TCREUR_Public/141119.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

                           E U R O P E

         Wednesday, November 19, 2014, Vol. 15, No. 229



OW BUNKER: Trustees Identify Single Car to Liquidate


ALCATEL-LUCENT: Moody's Changes 'B3' CFR Outlook to Positive
VEOLIA ENVIRONNEMENT: Fitch Affirms 'BB+' Rating on Reset Notes


AAREAL BANK: Fitch Rates Additional Tier 1 Securities 'B+(EXP)'
PHOENIX PHARMAHANDEL: Fitch Affirms 'BB' IDR; Outlook Stable
SCHRADER GLASFORMENBAU: Administrators Seek Investors


PANSHIRE: Two Directors Liable for EUR7MM, Liquidator Claims
TABERNA EUROPE: Fitch Affirms 'Csf' Ratings on 4 Note Classes


SESTANTE FINANCE 3: S&P Cuts Ratings on 2 Note Classes to 'CCC+'


KOMPETENZ JSC: Fitch Affirms 'B' IFS Rating; Outlook Stable


POBJEDA: Media Nea Inks Deal to Buy Business for EUR757,000


DUCHESS V CLO: Moody's Raises Rating on Class D Notes to 'Ba1'


CIECH: S&P Raises Corporate Credit Rating to 'B+'; Outlook Stable


BANCO ESPIRITO: Ex-Management Probed Over Illegal Debt Issuance


KHAKASSIA REPUBLIC: Fitch Affirms 'BB' IDR; Outlook Stable
MARI EL REPUBLIC: Fitch Affirms 'BB' IDR; Outlook Stable
MURMANSK REGION: Fitch Affirms 'BB' IDR; Outlook Negative
UDMURTIA REPUBLIC: Fitch Affirms 'BB-' IDR; Outlook Stable


TRBOVLJE: HSE to Commence Liquidation Proceedings


FTA SANTANDER 3: Moody's Assigns 'Ca' Rating to Serie C Notes


KHARKOV CITY: Fitch Affirms 'CCC' IDR; Outlook Negative
ODESSA REGION: Fitch Withdraws 'CCC' Issuer Default Ratings

U N I T E D   K I N G D O M

JKL (WAKEFIELD): Directors Banned For Combined 20 Years
RANGERS FOOTBALL: Four Men Face Charges Over Fraudulent Sale



OW BUNKER: Trustees Identify Single Car to Liquidate
Peter Levring at Bloomberg News reports that so far, the trustees
of bankrupt OW Bunker A/S have identified a single car they say
can be liquidated to start building funds with which to reimburse

The disclosure was made by John Sommer Schmidt -- -- an Aarhus-based attorney and
partner at Gorrissen Federspiel Law Firm, who is overseeing the
winding-up process, Bloomberg discloses.  He didn't reveal the
car's brand or model, according to the report.

All the company's other cars were leased, Mr. Schmidt said on
Nov. 14 in a phone interview, Bloomberg relates.  "It's much too
soon to say what, if anything, will be left for the creditors."

Meanwhile, the trustees appointed to find any value in the
shipping fuel provider are struggling to identify liquid assets,
Bloomberg relays.

"The problem with this bankruptcy has been that the company
didn't have any cash or bank accounts that could fund work to
unwind the company and pay the people taking care of the estate,"
Bloomberg quotes Mr. Sommer Schmidt as saying.  "We've discussed
funding with some of OW Bunker's banks as they also have an
interest in recovering as many assets as possible. We certainly
hope to recover many assets, but it's premature to guess just how

"We've scrambled to protect assets," Mr. Sommer Schmidt, as cited
by Bloomberg, said.  "That's been our top priority, so we've
delayed deciding on the issue of possibly pushing charges as
that's not going away."

He said that even if the trustees do manage to recover enough
assets to cover claims, creditors need to brace themselves for a
long wait, Bloomberg notes.

"An estate of this size doesn't just get wound up in three
months," Bloomberg quotes Mr. Sommer Schmidt as saying.  "And if
someone decides to sue, it could add another two years to the

                          About OW Bunker

OW Bunker A/S is a Danish shipping fuel provider.

On Nov. 7, 2014, OW Bunker A/S, which went public in March,
declared bankruptcy and reported two employees at its Singapore
unit to the police following allegations of fraud.  It owes 15
banks a total of about US$750 million.

OW Bunker said on Nov. 5 it had lost US$275 million through a
combination of fraud committed by senior executives at its
Singapore office and poor risk management.  Trading in its shares
was suspended on Nov. 5 and the company said its banks had
refused to provide more credit.

OW Bunker's U.S. businesses, which opened in 2012 as part of its
global expansion, filed Chapter 11 petitions on Nov. 13.


ALCATEL-LUCENT: Moody's Changes 'B3' CFR Outlook to Positive
Moody's Investors Service has changed to positive from stable the
outlook on Alcatel-Lucent's B3 corporate family rating (CFR) and
B3-PD probability of default rating (PDR). Concurrently, Moody's
has affirmed Alcatel-Lucent's B3 CFR, B3-PD PDR as well as the
group's existing instrument ratings (Caa1 for outstanding
convertible notes, and B3 senior unsecured ratings).

"The positive outlook reflects Moody's view that Alcatel-Lucent's
credit metrics could improve following the company's stronger-
than-expected results in the last nine months," says Roberto
Pozzi, a Moody's Vice President -- Senior Credit Officer and lead
analyst for Alcatel-Lucent. "Moreover, if Alcatel-Lucent is able
to sustain the ongoing improvement in operating margins and cash
flow generation, we could consider upgrading its ratings over the
next 12-18 months."

Outlook Actions:

Issuer: Alcatel-Lucent

   Outlook, Changed To Positive From Stable

Issuer: Alcatel-Lucent USA, Inc.

   Outlook, Changed To Positive From Stable


Issuer: Alcatel-Lucent

  Probability of Default Rating, Affirmed B3-PD

  Corporate Family Rating (Foreign Currency), Affirmed B3

  Senior Unsecured Conv./Exch. Bond/Debenture (Local Currency)
  Jul 1, 2018, Affirmed Caa1

  Senior Unsecured Conv./Exch. Bond/Debenture (Local Currency)
  Jan 30, 2019, Affirmed Caa1

  Senior Unsecured Conv./Exch. Bond/Debenture (Local Currency)
  Jan 30, 2020, Affirmed Caa1

  Senior Unsecured Regular Bond/Debenture (Local Currency) Jan
  15, 2016, Affirmed B3

Issuer: Alcatel-Lucent USA, Inc.

  Senior Unsecured Regular Bond/Debenture (Local Currency) Jan 1,
  2020, Affirmed B3

  Senior Unsecured Regular Bond/Debenture (Local Currency) Nov
  15, 2020, Affirmed B3

  Senior Unsecured Regular Bond/Debenture (Local Currency) Jul 1,
  2017, Affirmed B3

Ratings Rationale

Alcatel-Lucent's B3 CFR reflects the company's persistent
negative profitability and large negative free cash flows
stemming from a highly competitive industry, subdued investments
from telecom operators, major competitors' aggressive marketing
strategies and continued very sizeable restructuring efforts.
These credit negatives are to some extent mitigated by the
company's entrenched market position and long-standing customer
relationships, its large installed base and a solid liquidity
position with moderate leverage on a net of cash basis. Alcatel-
Lucent is currently executing a new strategic plan announced in
June 2013 that is repositioning the company as an IP Networking
and Ultra Broadband specialist whilst managing its Access
activities for cash.

The outlook change to positive reflects Alcatel-Lucent's
improving results in the last 12 months and Moody's improved
expectations with regard to the company's operating performance
and cash flow generation over the next year. In the 12 months to
end September 2014, revenues declined by 5% to EUR13.3 billion
mainly due to a reduction of non-profitable contracts, whilst
EBITDA rose by 44% to EUR1.5 billion (Moody's adjusted) from 2013
levels, resulting in a debt/EBITDA of 6.4x, compared to 10.1x in
2013. Although improving, the company's free cash flow after
restructuring costs remained negative at approximately EUR0.7
billion (Moody's adjusted), compared to a negative EUR0.9 billion
in 2013. The group's core Networking business reported an
underlying operating margin of 8.2% and was cash flow positive in
the first 9 months of 2014 whilst the Access division (including
wireless and fixed access) reported an operating margin of 0.7%
and negative cash flow over the same period.

Whilst recognizing the company's improving operating performance,
Moody's also highlight its very weak track record in terms of
profitability and, especially, free cash flow generation, as well
as the risks associated with the ongoing strategic repositioning
of the company. Legacy products still generate over one third of
the company's core Networks revenues, whose rate of decline is
highly uncertain, whilst a possible decline in US carrier
spending -- (AT&T recently announced a 15% reduction in capex
next year) could negatively affect Alcatel-Lucent's wireless
business in the US (around 20% of group revenues).

Moody's currently expects Alcatel-Lucent's operating margins
(Moody's adjusted) to improve towards mid-single digits over the
next 12-18 months but its free cash flows (Moody's adjusted) to
remain negative, albeit at a reduced level.


Since the beginning of 2013, Alcatel-Lucent has tapped the debt
capital markets several times and refinanced a major part of its
2015-16 debt maturities. These transactions have allowed the
company to extend the maturity profile of its debt, thus gaining
flexibility to implement cost reduction measures and to exit or
restructure unprofitable managed services contracts and
geographic markets.

Alcatel-Lucent's liquidity profile is adequate based on the
availability of around EUR4.9 billion in cash, cash equivalents
and marketable securities reported at the end of September 2014.
Estimated cash needs for operations of around EUR450 million (3%
of revenue) and about EUR0.8 billion of cash and marketable
securities held in countries subject to exchange controls, the
company's liquidity comfortably covers debt maturities in the
next 12 months and expected continued negative free cash flow in
2015. The company has debt maturities of EUR195 million in 2016,
EUR517 million in 2017, EUR629 million in 2018, EUR688 million in
2019 and EUR1.6 billion in 2020, followed by EUR1.3 billion
maturities between 2028-29.

What Could Change the Rating -- UP/DOWN

The rating could be upgraded if Alcatel-Lucent's operating
performance and cash flow generation improves further on a
sustainable basis, as evidenced by operating margins (Moody's
adjusted) to be in the mid-single digits, debt/EBITDA below 6x,
expected to be predominantly driven by an improvement in EBITDA,
and if Alcatel-Lucent stopped the cash burn with free cash flow
turning positive sustainably. For an upgrade, the company would
also need to maintain adequate liquidity.

Negative rating pressure would develop if the company's recent
improvements in operating performance were expected to reverse.
Quantitatively, the B3 rating would come under pressure if
operating margins reversed towards zero, debt/EBITDA remained
above 6x, or negative free cash flows after restructuring failed
to reduce to manageable levels. Negative pressure would also
develop if Moody's expected the company's liquidity to

The principal methodology used in this rating was the Global
Communications Equipment Industry published in June 2008. Other
methodologies used include Loss Given Default for Speculative-
Grade Non-Financial Companies in the U.S., Canada and EMEA
published in June 2009.

