TCREUR_Public/141113.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

                           E U R O P E

          Thursday, November 13, 2014, Vol. 15, No. 225

                            Headlines

A R M E N I A

ARMECONOMBANK: Moody's Lowers Currency Deposit Ratings to 'B2'


B E L A R U S

BELARUSIAN NAT'L: Fitch Assigns 'B-' IFS Rating; Outlook Stable


H U N G A R Y

BUDAPEST CITY: Moody's Changes 'Ba1' Rating Outlook to Stable


I R E L A N D

IRISH BANK: Asks Supreme Court to Overturn Quinn Decision
SLIEVE RUSSELL: Losses Decline to EUR544,000 in 2013


K A Z A K H S T A N

HALYK BANK: Fitch Assigns 'BB(EXP)' Rating to Sr. Unsecured Bond


P O R T U G A L

BES FINANCE: Moody's Comments on Outstanding Rated Debt


S P A I N

FTPYME BANCAJA 3: S&P Affirms 'CCC' Rating on Class D Notes
MAPFRE SA: Fitch Affirms 'BB' Rating on EUR700MM 5.91% Sub. Debt


U N I T E D   K I N G D O M

BESTWAY UK: S&P Assigns 'B+' CCR & Rates GBP725MM Sr. Debt 'BB-'
CONNAUGHT: Former Workers Lose Four-Year Bid for Compensation
ER HEMMINGS: In Administration; 37 Jobs at Risk
GEMGARTO 2012-1: S&P Raises Rating on B2 Notes to BBB- from BB
INFINIS ENERGY: Moody's Assigns 'Ba3' Corporate Family Rating

L M ENGINEERING: In Administration, Cuts 21 Jobs
OSPREY ACQUISITIONS: Fitch Affirms 'BB' Issuer Default Rating
SERCO GROUP: Faces Two More Difficult Years, CEO Says
SYNCRO: Robert Maxwell's Sons Escape Bankruptcy
TENZA TECHNOLOGIES: In Administration; Potential Buyers Sought

TITAN EUROPE 2007-1: Fitch Cuts Ratings on 4 Note Classes to 'C'


                            *********


=============
A R M E N I A
=============


ARMECONOMBANK: Moody's Lowers Currency Deposit Ratings to 'B2'
--------------------------------------------------------------
Moody's Investors Service has downgraded to B2 from B1 the long-
term foreign- and local-currency deposit ratings of Armeconombank
(Armenian Economy Devt Bank) (AEB). Concurrently, Moody's
affirmed the bank's Not Prime short-term foreign- and local-
currency deposit ratings and standalone E+ bank financial
strength rating (BFSR), which is now equivalent to a baseline
credit assessment (BCA) of b2 (formerly b1). The outlook on all
long-term ratings is stable, while short-term ratings carry no
specific outlook.

Moody's assessment is primarily based on AEB's audited year-end
2013 financial statements prepared under IFRS, information
received from the bank, latest available unaudited quarterly IFRS
reports, as well as statutory financials.

Ratings Rationale

The downgrade of AEB's deposit ratings reflects the bank's (1)
weak profitability in recent years and, in Moody's opinion,
limited prospects for improvement in the bank's earnings over the
medium- to long-term rating horizon (i.e., over the next 18 to 24
months); and (2) modest regulatory capital buffer, which has been
on a downward trend in recent years.

AEB has reported weak profitability in recent years (the pre-
provision income-to-average equity ratio stood at 5%-11% during
the period 2009-13), with credit growth exceeding the bank's
internal capital generation in some of these years (including
2012, 2013, and the first three quarters of 2014). AEB's bottom-
line profitability is pressured by high operating expenses that
have been inflated by the bank's efforts to develop and maintain
its branch network. These expenses translate into a high cost-to-
income ratio, which has remained at 80%-90% since 2009, and
limits the bank's loss absorption buffer. Moody's expects that,
over the medium- to long-term (in the next 18 to 24 months),
material improvement of AEB's operating efficiency will be
constrained by intense competition in the sector, which puts
pressure on the bank's revenues and requires additional
investments in order to maintain its branch network.

Additionally, AEB's low profitability and credit growth have
resulted in decline of the bank's capital cushion in recent
years. The regulatory capital adequacy ratio declined to 13.2% as
at end-September 2014 from 15.5% as at year-end 2011 (YE2010:
18.9%), which is now only moderately above the minimum required
level of 12%.

At the same time, AEB's ratings are supported by a track record
of good asset quality, with historic cost of risk not exceeding
2%. According to the bank, loans overdue more than 90 days
accounted for 0.4% of the gross loan book as at end-June 2014 and
were fully covered by reserves. The bank's asset quality benefits
from moderate borrower concentration, which is lower than average
for single-b rated banks (the top 20 loans accounted for 123% of
the bank's Tier 1 capital at end-May 2014).

Moody's also notes the bank's adequate liquidity profile. AEB's
significant amount of liquid assets (accounting for a third of
total assets as at Q3 2014) sufficiently mitigates risks stemming
from maturity mismatches on the bank's balance sheet.

What Could Move The Ratings UP/DOWN

Moody's might consider upgrading AEB's ratings if the bank
significantly enhances its loss absorption capacity (i.e., pre-
provision profitability and capital cushion), while maintaining
its adequate asset quality metrics and liquidity profile. Moody's
would also consider any notable strengthening of the bank's
market position to be a credit positive factor.

Any further decline AEB's capital adequacy metrics or evidence of
material asset-quality impairment and weakening of the liquidity
profile will have negative rating implications for the bank.

Principal Methodology

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



=============
B E L A R U S
=============


BELARUSIAN NAT'L: Fitch Assigns 'B-' IFS Rating; Outlook Stable
---------------------------------------------------------------
Fitch Ratings has assigned Belarusian National Reinsurance
Organization (Belarus Re) an Insurer Financial Strength (IFS)
rating of 'B-'.  The Outlook is Stable.

KEY RATING DRIVERS

The rating reflects Belarus Re's 100% state ownership, the
reinsurer's exclusive position in the local reinsurance sector
underpinned by legislation, and strong underwriting
profitability. The rating also takes into account the relatively
low quality of the reinsurer's investment portfolio.

The Belarusian state has established an exclusive position for
Belarus Re as the national monopoly reinsurer.  The aim of this
is to promote national reinsurance and raise the capacity of the
local insurance sector.  Although there is no formal support
agreement between the state and the company, there is a track
record of state support through significant capital injections at
inception and in recent years.

The regulation obliges local primary insurers to cede risks
exceeding the permitted net retention of 20% of their equity.
These obligatory cessions as well as any voluntary cessions of
risks below the threshold need to be offered to Belarus Re first.
The reinsurer has the right to reject both types of cessions and
in practice is often involved at the primary underwriting of
large risks.  Belarus Re's monopoly has been introduced gradually
with its share in compulsory cessions growing from 10% in 2006 to
100% in 2014.

Fitch's assessment of Belarus Re's risk-adjusted capital adequacy
concludes that the company is adequately capitalized for its
rating.  The insurer nominally maintains an exceptionally strong
level of capital relative to its current business volumes with
the Solvency I-like statutory ratio standing at 44x at end-6M14.
However, Fitch believes that Belarus Re's economic capital
adequacy is not as strong as the statutory solvency ratio implies
since the regulator's formula does not take asset risk into
account.  Risks on the asset side of the reinsurer's balance
sheet are highly concentrated and directly linked to the
sovereign credit profile.

Belarus Re has demonstrated strong underwriting results with the
combined ratio averaging 70% in 2009-2013.  Favorable claims
experience and conservative pricing in most lines of business
have been the key factors behind these strong results.  The
regulatory cap of 4% on commissions paid for inwards obligatory
cessions (removed in 2014) has also helped Belarus Re to generate
underwriting profit in previous years.

