TCREUR_Public/141218.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

                           E U R O P E

         Thursday, December 18, 2014, Vol. 15, No. 250

                            Headlines

B U L G A R I A

NATSIONALNA ELEKTRICHESKA: S&P Puts 'B+' CCR on CreditWatch Neg.


G E R M A N Y

BITCOMPOSER: Files for Insolvency; Seeks New Investor
SOLARSTROM AG: Executive Board Won't Take Over Management


I R E L A N D

AVOCA CLO XIII: Moody's Assigns B2 Rating to EUR13MM Cl. F Notes
AVOCA CLO XIII: Fitch Assigns 'B-sf' Rating to Class F Notes
RYE HARBOUR: Fitch Rates Class F Notes 'B-(EXP)sf'


I T A L Y

WASTE ITALIA: Moody's Assigns 'B2' Corporate Family Rating


K A Z A K H S T A N

ALLIANCE BANK: S&P Raises Counterparty Credit Ratings to 'B/B'
FORTEBANK JSC: S&P Affirms 'B/B' Counterparty Credit Ratings


L U X E M B O U R G

BREEZE FINANCE: Moody's Lowers Rating on Class B Bonds to 'Caa2'
EURASIAN NATURAL: S&P Withdraws 'B-' CCR; Outlook Negative


N E T H E R L A N D S

CID FINANCE: S&P Raises Rating on EUR2.5 Million Notes to 'BB'


N O R W A Y

NORWEGIAN ENERGY: Faces Cash Shortfall; Seeks Bond Conversion


S P A I N

HIPOTEBANSA X: S&P Lowers Rating on Class B Notes to 'B-'


U K R A I N E

CB PRIVATBANK: Fitch Affirms 'CCC' Issuer Default Rating
DNIPROAVIA AIRLINE: Airport Closure Prompts Bankruptcy
SUMYKHIMPROM PJSC: Court Extends Reorganization for Six Months


U N I T E D   K I N G D O M

AA BOND CO: S&P Puts 'BB' Rating on Class B Notes on Watch Neg.
EQUINOX ECLIPSE: Moody's Affirms Caa1 Rating on GBP329MM A Notes
FOLKESTONE INVICTA: To Become Debt-Free Within Next Month
TAYLOR WIMPEY: Fitch Raises Issuer Default Rating From 'BB+'
TOWERGATE FINANCE: Fitch Lowers Issuer Default Rating to 'CC'


                            *********


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B U L G A R I A
===============


NATSIONALNA ELEKTRICHESKA: S&P Puts 'B+' CCR on CreditWatch Neg.
----------------------------------------------------------------
Standard & Poor's Ratings Services placed its 'B+' long-term
corporate credit rating on Bulgaria-based electricity utility
Natsionalna Elektricheska Kompania EAD (NEK) on CreditWatch with
negative implications.  NEK is a subsidiary of the 100% state-
owned holding company Bulgarian Energy Holding (BEH).

The CreditWatch placement reflects uncertainties about NEK's
earnings recovery and whether its parent, BEH, will continue its
support going forward.  S&P has lowered its assessment of NEK's
SACP to 'ccc+' to reflect that NEK's liquidity position has
significantly deteriorated following mounting losses.  S&P
believes that NEK's capacity to honor its financial obligations
in a timely manner primarily depends on the willingness and
capacity of its parent BEH to provide timely financial support.
In S&P's view, NEK's financial prospects have worsened; the
company continued to incur losses through the third quarter of
2014, despite the successive rounds of tariff increases in 2014
by a total of about 25%.  These losses are mainly due to NEK's
inability to fully recover its disbursements for preferential
subsidies to renewable and combined heat and power generators
(CHP).  As a consequence, BEH has had to support NEK with
shareholder loans to cover NEK's immediate cash flow deficits and
liquidity needs.

S&P's 'ccc+' SACP reflects significant hurdles that NEK must
overcome in order to regain profitability and be able to service
its debt on a sustainable basis.  S&P's forecasts include subdued
growth and low deflators in Bulgaria and these factors, which are
specific to NEK:

   -- S&P anticipates that NEK's losses will persist in 2015,
      although at a lower rate than 2014 considering the tariff
      hikes, as well as some incremental profits from the
      balancing market where NEK sells electricity to cover the
      system deficit.  S&P understands that NEK is in the process
      of renegotiating its purchase power agreements in order to
      lower its legacy cost base.