Headquartered in Boulogne Billancourt, France, Alcatel-Lucent is
a leading developer and manufacturer of telecom equipment with
sales of about EUR14.4 billion in 2013. The company traditionally
focuses on fixed, mobile, optics and converged networking
hardware, IP technologies, software, and services. It holds Bell
Labs, one of the largest innovation and R&D houses in the telecom

VEOLIA ENVIRONNEMENT: Fitch Affirms 'BB+' Rating on Reset Notes
Fitch Ratings has affirmed Veolia Environnement's Long-term
Issuer Default Rating (IDR) and senior unsecured rating at 'BBB'.
The rating on its undated deeply subordinated reset rate notes
has been affirmed at 'BB+'.  The Outlook is Stable.

The affirmation reflects Veolia's cost reduction program,
cyclical recovery in waste volumes and bond buyback, improving
interest cover.  However, these positives are offset by a
potential increase in risk as the business model moves away from
municipal customers and Europe, non-recurring items lowering
earnings visibility and continued delay in the sale of Transdev.
Although free cash flow (FCF) pre-movements in working capital &
disposals was negative EUR121 million in 1H14 vs EUR103 million
in 1H13, Fitch expects Veolia to turn cash flow neutral on lower
cash tax and capex than previously and an assumed 50% scrip
dividend.  Fitch expects funds from operations (FFO) adjusted net
leverage to fall from 5.5x in 2014 to 4.9x by 2017, supporting
the Stable Outlook.


Cost Reduction

Veolia has to cut costs to remain competitive or risks losing
existing contracts or lower profitability on contract renewals or
even losing access to new contracts.  The company achieved net
savings of EUR109 million (EUR101 million proforma), driving 9M14
reported EBITDA growth of EUR157 million.  The bulk of cost
savings has been achieved in water.  However, in the context of a
competitive slow growth macro environment, Fitch believes it
unlikely that Veolia can retain the full benefit of cost cutting.
With the EUR550 million cost savings target achievable by end-
2014 Veolia is nearing its 2013 target of EUR750 million net
cumulative savings by end-2015.  Given that in 1H14 60% of
contract wins were from new contracts and 40% from contract
renewals, Fitch views the former as likely lower margin.  Fitch
believes that additional cost cutting is desirable, particularly
in waste.

Recovery in Waste Volumes

Underlying waste revenues rose 2.8% in 3Q13 Y-O-Y compared with
2.5% in 2Q14 and 3.3% in 1Q14.  However, both Veolia and its main
competitor, Suez Environnement (SE), are achieving volume growth
partly by adding capacity and raising market share, which does
not support pricing, in contrast with the US players, notably
Waste Management, Inc. (BBB/Stable).  Barring industry
consolidation, it is difficult to see this changing soon.
Veolia's main drivers of volume growth were new PFI contracts in
the UK and growth in landfill in Australia.  It is unclear
whether the outlook for industrial production is strong enough to
support continued volume recovery into 2015.  Volumes face
structural and cyclical headwinds.  France's draft energy
transition law in June targets a 7% reduction in waste volumes
per head over the next five years. Furthermore, raw materials
prices continue to decline, with paper prices down 7% and scrap
metal down 5% for the first nine months. These falls have
accelerated in 4Q, especially the latter on weak Asian demand,
affecting sorting and recycling earnings.  Fitch believes that
these price pressures reinforce the need for further cost

Shift in Business Model and Risks

With revenues outside Europe increasing in 1H14 to 38.0% from
35.1% in 1H13, Veolia's business is becoming increasingly global,
not least with the acquisition of Proactiva (Latam), exit from
Dalkia France and acquisition of the rest of Dalkia International
(both energy services).  In 1H14, 40% of contract wins came from
key strategic growth areas (eg oil & gas) and 60% from
traditional business.  The focus on high growth, less developed
markets may increase political and currency risk, especially in
emerging markets.  At the same time, 60% of contract wins in 1H14
came from industrial customers and 40% from municipal.  Given
that industrial customers generally outsource financing, there is
greater counterparty risk compared with Veolia's traditional
municipal customer base.  With some cities in France insourcing
direct management of drinking water (eg Montpellier), Fitch
expects the business model to continue to shift.  This process
coincides with a recovery from very low levels of capex,
bottoming out in 2013 at just over EUR1.2 bn.

Non-recurring Items Reduce Visibility

Veolia reported non-recurring items of EUR358 million in 2013,
mainly reflecting asset impairment at Sulo (waste in Germany) and
restructuring charges in water in France.  Non-recurring items
have occurred regularly as industry conditions started to
deteriorate in 2008.  As SE reported a small asset impairment
charge in 1H14, covering intangible assets in water and tangible
assets in Waste Europe, plus a restructuring charge, there is a
possibility of further asset impairment and restructuring charges
at Veolia for FY2014.  There will also likely be a purchase price
adjustment charge on the acquisition of the minorities of Dalkia
International negatively affecting EBIT, although this is not in
Fitch's rating case.  Although some of these items are non-cash,
non-recurring, they substantially reduce earnings visibility.
Veolia's shift from a divisional to a geographical reporting
structure in July 2013 also lowers earnings visibility.

Asset Sales Ending Except for Transdev

Veolia has sold an estimated EUR470 million of assets this year,
but the asset sale program has practically ended and management
has confirmed that the deleveraging process is virtually
complete. Veolia is still looking to exit the transport business
and may ultimately recover EUR1.1 billion from Transdev in the
form of intercompany loans and equity.  However, SNCM has gone
into receivership, with a likely long lead time before Veolia can
renew negotiations with shareholder CdC with a view to reducing
its holding in Transdev (the transfer of SNCM to Transdev was a
precondition for the sale of its 50% of Transdev to CdC).  In
view of the uncertainty, Fitch has made no allowance for the sale
of Transdev in the rating case.  Veolia reclassified Transdev as
a joint venture, consolidated at equity in 2013.  Fitch continues
to deconsolidate Transdev from the rating case.  For three years
up to 2012, it was accounted for as an asset classified for
sale/discontinued activity.

Bond Buybacks Improve Interest Cover

Veolia took a non-recurring charge of EUR73 million in 2013 to
cover the cost of EUR1,045m bond buybacks, nearly 8% of gross
debt, covering a range of maturities between 2014 and 2022.  This
partly explains lower interest costs in 2014.  With a further
non-recurring charge in 1H14, our understanding is that further
smaller bond buybacks are continuing this year.  Although the
figures are not fully comparable, expected FFO interest cover
over the rating horizon has improved to 4.3x from an average


As at June 30, 2014, Veolia had group net liquidity of EUR4.1
billion. This includes cash and cash equivalents of EUR2.3
billion at Veolia Environnement S.A. and EUR0.6 billion at Veolia
subsidiaries.  The gross liquidity position of EUR7.2 billion
includes undrawn committed bank facilities of EUR4.4 billion.
Debt is 82% fixed rate and 44% euro-denominated.  Fitch believes
that Veolia has adequate liquidity to meet debt maturities and
operating requirements until 2017.  FCF at 1H14 was negative
EUR121m pre-disposals and movements in working capital, with the
latter expected to reverse by year end.


Future developments that could lead to positive rating action

   -- Additional cost cutting, cyclical recovery and the sale of

   -- FFO net adjusted leverage falling below 4.7x, improvement
      in FFO fixed charge cover ratio towards 3.0x and positive
      FCF, on a sustained basis.

Future developments that could lead to negative rating action

   -- Operational underperformance and/ or a more aggressive debt
      funded acquisition strategy.

   -- FFO net adjusted leverage above 5.5x, a fall in FFO fixed
      charge cover ratio towards 2.0x and negative FCF, on a
      sustained basis.


AAREAL BANK: Fitch Rates Additional Tier 1 Securities 'B+(EXP)'
Fitch Ratings has assigned Aareal Bank AG's proposed issue of
EUR300 million undated non-cumulative fixed-to-reset rate
additional Tier 1 (AT1) securities an expected rating of
'B+(EXP)'. The bank's other ratings are unaffected.

The final rating of the AT1 securities is contingent on the
receipt of final documentation conforming to information already

Key Rating Drivers

The proposed notes are AT1 instruments with fully discretionary
coupon payments and are subject to a write-down if Aareal's Basel
III common equity tier 1 (CET1) ratio breaches a 7% trigger. The
trigger ratio is calculated on a 'phased-in' consolidated IFRS
basis under the EU capital requirement regulations (CRR).

The notes are rated five notches below Aareal's 'bbb' Viability
Rating (VR), in accordance with Fitch's criteria for "Assessing
and Rating Bank Subordinated and Hybrid Securities". The notes
are notched down twice for loss severity to reflect the write-
down on breach of the trigger, and three times for non-
performance risk relative to that captured in the VR.

The notching for relative non-performance risk reflects the
notes' fully discretionary coupons, which Fitch considers the
most easily activated form of loss absorption. In addition,
Aareal will not make an interest payment if the payment, together
with payments made on other Tier 1 instruments, exceeds available
distributable items (ADI) adjusted for interest expense on Tier 1
instruments, or if the authorities or legislation prohibit the
bank from making payments.

The ADI are calculated on an unconsolidated German GAAP basis for
the group's parent, Aareal Bank AG. The ADI include net income
after movements to and from capital reserves (balance sheet
profit), free capital reserves and retained earnings. Under the
German commercial code, certain amounts related to intangible
assets, deferred tax assets and pension assets cannot be
distributed, reducing the available distributable items.

German accounting standards allow Aareal to influence the amount
of ADI. Taking into account the bank's substantial discretionary
reserves pursuant to section 340 of the German Commercial Code,
the amount available for distribution to AT1 holders
significantly exceeds the ADI of about EUR660 million at end-2013
as indicated in the notes' documentation. Fitch believes that
Aareal would use the flexibility offered by these discretionary
reserves to manage its unconsolidated German GAAP balance sheet
profit and ensure that sufficient amounts are available to make
interest payments on the AT1 instruments.

The 7% trigger is on a phased-in basis, but even on a fully
applied basis Aareal has a sizeable buffer above this trigger.
The bank's fully applied Basel III CET1 ratio excluding the
EUR300 million grandfathered silent participations repaid to
SoFFin on October 30, 2014 stood at 12% at end-3Q14, providing a
buffer of over EUR800 million above the 7% trigger point. This
buffer also slightly exceeds the 10.75% fully-applied CET1 ratio
plus management buffer set as a medium-term target by Aareal's
management in a base case scenario.

However, we believe that loss absorption could occur before a
breach of the 7% trigger in the form of non-payment of coupon,
which under Fitch's criteria would be considered as non-
performance. We expect Aareal to be subject to capital
regulations' restrictions on distributions, including
distributions on AT1 instruments, if and when it breaches its
combined buffer requirements.

Aareal's solid outcome in the European Central Bank's (ECB)
Comprehensive Assessment and stress test published in October
2014 supports our view that the bank's capitalization can
adequately withstand cyclical shocks inherent to its monoline,
wholesale business model. Its fully-applied CET1 ratio in the
ECB's adverse stress scenario is, at 11.4%, the fifth-highest of
the 16 rated German banks in the stress test. This supports our
expectation that Aareal will maintain a sufficient buffer to
avoid restrictions on interest payments on its AT1 instruments.

