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        T R O U B L E D   C O M P A N Y   R E P O R T E R

                           E U R O P E

          Wednesday, November 5, 2014, Vol. 15, No. 219


                            Headlines


C Y P R U S

CYPRUS AIRWAYS: Ryanair Gets Through Second Round of Bidding


F R A N C E

SOCIETE NATIONALE: Suspends Payments; To File for Bankruptcy


G E O R G I A

PROCREDIT BANK: Fitch Revises Outlook to Pos. & Affirms 'BB' IDR


G E R M A N Y

ENERGIEBAU SOLAR: Court Orders Preliminary Insolvency Proceedings
INFINITY 2007-1: Fitch Affirms 'Csf' Ratings on 2 Note Classes


L U X E M B O U R G

BREEZE FINANCE 3: Fitch Lowers Rating on Class B Notes to 'CC'
BREEZE FINANCE 2: Fitch Affirms 'CCC' Rating on Class B Notes
LION/GEM LUXEMBOURG 3: S&P Alters Outlook to Pos., Affirms B- CCR


N E T H E R L A N D S

FIAT CHRYSLER: Moody's Affirms 'B1' Senior Secured Rating
KAZSTROYSERVICE GLOBAL: Moody's Assigns 'Ba3' Corp. Family Rating


P O R T U G A L

DOURO MORTGAGES NO.2: Fitch Affirms 'Bsf' Rating on Cl. D Tranche
NOSTRUM MORTGAGES NO.1: Fitch Cuts Rating on Cl. C Tranche to BB+


R U S S I A

VENTRELT HOLDINGS: Fitch Affirms 'BB-' IDR; Outlook Stable


S L O V E N I A

T-2: Higher Court Reverses Receivership Ruling


S P A I N

BANCAJA 7: Fitch Affirms 'BBsf' Rating on Class D Notes
BASHNEFT: Oct. 30 Ruling No Immediate Impact on Fitch's BB Rating
GRUPO EMBOTELLADOR: Fitch Affirms 'BB+' IDR; Outlook Negative
SANTANDER PUBLICO 1: Moody's Raises Ratings on 2 Notes to 'Ba2'


S W E D E N

ALANDS OMSESIDIGA: S&P Withdraws Unsolicited 'BBpi' Rating


S W I T Z E R L A N D

NUANCE GROUP: S&P Withdraws 'BB+' Corporate Credit Rating


U N I T E D   K I N G D O M

EUROSAIL 2006-1: S&P Lowers Ratings on 2 Note Classes to 'B+'
EUROSAIL 2006-2BL: S&P Affirms 'B-' Rating on 2 Note Classes
JOHN WOODS: To Hold Meeting on Nov. 7 to Discuss CVA Deal
PRINCIPALITY BUILDING: Moody's Raises Sub. Rating From 'Ba1'


                            *********


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C Y P R U S
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CYPRUS AIRWAYS: Ryanair Gets Through Second Round of Bidding
------------------------------------------------------------
Barry O'Halloran at The Irish Times reports that Ryanair is one
step closer to taking over Cyprus Airways after getting through to
the second round of bidding for the ailing flag carrier at the
weekend.

The Irish airline was one of 15 which submitted proposals to the
Cypriot government in September to acquire and turn around Cyprus
Airways, which in 2012 needed a EUR73 million state bailout after
losing EUR56 million, The Irish Times discloses.

According to The Irish Times, incoming finance chief Neil Sorahan
said Ryanair was informally told on Oct. 31 that it was on a
shortlist, meaning it is through to the second round of the
process.

Ryanair, The Irish Times says, is not offering any cash for the
airline, but has told the Cypriots that if its bid succeeds, it
will expand the airline from five aircraft and 700,000 passengers
a year to 20 aircraft and three million passengers over five
years.

Cyprus Airways is the national airline of Cyprus, a public limited
company with its head offices located in the capital of the
island, Nicosia.



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


SOCIETE NATIONALE: Suspends Payments; To File for Bankruptcy
------------------------------------------------------------
TradeWinds reports that loss-making Societe Nationale Maritime
Corse Mediterranee has said it will file for bankruptcy
protection, but will continue to operate while a buyer is sought.

SNCM said in a statement that it has suspended payments to
creditors, TradeWinds relates.

According to TradeWinds, court protection could mean it will not
repay EUR440 million (US$551 million) in illegal state aid to the
European Union, but could also entail a piecemeal sale of the
eight-ship fleet and discontinuation of its routes, aside from the
key subsidized crossing from Marseille.

Two routes to North Africa may also be saved, but other crossings
from Nice and Toulon to Corsica and Sardinia would probably be
abandoned, TradeWinds says.

The firm's unions, who fought moves to seek court protection, said
they had no immediate plans to go on strike, TradeWinds relays.

As reported by the Troubled Company Reporter-Europe on Nov. 3,
2014, Reuters related that French public passenger transport group
Transdev, owned by Veolia and state bank CDC, would call in loans
to its unit SCNCM.  SNCM was kept going by a EUR103 million loan
from Transdev and a EUR14 million loan from Veolia, as well as
cash advances from the state, which has a direct stake of 25% in
the former monopoly ferry operator, Reuters disclosed.

SNCM is a France-Corsica ferry operator.  The company is owned 66%
by Transdev, a public transport joint venture between water and
waste group Veolia Environnement and state-bank CDC.



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G E O R G I A
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PROCREDIT BANK: Fitch Revises Outlook to Pos. & Affirms 'BB' IDR
----------------------------------------------------------------
Fitch Ratings has revised the Outlooks on the Long-term Issuer
Default Ratings (IDRs) of ProCredit Bank Georgia (PCBG) and JSC
Liberty Bank (LB) to Positive from Stable and affirmed the IDRs at
'BB' and 'B', respectively.  Fitch has also affirmed the banks'
Support Ratings at '3' and '4', respectively.

The revision of the Outlooks to Positive follows the revision of
the Outlook on Georgia's sovereign rating to Positive from Stable.

KEY RATING DRIVERS: PCBG's IDRS AND SUPPORT RATING

The affirmation of PCBG's 'BB' Long-term IDRs, one notch above the
sovereign rating, and '3' Support Rating, reflect Fitch's view of
the moderate probability of support from the bank's 100%
shareholder, ProCredit Holding AG & Co. KGaA (PCH; BBB/Stable).
Fitch views the propensity of PCH to provide support as high.
However, PCBG's ability to receive and utilise this support could
be restricted by transfer and convertibility restrictions.  PCBG's
Long-term IDR is constrained by Georgia's 'BB' Country Ceiling,
whilst its local currency Long-term IDR also takes into account
Georgian country risks.

KEY RATING DRIVERS: LB'S SUPPORT RATING AND SUPPORT RATING FLOOR

The affirmation of LB's Support Rating and Support Rating Floor
(SRF) reflect Fitch's view of the limited probability of support
available from the Georgian government.  In Fitch's view, the
authorities would likely have a high propensity to support LB,
notwithstanding its moderate share (around 8%) of banking sector
assets.  This reflects the bank's important role as the primary
distributor of pensions and welfare payments in Georgia.  LB
fulfils a unique social function in this respect, made possible by
its extensive branch network, which is the largest and most
geographically spread in the country.  Fitch's view of support
also takes into account the support made available to LB in 2009.
However, LB's Support Rating and SRF are constrained by the
potentially limited ability of the authorities to provide support.

RATING SENSITIVITIES: PCBG's IDRs AND SUPPORT RATING

The Positive Outlook on PCBG's IDRs follows the revision of the
Outlook on Georgia's sovereign ratings to Positive from Stable.
Should Georgia's IDRs be upgraded and the Country Ceiling raised,
PCBG's Long-term IDRs, which take into account Georgian country
risks, would likely also be upgraded.  Any change in Fitch's view
of support available to PCBG from PCH would likely also result in
a change to PCBG's Long-term IDRs.

RATING SENSITIVITIES: LB's SUPPORT RATINGS AND SRF

LB's Long-term IDR is at the level of its Viability Rating but is
also underpinned by potential government support, as reflected in
its 'B' SRF.  The revision of the Outlook on the bank's IDR to
Positive from Stable reflects the Positive Outlook on the
sovereign rating.  In view of LB's important social function in
Georgia and the bank's track record of government support, an
upgrade of Georgia's IDRs, indicating the increased ability of the
government to provide support, would likely lead to an upward
revision of LB's SRF.  This in turn would drive an upgrade of the
bank's Long-term IDR, and the bank's ratings would become driven
by support rather than its intrinsic strength.

The rating actions are:

ProCredit Bank Georgia

Long-Term IDR: affirmed at 'BB', Outlook revised to Positive
  from Stable
Short-Term IDR: affirmed at 'B'
Long-Term Local Currency IDR: affirmed at 'BB', Outlook revised
  to Positive from Stable
Short-Term Local Currency IDR: affirmed at 'B'
Viability Rating: 'bb-', unaffected
Support Rating: affirmed at '3'

JSC Liberty Bank

Long-Term IDR: affirmed at 'B', Outlook revised to Positive from
  Stable
Short-Term IDR: affirmed at 'B'
Viability Rating: 'b', unaffected
Support Rating: affirmed at '4'
Support Rating Floor: affirmed at 'B'



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G E R M A N Y
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ENERGIEBAU SOLAR: Court Orders Preliminary Insolvency Proceedings
-----------------------------------------------------------------
pv magazine reports that the Cologne District Court has ordered
the opening of preliminary insolvency proceedings for Energiebau
Solar Power Systems GmbH.

The court said in a statement that it has appointed Cologne
attorney Andreas Ringstmeier as the company's provisional
insolvency administrator, pv magazine relates.

The provisional administrator is reviewing the state of the
company, pv magazine discloses.

Energiebau, as cited by pv magazine, said it filed for provisional
insolvency due to the "difficult situation in the photovoltaic
industry resulting from the collapse of the market."

The company sought early on to develop cooperative agreements and
development of new sales channels as part of its new strategy, pv
magazine relays.  "Unfortunately, we were unable to convince our
financing partners to continue on this path with us," pv magazine
quotes Energiebau Managing Directors Rene Medawar and Michael
Shepherd as saying in a statement.

The management is now working with the provisional liquidator on
finding a way to ensure the long-term survival of the company, pv
magazine notes.

Energiebau Solar Power Systems GmbH is a German photovoltaic
wholesaler.


INFINITY 2007-1: Fitch Affirms 'Csf' Ratings on 2 Note Classes
--------------------------------------------------------------
Fitch Ratings has affirmed Infinity 2007-1 (Soprano)'s commercial
mortgage-backed floating rate notes due 2019 as:

EUR374.6 million class A (FR0010478420) affirmed at 'BBBsf'';
Outlook Negative

EUR36 million class B (FR0010478438) affirmed at 'Bsf''; Outlook
Negative

EUR28.1 million class C (FR0010478446) affirmed at 'CCsf'';
Recovery Estimate (RE) 65%

EUR22.5 million class D (FR0010478453) affirmed at 'Csf''; RE0%

EUR28.1 million class E (FR0010478479) affirmed at 'Csf'; RE0%

This transaction is a securitization of the monetary rights
arising in favor of the protection seller under, originally, 15
credit default swaps referenced to 15 commercial mortgage loans.
Nine loans now remain which are secured by collateral located in
Germany (68% by loan balance), France (19%), and Spain (13%).

KEY RATING DRIVERS

The affirmation reflects progress made in the disposal of the
German retail/retail warehouse assets, which secure the two
defaulted loans, the EUR344.7 million EHE 1A and EUR12.6 million
EHE 1B loans, and the recent switch to a sequential allocation of
principal proceeds.  Positive sentiment over the German retail
market is muted by uncertainty over the depth of the investor base
for such assets and is reflected in the Negative Outlooks.