   -- In S&P's forecast, it treats the shareholder loans from BEH
      (Bulgarian lev [BGN] 1.2 billion at Dec. 31, 2013) as debt
      because of their short maturity (which has been extended to
      10 years), mostly amortizing terms, and an absence of
      option to defer interest.  Nevertheless, S&P recognizes
      that it is provided by what it considers to be a supportive
      strategic owner.

"We continue to anticipate full and timely support from BEH
during NEK's financial recovery phase, although this might change
if NEK's long-term financial prospects are not sustainable.  In
line with our group rating methodology, NEK's credit profile is
supported by our view of its status within the BEH group as
"strategically important."  This reflects that NEK is a fully
controlled, strategic subsidiary within the BEH group.  At the
same time, we understand that NEK retains its own identity,
management, financing, and operational independence.  We believe
our 'bb-' group credit profile for BEH reflects its likelihood to
benefit from state support, stronger business risk position, and
diversified holdings in the energy sector.  In addition, we view
BEH's financial risk profile and flexibility as stronger than
NEK's, although it has diminished with its EUR500 million bond,
raised in November 2013, and the financial underperformance of
some of its subsidiaries," S&P said.

S&P's assessment of NEK's 'ccc+' SACP is based on S&P's view of
the company's "weak" business risk profile and its "highly
leveraged" financial risk profile.  S&P assess NEK's management
and governance as "weak" due to its aggressive liquidity
management, frequent management turnover, and weak reporting
disclosures.

NEK's business risk profile is constrained by the company's
meager profitability and regulatory uncertainty owing to annual
tariff resets by Bulgaria's State Energy and Water Regulatory
Commission. S&P's assessment of NEK's business risk profile also
factors in the uncertainty related to the Belene nuclear power
plant project, which S&P understands is on hold.  Any commitment
to commence construction, particularly without any direct
government support, could alter S&P's view of the company's
business and financial risk profiles.  These negative factors are
partly mitigated by NEK's dominant market position; its strategic
importance as provider of an essential public service; and its
ownership of mostly all of the low-cost hydro generation assets
in Bulgaria. S&P's view of NEK's financial risk profile reflects
its weak credit metrics, "weak" liquidity position, and
aggressive financial policies.

S&P aims to resolve the CreditWatch placement in the next 90
days. During this period, S&P will discuss with BEH whether the
degree of financial commitment and capacity to support NEK will
persist in the foreseeable future.  Any evidence of weakening
financial support from BEH or of the link between it and NEK, or
of BEH's ability or willingness to support a weakened NEK, could
cause S&P to revise its view of NEK's group status downward,
leading to a lower rating.

S&P's assessment of NEK's SACP will include a review of its
financial plans for 2015.  S&P could lower the SACP assessment,
and consequently the rating, if NEK's ability to meet its
financial commitments appears more precarious.



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G E R M A N Y
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BITCOMPOSER: Files for Insolvency; Seeks New Investor
-----------------------------------------------------
Craig Chapple at Develop reports that BitComposer has filed for
insolvency.

The studio claimed its own problems stemmed from "the financial
difficulties of its suppliers in game development," Develop
relates.  As a result, the studio said, it could not complete
work on its new titles and subsequently missed financial targets,
Develop notes.

BitComposer had applied for a protective shield procedure on
Sept. 26, Develop relays.  This protected the company from
foreclosure from creditors, while also allowing it to develop an
insolvency plan, Develop states.

During this period, the firm was able to publish additional
titles, Develop says.  As of Dec. 3, the studio filed for regular
insolvency proceedings, Develop relays.  The district court of
Frankfurt appointed Robert Schiebe of law firm Schiebe und
Collegen as preliminary insolvency administrator, Develop
discloses.

According to Develop, despite claiming its operations are
"running smoothly" amidst what it has termed a crisis, the
company is now seeking a new investor to ensure it can continue
game development.

BitComposer is German developer and publisher.