Fitch has assigned 100% equity credit to the securities. This
reflects their full coupon flexibility, their ability to be
written down well before the bank would become non-viable, their
permanent nature and subordination to all senior creditors. The
equity credit also factors in Aareal's sole discretion to
activate the notes' write-up mechanism, or the bank's option to
call the notes from 2020, subject to the supervisory authority's

Rating Sensitivities

The rating of the notes is primarily sensitive to any changes to
Aareal's VR, from which they are notched down. Aareal's 'bbb' VR
notably reflects -- and is therefore sensitive to -- the bank's
solid earnings and slight capitalization benefits arising from
its acquisition at end-1Q14 of COREALCREDIT (BBB/Stable/F2). The
benefits from the acquisition already reflected in 1Q14 include a
EUR150m one-off gain stemming from negative goodwill and Aareal's
improved impaired loan ratio, following COREALCREDIT's divestment
of a material share of its impaired legacy loan portfolio. The VR
also takes into account residual execution risk from the

The notes' rating is also sensitive to any changes in notching,
if Fitch changes its assessment of the notes' non-performance
risk relative to that captured in Aareal's VR. This may reflect a
change in capital management or flexibility or an unexpected
shift in regulatory buffers, for example.

PHOENIX PHARMAHANDEL: Fitch Affirms 'BB' IDR; Outlook Stable
Fitch Ratings has affirmed Germany-based pharmaceuticals
wholesaler Phoenix Pharmahandel GmbH & Co. KG's Long-term Issuer
Default Rating (IDR) at 'BB'.  The Outlook on the IDR is Stable.
It has also affirmed the instrument ratings on the bonds issued
by Dutch finance company Phoenix PIB Dutch Finance B.V. at 'BB'.

The affirmation recognizes Phoenix's size and market position as
a leading pan-European player in the oligopolistic pharmaceutical
wholesale and distribution market (W&D), complemented by leading
retail networks in selected European jurisdictions.  The ratings
also recognize that Phoenix's financial metrics are currently
stretched following competitive pressures resulting in loss of
market share and profitability in its domestic German market as a
result of regulatory changes in 2011.  Phoenix is gradually
repairing these.  As a result, the 'BB' rating assumes stretched
financial metrics in the short term and the Stable Outlook is
predicated upon an improvement in Phoenix's debt protection
measures over the rating horizon.


Addressing Sector Pressures

Like its wholesale sector peers and despite operating in an
oligopolistic industry, Phoenix is subject to structurally
limited profitability compared with pharmaceuticals
manufacturers, reflecting intense competitive and regulatory
pressures.  Given the limited contribution to the pharmaceutical
industry's value chain (around 4% of the total final price of
pharma products relates to W&D), Fitch sees limited scope for
margin expansion in the W&D industry.

Phoenix's profitability in its German home market has been under
significant pressure following intense and unsustainable price
competition triggered by regulatory changes in 2011.  These
resulted in Phoenix losing market share.  In FY14, Phoenix
focused on regaining its market share to 28% and it now aims to
gradually improve profitability in the country.

Elevated Leverage Removes Flexibility

The recent difficult trading environment in Germany coupled with
working capital investments aimed at regaining competitiveness
has translated into elevated leverage, leading Fitch to forecast
funds from operations (FFO) adjusted net leverage peaking at 4.8x
in FY15 (FY14: 4.3x) and removing any headroom under the 'BB'
rating. Fitch applied a EUR125m adjustment for restricted cash
and intra-year working capital swings as per its criteria.   The
ratios also include leases and working capital facilities in the
form of factoring and ABS.

Stable Outlook

The Stable Outlook assumes that the improvement in profitability
that Phoenix experienced in 2Q15 should continue.  As a result
Fitch expects the German business to be profitable in FY15.
Phoenix has won back the market share it lost in 2012 and Fitch
expects profitability will gradually improve.  As a result, FFO-
adjusted net leverage should return to 4.5x by FY16, a level more
commensurate with the 'BB' rating and in line with management's
commitment towards improving the financial profile.

Downside Risks

Failure to see a continued improvement in profitability in its
home market and continued weak free cash flow (FCF) generation
would put prolonged pressure on the credit metrics and ratings.
Fitch will particularly focus on monitoring working capital
levels over the projected horizon as a key sensitivity to FCF
generation and assess terms of trade achieved by Phoenix with
both suppliers and retailers.

Phoenix Forward Programme

The Phoenix forward program -- the company's cost rationalization
program -- should also support EBITDAR margins over the next
three years.  Phoenix estimates that the program will provide
sustainable savings of at least EUR100m per annum from FY16.
However, Fitch expects the company to reinvest some of these cost
savings to maintain competitive pricing.  Therefore, the rating
agency assumes only a modest increase of EBITDAR margin post FY16
to around 3.0% (this is also dependent on the wider pricing
environment).  This is reflected in the Stable Outlook.

Integrated Wholesale Pharmaceuticals Leader

Phoenix is one of the largest European players in the
pharmaceuticals wholesale market.  The rating reflects its
geographical diversification, which helps strengthen its market
position with pharmaceutical manufacturers and makes it fairly
resilient to healthcare policy changes.  Phoenix's leading
position in the European wholesale market is complemented by
retail and supplier service activities.  Phoenix owns pharmacies
in most countries it operates in and where multiple pharmacy
ownership is possible, such as the UK.  Integrating supplier
services and retail activities has enabled Phoenix to achieve
synergies and to fully capture the available margin between
pharmaceutical manufacturers and end-customers.

Challenged Sector

However, the pharmaceutical wholesale sector is subject to
comprehensive regulation, affecting major aspects of the
underlying business model, especially the distribution chain,
reimbursement and pricing levels, including margin structures of
pharmaceutical distribution and related services.  Regulatory
intervention recognizes pharmaceutical distribution as a key
healthcare cost in national systems.


Instrument Rating Mirrors IDR

Fitch rates Phoenix's bonds and bank debt (which both rank pari
passu) at the same level as the IDR, reflecting only limited
subordination from the group's prior ranking on-balance sheet ABS
and factoring lines and Italian credit lines representing around
EUR465m at end-FY14.  Accordingly prior ranking debt compared to
EBITDA in FY14 was 1.1x (increasing from 0.8x compared to prior
year given the reduction of profitability of the group) and the
agency expects this to remain around 1.5x, which is comfortably
below the 2.0x-2.5x threshold that Fitch typically applies in its
recovery analysis to assess subordination issues for unsecured
bond holders.  In addition, subordination is also mitigated by
the upstream guarantee network capturing a minimum 70% of
turnover and EBITDA.

Adequate and Improving Liquidity

The group has a diversified financial structure and maturity
profile and has adequate liquidity following the successful bond
issue in 2013 and 2014 raising EUR600 million in total and the
extension of the EUR1,050 million RCF to 2019 from 2017.  At end-
1HFY15 Phoenix had headroom of around EUR1.5 billion under its
committed facilities and a cash position of EUR85 million.  These
were more than enough to cover its short-term financial
liabilities of EUR1,249 million (including a EUR506 million bond
which was repaid in July 2014).


Negative: Future developments that individually and collectively
could lead to a negative rating action include:

   -- Net (lease, factoring and ABS) adjusted FFO adjusted net
      leverage above 4.5x on a sustained basis (FY14: 4.4x).

   -- FFO fixed charge coverage below 2.2x (FY14: 2.4x).

   -- FCF/EBITDAR falling below 25% on a sustained basis (FY14:

   -- Continued and/or increasing competitive pressures in key
      geographies slowing or eroding expected profitability

Positive: Future developments that individually and collectively
could lead to a positive rating action include:

   -- Stabilization of operating performance and conservative
      financial policy driving FFO-adjusted net leverage to below

   -- FFO fixed charge coverage above 3x.

   -- FCF/EBITDAR sustainably above 40%.

   -- Slowing competitive pressure in Phoenix's major markets and
      sustainable recovery of the group-wide profitability.

SCHRADER GLASFORMENBAU: Administrators Seek Investors
----------------------------------------------------- reports that Schrader Glasformenbau is currently
undergoing a process of corporate restructuring embedded in
formal insolvency proceedings due to structural reasons.

According to the report, the aim of the insolvency administrator
is to restructure Schrader both organisationally and financially
in order to ensure a sustainable business continuation after

A process of adapting the workforce to future market demands has
already been completed, the report relates.

In order to guarantee the best possible restart for Schrader, the
insolvency administrator is searching for a strategic investor as
the new shareholder of the company, reports.

The investor process is conducted by the distressed-M&A
specialist, Mentor AG, the report notes.

Germany-based Schrader Glasformenbau is a manufacturer of glass
moulds for the container glass industry, and in recent years, the
turnover volume has ranged between EUR12 million and EUR15


PANSHIRE: Two Directors Liable for EUR7MM, Liquidator Claims
Tim Healy at Irish Independent reports that Aidan Garcia -- -- liquidator of Panshire, has
claimed two directors of the building company are personally
liable for EUR7 million from the sale of flats allegedly misused
to discharge personal debts to Danske Bank.

According to Irish Independent, Mr. Garcia also alleges that
Danske Bank "manipulated" the finances of Panshire to its own
advantage and to the disadvantage of the Revenue, owed EUR2.2
million in unpaid VAT, and other trade creditors owed EUR1.2

The liquidator claims that while the directors, Mark Kilkenny and
Patrick Rooney, had agreed to give the bank a charge over
apartment sale proceeds as security for loans, neither director
held any security or charge over Panshire and the bank should not
have got any of the funds to which the company was entitled under
building agreements, Irish Independent relates.

Gary McCarthy, a barrister acting for Mr. Garcia, applied on
Nov. 17 to have the proceedings against Mr. Kilkenny, Mr. Rooney
and Panshire and Danske Bank fast-tracked in the Commercial
Court, Irish Independent relays.  Both men were in court and
neither opposed transfer, Irish Independent notes.

James Doherty, a barrister for the bank, argued there was no
cause of action against it and objected to the case being fast-
tracked in on grounds of alleged delay by Mr. Garcia, Irish
Independent discloses.  Mr. Justice McGovern, as cited by Irish
Independent, said he would exercise his discretion to admit the
matter to the court list.

In an affidavit, Mr. Garcia of Copsey Murray Chartered
Accountants, said he was appointed liquidator of Panshire in
August 2011, replacing another liquidator appointed when the
company was put into voluntary liquidation in March 2010, Irish
Independent relays.

Panshire was incorporated in April 2004 to build Clearstream
Court, an apartment complex at McKee Avenue.

TABERNA EUROPE: Fitch Affirms 'Csf' Ratings on 4 Note Classes
Fitch Ratings has affirmed the ratings on all classes of notes
from two European collateralized debt obligations (CDOs) as:

Taberna Europe CDO I P.L.C. (Taberna Europe I)

   -- EUR263,003,220 class A1 notes at 'Bsf'; Outlook revised to
      Stable from Negative;
   -- EUR90,500,000 class A2 notes at 'CCsf';
   -- EUR50,458,989 class B notes at 'Csf';
   -- EUR31,908,129 class C notes at 'Csf';
   -- EUR35,096,098 class D notes at 'Csf';
   -- EUR25,436,946 class E notes at 'Csf'.