With a cumulative inflation rate of 196% in 2011-2013 Belarus was
treated as a hyperinflationary domicile under IFRS reporting.
Belarus Re's hyperinflation loss on the net monetary position
reached BYR166bn in 2013, almost fully offsetting the reinsurer's
operating profit of BYR164bn in the same year.  As the country's
peak inflation rate of 108.7% in 2011 will drop out from the
three-year corridor for the application of the IFRS
hyperinflation standard, Fitch expects Belarus Re to demonstrate
stronger net income in 2014.

Belarus Re makes intensive use of retrocession with an average of
54% of premiums ceded in 2009-2013.  Most cessions are made to
strong international reinsurers, although select single large
risks may be ceded to insurers in developing countries if the
risks involve the economic interests of those countries.  The
effectiveness of Belarus Re's retrocession program has not been
seriously tested since at least 2009, as the claims experience
has been favorable.  Domestic cessions are said to be monitored
to limit accumulations.

At the sector level, Fitch believes Belarusian insurers have
significant exposure to financial risks insurance, which
transfers credit risks from the banking sector and bond
investors.  As there is no reinsurance of high credit quality
available for this kind of risks, Belarusian insurers have to
spread these risks within the country.

Belarus Re is also exposed to these risks (14% of GPW) in 2014,
although the highest single net retention per policy under this
line was less than 13% of the reinsurer's IFRS-based capital at
end-2013.  Most insured credit risks are also linked to the
state-owned issuers.

RATING SENSITIVITIES

Any change in Fitch's view of the financial condition of the
Republic of Belarus or any significant change in Belarus Re's
relationship with the government would be very likely to have a
direct impact on the company's rating.



=============
H U N G A R Y
=============


BUDAPEST CITY: Moody's Changes 'Ba1' Rating Outlook to Stable
-------------------------------------------------------------
Moody's Investors Service has changed to stable from negative the
outlook on the City of Budapest's Ba1 issuer rating. Moody's has
also affirmed the Ba1 rating.

The main drivers of the rating action are (1) the stabilization
in the Hungarian sub-sovereign operating environment, as
reflected in Moody's outlook change on Hungary's Ba1 government
bond rating to stable from negative; and (2) the strong
correlation between sovereign and sub-sovereign credit risk,
reflected in macroeconomic and financial linkages as well as in
institutional factors.

The change in outlook and the affirmation follow similar actions
on Hungary's government bond rating on November 7, 2014.

Ratings Rationale

The outlook change follows the stabilization in the Hungarian
sub-sovereign operating environment, reflected by the same change
in outlook on the sovereign rating.

The outlook change also reflects Moody's view that the
creditworthiness of Budapest is directly linked to that of the
sovereign, as Hungarian local governments depend on revenues that
are linked to the sovereign's macroeconomic and fiscal
performance. Budapest is highly dependent on intergovernmental
revenues in the form of shared taxes and central government
transfers that are set at the national level and represent 78% of
the city's operating revenue.

Moody's expects that the improving economic outlook, both in the
short and medium term, will be a positive for the city's income
stream and will result in growing central government allocations
for Budapest.

In addition, the institutional linkages illustrate the close ties
between the two levels of government, as the sovereign has the
ability to change the institutional framework under which local
governments operate.

Rationale for Rating Affirmation

The affirmation of Budapest's rating reflects the city's proven
track record of prudent budgetary management, as reflected in its
solid operating surplus of 12% of operating revenue in 2013,
which Moody's expects will improve in 2014 to 15% following the
central government's assumption of Budapest's entire debt and the
elimination of debt servicing costs.

In addition, Budapest's rating continues to be underpinned by its
good financial performances, zero direct debt and strong cash
reserves at HUF119 billion (EUR388 million) at year-end 2013,
equivalent to 63% of its operating revenue, which provides
sufficient spending flexibility in medium term.

Moody's also notes that the Ba1 rating reflects Budapest's sound
governance and management practices, as well as its strong
internal budget procedures.

What Could Change the Ratings UP/DOWN

Upward pressure on Budapest's rating could arise from an upgrade
of the sovereign rating.

Downward pressure on the rating could result from a downgrade of
Hungary's sovereign rating; and/or a material deterioration in
the city's operating and financial performance.

The sovereign action required the publication of this credit
rating action on a date that deviates from the previously
scheduled release date in the sovereign release calendar.

Specific economic indicators as required by EU regulation are not
applicable for this entity.

On November 6, 2014, a rating committee was called to discuss the
rating of the Budapest, City of. The main points raised during
the discussion were: The systemic risk in which the issuer
operates has materially decreased.

The principal methodology used in this rating was Regional and
Local Governments published in January 2013.

The weighting of all rating factors is described in the
methodology used in this rating action, if applicable.



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


IRISH BANK: Asks Supreme Court to Overturn Quinn Decision
---------------------------------------------------------
Mary Carolan at The Irish Times reports that Irish Bank
Resolution Corporation has asked the Supreme Court to overturn a
decision permitting the family of bankrupt businessman Sean Quinn
advance legal claims which could lead to their avoiding liability
for EUR2.34 billion loans.

According to The Irish Times, Patricia Quinn and her five
children say they had no knowledge of activities surrounding the
loans made to Quinn companies by IBRC's predecessor, Anglo Irish
Bank.  They claim the loans were illegal because they were used
to support the bank's share price and they cannot therefore be
made liable for them, The Irish Times relates.

In the High Court in 2012, Mr. Justice Peter Charleton, who is
now in the Supreme Court, ruled that the family were entitled to
advance claims that the loans were made for "wholesale" market
manipulation in breach of Irish and European law, The Irish Times
recounts.

IBRC argues the High Court was wrong to find the Quinns could
rely on the "general principle of illegality" in support of their
bid to avoid liability, The Irish Times notes.

                   About Irish Bank Resolution

Irish Bank Resolution Corp., the liquidation vehicle for what was
once one of Ireland's largest banks, filed a Chapter 15 petition
(Bankr. D. Del. Case No. 13-12159) on Aug. 26, 2013, to protect
U.S. assets of the former Anglo Irish Bank Corp. from being
seized by creditors.  Irish Bank Resolution sought assistance
from the U.S. court in liquidating Anglo Irish Bank Corp. and
Irish Nationwide Building Society.  The two banks failed and were
merged into IBRC in July 2011.  IBRC is tasked with winding them
down and liquidating their assets.  In February, when Irish
lawmakers adopted the Irish Bank Resolution Corp., IBRC was
placed into a special liquidation in the Irish High Court to
complete liquidation and distribution of the two banks' assets.

IBRC's principal asset as of June 2012 was a loan portfolio
valued at some EUR25 billion (US$33.5 billion). About 70 percent
of the loans were to Irish borrowers. Some 5 percent of the
portfolio was under U.S. law, according to a court filing.  Total
liabilities in June 2012 were about EUR50 billion, according
to a court filing.

Most assets in the U.S. have been sold already.  IBRC is involved
in lawsuits in the U.S.

IBRC was granted protection under Chapter 15 of the U.S.
Bankruptcy Code in December 2013.

Kieran Wallace and Eamonn Richardson of KPMG have been named the
special liquidators.


SLIEVE RUSSELL: Losses Decline to EUR544,000 in 2013
----------------------------------------------------
John Mulligan at Irish Independent reports that the Slieve
Russell Hotel in Cavan, once a gem in Sean Quinn's family
businesses but now under the control of a receiver, slashed its
losses from EUR9.2 million to EUR544,000 last year as a writedown
in the value of the property wasn't repeated.