Over the last 12 months the transaction has achieved 11 asset
sales for the EHE 1A loan with gross sales proceeds of EUR21.6
million, representing a premium to the assets' reported valuation
of 8%. Net sales proceeds, when combined with swept cash, had
reduced the senior loan balance by EUR24.6 million or 6.7%.
Contracted rental income has seen a disproportionate decrease of
15.1% although this is partly due to the disposed assets being
higher-yielding and therefore of comparatively weaker quality to
the remaining pool, mitigating negative selection risk.

With the portfolio now reduced to 29 properties both the metrics
for reported loan to value (LTV) and debt yield (on the senior
loan) have deteriorated slightly since August 2013 with LTV
increasing to 135% from 132% and debt yield reducing to 6.1% from
6.5%.  Losses remain almost unavoidable unless investor optimism
for German retail assets reaches pre-crises levels.  In its base
case Fitch estimates losses to be around EUR100 million.

The smaller EHE 1B loan has sold down three assets over the same
period, which has resulted in repayment of EUR21.3 million or 63%
of the loan balance with gross sale proceeds being almost 10%
above the assets' reported valuation.  However, two of the
remaining three assets are linked to the defaulted tenant
Praktiker, which will likely suppress recoveries and could extend
recovery timing until the position of the tenant post-
insolvency/restructure is known.

Of the other seven loans, all sponsored by the same French
property investor, Altarea, one has repaid in full - the EUR23.2m
Bercy loan.  The remainder are all due in 2016.  Except for one
loan secured on a shopping centre close to Barcelona, the
collateral is located in France.  The French loans have reported
LTVs ranging from 24% to 58%, and weighted average interest
coverage of 3x.  Increasing collateral value and scheduled
amortization have reduced the Spanish loan's LTV to 57.4%
currently from 60.6% in Nov. 2013 and interest coverage is healthy
at 3.1x.  Fitch expects these loans to repay in full.

RATING SENSITIVITIES

Any performance deterioration of the portfolio underpinning the
EHE 1A and 1B loans or signs of waning investor appetite for
German retail assets could lead to negative rating action.

Fitch estimates 'Bsf' principal proceeds of approximately EUR420
million.



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L U X E M B O U R G
===================


BREEZE FINANCE 3: Fitch Lowers Rating on Class B Notes to 'CC'
--------------------------------------------------------------
Fitch Ratings has downgraded Breeze Finance S.A.'s (Breeze 3)
class A and class B bonds as:

  EUR287 million class A (XS0294895999) downgraded to 'B' from
  'B+'; Outlook Stable

  EUR84 million class B (XS0294895726) downgraded to 'CC' from
  'CCC'

The downgrades are based on the drawdown of the class A debt
service reserve at the Oct. 2014 payment following significant
underperformance of the wind yield in 2014.  In addition, the
class B has been downgraded to 'CC', indicating that default of
some kind appears probable, as the deferred principal balance has
now reached EUR18.4m and is increasingly unlikely to be fully
repaid by the final maturity in 2027.

KEY RATING DRIVERS

Operation Risk: Weaker

The key operational risk is a rise in maintenance and repair costs
above budgeted amounts as the turbines age.  In 2012 the company
materially increased the operating cost projections recognizing
the inadequacy of the initial assumptions.  Positively, in 2013
and 1H14, actual expenses have been in line or even below budget.
Breeze 3's average turbine age is nine years.  Unexpected
technical failures may become more frequent and hence may further
jeopardize Breeze 3's ability to service debt, particularly if the
failure coincides with weak wind yield.

Revenue Risk -- Volume: Weaker

The project continues to suffer from weak wind conditions, which
are the main driver of the project's tight liquidity position.
Fitch's base case and rating case energy production assumptions
are 15% lower than the original P50 and P90 projections.
Furthermore, the variability of wind yield during the year,
coupled with the uniform principal repayment amount at the April
and October payment dates, results in the company being unable to
service the class B notes at the October payment date.

Revenue Risk -- Price: Midrange

The wind farms are remunerated through fixed feed-in-tariffs
embedded in German and French energy regulations.  Limited
exposure to merchant prices (approximately 7% of generation
capacity in 2023 increasing to 30% in 2026) over the past three to
four years of the debt term is mainly a result of the shorter
period over which French tariffs are fixed (15 years from the
commencement of operation compared with 20 years for German
projects).

Debt Structure: Class A -- Midrange; Class B -- Weaker

Debt service payments on class B are deferrable and are fully
subordinated to the payment of interest and the repayment of
principal of class A.  The amount currently deferred on class B is
EUR18.4 million of principal and EUR4.7 million of interest.  The
borrower will not be in a position to pay back this amount, or
possible future additional deferred amounts, unless energy
production consistently and materially exceeds the historical
average.  Further the class B debt service reserve account (DSRA)
has been fully drawn since 2009.  The class A DSRA remained fully
funded until the most recent payment date in October 2014, when
EUR1 million had to be withdrawn to make the class A debt service
payment in full.  Once drawn, class A debt reserve cannot be
replenished as long as class B deferrals remain outstanding.

Financial Metrics

The projected Fitch rating case average DSCR is 1.11x and 0.79x
for class A and class B, respectively, deteriorating marginally as
turbines age and Fitch assumes lower availability in the later
years.  In Fitch's base case, class A and B DSCRs average 1.24x
and 0.88x.

Peer Group

The closest peer is CRC Breeze Finance (Breeze 2) rated 'B'/Stable
for class A and 'CCC' for class B.  Breeze 2 has similar rating
drivers.

RATING SENSITIVITIES

Negative: The rating could be downgraded as a result of weak wind
conditions leading to a further draw down of class A DSRA, a
material decline of the turbines' availability and/or a lasting
increase in O&M costs above current expectations.

Positive: Wind yield at or above Fitch's base case expectations
enabling the project to repay the deferred class B principal would
lead to an upgrade.

TRANSACTION SUMMARY

Breeze 3 is a Luxembourg SPV that issued three classes of notes on
April 19, 2007, for an aggregate issuance amount of EUR455m to
finance the acquisition and completion of a portfolio of wind
farms located in Germany and France, as well as establishing
various reserve accounts.  The notes will be repaid from the cash
flow generated by the sale of the energy produced by the wind
farms, mainly under regulated tariffs.

Breeze 3's financial underperformance is primarily driven by the
shortfall of the wind resource as feed-in-tariffs are fixed and
technical availability meets Fitch's expectation of 96%.
Furthermore, operating cost increases, as turbines age, draw on
liquidity.  Breeze 3 has recently revised its repair budget to
take account of the increase in expenses.  Operating costs now
seem largely in line with the budgeted amounts.

Fitch's base case projections assume production in line with the
Fitch-adjusted P50 estimates (544,367 Mwh p.a.) and further assume
declining revenues as wind farms roll off their fixed feed-in-
tariffs from 2022 and plant availability falls consecutively in
addition to moderate expense growth.  While cash flow available
for debt service would be sufficient to fully service class A debt
without drawing on the class A DSRA, class B debt service can only
be partially met.

Fitch's rating case scenario, which represents a moderate downside
scenario, uses Fitch-adjusted P90 production assumption (498,560
Mwh p.a.) and assumes operating expenses 10% above that of Fitch's
base case.  Due to the seasonal production and the uniform debt
service requirements, the semi-annual DSCR profile shows
significant differences between the spring and the autumn payment
date.  Coverage falls below 1.0x for class A at the autumn payment
date, which results in the gradual drawdown of the class A DSRA
and would ultimately lead to payment default in 2021 as the class
A DSRA is exhausted.

The 'B' rating on class A indicates that material default risk is
present, but a limited margin of safety remains.  Financial
commitments are currently being met.  However, capacity for
continued payment is vulnerable to deterioration in the business
and economic environment.


BREEZE FINANCE 2: Fitch Affirms 'CCC' Rating on Class B Notes
-------------------------------------------------------------
Fitch Ratings has affirmed CRC Breeze Finance S.A.'s (Breeze 2)
class A and B bonds as:

EUR300 million class A (XS0253493349) affirmed at 'B'; Outlook
Stable

EUR50 million class B (XS0253496441) affirmed at 'CCC'

The affirmation reflects the stable performance of the
transaction, which is below Fitch's base case expectations, but
within the expected performance of the rating case.  On the last
two payment dates, Breeze 2 paid class A debt service in full
without any draw down of the class A debt service reserve account.
The same is expected to occur on the upcoming Nov. payment date.
Debt service payments on the class B are expected to continue to
be at least partially deferred.

KEY RATING DRIVERS

Operation Risk: Weaker

The key operational risk is the increase of maintenance and repair
costs as the turbines age.  Fitch notes that increases in
operating costs have been factored into the project's financial
projections.  However unexpected technical failures, such as
gearbox breakdowns, could negatively impact Breeze 2's ability to
service debt, in particular, if the failure coincides with weak
wind yield.

Breeze 2 aims to make efficiency savings by concentrating wind
farm management in a single entity.  However, this is subject to
trustee approval, which has not been granted to date.  The company
also plans to strengthen protection from turbine unavailability
accidents through tighter insurance and O&M contractual
provisions.

Revenue Risk -- Volume: Weaker

The initial wind study grossly overestimated the project's wind
resource and as a result a new study was commissioned in 2009,
which revised down the wind forecast.  The project's liquidity
remains tight and Fitch does not expect it to materially improve.
Furthermore, the variability of wind yield during the year,
coupled with the uniform principal repayment amount at the May and
November payment dates, results in the company being unable to
service its class B notes fully at the November payment date.

Revenue Risk -- Price: Midrange

The wind farms are remunerated through fixed feed-in-tariffs
embedded in German and French energy regulations.  Limited
exposure to merchant prices (approximately 10% of the portfolio's
generation capacity increasing to 23% at the last payment date) in
the past three to four years is mainly the result of the shorter
period over which French tariffs are fixed (15 years from the
commencement of operation compared with 20 years for German
projects).

Debt Structure: Class A -- Midrange; Class B -- Weaker

Payments on class B are deferrable and are fully subordinated to
the payment of interest and the repayment of principal on class A.
The amount currently deferred on class B is EUR17.3m.  The
borrower will not be in a position to pay back this amount, or
possible future additional deferred amounts, unless energy
production consistently and materially exceeds the historical
average.  Due to the class A debt service reserve account's (DSRA)
structural subordination to class B debt service, the class A debt
reserve will not be replenished (EUR2.2m was drawn in 2009) as
long as class B deferrals remain outstanding.  The class B DSRA
was fully eroded in 2009.

Financial Metrics

The projected Fitch rating case average DSCR is 0.86x and 0.78x
for class A and class B, respectively, deteriorating marginally as
turbines age and Fitch assumes lower availability in the later
years.  In Fitch's base case, class A and B DSCRs average 1.21x
and 0.98x.

Peer Group

The closest peer, Breeze Finance S.A. (Breeze 3), is rated
'B'/Stable for class A and 'CC' for class B, and has similar
rating drivers.

RATING SENSITIVITIES

Negative: The rating could be downgraded as a result of weak wind
conditions causing a further draw down of class A DSRA, a material
decline of the turbines' availability and/or a lasting increase in
O&M costs above current expectations.

Positive: Wind yield at or above P50 enabling the project to repay
the deferred class B principal may lead to an upgrade.

TRANSACTION SUMMARY

Breeze 2 is a Luxembourg special purpose vehicle that issued three
classes of notes on May 8, 2006, for an aggregate issuance amount
of EUR470m to finance the acquisition and completion of a
portfolio of wind farms located in Germany and France, as well as
establishing various reserve accounts.  The notes are scheduled to
be repaid from the cash flow generated by the sale of the energy
produced by the wind farms, mainly under regulated tariffs.

Breeze 2's financial underperformance is primarily driven by the
shortfall of the wind resource as feed-in-tariffs are fixed and
technical availability meets Fitch's expectation of 96.5%.
Historically Breeze has performed 2% above the Fitch rating case,
although has fallen short of Fitch's base case, which uses a
Fitch-adjusted P50 production assumption.