SOLARSTROM AG: Executive Board Won't Take Over Management
---------------------------------------------------------
The current members of the executive board of S.A.G. Solarstrom
AG, a company under insolvency proceedings, (German security
identification number: 702 100, ISIN: DE0007021008), comprising
the chairman Dr. Karl Kuhlmann and Ulrich Kenk and Karin Schopf,
will not be part of the management of S.A.G. Solar GmbH Co. KG,
part of the Shunfeng International Clean Energy Group which
acquired material parts of the businesses of S.A.G. Solarstrom AG
group by agreement dated August 30, 2014.  No agreement could be
reached that the members of the executive board would work for
Shunfeng International Clean Energy Group going forward.

The three board members of S.A.G. Solarstrom AG believe that
Shunfeng International Clean Energy Group has a very good chance
of positioning itself as one of the leading international solar
providers in the future.  The executive board of S.A.G.
Solarstrom AG will therefore support the integration process
until the end of 2014.

"S.A.G. Solarstrom AG's executive board has supported both the
investor and integration processes with great commitment and
dedication, and has thus significantly contributed to a
successful conclusion," says Dr. Joerg Nerlich, insolvency
administrator of S.A.G. Solarstrom AG "for which I would like to
express my sincere gratitude.  I am very happy that the executive
board has confirmed that it will continue to support liquidation
tasks not associated with the sale of the parts of S.A.G.
Solarstrom AG to the Shunfeng Group."

S.A.G. Solarstrom AG will be liquidated under the continuing
insolvency process, as already reported.  The shares in S.A.G.
Solarstrom AG will be delisted on the Frankfurt Stock Exchange on
May 19, 2015, the listing in the exchange segment m:access of the
Munich Stock Exchange will end on December 30, and the listing on
the open market will end on April 30.

Headquartered in Freiburg i.Br., Germany S.A.G. Solarstrom AG
(German security identification number: 702 100, ISIN:
DE0007021008) -- http://www.solarstromag.com-- is a
manufacturer-independent provider of photovoltaic plants
configured to customers' individual needs.  The Group constructs
plants of all sizes both in Germany and abroad. S.A.G. Solarstrom
AG also produces solar energy at its own plants.

S.A.G. Solarstrom AG's service portfolio covers the entire life
cycle of photovoltaic plants, including forecast and energy
services, yield reports, and remote service and maintenance, as
well as insurance and financing.  The Group thus offers a
comprehensive value chain in photovoltaics, from yield reports,
planning, construction, operations, and monitoring to
optimization, repowering, and deconstruction.

S.A.G. Solarstrom AG was founded in 1998.  Around 190 specialists
work at the four locations in Germany and the foreign
subsidiaries.  S.A.G. Solarstrom AG is listed in the Prime
Standard of the Frankfurt Stock Exchange as well as according to
the rules and standards M:access of the Munich Stock Exchange.



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I R E L A N D
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AVOCA CLO XIII: Moody's Assigns B2 Rating to EUR13MM Cl. F Notes
----------------------------------------------------------------
Moody's Investors Service announced that it has assigned the
following definitive ratings to notes issued by Avoca CLO XIII
Limited:

  EUR5,000,000 Class A-1 Senior Secured Fixed Rate Notes due
  2027, Definitive Rating Assigned Aaa (sf)

  EUR235,000,000 Class A-2 Senior Secured Floating Rate Notes due
  2027, Definitive Rating Assigned Aaa (sf)

  EUR14,000,000 Class B-1 Senior Secured Fixed Rate Notes due
  2027, Definitive Rating Assigned Aa2 (sf)

  EUR29,000,000 Class B-2 Senior Secured Floating Rate Notes due
  2027, Definitive Rating Assigned Aa2 (sf)

  EUR27,000,000 Class C Deferrable Mezzanine Floating Rate Notes
  due 2027, Definitive Rating Assigned A2 (sf)

  EUR19,000,000 Class D Deferrable Mezzanine Floating Rate Notes
  due 2027, Definitive Rating Assigned Baa2 (sf)

  EUR26,000,000 Class E Deferrable Junior Floating Rate Notes due
  2027, Definitive Rating Assigned Ba2 (sf)

  EUR13,000,000 Class F Deferrable Junior Floating Rate Notes due
  2027, Definitive Rating Assigned B2 (sf)

Ratings Rationale

Moody's rating of the rated notes addresses the expected loss
posed to noteholders by legal final maturity of the notes in
2027. The ratings reflect the risks due to defaults on the
underlying portfolio of loans given the characteristics and
eligibility criteria of the constituent assets, the relevant
portfolio tests and covenants as well as the transaction's
capital and legal structure. Furthermore, Moody's is of the
opinion that the collateral manager, KKR Credit Advisors
(Ireland) ("KKR Credit Advisors"), has sufficient experience and
operational capacity and is capable of managing this CLO.