Underlying operating profit at the hotel, which is operated by a
receiver, rose 27% to EUR439,000 despite turnover dipping to
EUR11.3 million from EUR11.9 million, Irish Independent
discloses.

The Slieve Russell, which is located close to what was the Quinn
group headquarters, had a share receiver appointed to it in 2011
as the Quinn empire unraveled, Irish Independent recounts.

The hotel is currently valued at EUR10 million, having had its
value significantly reduced, Irish Independent notes.

A subsidiary of the Slieve Russell business had been loaned a
substantial amount of money by what was then Anglo Irish Bank,
Irish Independent relays.

At the end of 2013, EUR67 million was still owed to Anglo's
successor, IBRC, Irish Independent states.



===================
K A Z A K H S T A N
===================


HALYK BANK: Fitch Assigns 'BB(EXP)' Rating to Sr. Unsecured Bond
----------------------------------------------------------------
Fitch Ratings has assigned Halyk Bank of Kazakhstan's upcoming
KZT100bn senior unsecured local bond an expected Long-term rating
at 'BB(EXP)'.  The bank's other ratings are unaffected by the
rating action.

KEY RATING DRIVERS

The bond is rated at the same level as Halyk's 'BB' Long-term
local-currency Issuer Default Rating (IDR), as it will rank
equally with the claims of other senior unsecured creditors, save
the claims of retail depositors.

The notes will be issued by the bank under its KZT200bn local
bond program.  The Series 7 issue will carry a coupon rate at
7.5%, payable semi-annually; it is expected to have a maturity 10
years.

Retail depositors accounted for about 40% of Halyk's liabilities
at end-3Q14 according to local accounting standards.

RATING SENSITIVITIES

Changes to Halyk's Long-term local currency IDR will be reflected
in the bond's rating.

Halyk's other ratings are:

  Long-term foreign and local currency IDRs: 'BB'; Outlook Stable
  Short-term foreign and local currency IDRs: 'B'
  Viability Rating: 'bb'
  Support Rating: '4'
  Support Rating Floor: 'B'
  Senior unsecured debt rating: 'BB'



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


BES FINANCE: Moody's Comments on Outstanding Rated Debt
-------------------------------------------------------
Moody's Investors Service has transferred the funding vehicle BES
Finance Ltd. together with its outstanding B3 senior unsecured
debt and the C(hyb) junior subordinated debt and preferred stock
to Novo Banco, S.A. (B2 under review for downgrade bank deposits,
BFSR E under review for upgrade/BCA ca). BES Finance Ltd.'s B3
long-term senior debt ratings remain on review for downgrade.

Following the transfer, the guarantor of BES Finance Ltd's
outstanding senior unsecured debt is Novo Banco, while the
guarantor of its subordinated debt and preferred shares remains
Banco Espirito Santo, S.A. (BES, E/ca).

Ratings Rationale

Moody's has taken this action as it has now been able to clarify
the legal status of this debt. Specifically, BES Finance Ltd.
together with its outstanding debt has been transferred to Novo
Banco. This transfer was not clear to the rating agency at the
time when it assigned ratings to Novo Banco, and other debt
transferred from BES on August 12, 2014. Following the transfer,
the guarantor of BES Finance Ltd's outstanding senior unsecured
debt is Novo Banco, while the guarantor of the vehicle's
subordinated debt and preferred shares is BES.

On August 3, 2014, Bank of Portugal intervened and applied
resolution measures to BES to preserve the stability of the
Portuguese Banking system in face of the bank's imminent risk of
default. Bank of Portugal transferred most of BES's assets,
liabilities and off-balance-sheet items to the newly created bank
Novo Banco. In addition, Novo Banco received a EUR4.9 billion
capital injection from the Portuguese Resolution Fund. Depositors
and senior debt holders were protected by the Portuguese
authorities, because they were transferred to Novo Banco.
However, shareholders and holders of junior debt instruments
remained at or were guaranteed by BES.

What Could Change The Rating UP/DOWN

The transferred senior unsecured debt could be downgraded if
Moody's were to assess a lower probability of systemic support in
the case that a new government intervention is needed, and this
downside risk is not fully offset by the potential improvement in
Novo Banco's BFSR.

Moody's could upgrade the rating of the junior debt instruments
as a consequence of a recovery from the assets remaining and/or
guaranteed by BES, which warrants a loss severity for these
instruments below 65%.



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


FTPYME BANCAJA 3: S&P Affirms 'CCC' Rating on Class D Notes
-----------------------------------------------------------
Standard & Poor's Ratings Services affirmed its credit ratings on
FTPYME Bancaja 3, Fondo de Titulizacion de Activos' class B, C,
and D notes.

Upon publishing S&P's updated criteria for rating single-
jurisdiction securitizations above the sovereign foreign currency
rating (RAS criteria), S&P placed those ratings that could
potentially be affected "under criteria observation".

Following S&P's review of this transaction, its ratings that
could potentially be affected by the criteria are no longer under
criteria observation.

S&P has used data from the Sept. 2014 investor report to perform
its credit and cash flow analysis and have applied its European
small and midsize enterprise (SME) collateralized loan obligation
(CLO) criteria and its current counterparty criteria.  For
ratings in this transaction that are above S&P's rating on the
sovereign, it has also applied its RAS criteria.

CREDIT ANALYSIS

FTPYME Bancaja 3 is a single-jurisdiction cash flow CLO
transaction securitizing a portfolio of SME loans that was
originated by Bankia S.A. in Spain.  The transaction closed in
Oct. 2004.

S&P has applied its European SME CLO criteria to determine the
scenario default rate (SDR)--the minimum level of portfolio
defaults that S&P expects each tranche to be able to withstand at
a specific rating level using CDO Evaluator.

To determine the SDR, S&P adjusted the archetypical European SME
average 'b+' credit quality to reflect two factors (country and
originator and portfolio selection adjustments).

"We ranked the originator into the moderate category.  Taking
into account Spain's Banking Industry Country Risk Assessment
(BICRA) score of 6 and the originator's average annual observed
default frequency, we have applied a downward adjustment of one
notch to the 'b+' archetypical average credit quality.  To
address differences in the creditworthiness of the securitized
portfolio compared with the originator's entire loan book, we
further adjusted the average credit quality by three notches,"
S&P said.

As a result of these adjustments, S&P's average credit quality
assessment of the portfolio was 'ccc', which it used to generate
its 'AAA' SDR of 88.99%.

S&P has calculated the 'B' SDR, based primarily on its analysis
of historical SME performance data and S&P's projections of the
transaction's future performance.  S&P has reviewed the
originator's historical default data, and assessed market
developments, macroeconomic factors, changes in country risk, and
the way these factors are likely to affect the loan portfolio's
creditworthiness.  As a result of this analysis, S&P's 'B' SDR is
23%.

S&P interpolated the SDRs for rating levels between 'B' and 'AAA'
in accordance with S&P's European SME CLO criteria.

RECOVERY RATE ANALYSIS

S&P applied a weighted-average recovery rate (WARR) at each
liability rating level by considering the asset type and its
seniority, the country recovery grouping, and the observed
historical recoveries in this transaction.

COUNTRY RISK

S&P's long-term rating on the Kingdom of Spain is 'BBB'.  S&P's
RAS criteria require the tranche to have sufficient credit
enhancement to pass a minimum of a "severe" stress to qualify to
be rated above the sovereign.

CASH FLOW ANALYSIS

S&P used the reported portfolio balance that it considered to be
performing, the principal cash balance, the current weighted-
average spread, and the weighted-average recovery rates that S&P
considered to be appropriate.  S&P subjected the capital
structure to various cash flow stress scenarios, incorporating
different default patterns and timings and interest rate curves,
to determine the rating level, based on the available credit
enhancement for each class of notes under S&P's European SME CLO
criteria.