Taberna Europe CDO II P.L.C. (Taberna Europe II)

   -- EUR404,389,005 class A1 notes at 'CCCsf';
   -- EUR95,000,000 class A2 notes at 'CCsf'.


The affirmations for the notes at their current ratings reflect
no major changes in the portfolio since last review.  In Taberna
Europe I, the credit quality of the collateral has remained
relatively stable since last review.  In this transaction, 16% of
the portfolio upgraded versus 13% downgraded.  However, the
magnitude of downgrades was slightly higher than the upgrades.
In this portfolio, 45% of total notional value of EUR503 million
as of the Nov. 2014 trustee report is publicly rated, 24% is
assigned credit opinions and the remainder of the portfolio is
defaulted. At this review, 33.5% of the portfolio is rated or
carries a credit opinion-equivalent of investment grade versus
32.9% at last review.

In Taberna Europe II, the percentages of upgrades and downgrades
were comparable to Taberna Europe I, however, the magnitude of
downgrades was slightly higher than Taberna Europe I resulting in
slight deterioration of the credit quality.  In this transaction,
44% of the current portfolio notional value of EUR676 million as
of the Nov. 2014 trustee report is publicly rated, 33% is
assigned credit opinions and remainder of the portfolio is
defaulted.  At this review, 34.3% of the portfolio is rated or
carries a credit opinion-equivalent of investment grade same as
last review.

The paydown in Taberna Europe I was significantly higher than
Taberna Europe II.  The senior note in Taberna Europe I benefited
from capital structure deleveraging, receiving EUR28.2 million in
principal amortization over the last year.  The improved credit
enhancements were partially offset by the adverse selection as
88.8% of portfolio amortization came from underlying assets with
investment grade ratings.  In Taberna Europe I, the class A1 note
received only EUR0.3 million from partial collateral redemption.

The percentages of distressed assets that are currently not
paying interest are 21% and 19%, in Taberna Europe I and Taberna
Europe II, respectively.  The high percentage of non-performing
assets combined with sizeable out-of-the money interest rate
swaps, and a fixed schedule of substantial structuring and
placement fees continue to contribute to the high risk of
interest shortfall in both transactions.  The structuring fee,
due and deferred collateral management fee in the interest
waterfall are paid senior to the interest due on the non-
deferrable classes.

While class A-1 notes continue to face a risk of an interest
shortfall, the analysis considered past history of full or
partial structuring fee waivers and deferrals of management fees.
The decision to waive or defer these fees is made separately for
each payment period; therefore, no certainty exists that this
will continue in the future.  However, in Taberna Europe I, the
structuring fee will no longer be due after May 2015.  In
addition, interest rate swap notional will continue to step down.
Combined with the paydowns received by the class A-1 since last
review, these mitigating factors support a revision in the
Outlook to Stable from Negative.  Fitch does not assign outlooks
to notes rated below 'Bsf'; however, the current ratings on the
non-deferrable classes in both transactions appropriately reflect
the risk.

The portfolios in both transactions are comprised primarily of
senior unsecured, subordinate debt, and Trust Preferred
Securities (TruPS) issued by Real Estate Investment Trusts
(REITs), and make up 66% of the portfolio in Taberna Europe I and
47% in Taberna Europe II.  The remaining exposure consists of
securities issued by financial companies, commercial mortgage
backed securities, and commercial real estate debt.

This review was conducted under the analytical framework
described in the reports 'Global Rating Criteria for Structured
Finance CDOs', and 'Global Rating Criteria for Corporate CDOs'.
The transactions were analyzed within the framework of Fitch
Portfolio Credit Model (PCM), and for each transaction, the PCM
rating loss rates for various rating stresses were compared to
the notes' credit enhancement levels.  The transactions were not
analyzed within a cash flow model framework, as the impact of
structural features and excess spread was determined to be
minimal in the context of these CDO ratings.  Fitch also
considered additional qualitative factors in its analysis to
conclude the rating actions for the rated notes.


The non-deferrable classes in each of these two transactions
could experience interest shortfalls and be downgraded to 'Dsf'.


SESTANTE FINANCE 3: S&P Cuts Ratings on 2 Note Classes to 'CCC+'
Standard & Poor's Ratings Services took various credit rating
actions in Sestante Finance S.r.l.'s series 3.

Specifically, S&P has:

   -- Affirmed its 'A (sf)' rating on the class A notes;

   -- Lowered and removed from CreditWatch negative its rating on
      the class B notes; and

   -- Lowered its ratings on the class C1 and C2 notes.

On March 13, 2014, S&P placed its 'BBB- (sf)' rating on Sestante
Finance's series 3 class B notes on CreditWatch negative
following the transaction's weak performance and decreasing
credit enhancement.

Upon publishing S&P's updated criteria for Italian residential
mortgage-backed securities (RMBS criteria) and its 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" (UCO).

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

The rating actions follow S&P's credit and cash flow analysis of
the most recent transaction information that S&P has received as
of the Oct. 2014 payment date.  S&P's analysis reflects the
application of its RMBS criteria and its RAS criteria.

Under S&P's RAS criteria, it applied a hypothetical sovereign
default stress test to determine whether a tranche has sufficient
credit and structural support to withstand a sovereign default
and so repay timely interest and principal by legal final

S&P's RAS criteria designate the country risk sensitivity for
RMBS as 'moderate'.  Under S&P's RAS criteria, this transaction's
notes can therefore be rated four notches above the sovereign
rating, if they have sufficient credit enhancement to pass a
minimum of a "severe" stress.  However, as not all of the
conditions in paragraph 48 of the RAS criteria are met, S&P
cannot assign any additional notches of uplift to the ratings in
this transaction.

As S&P's long-term unsolicited rating on the Republic of Italy is
'BBB', its RAS criteria cap at 'A+ (sf)' the maximum potential
rating in this transaction for all classes of notes.

Credit enhancement, considering performing collateral only, has
decreased for all classes of notes in the transaction since S&P's
previous review.

Sestante Finance series 3

  Class           Available Credit
                  Enhancement (%)
  A                     15.76
  B                      0.42
  C1                    (6.54)
  C2                    (6.54)

This transaction features a reserve fund, which was fully drawn
in May 2009 and has not been replenished since.

Severe delinquencies of more than 90 days at 5.93% are on average
higher for this transaction than S&P's Italian RMBS index.
Defaults are defined as mortgage loans in arrears for more than
12 months in this transaction.  Cumulative defaults, at 9.62%,
are also higher than in other Italian RMBS transactions that S&P
rates.  Prepayment levels remain low and the transaction is
unlikely to pay down significantly in the near term, in S&P's

After applying S&P's RMBS criteria to this transaction, its
credit analysis results show an increase in the weighted-average
foreclosure frequency (WAFF) and an increase in the weighted-
average loss severity (WALS) for each rating level.

  Rating level    WAFF (%)    WALS (%)
  AAA                22.47       22.38
  AA                 18.07       18.41
  A                  13.06       11.19
  BBB                10.77        7.78
  BB                  8.27        5.67
  B                   5.60        3.96

The increase in the WAFF is mainly due to the higher adjustment
that S&P applies to the broker-originated loans (the entire pool
is originated through brokers) and increasing arrears in the
pool. The increase in the WALS is mainly due to the application
of S&P's revised market value decline assumptions.  The overall
effect is an increase in the required credit coverage for each
rating level.

Following the application of S&P's RAS criteria and its RMBS
criteria, S&P has determined that its assigned rating on each
class of notes in this transaction should be the lower of (i) the
rating as capped by S&P's RAS criteria and (ii) the rating that
the class of notes can attain under S&P's RMBS criteria.  S&P's
ratings in this transaction are not constrained by the rating on
the sovereign, but by the application of its RMBS criteria.

Taking into account the results of S&P's updated credit and cash
flow analysis and the application of its RAS criteria, S&P
considers that the available credit enhancement for the class A
notes is commensurate with the currently assigned rating.  S&P
has therefore affirmed its 'A (sf)' rating on this class of
notes.  S&P's affirmation also reflects the fact that the class A
notes can now withstand the stresses that S&P applies at a 'A'
rating level without giving benefit to the swap provider.
Therefore, in S&P's analysis, it did not give benefit to the swap
provider (Commerzbank AG) and S&P removed it from the supporting
parties for the class A notes.

"In our cash flow analysis and considering the deterioration in
the performance, the class B notes can no longer withstand a
commingling stress equal to one month's collection of interest
and principal (including a certain amount of assumed
prepayments).  We have applied this stress as the Italian
collection bank account provider, Banca popolare dell'Emilia
Romagna S.C., has not taken remedy actions within the documented
period following our downgrade of Banca popolare dell'Emilia
Romagna, as outlined in our March 2013 review of the transaction.
Therefore, we have lowered to 'BB (sf)' from 'BBB- (sf)' and
removed from CreditWatch negative our rating on the class B
notes, in line with the current rating on Banca popolare
dell'Emilia Romagna as the collection bank account provider.  Our
rating on the class B notes is now weak-linked to our long-term
issuer credit rating on Banca popolare dell'Emilia Romagna.
Therefore, any change to our rating on the collection bank
account provider could result in an equivalent change to our
rating on the transaction's class B notes," S&P said.

"Interest payments on the class B, C1, and C2 notes can be
deferred if the cumulative gross default ratio rises above
certain documented levels.  The interest deferral triggers are
set at 16% for the class B notes and at 12% for the class C1 and
C2 notes. The cumulative gross default ratio was 9.62% on the
Oct. 2014 interest payment date.  According to our analysis, the
class C1 and C2 notes' creditworthiness is now commensurate with
a 'CCC+ (sf)' rating level, given that we believe the cumulative
default ratio is likely to exceed the trigger in the near term.
We have therefore lowered to 'CCC+ (sf)' from 'B (sf)' and 'B-
(sf)' our ratings on the class C1 and C2 notes, respectively,"
S&P added.

"In our opinion, the outlook for the Italian residential mortgage
and real estate market is not benign and we have therefore
increased our expected 'B' foreclosure frequency assumption to
2.55% from 1.50%, when we apply our RMBS criteria, to reflect
this view.  We base these assumptions on our expectation of
modest economic growth, continuing high unemployment, and
sluggish house price appreciation for the remainder of 2014 and
2015," S&P noted.

On the back of the weak macroeconomic conditions, S&P don't
expect the performance of the transactions in its Italian RMBS
index to significantly improve in 2014.

S&P expects severe arrears in the portfolio to remain at their
current levels, as there are a number of downside risks.  These
include weak economic growth, high unemployment, and fiscal
tightening.  On the positive side, S&P expects interest rates to
remain low for the foreseeable future.

Sestante Finance series 3 is an Italian RMBS transaction, which
closed in Dec. 2005.  It is backed by a pool of residential
mortgage loans originated by Meliorbanca SpA.


Class       Rating            Rating
            To                From

Sestante Finance S.r.l.
EUR899.51 Million Asset-Backed Floating-Rate Notes Series 3

Rating Affirmed

A           A (sf)

Rating Lowered and Removed From CreditWatch Negative

B           BB (sf)           BBB- (sf) CW NEG

Ratings Lowered

C1          CCC+ (sf)         B (sf)
C2          CCC+ (sf)         B- (sf)


KOMPETENZ JSC: Fitch Affirms 'B' IFS Rating; Outlook Stable
Fitch Ratings has revised Kazakhstan-based Kompetenz Joint Stock
Company's Outlooks to Stable from Negative and affirmed its
Insurer Financial Strength (IFS) rating at 'B' and National IFS
rating at 'BB(kaz)'.