Avoca CLO XIII Limited is a managed cash flow CLO. At least 90%
of the portfolio must consist of senior secured loans or senior
secured bonds, and up to 10% of the portfolio may consist of
senior unsecured loans, second-lien loans, mezzanine obligations
and high yield bonds. The portfolio is expected to be 70% ramped
up as of the closing date and to be comprised predominantly of
corporate loans to obligors domiciled in Western Europe. The
remainder of the portfolio will be acquired during the six month
ramp-up period in compliance with the portfolio guidelines.

KKR Credit Advisors will manage the CLO. It will direct the
selection, acquisition and disposition of collateral on behalf of
the Issuer and may engage in trading activity, including
discretionary trading, during the transaction's four-year
reinvestment period. Thereafter, purchases are permitted using
principal proceeds from unscheduled principal payments and
proceeds from sales of credit risk obligations, and are subject
to certain restrictions.

In addition to the eight classes of notes rated by Moody's, the
Issuer will issue EUR 46 million of subordinated notes which will
not be rated.

The transaction incorporates interest and par coverage tests
which, if triggered, divert interest and principal proceeds to
pay down the notes in order of seniority.

KKR Credit Advisors will acquire and hold 50% of the outstanding
shares in the Issuer. The remaining 50% of the Issuer's
outstanding shares will be held by a charitable trust. However,
in a typical CLO transaction 100% of the Issuer's shares would be
held by a charitable trust. As a result, certain structural
mitigants have been put in place to ensure that Avoca CLO XIII
will remain bankruptcy remote from KKR Credit Advisors (for
example, covenants to maintain a majority of independent
directors in Avoca CLO XIII, prohibition on KKR Credit Advisors
from acquiring more shares in Avoca CLO XIII, covenants to
maintain that Avoca CLO XIII and KKR Credit Advisors are operated
as separate businesses, and a share charge given by KKR Credit
Advisors over its shares in the Issuer securing it's observance
of such covenants).

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

The rated notes' performance is subject to uncertainty. The
notes' performance is sensitive to the performance of the
underlying portfolio, which in turn depends on economic and
credit conditions that may change. KKR Credit Advisors's
investment decisions and management of the transaction will also
affect the notes' performance.

Loss and Cash Flow Analysis:

Moody's modeled the transaction using CDOEdge, a cash flow model
based on the Binomial Expansion Technique, as described in
Section 2.3 of the "Moody's Global Approach to Rating
Collateralized Loan Obligations" rating methodology published in
February 2014. The cash flow model evaluates all default
scenarios that are then weighted considering the probabilities of
the binomial distribution assumed for the portfolio default rate.
In each default scenario, the corresponding loss for each class
of notes is calculated given the incoming cash flows from the
assets and the outgoing payments to third parties and
noteholders. Therefore, the expected loss or EL for each tranche
is the sum product of (i) the probability of occurrence of each
default scenario and (ii) the loss derived from the cash flow
model in each default scenario for each tranche. As such, Moody's
encompasses the assessment of stressed scenarios.

Moody's used the following base-case modeling assumptions:

Par amount: EUR400,000,000

Diversity Score: 34

Weighted Average Rating Factor (WARF): 2750

Weighted Average Spread (WAS): 3.75%

Weighted Average Recovery Rate (WARR): 44.5%

Weighted Average Life (WAL): 8 years.

Stress Scenarios:

Together with the set of modeling assumptions above, Moody's
conducted additional sensitivity analyses, which were important
components in determining the rating assigned to the rated notes.
These sensitivity analyses include increasing the default
probability relative to the base case. Below is a summary of the
impact of an increase in default probability (expressed in terms
of WARF level) on each of the rated notes (shown in terms of the
number of notch difference versus the current model output,
whereby a negative difference corresponds to higher expected
losses), holding all other factors equal:

Sensitivities are:

Percentage Change in WARF: WARF + 15% (to 3163 from 2750)

Ratings Impact in Rating Notches:

Class A-1 Senior Secured Fixed Rate Notes: 0

Class A-2 Senior Secured Floating Rate Notes: 0

Class B-1 Senior Secured Fixed Rate Notes: -2

Class B-2 Senior Secured Floating Rate Notes: -2

Class C Deferrable Mezzanine Floating Rate Notes: -2

Class D Deferrable Mezzanine Floating Rate Notes: -1

Class E Deferrable Junior Floating Rate Notes: 0

Class F Deferrable Junior Floating Rate Notes: 0

Percentage Change in WARF: WARF +30% (to 3575 from 2750)

Class A-1 Senior Secured Fixed Rate Notes: -1

Class A-2 Senior Secured Floating Rate Notes: -1

Class B-1 Senior Secured Fixed Rate Notes: -3

Class B-2 Senior Secured Floating Rate Notes: -3

Class C Deferrable Mezzanine Floating Rate Notes: -3

Class D Deferrable Mezzanine Floating Rate Notes: -2

Class E Deferrable Junior Floating Rate Notes: -1

Class F Deferrable Junior Floating Rate Notes: -2

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.


AVOCA CLO XIII: Fitch Assigns 'B-sf' Rating to Class F Notes
------------------------------------------------------------
Fitch Ratings has assigned Avoca CLO XIII Limited's notes final
ratings:

  Class A1: 'AAAsf'; Outlook Stable
  Class A2: 'AAAsf'; Outlook Stable
  Class B1: 'AA+sf'; Outlook Stable
  Class B2: 'AA+sf'; Outlook Stable
  Class C: 'Asf'; Outlook Stable
  Class D: 'BBBsf'; Outlook Stable
  Class E: 'BBsf'; Outlook Stable
  Class F: 'B-sf'; Outlook Stable
  Subordinated notes: not rated

Avoca CLO XIII Limited is an arbitrage cash flow collateralized
loan obligation (CLO).  Net proceeds from the issuance of the
notes are being used to purchase a EUR400 million portfolio of
European leveraged loans and bonds.  The portfolio is managed by
KKR Credit Advisors (Ireland).  The transaction features a four-
year reinvestment period.

KEY RATING DRIVERS

'B'/'B-' Portfolio Credit Quality

Fitch expects the average credit quality of obligors to be in the
'B'/'B-' range.  Fitch has credit opinions on 99.3% of the
identified portfolio.  The covenanted maximum Fitch weighted
average rating factor (WARF) for assigning the final ratings is
33.0.  The WARF of the identified portfolio is 31.8.

High Recovery Expectations

At least 90% of the portfolio will comprise senior secured loans
and bonds.  Recovery prospects for these assets are typically
more favorable than for second-lien, unsecured, and mezzanine
assets. Fitch has assigned Recovery Ratings to 99.3% of the
assets in the identified portfolio.  The covenanted maximum Fitch
weighted average recovery rate (WARR) for assigning the final
ratings is 68.0.  The WARR of the identified portfolio is 70.6.

Selling Bonds to Address a Regulatory Change

The issuer has not been registered under the United States
Investment Company Act of 1940, as amended, in reliance on both
section 3(c)(7) and Rule 3a-7.  The transaction allows the
manager to buy bonds; however, the manager may be required to
sell the bonds if a regulatory change occurs.  In Fitch's view,
the sale of these assets could expose the issuer to additional
market value losses which could negatively impact the rating of
the notes.

However Fitch took into consideration the legal advice stating
that the regulator change condition does not force the issuer to
sell the bonds at all costs (fire sale).  In addition, Fitch ran
a sensitivity scenario by assuming a 20% bond bucket sold at 50%
of par at day one which confirmed that the ratings would largely
remain within one rating category if the sale resulted in
additional market value losses.

Documentation Amendments

The transaction documents may be amended subject to rating agency
confirmation or noteholder approval.  Where rating agency
confirmation relates to risk factors, Fitch will analyze the
proposed change and may provide a rating action commentary if the
change has a negative impact on the ratings.  Such amendments may
delay the repayment of the notes as long as Fitch's analysis
confirms the expected repayment of principal at the legal final
maturity.

If in the agency's opinion the amendment is risk-neutral from a
rating perspective Fitch may decline to comment.  Noteholders
should be aware that the structure considers the confirmation to
be given if Fitch declines to comment.