Under S&P's RAS criteria, it can rate a securitization up to four
notches above its foreign currency rating on the sovereign if the
tranche can withstand "severe" stresses.  However, if all six of
the conditions in paragraph 48 of the RAS criteria are met
(including credit enhancement being sufficient to pass an extreme
stress), S&P can assign ratings in this transaction up to a
maximum of six notches (two additional notches of uplift) above
the sovereign rating.  In S&P's view, the available credit
enhancement for the class B notes withstands extreme stresses.
S&P has therefore affirmed its 'AA (sf)' rating on the class B
notes.

Given that the rating levels for the class C and D notes are
lower than the sovereign ratings, S&P has not applied its RAS
criteria. Based on S&P's credit and cash flow analysis and the
application of its current counterparty criteria, S&P considers
the available credit enhancement for the class C and D notes to
be commensurate with their current ratings.  S&P has therefore
affirmed its ratings on the class C and D notes.

RATINGS LIST

Class       Rating

FTPYME Bancaja 3, Fondo de Titulizacion de Activos
EUR900 Million Floating-Rate Notes

Ratings Affirmed

B           AA (sf)
C           BB (sf)
D           CCC (sf)


MAPFRE SA: Fitch Affirms 'BB' Rating on EUR700MM 5.91% Sub. Debt
----------------------------------------------------------------
Fitch Ratings has affirmed Mapfre SA's Issuer Default Rating
(IDR) at 'BBB+' and its core operating subsidiaries' Insurer
Financial Strength (IFS) ratings at 'A-'.  The Outlook on the
ratings is Stable.

Key Rating Drivers

The affirmation reflects Mapfre's strong underwriting performance
in 1H14 and its strong and stable level of risk-adjusted
capitalization.  Offsetting factors include Mapfre's exposure to
the Spanish sovereign (BBB+/Stable) and other countries rated
'BBB+' and below.

Spain's sovereign rating (BBB+/Stable) continues to weigh on the
group's ratings.  The ratio of Spanish fixed income instruments
to shareholders funds remained high at end-1H14 at 124% (YE13:
115%), which leaves Mapfre substantially exposed to the Spanish
economy.

Mapfre's credit fundamentals are supported by its solid capital
adequacy (247% at end-2013) and consolidated shareholders' funds
of EUR8.5 billion at end-1H14 (YE13: EUR7.8 billion).  The
increase in shareholders' funds of EUR650 million since YE13 was
predominantly due to falling spreads in Spain, the appreciation
of the Brazilian real, the US dollar and the Turkish lira.

Fitch considers Mapfre's financial leverage as low and supportive
of the ratings, and expects it to remain stable in 2014.
Mapfre's Fitch-calculated financial leverage declined to 21% at
end-2013 from 24% at end-2012, compared with its peak of 33% at
end-9M12.

The ratings incorporate Fitch's expectation that Mapfre will
maintain a strong and stable underwriting performance.  At 1H14,
Mapfre reported a combined ratio of 95.7% (1H13: 95.6%).  The
life business reported a result of EUR373.8 million (1H13:
EUR284.3 million).

The ratings also reflect Mapfre's strong franchise and access to
distribution in Spain and Latin America. Mapfre remains a market
leader in Spain, with a 13% market share and a strong player in
Latin America with a 9.5% share.

RATING SENSITIVITIES

Mapfre's ratings could be downgraded if its exposure to the
Spanish insurance market or sovereign debt results in investment
losses with a material impact on capital.  Mapfre's ratings could
also be downgraded if the Spanish sovereign rating is downgraded.
Factors that could trigger an upgrade include an upgrade of
Spain's rating, alongside strong group capitalization (as
measured by, for example, the regulatory Solvency I ratio
remaining above 200%), or exposure to Spanish debt falling below
100% of group shareholders' funds (currently 115%).

The rating actions are:

Mapfre Familiar
Mapfre Global Risks Cia De Seguros Y Reaseguos
Mapfre Vida SA De Seguros Y Reaseguros
Mapfre Re Compania De Reaseguros S.A
  -- IFS affirmed at 'A-'; Outlook Stable

Mapfre SA
  -- Long-term IDR affirmed at 'BBB'; Outlook Stable
  -- EUR1 billion 5.125% senior unsecured debt due 2015 affirmed
     at 'BBB-'
  -- EUR700 million 5.91% subordinated debt due 2037 with step-up
     in 2017 affirmed at 'BB'



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


BESTWAY UK: S&P Assigns 'B+' CCR & Rates GBP725MM Sr. Debt 'BB-'
----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B+' long-term
corporate credit rating to Bestway UK Holdco Ltd., the parent
company of U.K.-based food wholesale and cash-and-carry business
of Bestway Group.  The outlook is stable.

At the same time, S&P assigned its 'BB-' long-term issue rating
to Bestway UK's proposed senior secured debt of GBP725 million,
comprising a revolving credit facility (RCF), a term loan A, and
a term loan B.  The recovery rating is '2', indicating S&P's
expectation of "substantial" (70%-90%) recovery for senior
secured creditors in the event of a default.

The ratings on Bestway UK reflect S&P's view of its stand-alone
credit profile (SACP) of 'bb-' incorporating its assessment of
its business risk profile as "fair" and financial risk profile as
"aggressive."  The long-term corporate credit rating is one notch
lower than Bestway UK's SACP in accordance with S&P's group
rating methodology.

"We assess Bestway UK's business risk profile as "fair,"
reflecting the group's well-established positions in both the
U.K. food wholesale and pharmacy markets, the group's relatively
low cyclicality of earnings in both of its main end markets; and
its stable cash generation.  Likewise, we consider the barriers
to entry posed by the restricted issue of new pharmacy licenses
in the U.K. as an important business risk strength.  At the same
time, our business risk assessment is tempered by what we
consider to be the highly competitive nature of both the food
wholesale and pharmacy markets and the group's reliance on
government funding and regulatory risks in the pharmacy business.
What's more, we see geographical concentration of earnings in the
U.K. and execution risks related to integrating the pharmacy
business into Bestway UK's group structure as another limiting
factor," S&P said.

"We consider the Co-operative pharmacy's operating model to be
generally more efficient than the average U.K. pharmacy, due to
its meaningful scale and well-established operating model.  We
consider this model to comprise a robust supply chain and strong
wholesale procurement operations and supplier relationships, an
efficient distribution system, good customer service, and an
experienced management team.  On the other hand, we also note
that the profitable over-the-counter and health and beauty
products segments contribute very low revenues, and we view this
negatively when comparing the Co-operative pharmacy's business
with other market-leading pharmacy chains.  This also renders the
pharmacy significantly reliant on U.K. health care spending and
exposes it to some level of event risk arising from unexpected or
unfavorable changes to the U.K. government's policies.  Such
adverse regulatory changes could affect the Co-operative
pharmacy's market position or erode its profitability," S&P
added.

"In our opinion, Bestway UK's wholesale food retail business,
which is based on the cash and carry model, relies on the group's
ability to effectively control its fixed-cost base and maintain a
focused product range.  Profitability in the cash and carry
business is generally low with historical EBITDA margins reaching
3.5% (on a reported basis) at most.  This drives our assessment
of the combined group's (the pharmacy and the wholesale business)
profitability as "less than average" when compared with the wider
retail sector.  That said, we believe that Bestway UK's good
brand recognition, retail network supported by two supervised
symbol groups, and broad national coverage underpin the group's
competitive position and allow it to somewhat offset the pricing
and profitability pressure resulting from fierce competition in
the market place.  While the wholesale business is generally able
to convert a relatively high share of its profits into cash, we
note that it is exposed to the temporary swings in working
capital caused by tobacco products purchasing.  Funding
requirements are generally at their highest in April, around the
time of the government's budget announcement and the related rise
in excise duties.  Just before the budget is announced and prices
increase, wholesalers stock as many tobacco products as
possible," S&P added.