Key Rating Drivers

The revision of the Outlooks reflects a moderate narrowing of
Kompetenz's net losses, a slowdown in adverse reserve development
for workers' compensation and renewed business growth.  The
ratings continue to reflect the insurer's fairly strong capital
position, and its more conservative investment strategy than
local peers.  However, these positive rating drivers are offset
by the company's limited financial flexibility and a business
strategy that Fitch believes is challenging to execute.

Kompetenz managed to achieve a moderate improvement in its
operating performance with a smaller net loss of KZT86 million
for 9M14, compared with a KZT174 million net loss in 9M13 (2013:
net loss of KZT186 million).  This improvement was mainly driven
by a stronger investment result and, to a lesser extent, by a
smaller underwriting loss.  The latter was due to a slowdown in
loss reserves development for workers' compensation, changes in
the regulatory reserving methodology and a significant volume of
subrogation income.

Continuing adverse loss reserve development for the workers'
compensation (WC) line has been the key reason behind Kompetenz's
poor underwriting results since 2012, when it, as with other
local non-life insurers, discontinued the line due to regulatory
changes.  The existing WC liabilities are being managed on a run-
off basis.  The long-tail nature of WC risks and a significant
increase in claims frequency had affected most underwriters in
the country over the last three years.  The line contributed 55pp
to Kompetenz's combined ratio of 165% in 2013 and 35pp to its
135% combined ratio in 9M14.

A small positive underwriting result on Kompetenz's non-WC
business and significant investment income were not enough to
offset the WC loss in 2013.  In 9M14, Kompetenz's investment
income improved while its non-WC portfolio's performance
worsened.  As part of its growth strategy, Kompetenz increased
the share of retail lines, which are associated with larger loss
ratios than commercial lines.  In particular, the share of
compulsory motor third-party liability insurance in the insurer's
net written premiums (NWP) grew to 52% in 9M14 from 16% in 9M13.
In addition, the insurer continues to be affected by its large
cost base relative to NWP.

Fitch continues to see the operating environment as a difficult
one in which to execute Kompetenz's growth strategy.  This is
because the company has neither an affiliation with a large local
industrial group nor exclusive access to bancassurance
distribution channels, both being common business models for
insurers in Kazakhstan.

Fitch views Kompetenz's risk-adjusted capital position as fairly
strong for the ratings.  This is mainly explained by the low
volumes of net premiums, relative to its equity.  Kompetenz's
risk-adjusted capitalization also benefits from the credit
quality of its fixed-income investment portfolio, which is better
than that of its local peers.  At the same time, Fitch also
believes that Kompetenz's financial flexibility is limited, as it
is the main operating company of an individual shareholder.  In
addition, Kompetenz's regulatory solvency margin has experienced
some volatility from month to month due to large single
contracts, although the company has remained compliant so far in
2014 (end-9M14: 119%).


The ratings could be downgraded if Kompetenz's risk-adjusted
capital strength is significantly eroded by the continuing losses
or rapid growth of net business volumes.  The ratings could also
be downgraded if the insurer's statutory solvency margin falls
below 100% for a sustained period.

An upgrade could be triggered by a sustained improvement in the
net result to positive levels and diversified premium growth,
although Fitch views this as unlikely in the near term.


POBJEDA: Media Nea Inks Deal to Buy Business for EUR757,000
SeeNews reports that Montenegrin newspaper publisher Media Nea
signed a contract to acquire Pobjeda, the bankrupt publisher of a
local daily of the same name for EUR757,000 (US$946,000).

According to SeeNews, Pobjeda, quoting the court-appointed
administrator Mladen Markovic, said on the sale contract, which
was signed on Nov. 17, envisages that Media Nea become the owner
of Pobjeda on the day it pays the agreed price, which will happen
on Dec. 1.

Mr. Markovic added that Media Nea has pledged to keep part of
Pobjeda's 197 employees, SeeNews notes.

Pobjeda was declared bankrupt on Aug. 11, SeeNews recounts.  The
court in Podgorica has confirmed EUR10.35 million in claims,
including EUR7.6 million in claims filed by the country's finance
ministry, SeeNews relates.


DUCHESS V CLO: Moody's Raises Rating on Class D Notes to 'Ba1'
Moody's Investors Service has taken a variety of rating action on
the notes issued by Duchess V CLO B.V.:

EUR290 million (currently outstanding EUR 24.4M) Class A-1 First
Priority Senior Secured Floating Rate Notes due 2021, Affirmed
Aaa (sf); previously on Feb 17, 2014 Affirmed Aaa (sf)

EUR35.25 million Class B Second Priority Deferrable Secured
Floating Rate Notes due 2021, Affirmed Aaa (sf); previously on
Feb 17, 2014 Upgraded to Aaa (sf)

EUR29.5 million Class C Third Priority Deferrable Secured
Floating Rate Notes due 2021, Upgraded to Aa2 (sf); previously
on Feb 17, 2014 Upgraded to A2 (sf)

EUR31.5 million Class D Fourth Priority Deferrable Secured
Floating Rate Notes due 2021, Upgraded to Ba1 (sf); previously
on Feb 17, 2014 Affirmed Ba2 (sf)

EUR7 million Class O Combination Notes due 2021, Upgraded to Aa2
(sf); previously on Feb 17, 2014 Upgraded to Aa3 (sf)

EUR4 million Class W Combination Notes due 2021, Upgraded to Aa2
(sf); previously on Feb 17, 2014 Upgraded to Aa3 (sf)

Duchess V CLO B.V., issued in December 2005, is a collateralized
loan obligation (CLO) backed by a portfolio of mostly high-yield
senior secured European loans. The portfolio is managed by Babson
Capital Europe Limited. The transaction's reinvestment period
ended in February 2011.

Ratings Rationale

According to Moody's, the rating actions taken on the notes
result the improvement in credit metrics of the underlying
portfolio and the deleveraging since last rating action in
February 2014.

The credit quality has improved as reflected in the improvement
in the average credit rating of the portfolio (measured by the
weighted average rating factor, or WARF) and a decrease in the
proportion of securities from issuers with ratings of Caa1 or
lower. As of the trustee's September 2014 report, the WARF was
3,029, compared with 3,113 in December 2013. Securities with
ratings of Caa1 or lower currently make up approximately 10.2% of
the underlying portfolio, versus 17.5% in December 2013.

The Class A-1 notes has paid down by approximately EUR78.3
million (27.0% of closing balance) and in the last 3 payment
dates. In addition, over the same period the class E notes have
paid down approximately EUR0.8 million (6.1% of closing balance)
from remaining excess spread at the end of the waterfall . As a
result of the deleveraging, over-collateralization (OC) ratios
have increased. As of the trustee report dated 31 September 2014,
the Class A-1, Class B, Class C and Class D OC ratios are
reported at 570.7%, 233.5%, 156.2%, and 115.5%, respectively,
versus December 2013 levels of 208.9%, 155.5%, 128.1%, and
107.1%, respectively.

The ratings on the combination notes address the repayment of the
rated balance on or before the legal final maturity. For Classes
O and W Combination Notes, the 'rated balance' at any time is
equal to the principal amount of the combination note on the
issue date times a rated coupon of 0.25% per annum accrued on the
rated balance on the preceding payment date, minus the sum of all
payments made from the issue date to such date, of either
interest or principal. The rated balance will not necessarily
correspond to the outstanding notional amount reported by the

The key model inputs Moody's uses in its analysis, such as par,
weighted average rating factor, diversity score and the weighted
average recovery rate, are based on its published methodology and
could differ from the trustee's reported numbers. In its base
case, Moody's analyzed the underlying collateral pool as having a
performing par of EUR83.0 million and GBP22.8 million, and
principal proceeds balance of EUR10.8 million and GBP3.8 million,
defaulted par of EUR24.0 million, a weighted average default
probability of 23.5% over 3.9 weighted average life (consistent
with a WARF of 3461), a weighted average recovery rate upon
default of 48.8% for a Aaa liability target rating, a diversity
score of 16 and a weighted average spread of 3.77%. The GBP-
denominated assets are fully hedged with a macro swap, which
Moody's also modelled.

The default probability derives from the credit quality of the
collateral pool and Moody's expectation of the remaining life of
the collateral pool. The estimated average recovery rate on
future defaults is based primarily on the seniority of the assets
in the collateral pool. For a Aaa liability target rating,
Moody's assumed a recovery of 50% of the 96.3% of the portfolio
exposed to first-lien senior secured corporate assets upon
default and of 15% of the remaining non-first-lien loan corporate
assets upon default. In each case, historical and market
performance and a collateral manager's latitude to trade
collateral are also relevant factors. Moody's incorporates these
default and recovery characteristics of the collateral pool into
its cash flow model analysis, subjecting them to stresses as a
function of the target rating of each CLO liability it is

Moody's notes the October trustee report has recently been
issued. Key portfolio metrics such as OC ratios, WARF, diversity
score, defaults, and weighted average spread are materially
unchanged from September 2014 data.

Methodology Underlying the Rating Action:

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

Factors that Would Lead to an Upgrade or Downgrade of the Rating:

In addition to the base-case analysis, Moody's conducted
sensitivity analyses on the key parameters for the rated notes,
for which it assumed a lower weighted average recovery rate in
the portfolio. Moody's ran a model in which it reduced the
weighted average recovery rate by 5%; the model generated outputs
were within 1 notch of the base-case results.

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

Additional uncertainty about performance is due to the following:

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

   * Around 35% of the collateral pool consists of debt
obligations whose credit quality Moody's has assessed by using
credit estimates.

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

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


CIECH: S&P Raises Corporate Credit Rating to 'B+'; Outlook Stable
Standard & Poor's Ratings Services raised its long-term corporate
credit rating on Poland-based soda ash producer Ciech to 'B+'
from 'B'.  The outlook is stable.

At the same time, S&P raised its issue ratings on Ciech's
existing EUR245 million senior secured notes to 'B+' from 'B'.

The rating actions reflect S&P's view that Ciech will continue to
report strong results in 2015 and beyond, and that its
performance will benefit from favorable soda ash prices, capacity
expansions, and the increasing contribution from its crop
protection business, Organika Sarzyna.

S&P's upward assessment of Ciech's business risk profile to
"fair" from "weak" reflects Ciech's track record of increasing
EBITDA and margins, and S&P's view of its inherently stronger
business, following the disposals completed in 2013 and the
implementation of cost-saving measures.  These actions, combined
with favorable conditions in the soda ash industry and Ciech's
low cash cost position, led to a significant improvement in the
company's performance in 2014, which S&P anticipates will
continue in 2015 and beyond.  Under S&P's base-case scenario, it
forecasts Ciech's EBITDA of about Polish zloty (PLN) 470 million
in 2014 and PLN510 million in 2015, with stable margins of about
15% to 16%.