Fitch's base case projections assume production in line with the
Fitch-adjusted P50 estimates (562,594Mwh p.a.) and further assumes
declining revenues as wind farms roll off their fixed feed-in-
tariffs from 2022 and plant availability falls consecutively, in
addition to moderate expense growth.  While cash flow available
for debt service would be sufficient to fully service class A debt
without drawing on the class A DSRA, class B debt service can only
be partially met.

Fitch's rating case scenario, which represents a moderate downside
scenario, uses Fitch-adjusted P90 production assumption (484,465
Mwh p.a.) and assumes operating expenses 10% above that of Fitch's
base case.  Due to the seasonal production and the uniform debt
service requirements, the semi-annual DSCR profile shows
significant differences between the spring and the autumn payment
date.  Coverage falls below 1.0x for class A at the autumn payment
date, which results in the gradual drawdown of the class A DSRA
and would ultimately lead to payment default in 2016 as the class
A DSRA is exhausted.

The 'B' rating on class A indicates that material default risk is
present, but a limited margin of safety remains.  Financial
commitments are currently being met.  However, capacity for
continued payment is vulnerable to deterioration in the business
and economic environment.


LION/GEM LUXEMBOURG 3: S&P Alters Outlook to Pos., Affirms B- CCR
-----------------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on Lion/Gem
Luxembourg 3 S.a.r.l. (Findus) to positive from stable.

At the same time, S&P affirmed its 'B-' long-term corporate credit
rating on Findus.

In addition, S&P affirmed the 'B-' issue rating on the existing
GBP150 million and EUR305 million senior secured notes issued by
Findus' subsidiary Findus Bondco S.A.  The recovery rating on
these notes is '4', indicating S&P's expectation of average (30%-
50%) recovery in the event of a payment default.

Finally, S&P affirmed the 'CCC' issue rating to the payment-in-
kind (PIK) notes to be issued by Findus PIK SCA.  The recovery
rating on these instruments is '6', indicating S&P's expectation
of negligible (0%-10%) recovery in the event of a payment default.

The outlook revision reflects S&P's assumption that Findus will be
able to improve its credit metrics, specifically maintaining its
funds from operations (FFO) cash interest coverage at 2.0x on
average over the next three years.  This metric is commensurate
with a higher rating, and S&P considers it to be achievable if the
EBITDA margin is maintained at least at 7% and if the company does
not pay any cash interest on its EUR200 million PIK instrument due
in 2019, supported by its commitment to fulfill these aims
consistently over the instrument's life.  S&P understands that the
company has no upcoming maturities in the next 12-18 months (the
senior debt and RCF mature in June 2018).  S&P's positive outlook
also incorporates its assumption that there will be no major cash
outflows in the form of dividends to shareholders or cash payments
to PIK noteholders, at least in the near term.

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

The company's restructuring process completed in Sept. 2012, and
new management came on board in April 2013.  Since then, the
company has focused on closing plants that were not needed and has
disposed of its underperforming businesses mainly in Hungary, the
Czech Republic, and Denmark, which has helped improve the
company's cost base.  With its focus on brand development and
continued investment in innovation, the company has been able to
achieve high cash conversion in excess of GBP50 million as of
Sept. 30, 2013.

S&P's rating on Findus reflects S&P's assessments of the group's
financial risk profile as "highly leveraged" and its business risk
profile as "weak."

The group's "highly leveraged" financial risk profile reflects its
expected Standard & Poor's-adjusted debt to EBITDA of about 12.4x
as at Dec. 31, 2014.  This high leverage is the result of the
company's preferred equity certificates (PECs) and the PIK notes,
which S&P considers to be debt-like instruments, although it
recognizes their cash-preserving function.  Excluding these PECs,
the company's leverage is expected to be at 7.2x for 2014, in line
with a "highly leveraged" financial risk profile.  S&P also
projects that Findus' FFO cash interest coverage will be about
1.8x at Dec. 31, 2014, which is in line with a "highly leveraged"
financial risk profile.

In S&P's base-case scenario, it forecasts that Findus will be able
to maintain its EBITDA margin at more than 7% in 2014.  S&P do not
forecast any margin erosion due to the group's cost-improvement
measures, which include restructuring, new product launches, and
improved processes.  S&P believes that these initiatives will
continue to have a positive effect on the group's profitability.
Any future improvement in leverage is likely to result from higher
profitability rather than from debt reduction, reflecting the
group's long-dated debt maturity profile.

Findus' "weak" business risk profile reflects its limited ability
to pass on price increases to customers, along with lower
profitability than its branded- and private-label peers.  This
partly reflects the group's exposure to private labels, which
reduces its pricing flexibility, along with heavy private-label
competition for its branded products.  In addition, S&P views
Findus' operating leverage as lower than its peers', with more
than 80% of its costs variable in nature, leading to an inability
to realize scale benefits in product development and production.
Furthermore, S&P believes that the group's diversification is
lower than that of its peers.  Findus has high geographic
concentration in the U.K., which contributed 50% of 2013 revenues,
and high customer concentration risk, with 84% of 2013 revenues
coming from retailers.

These weaknesses are partially offset by Findus' leading position
in the frozen food market in Sweden, Norway and the U.K., along
with a strong relationship with retailers.  However, S&P perceives
that the group is improving its focus on brand development and
innovation, resulting in improving its price premiums for its
products.

Based on these factors, S&P assess the group's competitive
position as "weak."

S&P's business risk assessment for Findus also incorporates S&P's
view of the global branded nondurable consumer products industry
as having "low" risk and "very low" country risk.  The group
operates in the U.K. and the Nordic region, which contributed
nearly 85% of its revenues in 2013.

S&P's base-case operating scenario for Findus assumes:

   -- Flat to low-single-digit top-line growth in 2014 and 2015,
      reflecting heavy private-label competition, offset by new
      product launches.

   -- An improving cost structure that will benefit the group
      from 2014 onward.

   -- Restructuring costs of about GBP7.5 million, reflecting
      site closures and ongoing cost-improvement measures, which
      S&P includes in its EBITDA calculation.

   -- An improvement in EBITDA to GBP84 million in 2014 and about
      GBP90 million in 2015, reflecting the aforementioned cost-
      improvement measures.

   -- Capital expenditure (capex) of GBP30 million in 2014 and
      2015.

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

   -- An EBITDA margin of 7.3% in 2014 and 7.7% in 2015.
   -- Debt to EBITDA of 12.4x in 2014 and 12.7x in 2015.
   -- FFO cash interest coverage of 1.8x in 2014 and 1.6x in
      2015.

The positive outlook reflects S&P's view that Findus will continue
to improve its operating performance, including benefits from cost
optimization projects, and grow its EBITDA close to GBP90 million
over the next 12-18 months.  S&P thinks Findus is already
establishing a track record of its stabilized business model,
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 coverage maintained at about 2x on average over
the next three years, along with "adequate" liquidity as
commensurate with a higher rating.

S&P could raise the rating if Findus establishes a track record of
maintaining its positive operating performance momentum, such that
S&P sees a consistent improvement in the company's business
performance via improved EBITDA margins, improving market share,
and free cash flow generation.  This would enable it to maintain
debt protection metrics that correspond to a higher rating.

This would translate into reaching and maintaining FFO cash
interest coverage of 2.0x on a sustainable basis.  This threshold
would be achievable if the company does not pay any cash dividend
to its shareholder or cash interest on its EUR200 million PIK
instrument due in 2019.  This would need to be supported by its
commitment to do so consistently over the life of the instrument.

Conversely, S&P would return the outlook to stable if the company
decides to pay dividends to its shareholders or if the company
decides to pay cash interest in the near term on its recently
issued PIK notes.

S&P sees the potential for downside if the company's liquidity
becomes weaker due to reduced profitability and/or restructuring
costs, and if FFO cash interest coverage falls to less than 1.5x.
Moreover, increases in raw material costs within a short time that
the company cannot recover from, and further deterioration in the
performance of its business could lead to negative rating action.



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


FIAT CHRYSLER: Moody's Affirms 'B1' Senior Secured Rating
---------------------------------------------------------
Moody's Investors Service has affirmed the ratings of Fiat
Chrysler Automobiles N.V. (FCA) and its guaranteed finance
vehicles following the announcement of the company's decision to
launch capital market transactions, spin-off its luxury brand
Ferrari and eliminate any contractual terms limiting the free flow
of capital among members of the FCA group. Concurrently, Moody's
has affirmed the Ba1 senior secured bank credit facility and B1
senior secured rating assigned to FCA's wholly owned subsidiary
Chrysler Group LLC (Chrysler). Moody's has also withdrawn
Chrysler's B1 corporate family rating (CFR), B1-PD Probability of
Default Rating (PDR) and SGL-2. The outlook on all ratings is
stable.

"The sale of FCA's common shares and issuance of hybrid securities
will inject much needed new money to fund the company's 2014-18
business plan", says Yasmina Serghini Douvin, a Moody's Vice
President -- Senior Credit Officer and lead analyst on FCA.
"However, we view the spin-off of Ferrari as a credit negative
because it will reduce the contribution of FCA's Luxury Brands at
a time when the company's operational performance in Latin America
has weakened and it is in the early stages of the implementation
of its 2014-18 strategy", says Mrs Serghini-Douvin. "FCA's
commitment to eliminate the ring-fencing of Chrysler will complete
the integration of Chrysler within the FCA group and ultimately
reduce FCA's financial complexity", adds Mrs Serghini-Douvin.

Ratings Rationale

Rationale for the Affirmation of FCA'S B1 Rating

The affirmation of FCA's ratings reflects Moody's belief that the
company's proposed capital market transactions, which include the
sale of FCA's common shares as well as the issuance of new hybrid
securities, will bring much needed new capital to fund the
company's 2014-18 business plan, which will require a significant
amount of investment during that period. By the end of 2014, FCA
intends to offer up to 100 million FCA common shares and USD2.5
billion (approximately EUR2.0 billion) of mandatory convertible
securities. Moody's will determine the debt/equity treatment of
this hybrid instrument when the terms and conditions have been
defined by the company.

However, Moody's considers that the announced spin-off of FCA's
luxury brand Ferrari in 2015 is credit negative because it is a
profitable and cash flow generative asset which supports the
company's profitability. Together with FCA's growing North
American and Asian operations, the solid performance of the Luxury
Brands division (which includes Ferrari and Maserati), has
mitigated operating losses incurred by the company within Europe,
the Middle East and Africa and, more recently, declining profits
in Latin America. In the first nine months of 2014, FCA's Luxury
Brands generated EUR484 million in EBIT (as reported by the
company), of which EUR274 million at Ferrari or a margin of 12.5%,
well above the 3.1% for the company as a whole.

Moreover, Moody's has previously incorporated in its liquidity
assessment Ferrari as a valuable asset which could be monetized if
needed, thus supporting FCA's liquidity profile. In the near term,
it is likely that the deconsolidation of Ferrari will weigh on the
company's 2015 debt-protection ratios. As such Moody's believes
that the spin-off of Ferrari somewhat weakens FCA's position in
its B1 rating category because it will reduce the contribution of
the Luxury Brands division, at a time when FCA is facing more
challenging market conditions in Latin America and is only in the
early stages of implementing its strategic plan.

Although the company's guidance for 2015 is for an increase in its
worldwide volumes to 4.8 and 4.9 million units (approximately 4.7
million expected in 2014), suggesting a growth in the low-single-
digit range, Moody's considers that there is a lack of visibility
in the Latin American region and some uncertainties still
regarding the passenger cars demand growth trajectory in Europe,
which could hold back earnings improvement in 2015.

Rationale for the Withdrawal of Chrysler's CFR and PDR

Moody's decision to withdraw Chrysler's B1 CFR and B1-PD PDR
reflects FCA's commitment to eliminate the contractual terms
contained in Chrysler's credit agreements preventing FCA from
accessing the cash and cash flows of Chrysler within a reasonable
timeline. These constraints are the main reason why Moody's has
maintained separate CFRs for FCA and Chrysler.