"Our assessment of Bestway UK's financial risk profile as
"aggressive" is based on the proposed capital structure after the
pharmacy business buyout.  We estimate that Bestway UK will post
a Standard & Poor's-adjusted debt-to-EBITDA ratio of about 4x-
4.5x in financial 2015 ending June 30, 2015.  This ratio includes
the proposed GBP650 million first-lien term loans, about GBP50
million of capitalized operating leases, and about GBP5 million
of unfunded pension liabilities.  From the debt figure, we net
our estimate of surplus cash of about GBP55 million after
applying a standard 25% haircut.  Our estimate of Bestway UK's
adjusted EBITDA for 2015 is about GBP150 million-GBP155 million,
giving effect to our operating lease adjustment.  We treat the
GBP183 million shareholder loan provided by the ultimate parent
of Bestway UK to Bestway UK's subsidiaries as equity, according
to our criteria," S&P noted.

S&P anticipates Bestway UK to steadily post modest growth over
the medium term, thanks to some growth in the pharmacy segment
underpinned by acquisitions, relocations, and managed care
uplifts against the backdrop of stable performance in the food
retail segment.  Earnings should also be supported by Bestway
UK's continuous cost-reduction efforts, implemented in order to
withstand pricing pressures that flow from Bestway UK's
customers, inherent in the nature of its wholesale cash and carry
operations.

S&P's base case assumes:

   -- Continuing U.K. GDP growth owing to strong consumer demand.
      S&P's U.K. GDP forecast is 2.9% for 2014 and 2.5% for 2015,
      with the unemployment rate improving to 6.7% in 2014 and
      6.4% in 2015.

   -- The U.K. food wholesale market continuing to grow
      consistently in the low-to-mid-single-digits as evidenced
      in recent years.  Accordingly, S&P forecasts growth of
      about 2% in the medium term primarily driven by the
      delivered grocery segment, which has a modest but growing
      share of online business.

   -- Low-single-digit sales growth on a combined basis, with no
      openings or acquisitions of new wholesale depots in the
      forecast period and small add-on acquisitions in the
      pharmacy segment.

   -- Overall, EBITDA margins to remain largely flat with a
      slight reduction in gross margins on the back of

      competitive pressure offset by a reduction in fixed costs
      and some synergies between the two segments.

   -- Low synergies and integration costs due to the varying
      nature of the two U.K. businesses.  S&P expects an orderly
      pharmacy divestment process from the Co-operative Group and
      no major integration issues.

   -- No dividend inflow from the overseas subsidiaries of
      Bestway Group.  However, historically, Bestway Group used
      part of such dividend inflow to pay down debt at the U.K
      subsidiaries.  Should Bestway UK benefit from its parent
      using the same approach in the future, there could be
      potential for greater deleveraging.

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

   -- Adjusted debt to EBITDA of about 4.5x in June 2015,
      declining to about 4.0x by June 2016, mostly on the back of
      debt reduction due to mandatory amortization and a cash
      flow sweep.

   -- Adjusted FFO to debt of 15%-20% over the forecast period.

   -- On average over the forecast period, both of the above core
      credit ratios will remain in the "aggressive" financial
      risk profile category.

   -- Reported free operating cash flow (FOCF) of about GBP15
      million-GBP20 million in financial 2015, rising to about
      GBP30 million by 2017 as one-off integration spending is
      phased out.

"We view Bestway UK as a "core" subsidiary of the wider Bestway
Group incorporating, in addition to the Bestway UK business,
majority ownership in Pakistan-based United Bank Limited (UBL)
and Bestway Cement Limited (BCL).  We assess the group credit
profile (GCP) at 'b+' supported by Bestway UK's 'bb-' SACP, and
restricted by the country risk and sovereign rating of Pakistan
at 'B-/Stable/B'.  We believe that Bestway UK plays an integral
part in Bestway Group's strategy of growing its U.K. presence and
expansion in the markets adjacent to the wholesale operations
that Bestway Holding had originally developed.  We base our view
of Bestway UK's core status in the Bestway Group on its legacy
status within the group, including the shared name of Bestway UK
Holdco and Bestway Holdings, underpinned by Bestway's brand
recognition in the U.K. wholesale market.  Furthermore, the
financing structure in the GBP725 million senior facilities
agreement restricts dividend leakage from the U.K. operations to
overseas subsidiaries.  Finally, we view positively management's
track record over the past four years of using a significant part
of dividends received from overseas subsidiaries, averaging GBP30
million per year, to reduce debt at the U.K. subsidiaries," S&P
said.

The stable outlook reflects S&P's view that Bestway UK's good
market positions in both of its end markets should allow it to
post modest revenue growth amid soft market conditions, and
maintain an adjusted debt-to-EBITDA ratio of comfortably lower
than 5x.  This assumes an orderly pharmacy divestment process
from the Co-operative Group and no major integration issues that
could cause a higher one-off spend than S&P anticipates in its
base-case scenario.  Likewise, S&P anticipates that Bestway UK
will be able to generate positive reported FOCF and utilize
surplus cash mostly for debt reduction, in line with the debt
documentation requirements.  There is a risk that due to the
tightening of financial covenants already in financial 2016, as
stipulated in the debt documentation, headroom under the covenant
level could fall below the 15% that is required for S&P to assess
liquidity as "adequate".

S&P could lower the ratings if it revises downward its GCP
assessment on Bestway UK.  This could occur if the company's
operating performance deteriorates to such an extent that S&P
expects its adjusted EBITDA to fall significantly below the
GBP135 million-GBP145 million S&P estimates in its base case,
thereby impairing the performance of the whole Bestway Group.
This could occur if Bestway UK fails to offset flat trading in
its wholesale business with growth initiatives in the pharmacy
segment, faces unexpected issues in integrating the pharmacy
acquisition, and/or if the group faces unfavorable regulatory
changes.  S&P could also lower the ratings if we see increased
risks within other parts of Bestway Group, particularly its
banking operations.  This could happen if, for instance, S&P was
to take a negative rating action in respect of the sovereign
ating on Pakistan.  In that scenario, S&P would examine the
impact of abovementioned factors on Bestway UK's SACP, as well as
the GCP.  Likewise, S&P could lower its rating if it anticipates
the company's headroom under its financial covenants to decline
and lead to an increased liquidity risk in the medium term.

S&P does not expect to raise the rating on Bestway UK any time
soon. One-off spending related to the pharmacy acquisition and
integration that could take some time dampen the possibility of
an upgrade.  Nevertheless, S&P would consider raising the rating
if it was to raise the GCP.  This could happen if Bestway UK
improves its EBITDA and free cash flow generation causing
Standard & Poor's-adjusted debt to EBITDA to sustainably improve
to less than 4x, as a result of the sustained improvement in
trading, the rise in profitability, and better working capital
management.  A positive rating action would be contingent on a
Bestway GCP upgrade.  This would be underpinned by an improved
financial risk profile of U.K. operations and sustained stable
credit quality for the rest of the group.  Any positive rating
action would be conditional upon the company maintaining a
liquidity position of at least "adequate," according to S&P's
definition.


CONNAUGHT: Former Workers Lose Four-Year Bid for Compensation
-------------------------------------------------------------
Aaron Morby at Construction Enquirer reports that more than a
hundred Norwich workers who lost their jobs when housing repairs
contractor Connaught collapsed have failed in a bid to win
compensation.