That said, the company's strategy remains focused on growing its
soda ash business and the Organika Sarzyna crop protection
business.  Key growth projects currently underway include soda
ash capacity expansions in Poland by 200 kilotons per annum
(ktpa) and in Romania by 60ktpa, optimizing the product portfolio
in the salt business, and investments into further establishing
Ciech's market share in the crop protection business in Poland.
In addition, Ciech's non-growth investments include environmental
projects in relation to Industrial Emissions Directive
compliance.  According to management, the capital expenditure
(capex) related to these projects will amount to approximately
PLN450 million over 2015 and 2016.

Further factors supporting our assessment of Ciech's business
risk profile include its leading market positions in the soda ash
market in Central and Eastern Europe, reflected in its 98% market
share in Poland and No. 2 position in Europe, after market-leader
Solvay S.A.  Ciech's close proximity to well-established group of
customers is another positive.  S&P also sees Ciech's soda ash
activities as less cyclical than the chemical industry as a
whole, because about 60% of its end-market demand comes from
glass applications.

Factors constraining our assessment of the business risk profile
include the company's high exposure to the cyclical packaging and
construction industries, which are Ciech's key end-markets; its
limited product diversity through its core soda ash production;
and its reliance on a small number of suppliers for key raw
materials such as brine and limestone.  However, S&P recognizes
that there is some backward integration, notably of the company's
Polish operations into steam production and electricity, and its
German operations into limestone and brine, and also into steam
and electricity.  S&P's assessment takes into account ongoing
competitive threats to Ciech's market position (despite its
landlocked location), in particular from new capacity additions
such as low-cost natural soda ash in Turkey, potentially by 2018.

S&P's assessment of Ciech's financial risk profile as
"aggressive" factors in the company's focus on growth and the
consequent high capital expenditure plans for 2015 and 2016.
These plans will lead to significant negative free operating cash
flow (FOCF) under our base-case scenario.  Consequently, S&P
forecasts that Ciech's adjusted debt to EBITDA will increase to
about 3.3x-3.5x at year-end 2015 from about 3x at year-end 2014.

The current rating incorporates S&P's view that Ciech will manage
its investments prudently, while maintaining adequate liquidity
and headroom under financial covenants.  For example, S&P
understands from management that about PLN180 million of the
planned capex is flexible and could be postponed or cut if
needed. In addition, while S&P do not assume shareholder support
from new owner KI Chemistry, S&P takes comfort from the presence
of the Supervisory Board, which oversees the company's operating
performance and liquidity.

S&P modifies Ciech's anchor of 'bb-' downward by one notch
because of S&P's negative comparative rating assessment on the
company.  S&P bases its assessment on Ciech's negative FOCF and
increasing leverage under S&P's base case.

Following S&P's discussion with the new owner KI Chemistry, it no
longer modify the anchor downward by one notch due to S&P's
negative financial policy assessment.  This reflects the greater
clarity S&P now has about KI Chemistry's strategy for Ciech and
its dividend and financial policies, which S&P views as rating

The stable outlook reflects S&P's view that Ciech will continue
to deliver strong operating results over the short to medium
term.  S&P anticipates that Ciech will benefit from favorable
soda ash prices and capacity expansions, as well as the
increasing contribution from its crop protection business
Organika Sarzyna. S&P also assumes that the company will manage
"adequate" liquidity and headroom under financial covenants
during the high capex period.  S&P views an adjusted ratio of
debt to EBITDA of 3.5x-4.0x as commensurate with 'B+' rating.

Downward rating pressure could build if the company's investments
lead to negative FOCF that is significantly more than S&P
currently anticipates, putting pressure on liquidity and leading
to leverage higher than 4x.

Rating upside is currently unlikely, reflecting S&P's forecast of
ongoing negative FOCF in 2015 and 2016.  However, upside
potential could arise over the longer term, if, for example,
Ciech reports stronger-than-anticipated EBITDA growth, while
maintaining "adequate" liquidity and a sustainable adjusted ratio
of debt to EBITDA of about 3.0x-3.5x.


BANCO ESPIRITO: Ex-Management Probed Over Illegal Debt Issuance
Sergio Goncalves at Reuters reports that the Bank of Portugal is
investigating former management of Banco Espirito Santo over
suspected illegal debt issuance via a Swiss go-between to replace
liabilities of the collapsed business empire of the bank's
founding family with BES debt.

According to Reuters, Bank of Portugal Governor Carlos Costa told
a parliament committee looking into the rescue of BES by the
state in August the central bank was also examining alleged
concealment of losses by family holding company Espirito Santo
International that placed its debt via BES to the bank's retail

Mr. Costa defended his tackling of the BES crisis as timely and
diligent and said the bank's management used the scheme to
illegally bypass his own directives not to increase BES's
exposure to the Espirito Santos family businesses, Reuters

Criticized by the opposition for failing to detect problems
around BES in time, Mr. Costa said the fact that most Espirito
Santo holding firms were registered abroad, outside his bank's
jurisdiction, had also complicated the task of BES supervision,
Reuters relays.

Mr. Costa, as cited by Reuters, said there was "evidence
suggesting deceit and harmful management by BES management in
what regards issuance and placement of BES debt in special
purpose vehicles via various movements made via a Swiss

Mr. Costa has previously mentioned Swiss-based Eurofin Securities
as the company linked to such bond placements, Reuters notes.

Those operations were made "in order to make massive substitution
of Espirito Santo Group debt with BES debt circumventing the
ring-fencing and safeguarding (of BES accounts) imposed by the
Bank of Portugal," Reuters quotes Mr. Costa as saying.

                        About Espirito Santo

Espirito Santo Financial Group SA is the owner of about 20% of
Banco Espirito Santo SA.

Banco Espirito Santo is a private Portuguese bank based in
Lisbon, Portugal.

In August 2014, Banco Espirito Santo was split into "good"
and "bad" banks as part of a EUR4.9 billion rescue of the
distressed Portuguese lender that protects taxpayers and senior
creditors but leaves shareholders and junior bondholders holding
only toxic assets.  A total of EUR4.9 billion in fresh capital is
being injected into this "good bank", which will subsequently be
offered for sale.  It has been renamed "Novo Banco", meaning new
bank, and will include all BES's branches, workers, deposits and
healthy credit portfolios.

Also in August 2014, Espirito Santo Financial Portugal, a unit
fully owned by Espirito Santo Financial Group, filed under
Portuguese corporate insolvency and recovery code.

In August 2014, Espirito Santo Financiere SA, another entity of
troubled Portuguese conglomerate Espirito Santo International SA,
filed for creditor protection in Luxembourg.

In July 2014, Portuguese conglomerate Espirito Santo
International SA filed for creditor protection in a Luxembourg
court, saying it is unable to meet its debt obligations.


KHAKASSIA REPUBLIC: Fitch Affirms 'BB' IDR; Outlook Stable
Fitch Ratings has affirmed the Russian Republic of Khakassia's
Long-term foreign and local currency Issuer Default Ratings
(IDRs) at 'BB' with Stable Outlooks and Short-term foreign
currency IDR at 'B'.  The agency has also affirmed the republic's
National Long-term rating at 'AA-(rus)' with a Stable Outlook.

The republic's outstanding senior unsecured domestic bonds have
been affirmed at 'BB' and 'AA-(rus)'.


The affirmation reflects Fitch's unchanged baseline scenario
regarding Khakassia's still adequate budgetary performance with
the operating balance fully covering interest payments, its
moderate -- albeit increasing -- direct risk with smooth maturity
profile and low contingent liabilities.  The ratings also factor
in high tax concentration, persistent pressure on expenditure due
to federal government's election pledges and slow revenue growth
due to the economic slowdown.

Fitch expects Khakassia to report an operating balance of about
6% (2013: 4%) of operating revenue in 2014-2016 supported by a
rebound of tax revenue, which is expected to have increased by
12% yoy in 2014, and steady transfers from the federal
government. Fitch forecasts that partial restoration of corporate
income tax in 2014 after a sharp 28% decline in 2013 and
allocation of additional 10pp of personal income tax to the
region from 2014 will drive the recovery of its tax revenue.
Operating expenditure will remain under pressure in the medium
term due to the federal government's decision to raise public
sector salaries and fund other social programs.

Fitch estimates Khakassia's deficit before debt variation will
narrow to 9% of total revenue in 2014-2016 from 20% in 2013 on
the gradual restoration of tax revenue, steady transfers from the
federal government and control over the expenses.  Given the
republic's limited cash reserves, the agency expects the deficit
to be funded by new debt.  In Oct. 2014, Khakassia issued RUB1.65
billion five-year bonds to finance the expected deficit.

Fitch forecasts that the republic's direct risk will grow to 70%
of current revenue by end-2016.  The republic's direct risk
reached RUB9.9 billion as of Oct. 1, 2014, and was composed of
bank loans (40%), domestic bonds (42%), and budget loans (17%).
Fitch expects that debt servicing coverage (direct debt
servicing/operating balance) will be weak in the medium term as
the restoration of operating balance will lag the growing debt
servicing needs.

Fitch expects refinancing pressure to remain moderate in the
medium term, due to the republic's smooth debt maturity profile.
Khakassia relies mostly on three-year bank loans and five- to
seven-year domestic bonds.  In 2014-2015, the republic needs to
repay RUB3.8bn of maturing debt, which corresponded to 39% of
direct risk as of Oct. 1, 2014.  Fitch expects that Khakassia
will not have any problem refinancing its maturing debt with
domestic banks in the medium term.  However, the higher cost of
borrowing will put additional pressure on the budget.

Contingent risk remains moderate and is limited to the debt of a
few public sector entities and guarantees issued by the republic.
Fitch assesses the republic's ability to control contingent risk
stemming from its public sector and issued guarantees as prudent.

Khakassia's tax base is strong, but concentrated in a few
companies in the mining, non-ferrous metallurgy and hydro-power
generation sectors.  The 10 largest taxpayers contributed 44.1%
to the republic's tax revenue in 2013 (2012: 52.3%).  Taxes
provided 71% of operating revenue in 2013.

Khakassia's creditworthiness remains constrained by the
institutional framework for local and regional governments (LRGs)
in Russia.  The predictability of Russian LRGs' budgetary policy
is hampered by frequent reallocation of revenue and expenditure
responsibilities between the tiers of government and unstable
macroeconomic and geopolitical situation.


The inability to restore debt servicing coverage to 100%, coupled
with the inability to narrow deficit before debt variation to
less than 10% of total revenue for two consecutive years, would
be negative for the ratings.

A positive rating action, although unlikely in the near term,
would result from a consolidation of budgetary performance with
an operating margin consistently above 10% and maintaining sound
debt payback ratio (2013: 87.8 years) that matches average debt
maturity (2013: 4.4 years) over the medium term.

MARI EL REPUBLIC: Fitch Affirms 'BB' IDR; Outlook Stable
Fitch Ratings has affirmed the Russian Mari El Republic's Long-
term foreign and local currency Issuer Default Ratings (IDRs) at
'BB', with Stable Outlooks, and its Short-term foreign currency
IDR at 'B'.  The agency has also affirmed the republic's National
Long-term rating at 'AA-(rus)' with Stable Outlook.  Mari El's
outstanding senior unsecured domestic bonds have also been
affirmed at 'BB' and 'AA-(rus)'.