Although Moody's will now use a single CFR for the FCA group, this
has no immediate effect on the ratings assigned to the securities
previously issued (or borrowed) by Chrysler and FCA's guaranteed
finance vehicles. This is because Moody's considers that the
lenders and noteholders at Chrysler will continue to benefit from
a privileged position within the FCA group with access to a
separate pool of assets in a bankruptcy scenario as long as
Chrysler's secured 2019 and 2021 notes and secured loans and
revolving credit facility remain outstanding.

Rationale for the Stable Outlook

The stable outlook reflects Moody's expectations that FCA will
make progress in executing its strategic plan over 2014-18 in
order to further strengthen its position in the NAFTA region, grow
its presence in Asia, increase its Maserati brand's volumes and
earnings, and address its structural weakness in Europe, the
Middle East and Africa such that it continues to reduce its
operating losses in the region towards breakeven. Furthermore, the
stable outlook anticipates that FCA will maintain an adequate
liquidity with a coverage of a minimum of 12 months of its future
needs (under Moody's hypothetical scenario of no access to the
debt capital markets).

Quantitatively, Moody's would expect FCA to maintain a Moody's-
adjusted EBITA margin close to 3% and to limit its negative free
cash flow below EUR1.5 billion (on a consolidated basis).

What Could Change the Rating Up/Down

Moody's could downgrade FCA's ratings if (1) the company were to
lose significant market share in its key markets; (2) there is
evidence that its product renewal program for its key brands
stalls; and (3) its operating performance deteriorates with
limited prospect of improvement within a reasonable timeline as a
result, for example, of prolonged weakness in Latin America, a
major source of profits and cash flows for the company, which
would more than offset further improvements in other regions and
its Luxury Brands division.

Credit metrics that could support a rating downgrade include a
Moody's-adjusted EBITA margin below 2% and a Moody's-adjusted
(gross) debt/EBITDA above 6.0x, for a prolonged period of time.

Upward pressure on Fiat's rating could materialize if FCA executes
successfully its 2014-18 plan which would lead to improved
operational performance with a positive free cash flow exceeding
EUR1.0 billion that would be applied to debt reduction and a
Moody's-adjusted EBITA margin sustainably above 4%. An upgrade of
FCA's rating would also require that the company maintains a
financial policy that balances both the interests of shareholders
and bondholders.

Principal Methodology

The principal methodology used in these ratings was Global
Automobile Manufacturer Industry published in June 2011. Other
methodologies used include Loss Given Default for Speculative-
Grade Non-Financial Companies in the U.S., Canada and EMEA
published in June 2009.

List of Affected Ratings

Affirmations:

Issuer: Fiat Chrysler Automobiles N.V.

Probability of Default Rating, Affirmed B1-PD

Corporate Family Rating, Affirmed B1

EUR15000M Senior Unsecured Medium-Term Note Program (Local
Currency), Affirmed (P)B2

EUR15000M Senior Unsecured Medium-Term Note Program (Local
Currency), Affirmed (P)NP

Issuer: Fiat Finance & Trade Ltd.

EUR15000M Senior Unsecured Medium-Term Note Program (Local
Currency), Affirmed (P)B2

EUR15000M Senior Unsecured Medium-Term Note Program (Local
Currency), Affirmed (P)NP

SwFr450M 4% Senior Unsecured Regular Bond/Debenture (Foreign
Currency) Nov 22, 2017, Affirmed B2

SwFr400M 5.25% Senior Unsecured Regular Bond/Debenture (Foreign
Currency) Nov 23, 2016, Affirmed B2

SwFr250M 3.125% Senior Unsecured Regular Bond/Debenture (Foreign
Currency) Sep 30, 2019, Affirmed B2

SwFr425M 5% Senior Unsecured Regular Bond/Debenture (Foreign
Currency) Sep 7, 2015, Affirmed B2

EUR1350M 4.75% Senior Unsecured Regular Bond/Debenture (Local
Currency) Jul 15, 2022, Affirmed B2

EUR1000M 4.75% Senior Unsecured Regular Bond/Debenture (Local
Currency) Mar 22, 2021, Affirmed B2

EUR1000M 6.375% Senior Unsecured Regular Bond/Debenture (Local
Currency) Apr 1, 2016, Affirmed B2

EUR600M 7.375% Senior Unsecured Regular Bond/Debenture (Local
Currency) Jul 8, 2018, Affirmed B2

EUR1250M 6.625% Senior Unsecured Regular Bond/Debenture (Local
Currency) Mar 15, 2018, Affirmed B2

EUR1250M 6.75% Senior Unsecured Regular Bond/Debenture (Local
Currency) Oct 14, 2019, Affirmed B2

EUR1000M 7.75% Senior Unsecured Regular Bond/Debenture (Local
Currency) Oct 17, 2016, Affirmed B2

EUR850M 7% Senior Unsecured Regular Bond/Debenture (Local
Currency) Mar 23, 2017, Affirmed B2

EUR1500M 6.875% Senior Unsecured Regular Bond/Debenture (Local
Currency) Feb 13, 2015, Affirmed B2

Issuer: Fiat Finance Canada Ltd.

EUR15000M Senior Unsecured Medium-Term Note Program (Foreign
Currency), Affirmed (P)B2

Issuer: Fiat Finance North America Inc.

EUR15000M Senior Unsecured Medium-Term Note Program (Foreign
Currency), Affirmed (P)B2

EUR15000M Senior Unsecured Medium-Term Note Program (Foreign
Currency), Affirmed (P)NP

EUR1000M 5.625% Senior Unsecured Regular Bond/Debenture (Foreign
Currency) Jun 12, 2017, Affirmed B2

Issuer: Chrysler Group LLC

US$3150M Senior Secured Bank Credit Facility (Local Currency)
May 27, 2017, Affirmed Ba1

US$1300M Senior Secured Bank Credit Facility (Local Currency)
May 24, 2016, Affirmed Ba1

US$1733M Senior Secured Bank Credit Facility (Local Currency)
Dec 31, 2018, Affirmed Ba1

US$1700M 8.25% Senior Secured Regular Bond/Debenture (Local
Currency) Jun 15, 2021, Affirmed B1

US$1500M 8% Senior Secured Regular Bond/Debenture (Local
Currency) Jun 15, 2019, Affirmed B1

US$1375M 8% Senior Secured Regular Bond/Debenture (Local
Currency) Jun 15, 2019, Affirmed B1

US$1380M 8.25% Senior Secured Regular Bond/Debenture (Local
Currency) Jun 15, 2021, Affirmed B1

Withdrawals:

Issuer: Chrysler Group LLC

Corporate Family Rating (Local Currency), Withdrawn, previously
rated B1

Probability of Default Rating, Withdrawn , previously rated
B1-PD

Speculative Grade Liquidity Rating, Withdrawn , previously rated
SGL-2

Outlook Actions:

Issuer: Fiat Chrysler Automobiles N.V.

Outlook, Remains Stable

Issuer: Fiat Finance & Trade Ltd.

Outlook, Remains Stable

Issuer: Fiat Finance Canada Ltd.

Outlook, Remains Stable

Issuer: Fiat Finance North America Inc.

Outlook, Remains Stable

Issuer: Chrysler Group LLC

Outlook, Remains Stable

Fiat Chrysler Automobiles N.V. has its corporate seat in
Amsterdam, the Netherlands, with principal executive office in the
United Kingdom. FCA owns 100% of Chrysler Group LLC and is one of
the largest automotive manufacturers by unit sales. FCA common
shares are listed on the New York Stock Exchange and on the
Mercato Telematico Azionario (MTA) in Italy.


KAZSTROYSERVICE GLOBAL: Moody's Assigns 'Ba3' Corp. Family Rating
-----------------------------------------------------------------
Moody's Investors Service has assigned a Ba3 corporate family
rating (CFR) and a Ba3-PD probability of default rating (PDR) to
KazStroyService Global B.V. (KSS), the largest engineering,
procurement and construction (EPC) services provider in Kazakhstan
via its 100% subsidiary JSC OGCC KazStroyService (KSS KZ). The
outlook on the ratings is stable. This is the first time Moody's
has assigned ratings to KSS.

Simultaneously, Moody's has assigned a provisional (P)Ba3 rating
to KSS's contemplated bond.

Rating Rationale

KSS's Ba3 corporate family rating reflects (1) KSS's quasi-
monopoly position on Kazakhstan's engineering, procurement and
construction (EPC) premium oil and gas market; (2) high
profitability measured by EBITDA margin of its operations by
industry standards; (3) strong near-term revenue visibility,
supported by a backlog of approximately 1.7x of revenue; (4) a
measured financial policy and business strategy; and (4) strong
growth prospects of the company's key Kazakhstan and India
markets.

The rating is constrained by (1) modest scale of the company's
operations by global standards ($1.2 billion in revenue in 2013);
(2) limited geographical and business line scope (the company's
Kazakhstan operations contribute more than 80% of group revenue
and more than 90% of EBITDA); (3) significant working capital
requirements currently served by short-term debt; and (4)
political and geographical risks associated with operating in
countries with evolving regulations regime such as Kazakhstan and
India.


Moody's has assigned a provisional (P)Ba3 rating to KSS's
contemplated bond, to refinance 70% of its short -term debt. The
new senior unsecured obligation will be guaranteed by KSS's
operating subsidiary in Kazakhstan, KSS KZ, and rank at least pari
passu with all of the issuer's and the guarantor's existing and
future unsecured senior debt and senior to all of their existing
or future subordinated debt. The bond will benefit from certain
negative incurrence covenants, and its terms will include the
occurrence of a change of control as a redemption trigger. The
proceeds of the issuance will be on-lent to subsidiaries in
Kazakhstan and India in the form of intra-company loans.

Moody's issues provisional ratings in advance of the final sale of
securities and these ratings reflect Moody's preliminary credit
opinion regarding the transaction only. Upon a conclusive review
of the final documentation, Moody's will endeavor to assign a
definitive rating to the Notes. A definitive rating may differ
from a provisional rating.

Rationale for the Stable Outlook

The stable outlook reflects Moody's expectation that KSS will
maintain conservative leverage of approximately 2.0x, and
successfully modify its capital structure towards a long-term debt
profile.

What Could Change the Rating Up/Down

Given KSS's current scale of operations and diversification, an
upgrade in the medium term is unlikely. KSS's track record of
strengthening financial metrics, and maintenance of good
visibility over future cash flows alongside conservative liquidity
profile would have a positive effect on the ratings.

Conversely, KSS's rating could come under pressure if the company
faced material deterioration in its business and financial profile
with EBITA falling below US$250 million, leverage measured by
reported debt/EBITDA increasing above 2.5x, and EBITA/interest
expense declining below 3.2x on a sustainable basis.

The principal methodology used in this rating was Global
Construction Methodology published in November 2010. Other
methodologies used include Loss Given Default for Speculative-
Grade Non-Financial Companies in the U.S., Canada and EMEA
published in June 2009.

KSS Global B.V. domiciled in the Netherlands is the largest EPC
services provider in Kazakhstan via its 100% subsidiary KSS KZ. In
addition, the company operates KSS Petron and Petron Engineering
which are engaged in oil and gas, industrial and infrastructure
projects in India. KSS provides general contracting, construction
management and design-build services for state-owned and private
customers primarily in Kazakhstan. KSS reported $1.2 billion in
revenue and $354 million in EBITDA in 2013, and its backlog
(secured orders in the company's project portfolio) was $2.0
billion as of end-June 2014. The major shareholders of KSS are:
Fraseli Investments Sarl (32.22%, not rated, representing the
interests of Lakshmi N. Mittal, Chairman, CEO and member of a
family which owns 40% of the world's largest steel company
ArcelorMittal (Ba1, negative); AT Holdings Europe B.V. (32.22%,
representing the interests of private investor Arvind Tiku),
KazStroyService Infrastructure BV (32.22%, not rated, representing
the interests of Timur Kulibaev, international entrepreneur of
Kazakh origin), and ELQ Investors II Ltd (3.34%, not rated, an
investment fund owned by Goldman Sachs). KSS owns a 26.6% stake in
the Kazakhstani exploration and production company Nostrum Oil and
Gas (Nostrum, B2 stable).