Up to 124 former Connaught workers were hoping to secure a legal
ruling that would have paved the way to seek compensation from
contractors that took over the housing repair work, according to
Construction Enquirer.

Construction union UCATT had taken an employment tribunal on
behalf of the workers arguing that when Connaught went into
administration in September 2010 their contracts transferred to
other companies and their staff should have been TUPE transferred
with the new contracts, the report notes.

If UCATT had been successful, the workers could have claimed for
unfair dismissal and other rights against the contractors, the
report relates.

The report disclosed that the Employment Tribunal ruled that no
TUPE transfer took place.

UCATT is now exploring a claim on behalf of the workers for a
protective award as Connaught failed to inform and consult the
workforce before making them redundant, the report relays.

If this claim is successful, the workers will be paid by the
Government's Insolvency Service for eight weeks pay at the
statutory maximum amount, the report notes.

The report adds that Brian Rye, Regional Secretary for UCATT's
Eastern Region, said: "The ex-Connaught workers are bitterly
disappointed with the decision by the employment tribunal.
Despite this setback, UCATT is absolutely committed to fighting
for justice for the workers and we will be using every legal
avenue left open to us."


ER HEMMINGS: In Administration; 37 Jobs at Risk
-----------------------------------------------
The Bristol Post reports that future of 37 workers at ER Hemmings
(Building) Limited and ERH Construction are in doubt after the
administrators were called in.

The two companies have been placed under the control of
administrators Grant Thornton, The Bristol Post relates.

Both companies are subsidiaries of construction and
communications group ERH, founded by Ernie Hemmings more than 40
years ago, The Bristol Post discloses.

Parent company ERH (Holdings) and its subsidiary ERH
Communications have now been taken over by Centregreat Limited, a
Welsh engineering and facilities management business, The Bristol
Post relays.

"The building and construction industry has suffered considerably
over the past few years and it is disappointing that, despite the
efforts of the companies' management teams, another employer has
been unable to survive in this difficult economic climate," The
Bristol Post quotes administrator Nigel Morrison --
nigel.morrison@uk.gt.com -- of Grant Thornton, as saying.

Mr. Morrison said people affected by the administration and
takeover would be receiving a letter in the next few days, The
Bristol Post notes.  The two subsidiaries had "both incurred
losses over the past few years", the administrator, as cited by
The Bristol Post, said leading to financial restructuring and the
end of trading.

ER Hemmings (Building) Limited and ERH Construction are based in
based in Yate.


GEMGARTO 2012-1: S&P Raises Rating on B2 Notes to BBB- from BB
--------------------------------------------------------------
Standard & Poor's Ratings Services raised its credit ratings on
Gemgarto 2012-1 PLC's class M1, M2, B1, and B2 notes.  At the
same time, S&P has affirmed its 'AAA(sf)' rating on the class A1
notes.

The rating actions follow S&P's credit and cash flow analysis
based on the Aug. 2014 investor report.  S&P's analysis reflects
the application of S&P's U.K. residential mortgage-backed
securities (RMBS) criteria.

The collateral pool comprises first-lien U.K. residential (74.4%)
and buy-to-let (25.6%) mortgage loans originated in or after
2010. The proportion of interest-only loans has slightly
increased to 31.44% from 30.80% at closing.

There are no self-certified loans in the pool and the weighted-
average indexed current loan-to-value (LTV) ratio has decreased
to 68.43% from 74.35% at closing.

The transaction has performed better than S&P's expectations at
closing.  While arrears have increased in recent periods, 90+
days arrears at 0.41% remain well below that of S&P's U.K. RMBS
index. The transaction has not experienced any losses.

The cash reserve, which was partially funded at closing, has
steadily increased to GBP9.12 million from GBP6 million as of the
August 2014 interest payment date.  The reserve's target level is
GBP12 million.

The pool factor (the outstanding collateral balance as a
proportion of the original collateral balance) is currently
51.24%.  The available credit enhancement for each class of notes
has increased significantly due to the deleveraging and the
increase in the cash reserve amount.

S&P lists its weighted-average foreclosure frequency (WAFF) and
weighted-average loss severity (WALS) assumptions at each rating
level:

          WAFF (%)        WALS (%)           Expected
                                      credit loss (%)
AAA          32.55           35.29              11.49
AA           22.84           28.28               6.46
A            17.07           16.87               2.88
BBB          11.92           10.57               1.25
BB            6.85            6.50               0.45
B             5.20            3.61               0.19

S&P's WAFF and WALS assumptions have decreased since closing.  In
particular, S&P's WAFF assumptions decreased due to the low level
of delinquencies compared with the rating agency's expectations
at closing, coupled with the increased seasoning.  S&P's WALS
assumptions decreased as a result of increasing house prices,
which have led to a decrease in S&P's weighted-average indexed
current LTV ratio.

Overall, S&P's expected credit loss at each rating level has
decreased.  Based on this and the aforementioned increase in
available credit enhancement, and following S&P's credit and cash
flow analysis, it has raised its ratings on the class M1, M2, B1,
and B2 notes.  S&P's analysis indicates that the available credit
enhancement for the class A1 notes is commensurate with the
currently assigned rating.  S&P has therefore affirmed its 'AAA
(sf)' rating on the class A1 notes.

Gemgarto 2012-1 is the first transaction to securitize collateral
originated under Kensington Mortgage Company Ltd.'s revised
underwriting framework.  The collateral pool consists of U.K.
residential and buy-to-let mortgage loans originated in or after
2010.

RATINGS LIST

Class       Rating            Rating
            To                From

Gemgarto 2012-1 PLC
GBP246.5 Million Mortgage-Backed Floating-Rate Notes

Ratings Raised

M1          AA+ (sf)          A+ (sf)
M2          AA (sf)           A (sf)
B1          A- (sf)           BBB (sf)
B2          BBB- (sf)         BB (sf)

Rating Affirmed

A1          AAA (sf)


INFINIS ENERGY: Moody's Assigns 'Ba3' Corporate Family Rating
-------------------------------------------------------------
Moody's Investors Service has assigned a Ba3 corporate family
rating (CFR) and Ba2-PD probability of default rating (PDR) to
Infinis Energy Plc. Concurrently, Moody's has withdrawn the Ba3
CFR and Ba2-PD PDR of Infinis Holdings. Finally, Moody's has
affirmed the Ba3 senior unsecured rating of the notes due 2019
issued by Infinis Plc. The outlook on all ratings is stable.

The rating actions follow the Initial Public Offering (IPO) in
November 2013 of the group, for which Infinis Energy Plc was
created specifically as a new holding company in order to issue
shares and in particular, the decision to no longer publish
future consolidated financial statements for the Infinis Holdings
group. The results of the Infinis Holdings group are now included
within the Infinis Energy Plc financial statements.

Ratings Rationale

The assignment to Infinis Energy Plc of a CFR at the same level
as that previously maintained in relation to Infinis Holdings and
the affirmation of the Ba3 rating of the senior notes issued by
Infinis Plc reflect Moody's opinion that the reorganization and
IPO were credit neutral for both the group in general and Infinis
Plc bondholders in particular.

The Ba3 CFR reflects, as positives: (1) the group's market
position as a leading renewable electricity generator in the UK;
(2) the stable and transparent renewable energy subsidy
mechanisms, controlled by the UK Government, under which all of
the group's assets operate; (3) Infinis' low marginal cost
generating fleet, which provides consistent load factors.