The affirmation reflects Fitch's unchanged baseline scenario for
Mari El's satisfactory fiscal performance, moderate direct risk
with limited exposure to refinancing risk, and low contingent
risk.  The ratings also consider the republic's modest economic

Fitch expects Mari El's fiscal performance to remain satisfactory
in 2014-2016, with operating surplus at about 8%-9% (2013: 9%).
Stable performance is likely to be driven by steady growth of
operating revenue by about 6% to 7% yoy expected in 2014 onwards
coupled with conservative fiscal management.  The republic's
deficit before debt variation remained at a reasonable 7.7% of
total revenue in 2013 (2012: 9.6%).  The agency expects the
republic's deficit before debt variation to be about 7% of total
revenue by end 2014 and about 5% to 6% in 2015 to 2016.

Fitch expects a moderate increase in the republic's direct risk
to about 50% of current revenue in 2014 and 55%-60% in 2015-2016
to fund its forecasted budget deficit.  The republic's direct
risk rose to 47% in 2013, in line with Fitch's expectations
(2012: 41%).  Mari El used debt in 2013 to fund some of its
capital outlays.

Fitch assesses Mari El's exposure to refinancing risk as
moderate. The republic issued RUB2bn domestic bonds in May 2014,
effectively covering its immediate refinancing needs by end 2014.
About 30% of the republic's debt should be refinanced in 2015,
while the average maturity of the debt profile was about four
years at end-3Q14.  Fitch expects the republic's contingent risk
to remain limited to the debt of its public sector entities and
guarantees, and no new guarantees are expected to be issued in

Mari El's interim cash reserves increased to RUB1.2 billion by
end-Sept. 2014 (2013: RUB264 million).  Additional support for
short-term liquidity is being provided by 30-day treasury loans
from the federal government made effective in 2014.

Mari El's socio-economic profile is historically weaker than the
average of other Russian regions.  Its per capita gross regional
product (GRP) was about 30% lower than the national median in
2012.  Mari El's economy slowed down in 2013 with GRP expanding
1.7% yoy (2012: 4.4% yoy).  The republic's administration expects
slow growth in the economy of around 3%-3.5% yoy in 2014-2016.


The ratings could be positively affected by improved budgetary
performance leading to deficit before debt decreasing below 5% of
total revenue, coupled with an extension of the debt maturity

Conversely, a downgrade or revision of the Outlook to Negative
could result from sustained deterioration of operating
performance with an operating margin below 5%, coupled with
weaker debt coverage (2013: 8 years) exceeding average debt
maturity (2013: 4 years) over the medium term.

MURMANSK REGION: Fitch Affirms 'BB' IDR; Outlook Negative
Fitch Ratings has affirmed Russian Murmansk Region's Long-term
foreign and local currency Issuer Default Ratings (IDRs) at 'BB',
with Negative Outlooks, and its Short-term foreign currency IDR
at 'B'.  The agency has also affirmed the region's National Long-
term rating at 'AA-(rus)' with a Negative Outlook.


The Negative Outlook reflects risks stemming from the region's
rapidly rising debt, driven by high deficit before debt
variation. The affirmation reflects the region's moderate direct
risk, a positive operating balance that is still sufficient to
cover interest payments, and a strong industrial economy
supporting above-national average wealth indicators.

Fitch expects direct risk will continue to grow over the next
three years, driven by deficit before debt variation on the back
of subdued tax revenue and continuous pressure on operating
expenditure.  Fitch forecasts direct risk will reach 40% of
current revenue by end-2014 and 60% in 2016, up from 31% at end-
2013.  Murmansk's debt burden is still moderate compared with
national and international peers, but expected rapid rise in debt
in 2014-2016 will cause an increase in both debt servicing and
refinancing needs, due to the region's short-term debt profile.

The region's direct risk is dominated by bank loans with maturity
between one and three years; Fitch expects bank loans to account
for 80% of direct risk by end-2014, and three-year loans from the
federal budget for the remainder.  Murmansk faces repayment of
93% of its outstanding debt during 4Q14-2016.  This, coupled with
the weak current balance, results in the region being highly
dependent on financial market access for debt refinancing and
deficit funding.  Fitch expects the region will be able to
refinance the maturing debt with the same banks as RUB6.6bn of
its credit lines were un-utilized as of Oct. 1, 2014.  However
higher interest rates for new bank loans will put additional
pressure on the budget.

Based on the budget execution during the first nine months of
2014 Fitch expects results for 2014 will be similar to 2013's, we
expect the region's operating balance to reach 2.2% of operating
revenue in 2014 and be around 2%-3% in 2015-2016, compared with
1.9% in 2013.  Fitch forecasts deficit before debt variation will
reach 13.7% of total revenue in 2014 and remain at 11%-13% in
2015-2016, against 15.2% in 2013.

The region's rigid operating expenditure represents a high 96% of
total revenue in 2014, leaving little scope for maneuver.
Capital outlays lag behind those of 'BB' national peers.  Fitch
expects the region's capex will average a low 10%-12% of total
expenditure in 2014-2016, given the region's intention to control
its budget deficit.

The regional economy has a strong industrial base as Murmansk is
home to several natural resource development conglomerates.  This
provides an extensive tax base for the region's budget, with tax
revenue representing 81% of operating revenue in 2013.  However,
a large portion of tax revenues depends on companies' profits,
resulting in high revenue volatility.  In 2012 and 2013 corporate
income tax proceeds fell sharply due to weak earnings at major
local taxpayers following price declines for key commodity
exports.  This led to significant deterioration of the region's
budgetary performance, a large deficit and rapid debt increase.


The inability to maintain a sustainable positive current balance
or a significant debt increase above Fitch's projections would
lead to a downgrade.

UDMURTIA REPUBLIC: Fitch Affirms 'BB-' IDR; Outlook Stable
Fitch Ratings has affirmed the Russian Republic of Udmurtia's
Long-term foreign and local currency Issuer Default Ratings
(IDRs) at 'BB-', with Stable Outlooks, and Short-term foreign
currency IDR at 'B'.  The agency has also affirmed the region's
National Long-term rating at 'A+(rus)' with a Stable Outlook.
The region's outstanding senior unsecured domestic bonds' ratings
(ISINs RU000A0JR530, RU000A0JRY67, RU000A0JTF76 and RU000A0JU740)
have been affirmed at 'BB-' and 'A+(rus)'.


The affirmation reflects Fitch's expectation of the restoration
of the region's operating performance in 2014 and deceleration of
direct risk growth as well as the republic's developed economy.
The ratings also factor in the continuous budget deficit and
refinancing pressure over the medium term.

Fitch expects Udmurtia's fiscal performance to partially recover
from 2014 onward, which will be manifested by the restoration of
a positive operating balance.  This financial rehabilitation is
the intention of the management team that was formed after the
election of a new head of the republic in Sept. 2014.  The
operating balance worsened to negative 4.9% of operating revenue
in 2013 due to both deceleration of revenue growth and continuous
pressure on opex.  The latter was caused by the federal
government's pledges to increase public sector salaries.

Fitch believes the republic will gradually decrease its currently
high budget deficit before debt variation to 6%-7% in 2015-2016.
This will be supported by the administration's intention to
strictly control growth of opex and further reduction of capital
spending.  The overall budget deficit widened to 16% of total
revenue in 2013 (2012: 13%) contributing to the sharp increase in
direct risk.

Fitch expects the growth of direct risk will decelerate in the
medium term and will account for around 70% of current revenue in
2015-2016, reflecting a narrowing deficit.  In 2013, direct risk
increased sharply to 63% of current revenue from a moderate 40%
one year earlier.  However, the region held part of the debt
incurred in 2013 as cash reserves, and will use this liquidity
for deficit financing in 2014-2016, which will help contain
direct risk growth.  Fitch also notes that the debt payback ratio
(direct risk to current balance) will remain weak in the medium
term as Fitch do not expect the restoration of a positive current
balance before 2016.

The republic remains exposed to refinancing pressure as in 2014-
2016 it has to refinance 89% of total direct risk.  The region
has to repay RUB9.6 billion by end-2014, which corresponds to 31%
of total debt stock.  In Oct. 2014, the republic received a RUB6
billion subsidized budget loan at 0.1% interest rate with three-
year maturity, which will be used for refinancing the majority of
maturing debt obligations.  The residual part will be covered by
unutilized credit lines.  Available credit lines with commercial
banks total RUB6 billion and could be drawn down during three
years. However, Fitch assumes the republic will use these lines
in 2014 to refinance part of the maturing debt obligations, and
the residual part to finance republic's capital spending.

Fitch forecasts the bank loans will continue to dominate the
region's debt profile.  The republic did not issue new domestic
bonds in 2014 due to unfavorable macroeconomic and geopolitical
conditions, which could become the reason for high interest
rates. The bank loans are not likely to have maturity of more
than three years, which implies that refinancing pressure will
continue over the medium term.  Overall, Fitch does not expect
problems with debt refinancing as the administrations lock in
required resources well in advance of maturity dates.

The republic has a well-diversified industrial sector, which is
dominated by oil extraction, metallurgy and machine building.
The republic's administration expects stability in oil extraction
and modest growth of the processing industry, contributing to GRP
growth of about 2% in 2014-2016.  In 2013 GRP growth was close to
zero in real terms.


The inability to narrow the budget deficit to below 10% of total
revenue leading to a debt increase far beyond Fitch's
expectations could lead to a downgrade.

Sustainable positive current balance accompanied by stabilization
of direct risk at below 70% of current revenue could lead to an


TRBOVLJE: HSE to Commence Liquidation Proceedings
SeeNews reports that Slovenian state-owned power conglomerate
Holding Slovenske Elektrarne said on Nov. 17 it decided to launch
liquidation proceedings at its thermal power plant Trbovlje

According to SeeNews, HSE said in a statement on its Web site the
decision was based on medium-term projections for electricity and
coal prices which indicate that TET cannot offer competitive
prices without subsidies.

HSE has appointed a liquidation manager to prepare a liquidation
plan within 30 days, SeeNews relates.

HSE also said that it remains open to offers for the purchase of
TPP Trbovlje, adding that a change of ownership would be the best
long-term solution for the plant, SeeNews notes.

In September, HSE said that Switzerland-based Edelweiss
Investment filed a final bid to acquire a 81.33% in Trbovlje
plant, but later explained it terminated the negotiations with
Edelweiss since it refused to take over costs for possible
environmental damages, SeeNews recounts.


FTA SANTANDER 3: Moody's Assigns 'Ca' Rating to Serie C Notes
Moody's Investors Service has assigned definitive ratings to
three classes of notes issued by Fondo de Titulizacion de Activos
RMBS Santander 3:

EUR5395 million Serie A Notes, Definitive Rating Assigned

EUR1105 million Serie B Notes, Definitive Rating Assigned

EUR975 million Serie C Notes, Definitive Rating Assigned Ca(sf)

The transaction is a securitization of Spanish prime mortgage
loans originated by Banco Santander S.A. (Spain) (Baa1 / P-2) and
Banco Espanol de Credito S.A (Banesto) to obligors located in
Spain. The portfolio consists of high Loan To Value ("HLTV")
mortgage loans secured by residential properties including a high
percentage of renegotiated loans (20%).