===============
P O R T U G A L
===============


DOURO MORTGAGES NO.2: Fitch Affirms 'Bsf' Rating on Cl. D Tranche
-----------------------------------------------------------------
Fitch Ratings has taken multiple rating actions on the Douro
Mortgages series by upgrading one tranche, downgrading two,
affirming 10 and placing a further tranche of on Rating Watch
Negative. The four Douro Mortgages transactions comprise loans
originated and serviced by Banco BPI (BB+/Negative/B).

Key Rating Drivers

Rating Watch Resolved

On August 4, 2014, Fitch placed five tranches of Douro Mortgages
on Rating Watch Evolving (RWE) and eight other on Rating Watch
Negative (RWN) pending information on recoveries on properties
taken into possession and sold.

Banco BPI has provided Fitch with loan-by-loan default and
recovery information on the securitized portfolio. The agency used
the data to validate its analytical assumptions for quick sale
adjustment (QSA) and recovery timing.

The default data shows that Banco BPI has sold properties taken
into possession at an average 39% discount to the property value
(estimated by applying the home price index to the valuation at
loan origination). It took an average of 3.8 years to complete the
workout from the date the loan entered arrears. Both of these
factors are in line with Fitch's standard assumptions for
Portuguese RMBS and for this reason no adjustments were made in
the analysis. The agency applied these recovery assumptions to
expected defaults, as well as defaulted loans that have been
provisioned for.

Robust Performance
The robust performance of the assets has resulted in the upgrade
of one tranche and the affirmation of 10 others with Stable
Outlooks in the three more seasoned transactions (Douro 1-3).

Three-months plus arrears (excluding defaults) currently range
from 0.4% (Douro 1) to 1% (Douro 5) of the outstanding pool
balances compared with the 1% Portuguese RMBS average for three-
months plus arrears.

Foreign Residents
In its recent criteria addendum for Portugal (published 3 June
2014), Fitch increased the 'Bsf' foreclosure frequency for foreign
borrowers to 200% from a maximum hit of 25% for foreign residents
from outside the euro area. The fairly high percentage (5.2%) of
foreign borrowers in combination with the comparatively thin
credit enhancement on the class A and B notes in Douro 3 has meant
that the current credit enhancement available to the notes is no
longer deemed sufficient to withstand this increased rating
stresses.

Provisioning
The Douro transactions feature a provisioning mechanism, whereby
excess spread is diverted to principal distributions to cover
deemed principal losses. The amount provisioned is dependent on
the number of monthly instalments in arrears.

To account for the staggered nature of provisions, Fitch has
estimated the amounts of loans that have defaulted, but for which
full provisions have not yet been made. Such amounts make up
between 0.4% (Douro 1) to 0.8% (Douro 5) of the current portfolio
balance and have been deducted from the available credit
enhancement, as they are payable in the coming quarters. Even
though the credit enhancement was reduced by the estimated amount
of un-provisioned loans, this was not the primary driver of
today's downgrades.

Counterparty Exposure
In its analysis, Fitch has assessed the liquidity available in the
transactions to fully cover senior fees, net swap payments and
note interest in case the servicer were to default. The agency has
found the available liquidity in Douro 5 is insufficient to
provide payments to the notes for two interest payment periods
should the servicer default.

Fitch has placed the class A notes on RWN. Failure to address the
payment interruption risk would result in the capping of the Class
A notes up to three notches above Banco BPI's ratings. The agency
will monitor the progress of potential remedial actions, if any,
and will take rating actions accordingly in the next three months.

Douro 1, 2 and 3 have a variable Liquidity Fund in place, which
mitigates the payment interruption for the three transactions.

Rating Sensitivities

Deterioration in asset performance may result from economic
factors. A corresponding increase in new defaults and associated
pressure on excess spread levels and reserve funds beyond Fitch's
assumptions could result in a negative rating action. In Douro 2,
a minor deterioration in asset performance is expected to result
in negative rating action, in particular for the senior tranche.

The ratings are also sensitive to changes to Portugal's Country
Ceiling (A+) and, consequently, changes to the highest achievable
rating of Portuguese Structured Finance notes.

Douro Mortgages No. 1:

Class A (ISIN XS0236179270): upgraded to 'A+sf' from 'Asf'; off
  RWE, Outlook Stable
Class B (ISIN XS0236179601): affirmed at 'Asf'; off RWE, Outlook
  Stable
Class C (ISIN XS0236180104): affirmed at 'BBBsf'; off RWN;
Outlook Stable
Class D (ISIN XS0236180443): affirmed at 'BBsf'; off RWN; Outlook
Stable

Douro Mortgages No. 2:

Class A1 (ISIN XS0269341334): affirmed at 'Asf'; off RWE; Outlook
Stable
Class A2 (ISIN XS0269341680): affirmed at 'Asf'; off RWE; Outlook
Stable
Class B (ISIN XS0269343389): affirmed at 'BBBsf'; off RWN;
Outlook Stable
Class C (ISIN XS0269343892): affirmed at 'BBsf'; off RWN; Outlook
Stable
Class D (ISIN XS0269344197): affirmed at Bsf'; off RWN; Outlook
Stable

Douro Mortgages No. 3:

Class A (ISIN XS0311833833) downgraded to 'BBB+sf' from 'Asf';
off RWE, Outlook Stable
Class B (ISIN XS0311834211) downgraded to 'BB+sf' from 'BBBsf';
off RWN, Outlook Stable
Class C (ISIN XS0311835374) affirmed at 'BBsf'; off RWN; Outlook
Stable;
Class D (ISIN XS0311836349) affirmed at 'Bsf'; off RWN; Outlook
Stable;

Douro Mortgages No. 5:

Class A (ISIN PTSSCEOM0000) 'Asf'; RWN maintained


NOSTRUM MORTGAGES NO.1: Fitch Cuts Rating on Cl. C Tranche to BB+
-----------------------------------------------------------------
Fitch Ratings has downgraded one tranche of Nostrum Mortgages No.
1 and affirmed two others. The agency placed one tranche of
Nostrum Mortgages No. 2 on Rating Watch Evolving (RWE). The rating
actions are as follows:

Nostrum Mortgages No. 1 Plc:

Class A (ISIN XS0180041278): affirmed at 'Asf'; off RWE; Outlook
Stable

Class B (ISIN XS0180041435): affirmed at 'Asf'; off RWE; Outlook
Stable

Class C (ISIN XS0180041609): downgraded to 'BB+sf' from
'BBB+sf'; off Rating Watch Negative (RWN); Outlook Stable

Nostrum Mortgages No. 2 Plc:

Class A (ISIN PTTGUIOM0007): 'Asf'; placed on RWE

The series comprises Portuguese mortgage loans originated and
serviced by Caixa Geral de Depositos (CGD; BB+/Negative/B).

Key Rating Drivers

Worst Case Scenario
Fitch placed Nostrum Mortgages No. 1's class A and B notes on RWE
and class C notes on RWN on 4 August 2014, pending information on
recoveries on properties taken into possession and sold. Recovery
rates reported in the investor reports suggested that proceeds
received from foreclosure activities across Portuguese RMBS were
below Fitch's expectations.

Despite requests from Fitch, CGD has not been able to provide
loan-by-loan default and recovery information for the
transactions. As a result, in its analysis Fitch applied the worst
case scenario assumptions based on experience of other Portuguese
lenders. This involved increasing the quick sale adjustment to 50%
from 40% and extending the expected recovery timing to six years
from four years. These recoveries were applied to both expected
defaults and outstanding defaults that have been provisioned for.

Fitch understands that the servicer has historically repurchased
loans out of the portfolio. As there is no binding commitment for
CGD to continue with this practice, in its analysis Fitch gave no
credit to the historical performance and applied its standard
weighted average foreclosure frequency assumptions. In combination
with the thin credit enhancement available for the junior notes,
this resulted in a downgrade of the class C notes to 'BB+sf' from
'BBB+sf'.

Counterparty Exposure
The RWE on the class A notes of Nostrum 2 reflects exposure to
payment interruption risk. In its analysis, Fitch assessed the
liquidity available in the transaction to fully cover senior fees,
net swap payments and note interest in the event of servicer
default. We have found that the available liquidity is
insufficient to provide payments to the notes for two interest
payment periods should the servicer default.

Fitch will monitor the progress of potential remedial actions, if
any, and will take rating actions accordingly in the next six
months. The structure cannot withstand an interest deferral on the
notes and therefore failure to implement appropriate remedial
actions will result in the class A notes of Nostrum 2 being capped
at three notches above CGD's rating.

RATING SENSITIVITIES

Deterioration in asset performance may result from economic
factors. A corresponding increase in new defaults and associated
pressure on excess spread and reserve funds, beyond Fitch's
assumptions, could result in negative rating actions. Furthermore,
an abrupt shift of interest rates might jeopardize the loan
affordability of the underlying borrowers.

The ratings are also sensitive to changes in Portugal's Country
Ceiling (A+) and consequently changes to the highest achievable
rating of Portuguese structured finance notes.



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


VENTRELT HOLDINGS: Fitch Affirms 'BB-' IDR; Outlook Stable
----------------------------------------------------------
Fitch Ratings has affirmed Russia-based Ventrelt Holdings Ltd's
Long-term foreign currency Issuer Default Rating (IDR) at 'BB-'
with Stable Outlook.

The ratings of Ventrelt, a leading private water and waste water
operator in Russia, reflect the company's long-term leasing and
concession agreements with municipalities to provide essential
infrastructure services, its fairly moderate leverage and complex
existing funding structure.

The ratings are constrained by Ventrelt's limited size and
diversification relative to larger peers and 'BB' rated Russian
companies, as well as an evolving regulatory framework for
concession agreements and tariff-setting.  In addition, its capex
relative to cash flow is sizeable and results in negative free
cash flows (FCF) while fairly moderate cash collection rates
result in working capital outflow.

KEY RATING DRIVERS

Refinancing Needs

Ventrelt had short-term debt of around RUB1.2 billion against cash
and cash equivalents of RUB2 billion as of Aug. 1, 2014.  In
addition, a major part of outstanding debt is represented by
RUB3bn 9.6% bonds maturing in Nov. 2015.  This creates refinancing
risks for the company in late 2015.  The company plans to issue
new bonds or raise a loan, for which it already has a preliminary
agreement.

Fitch expects Ventrelt's cash flows from operation to continue to
be insufficient to fully cover capex, resulting in negative FCF,
despite connection fee offsetting some of the capex and a
continued zero dividend policy.  Failure by the company to secure
refinancing by end-2014 may result in negative rating action.

Slight Leverage Deterioration

Ventrelt's net debt/EBITDA decreased to 1.8x at end-2013 from 1.9x
at end-2012.  However, to better capture the operating performance
of the company, Fitch deducts connection fees (the capital element
included in EBITDA) in its calculation of net leverage.  Fitch's
measure of net leverage (net debt/connection fee-adjusted EBITDA)
increased to 3.4x at end-2013 from 3.1x at end-2012, approaching
our negative rating guidance of 4.0x.  However, Fitch expects net
leverage to average 3.4x in 2014-2017.  Failure by the company to
keep net leverage below 4.0x could lead to negative rating action.