However, the rating is constrained by (1) the group's small
scale, relative to peers rated using Moody's Unregulated
Utilities and Unregulated Power Companies methodology; (2) the
reliance on landfill gas generation from its 121 sites, albeit
gradually diminishing as a result of the onshore wind investment
program; (3) the material level of planned debt-funded capital
expenditure, which will mean that the level of leverage is likely
to remain high in the medium term (between 4.5x and 5x debt to
EBITDA on a gross basis; 4-4.5x EBITDA on a net basis); (4) the
post-IPO financial policy, which prioritizes dividends and
investment over de-leveraging and hence could reduce financial
flexibility, particularly if power prices declined significantly
from current levels.

The Ba3 rating of the senior notes takes into account the group
Loss Given Default assessment of 65%, which reflects the fact
that, other than the ringfenced project financed wind business,
the group's capital structure primarily consists of the notes.
The LGD assessment is in line with Moody's approach for all-bond
transactions. According to this approach the LGD assessment for
the notes remains LGD4.

Rating Outlook

The stable rating outlook reflects that the group's capital
structure is relatively resilient to downside sensitivities.

What Could Change the Rating UP/DOWN

Given the current high level of leverage, the material investment
program and dividend growth plan, which will delay deleveraging,
Moody's considers that upward pressure on the ratings is unlikely
to arise in the short term.

Conversely, downward rating pressure could arise in the event (1)
a material deterioration in the technical availability of the
generation portfolio or the landfill gas yield; (2) a decline in
wholesale power prices to GBP40-45, which would result in gross
debt to EBITDA above 5x; (3) a material step-up in the planned
level of dividends over and above the current policy of real
annual growth; (4) a currently unforeseen change to the renewable
energy subsidy regime in the UK, which has a material adverse
impact on the value of the subsidies received.

Principal Methodologies

The methodologies used in these ratings were Unregulated
Utilities and Unregulated Power Companies published in October
2014, and Loss Given Default for Speculative-Grade Non-Financial
Companies in the U.S., Canada and EMEA published in June 2009.


L M ENGINEERING: In Administration, Cuts 21 Jobs
------------------------------------------------
Construction Enquirer reports that Wrexham specialist steelwork
contractor L M Engineering Services has fallen into
administration with the loss of 21 jobs.

The firm specialized in stainless steel structures for the
nuclear and process industries as well as smaller scale steel
bridges, according to Construction Enquirer.

The report notes that LMES worked for several major contractors,
including Laing O'Rourke where its delivered over 3 km of
stainless steel balustrades for the Cheesegrater tower at 122
Leadenhall, London.

It ranked as one of the UK's largest stainless steel fabricators
with over 60,000 sq ft of dedicated stainless factory space
approved to UK nuclear production standards, the report adds.


OSPREY ACQUISITIONS: Fitch Affirms 'BB' Issuer Default Rating
-------------------------------------------------------------
Fitch Ratings has affirmed Osprey Acquisitions Limited's (Osprey)
Long-term Issuer Default Rating (IDR) at 'BB' and senior secured
rating at 'BB+'.  The Outlook on the Long-term IDR is Stable.
Fitch has also affirmed the bond issued by Anglian Water (Osprey)
Financing Plc (AWOF) at 'BB+' senior secured.  The bond is
guaranteed by Osprey, and is rated in line with Osprey's 'BB+'
senior secured rating.

Osprey is a holding company of Anglian Water Services Limited
(Anglian Water or OpCo; A/BBB+/Negative), one of the 10 appointed
regulated water and sewerage companies (WaSC) in England and
Wales.

The affirmation reflects Fitch's expectation of a modest
reduction in gearing to around 85% by 2020, lower subordination
of the holding company debt due to de-leveraging of the Opco and
dividend cover in line with current rating guidelines of above
2.5x, offset by increasing business risk in the UK water sector.

The rating also reflects the market leading operational and
regulatory performance of Anglian Water, the main operating
subsidiary of the group, as well as the structurally and
contractually subordinated nature of the holding company
financing at the Osprey level.

AWOF is the financing vehicle for Osprey, which is a holding
company for businesses focused on the water sector, including
ownership of Anglian Water -- a water and wastewater business
that is regulated by Ofwat.

KEY RATING DRIVERS

Adequate Dividend Cover and Reduced Subordination at Holdco
For the year ending March 31, 2014, (FY14), Fitch calculates
Osprey's pension-adjusted net debt/regulatory asset value (RAV)
at 90.2%, dividend cover at 4.5x and post-maintenance and post-
tax interest cover (PMICR) at around 1.3x.  Fitch forecasts that
Osprey should be able to maintain credit metrics in line with
ratio guidelines, i.e. dividend cover above 2.5x and PMICR at
around 1.1x.  The agency forecasts gearing to reduce to around
85% by March 2020.  Fitch also notes that subordination at Osprey
is reducing as a result of the operating company deleveraging
over April 2015 to March 2020 (AMP6).

Increasing Business Risk in Water Sector

Fitch believes that business risk in the water sector will
increase for AMP6.  Fitch expects business risk for the water
sector will be more closely aligned with that of the UK gas
distribution sector.  In addition to a significant reduction in
the cost of capital to an all-time low of 3.85%, total
expenditure will be benchmarked at the top quartile, representing
a more demanding target for capital expenditure.  Ofwat is
pursuing progressive targets for the retail price controls,
eliminating protection from RPI and implementing catch-up
efficiency targets using an average cost to serve, which Fitch
believes does not fully reflect each company's operating cost
base.

Robust Performance vs. Regulatory Targets

Anglian Water is one of the top quartile performers in the
industry.  Over the first four years of the price control, the
company improved its regulatory performance and positioned itself
well to face the challenges that the new price control may bring
in April 2015.  For FY14, Anglian Water reported stable asset
serviceability in all four areas for its networks, including
wastewater infrastructure, which was assessed as marginal in
FY13.

In addition, Anglian Water continues to be an industry leader in
terms of leakage as a result of the implementation of a proactive
leakage control and reactive repair work program.  The company
also ranked joint top amongst water and wastewater companies for
the service incentive mechanism, a measure that captures the
quantitative and qualitative performance of customer service.

RATING SENSITIVITIES

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

   -- Given the regulator's proposals related to the price review
      2014, upgrades in the sector are unlikely.

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

   -- A sustainable drop of dividend cover below 2.5x. Similarly,
      an increase in group gearing above 90% or drop of PMICR
      below 1.1x would attract additional analysis from Fitch.

   -- A marked deterioration in operating and regulatory
      performance of Anglian Water or adverse changes to the
      regulatory framework in the UK water sector.

Once the final determinations are published and have been
evaluated, we could revise rating guidelines for the sector.

LIQUIDITY & DEBT STRUCTURE

Adequate Back-Up Liquidity

As of March 31, 2014, Osprey held GBP11.9 million in cash and
AWOF had available GBP25 million of undrawn, committed bank
facilities with a maturity in Nov. 2015.  This is sufficient to
bridge short-term liquidity needs.  For debt service, Osprey and
AWOF effectively rely on upstream cash flows from their operating
subsidiaries, primarily Anglian Water.


SERCO GROUP: Faces Two More Difficult Years, CEO Says
-----------------------------------------------------
Perry Gourley at The Scotsman reports that Rupert Soames, the
Serco chief executive who left Glasgow-based Aggreko to head up
the scandal-hit outsourcing firm, on Nov. 9 admitted the company
faces two more difficult years.

Shares in the firm -- which recently won a 15-year contract to
run the Caledonian sleeper train service between Scotland and
London -- plunged by almost a third after it slashed its profits
guidance for this year and next and wrote down the value of the
business by GBP1.5 billion, The Scotsman relates.

Mr. Soames highlighted the impact of several contracts where
Serco is making large losses and reiterated that he wants to
re-focus the company as being a provider of services to
governments in areas such as justice and immigration, defense and
transport, while looking to sell the majority of its business
outsourcing operations, The Scotsman discloses.