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

Ratings Rationale

FTA RMBS Santander 3 is a securitization of loans granted by
Banco Santander S.A. (Spain) (Banco Santander, Baa1 / P-2) to
Spanish individuals. Banco Santander is acting as Servicer of the
loans while Santander de Titulizacion S.G.F.T., S.A. is the
Management Company ("Gestora").

The ratings of the notes take into account the credit quality of
the underlying mortgage loan pool, from which Moody's determined
the MILAN Credit Enhancement and the portfolio expected loss.

The key drivers for the portfolio expected loss of 13% are (i)
benchmarking with comparable transactions in the Spanish market
via analysis of book data provided by the seller, (ii) the very
high proportion of renegotiated loans in the pool (20%), and
(iii) Moody's outlook on Spanish RMBS in combination with
historic recovery data of foreclosures received from the seller.

The key drivers for the 33% MILAN Credit Enhancement number,
which is higher than other Spanish HLTV RMBS transactions, are
(i) renegotiated loans represent 20.3% of the portfolio and 5% of
the pool corresponds to loans in principal grace periods; (ii)
the proportion of HLTV loans in the pool (21.1% with current LTV
> 80% based on original valuations) with Current Weighted Average
LTV of 102.1% (based on revaluations as of 2013); (iii)
approximately 13.4% of the portfolio correspond to self employed
debtors; (iv) 45% of the loans have been in arrears less than 90
days at least once since the loans was granted (v) weighted
average seasoning of 6.5 years and (vi) the geographical
concentration in Madrid (19.8%) and Andalusia (24.4%).

According to Moody's, the deal has the following credit
strengths: (i) sequential amortization of the notes (ii) a
reserve fund fully funded upfront equal to 15% of the Serie A and
B notes to cover potential shortfall in interest and principal.
The reserve fund may amortize if certain conditions are met.

The portfolio mainly contains floating-rate loans linked to 12-
month EURIBOR, and most of them reset annually; whereas the notes
are linked to three-month EURIBOR and reset quarterly. There is
no interest rate swap in place to cover this interest rate risk.
Moody's takes into account the potential interest rate exposure
as part of its cash flow analysis when determining the ratings of
the notes.

Stress Scenarios:

Moody's Parameter Sensitivities provide a quantitative/model-
indicated calculation of the number of rating notches that a
Moody's structured finance security may vary if certain input
parameters used in the initial rating process differed.

The analysis assumes that the deal has not aged and is not
intended to measure how the rating of the security might migrate
over time, but rather how the initial rating of the security
might have differed if key rating input parameters were varied.
Parameter Sensitivities for the typical EMEA RMBS transaction are
calculated by stressing key variable inputs in Moody's primary
rating model.

At the time the rating was assigned, the model output indicated
that the Serie A notes would have achieved an A3 even if the
expected loss was as high as 15% and the MILAN CE was 33% and all
other factors were constant.

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

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

Factors that may lead to an upgrade of the rating include a
significantly better than expected performance of the pool,
together with an increase in credit enhancement for the notes.

Factors that may cause a downgrade of the rating include
significantly different loss assumptions compared with Moody's
expectations at close due to either a change in economic
conditions from Moody's central scenario forecast or
idiosyncratic performance factors would lead to rating actions.
Finally, a change in Spain's sovereign risk may also result in
subsequent upgrade or downgrade of the notes.


KHARKOV CITY: Fitch Affirms 'CCC' IDR; Outlook Negative
Fitch Ratings has affirmed the Ukrainian City of Kharkov's Long-
term foreign and local currency Issuer Default Ratings (IDRs) at
'CCC' and its Short-term foreign currency IDR at 'C'.  Fitch has
also affirmed the city's National Long-term rating at 'A+(ukr)'.
The Outlook on the National Long-term rating is Negative.

Kharkov's outstanding senior unsecured domestic bond ratings have
also been affirmed at 'CCC' and 'A+(ukr)'.


The city's ratings are constrained by the ratings of Ukraine
(CCC/C).  Fitch assesses the institutional framework governing
Ukrainian regions as weak.  Notably, it lacks clarity and
sophistication, hindering long-term development and budget
planning of Ukrainian subnationals.  Ukraine's institutional
framework has been deteriorating since last year as a result of
the political crisis in the country and the military conflict in
the east of Ukraine.  Some stabilization is expected following
the election of Ukraine's parliament on Oct. 26, 2014 and the
formation of a new government by end-2014.

The city faces refinancing of 72% of its debt maturing in
December 2014, including UAH99.5m of bonds due on Dec. 8 and a
UAH185m bank loan due on Dec. 19.  Fitch expects the city to
issue UAH100m of three-year bonds by end-2014 and to extend the
maturing bank loan for one year.  Positively, Kharkov had large
cash reserves of UAH851m as of Oct. 1, 2014, 3x its maturing debt
amount, mitigating refinancing risk.

Fitch expects moderate deterioration of the city's budgetary
performance following the contraction of the national economy
(Ukraine's GRP to decline by 6.5% in 2014) and continuing
political risk.  Fitch expects the city's operating balance to be
around 10% of operating revenue, down from 15.3% in 2013 but
nevertheless still a strong performance.  Fitch forecasts the
city will report a low deficit before debt variation at 2%-3% of
total revenue in 2014-2016, compared with a surplus of 3.8% in

Fitch forecasts Kharkov's debt to remain low at around 10% of
current revenue in the medium term, supported by its close to
balance budgetary performance.  In 2013 Kharkov recorded debt at
8% of current revenue and a strong debt coverage ratio
(debt/current balance) of less than a year.

The amount of the city's contingent liabilities (UAH401m at end-
2013) is comparable to that of its direct debt and may put
pressure on the budget, particularly as major public sector
entities (PSEs) are loss-making and depend on subsidies to
sustain operations.  Nonetheless, the contingent liabilities
should not jeopardize the city's budget as they currently account
for less than 10% of the city's current revenue.


A downgrade of Ukraine's IDRs would lead to a corresponding
action on the city's IDRs.  A downgrade could also result from a
delay in the repayment of the city's maturing debt.

A sovereign upgrade could lead to the same action on the city's
ratings provided that the city maintains stable budgetary

ODESSA REGION: Fitch Withdraws 'CCC' Issuer Default Ratings
Fitch Ratings has withdrawn Ukrainian Odessa Region's Long-term
foreign and local currency Issuer Default Ratings (IDRs) of 'CCC'
and National Long-term rating of 'AA-(ukr) with Negative Outlook,
and its Short-term foreign currency IDR of 'C'.

The ratings have been withdrawn as the issuer has chosen to stop
participating in the rating process.  Therefore, Fitch will no
longer have sufficient information to maintain the ratings.
Accordingly, Fitch will no longer provide ratings or analytical
coverage for Odessa Region.

U N I T E D   K I N G D O M

JKL (WAKEFIELD): Directors Banned For Combined 20 Years
Two directors of JKL (Wakefield) Limited have been disqualified
for a combined 20 years for, among other things, allowing an
undischarged bankrupt and already disqualified director to act as
a company director.

Following an investigation by the Insolvency Service, Jody Dean
Firth (33) and Albert Leonard Goddard (57) both gave undertakings
to the Secretary of State for Business, Innovation and Skills not
to be a director of a limited company for 13 and 7 years

Messrs. Firth and Goddard were directors of JKL (Wakefield) which
went into voluntary liquidation on Feb. 26, 2013, owing creditors
and shareholders GBP52,535,011.

JKL (Wakefield) Ltd traded under the style Eric France Metal
Recycling and was the main sponsor of rugby Super League team
Wakefield Trinity Wildcats and rugby championship club Dewsbury

The misconduct uncovered by investigators included that they
allowed a connected party who was a disqualified director and
undischarged bankrupt to act as a director of JKL.

Commenting on the disqualification, Ken Beasley, Official
Receiver of the Insolvency Service's Public Interest Unit, said:

"These two directors have deprived the taxpaying public of huge
amounts of revenue whilst lining their own pockets.

"The Insolvency Service will not tolerate dishonest behavior and
our investigators will make every effort to expose and deal with
such misconduct."

The investigation further found that between 2008 and 2013, JKL
(Wakefield) Ltd evaded tax liabilities to HM Revenue & Customs
resulting in VAT losses of at least GBP50,204,505 and losses of
GBP4,888,661 in respect of unpaid PAYE tax and National Insurance
whilst Mr. Firth and the connected party received GBP1,250,000
from suppliers which was not accounted for in the company's books
and records. Further, the connected party received a bonus
payment from JKL (Wakefield) Ltd of GBP1,102,147 which was also
not accounted for in the company's books and records.

As reported in the Troubled Company Reporter-Europe on Feb. 28,
2013, Wakefield Express said liquidators were appointed to JKL
(Wakefield) Ltd at a meeting with the company's creditors on
February 26.  Liquidators KPMG and PricewaterhouseCoopers said:
"It is understood that, according to the directors' statement of
affairs, GBP21 million of the company's total debts of
GBP22 million relate to unpaid VAT."

Ossett-based JKL (Wakefield) Ltd was a sponsor of Rugby League
clubs Wakefield Wildcats and Dewsbury Rams.

RANGERS FOOTBALL: Four Men Face Charges Over Fraudulent Sale
BBC News reports that four men have appeared in court charged
with fraudulent activity following a probe into the sale of the
Rangers Football Club in 2011.

David Grier, 53, Paul Clark, 50, and David Whitehouse, 49, worked
for Duff and Phelps, then administrators of Rangers, BBC relates.

Gary Withey, 50, worked for law firm Collyer Bristow, which
represented Craig Whyte before he bought Rangers from Sir David
Murray for GBP1 in 2011, BBC discloses.

All four made no plea or declaration at Glasgow Sheriff Court and
were granted bail ahead of a future hearing, BBC notes.

Messrs. Grier, Clark and Whitehouse were also charged with
attempting to pervert the course of justice, according to BBC.

All four men were detained during dawn raids on Nov. 14 in
England and later arrested, BBC relays.

They were all charged with a fraudulent scheme, BBC discloses.

Messrs. Whitehouse, Clark and Grier were employees of MCR
Partners, prior to its acquisition by Duff and Phelps, in October
2011, BBC notes.

Duff and Phelps acted as Rangers administrators from February 14,
2012, BBC states.

                   About Rangers Football Club

Rangers Football Club PLC --
-- is a United Kingdom-based company engaged in the operation of
a professional football club.  The Company has launched its own
Internet television station,  The station combines
the use of Internet television programming alongside traditional
Web-based services.  Services offered include the streaming of
home matches and on-demand streaming of domestic and European
games, which include dedicated pre-match, half-time and post-
match commentary.  The Company will produce dedicated news
magazine and feature programs, while the fans can also access a
library of classic European, Old Firm and Scottish Premier League
(SPL) action.  Its own dedicated television studio at Ibrox
provides onsite production, editing and encoding facilities to
produce content for distribution on all media platforms.


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.

A list of Meetings, Conferences and Seminars appears in each
Thursday's edition of the TCR. Submissions about insolvency-
related conferences are encouraged.  Send announcements to

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


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

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

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

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

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

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

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