Bond Benefits From Sureties

The RUB3 billion bonds issued by RVK-Finance LLC benefit from
sureties provided on a joint and several basis by several
subsidiaries, including Kaluzhsky Oblastnoy Vodokanal LLC that
Ventrelt sold in May 2012.  However, the company agreed with the
new owner that its surety will remain in place until 2015.  In
turn, Barnaulskiy Vodokanal LLC, a fully-owned subsidiary, issued
a surety to Kaluzhsky Oblastnoy Vodokanal LLC covering all
potential obligations.  If the new financing sources are not
guaranteed by the operating companies, this may lead to the
unsecured rating being notched down.

Long-term Tariffs from 2016

Water and sewage tariffs in Russian cities are negotiated annually
between a water utility and a local tariff regulator under a cost-
plus mechanism, covering operating expenditure and planned capex.
In Dec. 2012 the government signed a decree to change the
regulatory framework for water utilities in 2016, introducing
long-term tariffs for water utilities for three to five years or
until the end of the rent/concession agreement.  This should
provide some longer-term clarity to waterworks.  The company has
received preliminary tariffs from the regulator, which have also
been approved by local governing bodies.  The final tariffs for
2015 will be set in Dec. 2014.  Fitch assumes close to 10% tariff
increases from 2015.  Cash collection rates remain around 97%,
according to the company, and therefore represent a continued
working capital drain.

Expansion Strategy

Ventrelt remains Russia's leading private water and wastewater
operator operating under the name of Rosvodokanal, serving about 6
million customers in Russia, operating about 23,000km of water and
sewerage pipelines and supplying over 450 million cubic meters of
water annually.  In 2013, Ventrelt reported revenues of RUB15bn, a
10% increase year on year mainly due to higher water and
wastewater tariffs.  Its strategy envisages further expansion into
Russian cities with at least 350,000 residents.  It plans to enter
about eight new cities by end-2015, which Fitch views as an
aggressive target given related investment needs and considering
that most Russian water utilities continue to be owned by
municipalities and may not be available for private operatorship
yet.

RATING SENSITIVITIES

Positive: Future developments that may, individually or
collectively, lead to positive rating action, include:

   -- Increased revenue and earnings visibility following the
      implementation of long-term tariffs
   -- Sustainable positive free cash flow generation

Negative: Future developments that may, individually or
collectively, lead to negative rating action, include:

   -- An increase in leverage above 4x net debt/connection-fee
      adjusted EBITDA to fund additional capital expenditure or
      acquisitions

   -- A sustained reduction in cash generation through a
      worsening operating performance or deteriorating cash
      collection

FULL LIST OF RATING ACTIONS

Ventrelt Holdings Ltd

  Long-term foreign currency IDR affirmed at 'BB-'; Stable
  Outlook

  Long-term local currency IDR affirmed at 'BB-'; Stable Outlook

  National Long-term rating affirmed at 'A+(rus)'; Stable Outlook

RVK-Finance LLC (wholly-owned indirect subsidiary of Ventrelt
Holdings Ltd)

  Local currency senior unsecured rating affirmed at 'BB-'

  National senior unsecured rating affirmed at 'A+(rus)'



===============
S L O V E N I A
===============


T-2: Higher Court Reverses Receivership Ruling
----------------------------------------------
SeeNews reports that the Higher Court in Ljubljana has overruled a
ruling by a lower court on the launch of receivership proceedings
against T-2.

According to SeeNews, news agency STA said the Higher Court
decided that a motion by the creditors was assessed wrongly by the
District Court, which has to review the application again.

The District Court opened receivership proceedings against T-2 in
September, SeeNews recounts.  However, the company, which at the
time had 175,000 subscribers and over 300 employees, said it would
continue to provide uninterrupted services to its customers and
would appeal the decision, SeeNews relates.

STA said earlier that the proposal for receivership was submitted
by Slovenia's "bad bank" -- the Bank Asset Management Company
(BAMC) -- and two lenders, SeeNews relays.  BAMC demanded
receivership after taking over some EUR90 million in unpaid loans
of T-2 from local Nova Ljubljanska Banka and Nova Kreditna Banka
Maribor, SeeNews notes.

T-2 is a fiber optic internet provider.



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


BANCAJA 7: Fitch Affirms 'BBsf' Rating on Class D Notes
-------------------------------------------------------
Fitch Ratings has affirmed Bancaja 7, FTA, a Spanish prime RMBS
comprising loans originated and serviced by Bankia, S.A. (BBB-
/Negative/F3).  The class A2 and B notes have been removed from
Rating Watch Evolving (RWE).

KEY RATING DRIVERS

Payment Interruption Risk Adequately Mitigated

The removal of the RWE on the class A2 and B notes follows the
implementation of a dedicated cash reserve aimed at mitigating
payment interruption risk in the event the servicer were to
default.  The cash deposit is sized to cover three months of
stressed senior interest, net swap payments and senior expenses.
The amount posted is sufficient to withstand Fitch's payment
interruption risk stresses.

Stable Asset Performance

The affirmations reflect the transaction's solid performance and
credit enhancement available to the rated tranches.  As of the
latest reporting period in Sept. 2014, three-month plus arrears
(excluding defaults) were at 1.3% of the current pool balance and
cumulative gross defaults stood at 1.0% of the initial pool
balance.  Fitch's Spanish RMBS Index of three-month plus arrears
and gross cumulative defaults are currently at 1.9% (of the
current pool balance) and 4.5%, (of the initial pool balance),
respectively.  Fitch expects the robust performance to continue
due to the gradual recovery of the Spanish economy.

The Positive Outlook on the class A2 notes reflects Fitch's
expectation that in the next 12 to 18 months credit enhancement
available to this tranche may be sufficient to withstand credit
losses at higher rating levels.

RATING SENSITIVITIES

Deterioration in asset performance may result from economic
factors, in particular the increasing effect of unemployment.  A
corresponding increase in new defaults and associated pressure on
excess spread and reserve funds could result in negative rating
action, particularly at the lower end of the capital structure.

The rating actions are:

  Class A2 (ISIN ES0312886015): affirmed at 'AA-sf'; off RWE,
  Outlook Positive

  Class B (ISIN ES0312886023): affirmed at 'AA-sf'; off RWE,
  Outlook Stable

  Class C (ISIN ES0312886031): affirmed at 'A-sf'; Outlook Stable

  Class D (ISIN ES0312886049): affirmed at 'BBsf'; Outlook
  Negative


BASHNEFT: Oct. 30 Ruling No Immediate Impact on Fitch's BB Rating
-----------------------------------------------------------------
Fitch Ratings says it is too early to tell what the impact of the
arbitration court ruling on Joint Stock Oil Company Bashneft
(Bashneft, BB/Rating Watch Negative (RWN)) released Oct. 30, 2014
will be for the ratings of the company, its parent Sistema Joint
Stock Financial Corporation (Sistema, BB-/RWN) and Sistema's other
subsidiaries, OJSC Mobile TeleSystems (MTS, BB+/RWN) and OJSC MTS
Bank (MTS Bank, B+/RWN).  The ratings of these entities remain on
RWN.  Fitch will aim to resolve the RWN by mid-March 2015.

The Moscow Arbitration court ruled on Oct. 30, 2014, to
effectively nationalize AFK Sistema's stake in Bashneft.  The
ruling will become effective in one month, and Sistema will
technically have one month to appeal.  Sistema has issued a press
release saying it does not agree with the ruling and is
considering an appeal.

The ruling does not contain a request to return all dividends paid
out to Sistema after the acquisition, which is potentially
positive for both Sistema and MTS.  However, Fitch understands the
prosecutors retain flexibility to revisit this issue at a later
stage.  The uncertainty over the likely outcome of this litigation
is reflected in the RWN.

While the consequences of the whole situation around Sistema and
Bashneft are still unclear, in our view, the ruling makes it
unlikely that Bashneft remains a part of Sistema.

Assuming the potential appeal does not succeed, the long-term
implications for Bashneft remain vague.  For example, it is not
clear whether the state would attempt to change the management
team, which has proved efficient in boosting the company's oil
production over the past five years, or if the company's
relatively aggressive dividend policy will change.  Also, it is
possible that at some stage Bashneft may be de-privatized.  In any
scenario, Bashneft's creditworthiness could be affected by its
relationship with a new owner, whether this is the state or a
private company.


GRUPO EMBOTELLADOR: Fitch Affirms 'BB+' IDR; Outlook Negative
-------------------------------------------------------------
Fitch Ratings has affirmed the 'BB+' foreign and local currency
Issuer Default Ratings (IDRs) of Grupo Embotellador Atic S.A.
(Atic) and revised the Outlook to Negative from Stable.  In
conjunction with this rating action, Fitch has affirmed the 'BB+'
rating of Ajecorp B.V.'s (Ajecorp) USD450 million notes due in
2022.  Ajecorp is a wholly owned subsidiary of Atic and is
incorporated in the Netherlands as a limited liability company.
Ajecorp's 2022 notes are unconditionally guaranteed by Atic and
its key operating subsidiaries.

The Negative Outlook reflects increased loans to sister companies,
while market conditions remain difficult in key markets such as
Peru, Colombia, Mexico and Thailand.  The loans have benefited a
beverage company in Indonesia owned by Atic's shareholders.  The
ratings of Atic and Ajecorp will be downgraded within six months
if this company is not brought into the guarantor group.  Even if
this were to occur, the ratings would likely remain with a
Negative Outlook.  Fitch remains concerned about the company's
weak cash flow generation in crucial countries such as Peru,
Colombia and Mexico.  If Atic's
performance in these markets does not recover within 12 to 18
months, negative rating actions will likely occur.

KEY RATING DRIVERS

High Leverage and Tight Liquidity

Fitch projects that Atic's year-end net leverage ratio will be
3.8x absent the incorporation of any sister companies.  The
company's challenging markets, along with its loans to related
parties, have increased this figure from 3.1x in 2013 and 2.2x in
2012.  Atic had USD534 million of consolidated debt as of June 30,
2014 versus USD75 million of cash and marketable securities.  Only
USD42 million of the company's debt is due in the short term.
Atic also has undrawn liquidity facilities.  Atic's cash has
fallen from USD202 million in 2012.  During 2013, the company
spent USD90 million on capex and around USD75 million on loans to
related parties.

Cash Flow Pressured

Fitch expects EBITDA to be around USD125 million for 2014.  Atic's
EBITDA has been pressured by strong competition in Thailand, the
implementation of taxes on caloric beverages in Mexico in 2014,
intense price competition between Pepsi and Coca-Cola in Colombia,
and poor market conditions in Peru.  The company continues to be
cash flow negative in Brazil and is quickly decreasing the scope
of its operations in that country.  Atic's EBITDA during the LTM
ended June 30, 2014 was USD122 million.  This figure compares
poorly with USD140 million in 2013 and USD150 million in 2012.

Limited Upside in Thailand

The company's presence in Thailand has decreased and cash flow
from this market is not expected to rebound to historical levels.
During 2012, Thailand represented around 15% of Atic's EBITDA.
The company has decreased its production and distribution presence
in this market following changes in market dynamics during 2012.
Key competitors in this market are Coca-Cola, PepsiCo, Inc.
(Pepsi) and Thai Beverage Plc. When Pepsi's bottling agreement
with ThaiBev expired at the end
of 2012, ThaiBev launched its own soft drink and quickly captured
about 20% of Thailand's carbonated soft drink market. At the same
time, Coca-Cola seized the opportunity to re-enter the market in
the second half of 2013 and aggressively expanded its presence.

Geographic Diversification

Colombia represented 49% of Atic's consolidated EBITDA as of
June 30, 2014.  The company's next most important market was Peru
(35%), followed by Central America (27%), Ecuador (10%), and
Venezuela (10%).  Historically its home market of Peru has been a
non-cola market, which benefits B-brand producers as they rely
heavily upon non-cola products.  Central America and Ecuador have
become drivers of sales growth.  The level of geographic
diversification mitigates to a degree the company's exposure to
markets such as Venezuela, where economic and political
uncertainty are high.