Among the operations being put up for sale is the group's Great
Southern Rail business in Australia, The Scotsman notes.

The turnaround plan will be financed by a GBP550 million cash
call to investors early next year, on top of the GBP165 million
raised in a share placing this summer, The Scotsman says.

Mr. Soames warned that Serco will have "to get smaller and more
focused" to get back on track, The Scotsman states.

Confronted by slowing growth rates and increased competition in
core markets, Mr. Soames, as cited by The Scotsman, said Serco
had concentrated too much on winning new business and lost focus
by diversifying into areas that required different skills.

"This transformation will take time, but will be worthwhile," The
Scotsman quotes Mr. Soames as saying.  "The next two years are
going to be difficult, and we expect our revenue to reduce over
this period through disposals and exiting loss-making contracts,
following which we expect to be able to start growing again."

As reported by the Troubled Company Reporter-Europe on Nov. 11,
2014, The Financial Times related that Serco lowered its forecast
for adjusted operating profit this year by GBP20 million to
GBP130 million-GBP140 million and lowered its outlook for 2015,
the FT discloses.  That will push the company into a breach of
its debt-to-profit covenant on a private placement loan, so it
plans to hold talks with its lenders to amend the conditions, the
FT said.

Serco Group plc is a British outsourcing company based in Hook,
Hampshire.  It operates public and private transport and traffic
control, aviation, military and nuclear weapons, detention
centers, prisons and schools on behalf of the UK government.


SYNCRO: Robert Maxwell's Sons Escape Bankruptcy
-----------------------------------------------
The Telegraph reports that two sons of the disgraced media boss
Robert Maxwell have escaped bankruptcy over a joint loan debt.

Kevin Maxwell, 55, and Ian Maxwell, 58, both faced bankruptcy
petitions at the High Court in London over an unspecified sum,
but the petitions were dismissed, according to The Telegraph.

Wendy Parker, representing DCF (UK) Ltd, a loan company based in
Bexhill on Sea in Sussex, told the court the parties had "agreed
terms," the report notes.

The report relates that neither brother was in court for the
brief hearing, which came after Mr. Maxwell was banned from
running a company for eight years in 2011 following an
investigation by the Insolvency Service.

The investigation found that he and two other directors had
diverted more than GBP2 million out of Syncro, a Manchester-based
construction company he ran, shortly before it went into
administration, the report says.

Mr. Maxwell had previously been made Britain's biggest bankrupt
in 1992, with debts of more than GBP400 million.

A year earlier, his father was found drowned at the age of 68
after apparently falling from his yacht off the Tenerife coast,
the report notes.

The two brothers, who had both sat on the board of Maxwell
Communications Corporation, were investigated after his death
over an alleged conspiracy to defraud the company's pension fund
but both were cleared of fraud in 1996, the report adds.


TENZA TECHNOLOGIES: In Administration; Potential Buyers Sought
--------------------------------------------------------------
Hanna Sharpe at Business Sale Report reports that Tenza
Technologies has been placed into administration with a 90% job
cull.

Only about eight staff remain at the business, which makes self-
adhesive and speciality packaging from its base in Saxmundham,
Suffolk.

Jason Godefroy -- jason.godefroy@duffandphelps.com -- and John
Whitfield -- john.whitfield@duffandphelps.com -- the appointed
administrators at Duff & Phelps, are understood to be in
discussion with some potential buyers for the business, which is
still trading but not at full capacity.

Tenza Technologies is a Suffolk packaging firm.  The company
makes standing heat resistant food pouches, tenzalopes --
documents enclosed envelopes made with oxo-biodegradable film,
and bespoke PVC items among other products.


TITAN EUROPE 2007-1: Fitch Cuts Ratings on 4 Note Classes to 'C'
----------------------------------------------------------------
Fitch Ratings has downgraded Titan Europe 2007-1 (NHP) Limited's
class B, C, D and E notes to 'C' from 'CC'.

KEY RATING DRIVERS

The 'C' rating on the junior class B, C, D and E notes indicates
that a default appears imminent or inevitable.  On Nov.3, 2014,
it was publicly announced that Formation Capital (a large US fund
focused on seniors housing and care, post-acute and health care
real estate investments) in partnership with Safanad (a global
principal investment firm) and Court Cavendish, the healthcare
turnaround specialist and current management team at HC-One, the
operator of the securitized care homes, have signed a binding
commitment to acquire NHP, the borrower in the transaction.
However, the proceeds would be insufficient to pay back the class
B, C, D and E notes.

The special servicer, Capita, has informed noteholders that the
binding sale and purchase agreement (SPA) has effectively been
executed in respect of the sale of all of the subsidiaries of the
borrower (which includes HC-One Limited), through the sale of all
of the shares of NHP Holdco 1 Limited.  The special servicer
received the consent of the issuer as controlling party, as
directed by the note trustee pursuant to a resolution passed by
the class A noteholders (as required in the servicing agreement).

The total consideration under the SPA for the disposal is around
GBP477.7 million, which is 10% lower than Jones Lang LaSalle's
last valuation in Dec. 2013 (albeit based on a marginally higher
number of properties).  The resulting net proceeds available to
the issuer's collection account (ICA) are expected to be around
GBP457.6 million.  However, this amount may change as it is
subject to a variety of assumptions and estimates provided by
third parties (as indicated by Capita).

This net amount will not allow the class B, C, D and E notes to
even be partially repaid as no proceeds are left after the more
senior ranking liabilities, namely around GBP14.9 million of
servicing advances, around GBP98.5 million of swap mark-to-
market, GBP133 mi of swap deferrals and GBP408 million of class A
notes.  Fitch estimates that the implied loan-to-value ratios
(with the additional inclusion of over GBP9.5 million of the
junior notes' deferred interests) are around 153% for the class B
notes, 162% for the class C notes, 175% for the class D notes and
189% for the class E notes.

The regulatory information services (RIS) notification published
on Nov. 3, 2014, indicated that the completion of the disposal
under the SPA is scheduled to occur on Nov. 12, 2014.  However,
the structure may not unwind until the next interest payment date
(IPD) in Jan. 2015.  Delays may occur in case of disputes with
regard to the allocation of funds at issuer level, notably, as
Fitch currently understands, between the swap providers and the
class A noteholders.  Ultimately, the net proceeds of the
disposal will remain in the ICA until disbursement by the cash
manager.

RATING SENSITIVITIES

Fitch expects to downgrade the class B, C, D and E notes to 'D'
and subsequently withdraw the ratings when the structure
effectively unwinds, which may occur at the next IPD in Jan.
2015.

SUMMARY OF CREDIT

Titan Europe 2007-1 (NHP) is a securitization of 275 nursing
homes owned by NHP, which are let on long leases to third-party
operators active in the UK healthcare sector (in particular HC-
One, a subsidiary of the borrower group, which accounts for
around 85% of the estate).

The rating actions are:

GBP42.15 million class B secured floating-rate notes due 2017:
downgraded to 'C' from 'CC'

GBP42 million class C secured floating-rate notes due 2017:
downgraded to 'C' from 'CC'

GBP58 million class D secured floating-rate notes due 2017:
downgraded to 'C' from 'CC'

GBP60 million class E secured floating-rate notes due 2017:
downgraded to 'C' from 'CC'


                            *********

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

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

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


                            *********


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

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

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

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

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

The TCR Europe subscription rate is US$775 per half-year,
delivered via e-mail.  Additional e-mail subscriptions for
members of the same firm for the term of the initial subscription
or balance thereof are US$25 each.  For subscription information,
contact Peter Chapman at 215-945-7000 or Nina Novak at
202-362-8552.


                 * * * End of Transmission * * *