Arts minister Caral Ni Chuilin told the committee
Northern Ireland's largest arts organisation had been 'facing
financial difficulties for some time' and that its financial
position 'goes from scary to scarier'.

Classical Music says the crisis comes in the wake of a political
deadlock over spending priorities that has seen Northern
Ireland's Assembly forced to accept a GBP100 million 'loan' from
the UK treasury to balance its books.

Speaking on BBC radio's Good Morning Ulster on October 10,
Mr. McCrea repeated his warning about the risk of insolvency,
saying that within weeks, the orchestra 'will not have enough
income to meet their outgoings. It's a very bleak picture for
them,' according to Classical Music.

The report says the orchestra has faced a double whammy in
funding cuts in recent years with successively lower grants from
the Arts Council of Northern Ireland and a reduction in financial
support from the BBC. In September, the Arts Council announced an
additional 2.3% cut -- around GBP47,000 -- to the orchestra's
funding, just weeks after imposing a 2.1% reduction.

Warning that the orchestra is facing a 28% reduction in its
income next year, Mr. McCrea said: 'It's already been cut to the
bone and it needs a minimum of amount of money to keep going. If
you don't have it, it will disappear. You cannot have half an
orchestra. If we do not act within the next few weeks then we
won't have an orchestra. And once it's gone, it's gone,'
Classical Music relays.

Describing the orchestra as 'one of the heritage gems of Northern
Ireland', Mr. McCrea added: 'If we want the Ulster Orchestra to
exist, and I think we do, then we're going to have to find money
from somewhere,' the report relates.

According to the report, the threat to the orchestra follows a
decision by the Northern Ireland Tourist Board in early October
to cancel its Tourism Events Fund from 2015/16. In the current
year, the fund provided GBP2.4 million to large-scale events
including Belfast's annual Culture Night and Cathedral Quarter
Arts Festival and the Maiden City Festival in Derry, the report
notes.

The report relates that a spokesperson for the Ulster Orchestra
said it would 'be making no formal statement at this time
regarding the financial stability or otherwise of the
organisation. However, we do plan to issue one towards the end of
this week'.


                            *********

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.


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