Market Position in 'B' Brand Segment

Atic has a relatively small presence in each country with market
shares typically below 20% and faces strong competition from Coca-
Cola and Pepsi in each market.  Atic prices its products
approximately 30% to 40% lower than Coca-Cola's products and
competes directly against other producers of non-branded products
in the 'B' brand segment of the market.  The company's target
customers are price sensitive consumers in the lower economic
classes.  Nearly 90% of its consolidated sales occur at mom-and-
pop stores.  Its key brands are 'Big Cola' and 'Kola Real'.

Family Ownership

Substantial loans to related companies are permitted under the
bond indenture but remain credit concerns.  Atic's controlling
shareholders, the Ananos family, own other beverage companies,
such as Callpa Limited and Kinlest Investments, which produce and
sell Aje-brand beverages.  Many of these companies are domiciled
in Asia. The family also directly owns the formulas for the
beverages produced by the company, which results in the transfer
of some operating profits to the shareholders in the form of
royalty payments.

RATING SENSITIVITIES

A positive rating action is not likely to occur in 2014 or 2015.
A negative rating action would occur if Atic fails to incorporate
the operations of a substantial sister company into the guarantee
structure.  The Negative Outlook will most likely continue to
remain even if the company adds additional guarantors.  If the
company's operations do not improve in other markets and leverage
remains above 3x, a rating downgrade will likely occur.


SANTANDER PUBLICO 1: Moody's Raises Ratings on 2 Notes to 'Ba2'
---------------------------------------------------------------
Moody's Investors Service has upgraded to Ba2 (sf) and Ba3 (sf),
respectively, the ratings on the Class A and B notes issued by FTA
SANTANDER PUBLICO 1.

The rating action concludes the review of the two 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 strength and
reduced susceptibility to event risk associated with lower
government liquidity and banking sector risks.

The transaction is an asset-backed security backed by loans
granted by Banco Santander S.A. (Spain) (Baa1/P-2) to Spanish
municipalities.

Ratings Rationale

The rating action reflects (1) an increase in the portfolio credit
quality following the improvement in the Spanish government's
credit quality as reflected in the upgrade and (2) sufficiency of
credit enhancement in the affected transaction which has increased
over the last 12 months.

-- Improvement in Portfolio Credit Quality

Moody's has assessed the current credit quality of the portfolio
as being equivalent to a Ba1 rating, which compares favorably with
the Ba3 average credit quality previously assessed. The rating
agency derives this average credit quality from recently updated
credit estimates (for the top eight exposures accounting for 43%
of the portfolio) and Q scores for the remaining part of the
portfolio. Rated entities represent 1.8% of the current portfolio.

As credit estimates and Q scores do not carry credit indicators,
such as ratings reviews and outlooks, Moody's performed several
stress tests. In the rating agency's central scenario, it
downgraded by two notches the credit estimates of the four largest
borrowers with individual exposures in excess of 3% individually
and 30% collectively of the portfolio. This resulted in an average
adjusted credit quality of Ba2 assuming a 1.9 year weighted
average life (corresponding to a 3% default probability).

Moreover, the sub-sovereign profile of the bulk of the debtors,
all of whom are domiciled in Spain, leads to a 100% correlation
assumption in Moody's model. Moody's has decreased the 45% fixed
recovery rate on defaulted assets to 35% based on low recovery
levels observed on defaulted loans.

Moody's also took into consideration the fact that the borrower
concentration in the portfolio has increased significantly with an
effective number of 29 based on loan-by-loan information as of
October 2014 down from 44 in February 2013. The top 16 exposures
now account for 60% of the outstanding pool. Among the largest six
borrowers, which collectively account for almost 40% of the volume
of loans of the pool, are (1) one region, which represents 10.6%
of the pool volume; (2) two provinces representing 7.5% and 4.6%,
respectively; and (3) three city councils, which represent 5.7%,
5.7% and 3.6%, respectively.

In the application of the "Updated Approach to the Usage of Credit
Estimates in Rated Transactions" (October 2009), Moody's has
performed a number of sensitivity analyses, including "jump-to-
default" tests. When downgrading either of the two senior
exposures to Caa2, the rating agency concluded that the model
output for the senior tranche would not be affected compared to
the central scenario, thus indicating the resiliency of its rating
to standard stress.

-- Structure

This transaction is a static securitization of a portfolio of
loans to Spanish public entities, which closed in December 2004.
The closing loan portfolio of EUR1,850 million has substantially
amortized to its current size of EUR153 million. The Class A and B
notes benefit from credit enhancement of approximately 15% and 7%,
respectively, including a EUR10.8 million reserve fund. The
reserve fund has amortized down to its minimum level on the back
of the transaction's good performance to date, but suffered
consecutive draws on recent interest payment dates.

-- Performance

The performance of FONDO DE TITULIZACION DE ACTIVOS SANTANDER
PUBLICO 1 has historically been very good in terms of 90+ day
delinquencies and defaults (delinquency levels have never exceeded
2%), and there are no loans in 90+ day delinquencies as of
September 2014.

Principal Methodology

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:

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: FTA SANTANDER PUBLICO 1

EUR1813 million A Notes, Upgraded to Ba2 (sf); previously on
Mar 17, 2014 Ba3 (sf) Placed Under Review for Possible Upgrade

EUR37 million B Notes, Upgraded to Ba3 (sf); previously on Mar
17, 2014 B2 (sf) Placed Under Review for Possible Upgrade



===========
S W E D E N
===========


ALANDS OMSESIDIGA: S&P Withdraws Unsolicited 'BBpi' Rating
----------------------------------------------------------
Standard & Poor's Ratings Services said that it affirmed and then
withdrew the first tranche of unsolicited public information (pi)
long-term counterparty credit and financial strength ratings on
insurance companies in Europe, the Middle East, and Africa (EMEA).
At the same time, S&P withdrew pi ratings on insurers in North
America.

As S&P announced on Oct. 15, it plans to withdraw all such ratings
by year-end 2014.

Pi ratings are unsolicited ratings based solely on S&P's analysis
of publicly available information and generally do not bear plus
(+) or minus (-) modifiers.  S&P currently publishes pi ratings on
selected insurers in EMEA and North America.

S&P is withdrawing pi ratings on insurance companies due to a lack
of market interest in the insurance pi rating product.

RATINGS LIST

Ratings Affirmed; Ratings Withdrawn
                                         To             From

AXA Assurances IARD Mutuelle             NR             A+pi


AXA Art Insurance Ltd.                   NR             Api
WGV - Versicherung AG
Wuerttembergische Gemeinde-Versicherung aG

Agria Ins. Co. Ltd.                      NR             A-pi

Ageas Insurance Ltd                      NR             BBBpi
Al Ain Ahlia Ins. Co.
Al Dhafra Insurance Co. P.S.C.
Alte Leipziger Versicherung AG
Avanssur
Badischer Gemeinde-Versicherungs-Verband
British Reserve Insurance Co. Ltd.
Fenix Directo S.A.
Filia - MAIF
F.M. Insurance Co. Ltd.
Gartenbau-Versicherung VVaG
GF-Forsikring A/S
Itzehoer Versicherung/Brandgilde von 1691 VVag
Kobstaedernes Forsikring
LB Forsikring A.S.
MAIF, Mutuelle Ass. des Instituteurs de France
Mutuelle de Poitiers Assurances
Pelayo Mutua de Seguros y Reaseguros a Prima Fija
Roland Rechtsschutz Versicherungs AG
Ste. Mut. d'Ass. du Batiment & des Travaux Publics
Sygeforsikringen danmark
Through Transport Mutual Ins. Assoc. Ltd.
TVM Zakelijk N.V.

Zurich Insurance Co. South Africa Ltd.    NR            BBB-pi

Alands Omsesidiga Forsakringsbolag        NR            BBpi
Allianz Sigorta A.S.
Assurant General Insurance Ltd.
AXA Seguros Generales
AXA Sigorta A.S.
China Taiping Insurance (UK) Co. Ltd.
Fennia Mutual Insurance Co.
Keskinainen Vakuutusyhtio Turva
Pohjantahti Keskinainen Vakuutusyhtio

NR--Not rated.



=====================
S W I T Z E R L A N D
=====================


NUANCE GROUP: S&P Withdraws 'BB+' Corporate Credit Rating
---------------------------------------------------------
Standard & Poor's Ratings Services affirmed and then withdrew its
ratings, including the 'BB+' long-term corporate credit rating, on
Swiss travel retailer Nuance Group AG.

The rating withdrawal is at the issuer's request.  It follows the
company's acquisition by competitor Dufry AG (BB+/Stable/-) and
the subsequent repayment of Nuance Group's EUR200 million senior
secured notes due 2019.



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


EUROSAIL 2006-1: S&P Lowers Ratings on 2 Note Classes to 'B+'
-------------------------------------------------------------
Standard & Poor's Ratings Services took various credit rating
actions in Eurosail 2006-1 PLC.

Specifically, S&P has:

   -- Affirmed its ratings on the class A2c, D1a, D1c, and E
      notes; and

   -- Lowered its ratings on the class B1a, B1c, C1a, and C1c
      notes.

The rating actions follow S&P's credit and cash flow analysis
using loan-level information as of March 2014, investor reports as
of Sept. 2014, and the application of S&P's relevant criteria.

In the Dec. 2012 investor report, the servicer (Acenden Ltd.)
updated how it reports arrears to include amounts outstanding,
delinquencies, and other amounts owed.  Other amounts owed include
arrears of fees, charges, costs, ground rent, and insurance, among
other items.  Delinquencies include principal and interest arrears
on the mortgage loans, based on the borrowers' monthly
installments.  Amounts outstanding are principal and interest
arrears, after the servicer first allocates borrower payments to
other amounts owed.

For the transaction, the servicer first allocates any arrears
payments to other amounts owed, then to interest and principal
amounts.  For borrowers, the servicer first allocates any arrears
payments to interest and principal amounts, and then to other
amounts owed.  This difference in the servicer's allocation of
payments for the transaction and the borrower results in amounts
outstanding being greater than delinquencies.

Since Q4 2011, amounts outstanding have been increasing.  Based on
the pool as of June 2014, the transaction's pool factor is 23.91%.
Acenden references the level of amounts outstanding to determine
the 90+ day arrears trigger.  The level of 90+ days amounts
outstanding (including repossessions) has increased to 37.81%
since Q4 2011.  Total amounts outstanding have increased to 48.93%
of the pool in Sept. 2014 from 36.13% in Dec. 2011.

In terms of delinquencies, based on the Sept. 2014 investor
report, the transaction underperforms S&P's U.K. nonconforming
RMBS index.  Delinquencies in the wider market have decreased to
14.06% in Q2 2014 from 17.56% in Q4 2011.  Conversely,
delinquencies in Eurosail 2006-1 increased to 21.09% from 15.88%
over this period.  As a result, and combined with the prospect of
future interest rate rises in the near to medium term, S&P
projected additional delinquencies of 5.0% in its analysis.

The notes are currently amortizing sequentially, as the
transaction's pro rata arrears triggers have been breached since
June 2012, as 90+ days amounts outstanding exceed 22.5%.  As
cumulative losses have also exceed the 1.15% threshold, currently
at 3.93%, S&P considers that the transaction will continue to pay
principal sequentially, and S&P has incorporated this assumption
in its cash flow analysis.  The sequential amortization, combined
with a non-amortizing reserve fund, has increased the
transaction's available credit enhancement since S&P's previous
review on
Nov. 29, 2013.

S&P's weighted-average foreclosure frequency (WAFF) and its
weighted-average loss severity (WALS) assumptions have increased
for this transaction since S&P's previous review.  S&P's WAFF
assumptions have primarily increased due to its delinquency
projection.  S&P's WALS assumptions have increased because it
expects potential losses to be higher, given the servicer's method
of allocating payments of other amounts owed.  Overall, S&P's
expected credit loss for this transaction has increased since its
previous review.

Rating level       WAFF (%)       WALS (%)       Expected credit
loss (%)
AAA                47.37          46.35          21.95
AA                 42.01          40.89          17.18
A                  36.03          32.22          11.61
BBB                30.35          27.30          8.28
BB                 25.70          23.84          6.13
B                  23.38          21.14          4.94

Credit enhancement increases have only partially mitigated the
deterioration.  Furthermore, high fees are an additional burden to
this transaction.  Based on the results of S&P's cash flow
analysis, it has lowered the ratings on class B1a, B1c, C1a, and
C1c notes, and affirmed its ratings on the class A2c, D1a, D1c,
and E notes.

The currency swap agreement is not in line with S&P's current
counterparty criteria.  These criteria therefore cap S&P's ratings
in this transaction at 'A+', i.e., one notch above its long-term
'A' issuer credit rating on Barclays Bank PLC as the currency swap
counterparty.

S&P's credit stability analysis indicates that the maximum
projected deterioration that it would expect at each rating level
over one and three-year periods, under moderate stress conditions,
is in line with S&P's credit stability criteria.

Eurosail 2006-1 is a U.K. nonconforming residential mortgage-
backed securities (RMBS) transaction, which Southern Pacific
Mortgage Ltd. and Southern Pacific Personal Loans Ltd. originated.

RATINGS LIST

Eurosail 2006-1 PLC
EUR60.7 mil, GBP474.003 mil, US$437.5 mil mortgage-backed
floating-rate notes
                                         Rating
Class             Identifier             To             From
A2c               29880BAF6              A+ (sf)        A+ (sf)
B1a               29880BAG4              A- (sf)        A (sf)
B1c               29880BAJ8              A- (sf)        A (sf)
C1a               29880BAK5              B+ (sf)        BB (sf)
C1c               29880BAM1              B+ (sf)        BB (sf)
D1a               29880BAN9              B (sf)         B (sf)
D1c               29880BAQ2              B (sf)         B (sf)
E                 29880BAS8              B- (sf)        B- (sf)


EUROSAIL 2006-2BL: S&P Affirms 'B-' Rating on 2 Note Classes
------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its credit ratings on
Eurosail 2006-2BL PLC's class A2c, B1a, B1b, C1a, C1c, D1a, D1c,
E1c, and F1c notes.

The affirmations follow S&P's credit and cash flow analysis using
March 2014loan-level information, the Sept. 2014 investor report,
and the application of S&P's relevant criteria.

In the Dec. 2012 investor report, the servicer (Acenden Ltd.)
updated how it reports arrears to include amounts outstanding,
delinquencies, and other amounts owed.  Other amounts owed
include, among other items, arrears of fees, charges, costs,
ground rent, and insurance.  Delinquencies include principal and
interest arrears on the mortgage loans, based on the borrowers'
monthly installments.  Amounts outstanding include principal and
interest arrears, after the servicer allocates borrower payments
to other amounts owed.

In this transaction, the servicer first allocates any arrears
payments to other amounts owed, then interest and principal
amounts.  For borrowers, the servicer first allocates any arrears
payments to interest and principal amounts, and then to other
amounts owed.  Due to this difference in the servicer's allocation
of payments for the transaction and the borrower, amounts
outstanding are greater than delinquencies.

Acenden references the level of amounts outstanding to arrive at
the 90+ day arrears trigger.  Based on the Sept. 2014 investor
report, the level of 90+ days amounts outstanding (including
repossessions) has been rising, currently at 38.80%.  Total
amounts outstanding have increased to 46.66% of the pool from
32.89% in Dec. 2011.

The notes are amortizing sequentially, as the pro rata arrears
trigger has been breached.  As cumulative losses exceed the 1.5%
threshold by reaching 4.58%, S&P considers that the transaction
will continue to pay principal sequentially, and it has
incorporated this assumption in its cash flow analysis.  This
transaction benefits from increased credit enhancement since S&P's
previous review due to the combination of a nonamortizing reserve
fund and sequential amortization.

S&P's weighted-average foreclosure frequency (WAFF) and weighted-
average loss severity (WALS) assumptions have increased for this
transaction since S&P's previous review.  S&P's WAFF assumptions
have increased primarily due to the arrears projected (S&P's total
projection is 4.66%).  S&P's WALS assumptions have increased
because it expects potential losses to be higher, given the
servicer's method of allocating payments to other amounts owed for
the transaction.

            WAFF (%)      WALS (%)    Expected credit loss (%)
AAA         46.99        50.85            23.89
AA          40.92        44.91            18.38
A           39.10        35.43            13.85
BBB         32.49        29.92            9.72
BB          26.61        25.86            6.88
B           22.47        22.69            5.10

Although S&P's expected credit losses at each rating level
increased due to the aforementioned factors, the credit
enhancement increases since S&P's previous review allow the notes
to pass its stresses at their currently assigned ratings.
Consequently, S&P has affirmed its ratings on the class A2c, B1a,
B1b,C1a, C1c, D1a, D1c, E1c, and F1c notes.  The class A2c to C1c
notes could achieve higher ratings, but remain constrained because
the currency swap agreement is not in line with S&P's current
counterparty criteria.  These criteria cap S&P's ratings in this
transaction at 'A+', i.e., one notch above S&P's 'A' long-term
issuer credit rating on Barclays Bank PLC as the swap provider

S&P's credit stability analysis for this transaction indicates
that the maximum projected deterioration that it would expect at
each rating level over one and three-year periods, under moderate
stress conditions, is in line with S&P's credit stability
criteria.

Eurosail 2006-2BL is a U.K. nonconforming residential mortgage-
backed securities (RMBS) transaction originated by Preferred
Mortgages Ltd.

RATINGS LIST

Eurosail 2006-2BL PLC
EUR60.8 mil, GBP406.278 mil, US$318 mil mortgage-backed floating-
rate notes
                                       Rating
Class            Identifier            To                 From
A2c              298805AF9             A+ (sf)            A+ (sf)
B1a              298805AG7             A+ (sf)            A+ (sf)
B1b              298805AH5             A+ (sf)            A+ (sf)
C1a              298805AK8             A+ (sf)            A+ (sf)
C1c              298805AM4             A+ (sf)            A+ (sf)
D1a              298805AN2             B (sf)             B (sf)
D1c              298805AQ5             B (sf)             B (sf)
E1c              298805AR3             B- (sf)            B- (sf)
F1c              298805AS1             B- (sf)            B- (sf)


JOHN WOODS: To Hold Meeting on Nov. 7 to Discuss CVA Deal
---------------------------------------------------------
Matthew Appleby at Horticulture Week reports that accountants
Chantrey Vellacott has convened a meeting of creditors and members
for John Woods Nurseries proposed creditors voluntary arrangement
(CVA) on Nov. 7.

Non-preferential, unsecured creditors will be offered 49p in the
pound over five years and three months, Horticulture Week
discloses.

In August 2007, John Woods Nurseries bought the assets and
business from Notcutts, Horticulture Week recounts.  The two
companies made a commercial loan agreement where the payment of
the consideration was on a deferred basis over 25 years and the
company has since been reliant on Notcutt's loan, Horticulture
Week relays.

The company had two difficult years of trading in 2012 and 2013
caused by harsh and unseasonal weather conditions which hit
speculative plant nurseries particularly hard, Horticulture Week
notes.

The accountants said the company was unable to service the level
of debt but the core business was viable so a CVA would provide
best return for creditors and would enable the business to
survive, Horticulture Week relates.

Restructuring involves reducing staffing levels, annualizing staff
pay to reflect seasonal sales and looking to reduce rent by
relocating to a smaller office in April 2016, according to
Horticulture Week.

Major creditors are Lloyds Bank, Notcutts and HM Revenue &
Customs, Horticulture Week discloses.

John Woods Nurseries is a wholesale nursery based in East Anglia,
supplying garden centers and nurseries throughout the UK.


PRINCIPALITY BUILDING: Moody's Raises Sub. Rating From 'Ba1'
------------------------------------------------------------
Moody's Investors Service has upgraded Principality Building
Society's deposit and senior unsecured ratings to Baa3 from Ba1.
Principality's short-term ratings were upgraded to Prime-3 from
Not-Prime. Moody's affirmed Principality's D+ Bank Financial
Strength Rating (BFSR) and raised its standalone baseline credit
assessment (BCA) to baa3 from ba1. At the same time, Moody's
upgraded Principality's subordinated debt to Ba1 from Ba2 and its
junior subordinated debt to Ba3 (hyb) from B1 (hyb). The outlook
on the society's BFSR and long-term ratings has been changed to
positive from stable.

Ratings Rationale

The key drivers of the rating action are : (i) significant
improvement in profitability, on the back of higher volumes,
better net interest rate margin (NIM) and lower cost of risk; (ii)
improved regulatory capital ratios; (iii) reduction in the
organizational complexity following the sale of the real estate
agency; (iv) continued deleveraging of the riskiest segments of
the loan book; and (v) increase in retail deposits and
diversification of funding profile, including access to more
stable wholesale funds. The rating action also considers
Principality's rating position compared to peers.

Moody's notes that Principality's profitability substantially
improved over the last three years, owing to: (i) higher volumes,
with gross loans up 16.6% between end-2011 and end-1H2014 while
remaining within risk appetite; (ii) improved NIM as a consequence
of a lower cost of funding from use of the Funding for Lending
scheme and from the repricing of risk on the second lien and
commercial portfolios; and (iii) lower loan loss provisions,
despite maintaining one of the higher coverage ratios among peers.
The improvement in internal capital generation has in turn lifted
Principality's regulatory capital ratios, with Tier 1 ratio going
up to 17.1% at end-1H2014 from 13.5% of 2011, also thanks to the
approval to use the IRB approach for the residential and
commercial portfolios received in 2013. The year-end
capitalization will also be boosted by the sale of the society's
real estate agency, Peter Alan, realized in July this year for a
total consideration of GBP16.4 million. In Moody's view, the sale
of the real estate subsidiary was also beneficial because it
reduces the organizational complexity of Principality by
simplifying its business model and improves the society's cost
efficiency.

The ratings are also underpinned by Principality's solid and
stable funding base and ample liquidity. While Moody's believes
that the society will remain primarily retail funded over the next
years, the agency notes that Principality is diversifying its
funding base by accessing the wholesale markets. In particular, in
June 2014 it launched its second RMBS transaction for a total
amount of GBP520.5 million. As of end-1H2014, the NFSR and LCR
ratios stood at 142.7% and 222.1% respectively, which are among
the highest values among peers.

As part of strengthening its balance sheet and improving its risk
profile, over the last three years Principality deleveraged its
commercial and second lien portfolios, with both going down by 11%
between 2011 and 1H2014. Despite the deleveraging, the net
interest income for both portfolios held up relatively well.
However the agency believes that in a downturn scenarios, both
portfolios are at risk and may be source of losses for the
society.

Rationale for Positive Outlook

The outlook is positive reflecting the favorable market
conditions, improving operating environment and the anticipation
that Principality will continue to deliver sustainable
profitability and efficiency while maintaining satisfactory
capital levels and sound liquidity and to continue to improve its
asset quality metrics.

What Could Move the Rating Up

Upward rating pressure could arise from (i) further deleveraging
of their riskier exposures while maintaining positive performance
in the commercial and second charge portfolios; (ii) sustainable
improvement in profitability supported by a decrease in cost of
risk; and (iii) additional material strengthening in the society's
solvency profile.

What Could Move the Ratings Down

Downward pressure on Principality's BCA could stem from (i)
unanticipated asset quality erosion in the loan portfolio; (ii)
deterioration in the capital position owing to excessive growth;
and (iii) material weakening of the society's franchise.

Principal Methodology

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


                            *********

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-
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Valerie U. Pascual, Marites O. Claro, Rousel Elaine T. Fernandez,
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Copyright 2014.  All rights reserved.  ISSN 1529-2754.

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                 * * * End of Transmission * * *