Rating Sensitivities

A 25% increase in the expected obligor default probability would
lead to a downgrade of up to two notches for the rated notes.  A
25% reduction in expected recovery rates would lead to a
downgrade of up to four notches for the rated notes.


RYE HARBOUR: Fitch Rates Class F Notes 'B-(EXP)sf'
--------------------------------------------------
Fitch Ratings has assigned Rye Harbour CLO Limited's notes
expected ratings:

  Class A: 'AAA(EXP)sf'; Outlook Stable
  Class B-1: 'AA+(EXP)sf'; Outlook Stable
  Class B-2: 'AA+(EXP)sf'; Outlook Stable
  Class B-3: 'AA+(EXP)sf'; Outlook Stable
  Class C-1: 'A+(EXP)sf'; Outlook Stable
  Class C-2: 'A+(EXP)sf'; Outlook Stable
  Class D: 'BBB(EXP)sf'; Outlook Stable
  Class E: 'BB(EXP)sf'; Outlook Stable
  Class F: 'B-(EXP)sf'; Outlook Stable
  Subordinated notes: not rated

The assignment of the final ratings is contingent on the receipt
of final documents conforming to information already reviewed.

Rye Harbour CLO Limited is a cash flow collateralized loan
obligation (CLO).

KEY RATING DRIVERS

Portfolio Credit Quality

Fitch has public ratings or credit opinions on 64 of the 66
obligors in the identified portfolio and expects the average
credit quality to be in the 'B' to 'B-' range.  The weighted
average rating factor of the identified portfolio, which
represents 67.8% of target par, is 33.4.

High Expected Recoveries

At least 90% of the portfolio will comprise senior secured
obligations.  Recovery prospects for these assets are typically
more favorable than for second-lien, unsecured and mezzanine
assets.  Fitch has assigned Recovery Ratings to 64 of the 66
obligations in the identified portfolio.  The weighted average
recovery rating of the identified portfolio is 75.7%.

Diversified Asset Portfolio

Unlike other CLO 2.0s, this transaction contains a covenant which
limits the top 10 obligors in the portfolio to 18% of the
portfolio balance.  This ensures that the asset portfolio will
not be exposed to excessive obligor concentration.

Limited Interest Rate Risk

Interest rate risk is naturally hedged for most of the portfolio,
as fixed-rate liabilities and assets initially represent 9% and
up to 10% of target par, respectively.  As fixed-paying
liabilities are junior in the structure and the class B-3 notes
switch to floating after five years, the notional of fixed-rate
liabilities will fluctuate after the reinvestment period so that
the proportion will adjust to remain a natural hedge for the
fixed-rate assets.

Unhedged Non-Euro Assets Exposure

The manager may invest up to 5% in unhedged and FX forward hedged
non-euro assets.  Unhedged assets may not account for more than
2.5%.  If the assets are not sold 90 days after their purchase,
the manager will try to obtain perfect asset swaps.  Any unhedged
asset in excess of the allowed limits or held for longer than 90
days will receive a zero balance for the calculation of the OC
tests.  Unhedged assets may only be purchased if after a haircut
of 20% in the case of sterling assets and 50% for all other
assets the portfolio notional is still above target par.  No
haircut is applied to FX forward hedged assets.

Hedged Non-Euro Assets Exposure

The transaction is permitted to invest up to 30% of the portfolio
in non-euro assets, provided perfect asset swaps can be entered
into.

TRANSACTION SUMMARY

Net proceeds from the notes will be used to purchase a EUR350m
portfolio of mostly euro-denominated leveraged loans and bonds.
The transaction features a four-year reinvestment period and the
portfolio of assets will be managed by Sankaty Advisors Limited.

The transaction features a weighted average life test which
differs to other CLO 2.0 transactions in that it stays constant
at four years once the reinvestment period ends instead of
continuing a linear step down as it does during the reinvestment
period. While this will allow the transaction to pass the
weighted average life test more easily after the reinvestment
period, extension of the portfolio's life is restricted by
reinvestment criteria and conditions for maturity extensions
within the portfolio.  Fitch did not make any adjustments in its
analysis for this feature and was satisfied that the risk horizon
remains in-line with other recently rated transactions.

The transaction documents may be amended subject to rating agency
confirmation or note-holder approval.  Where rating agency
confirmation relates to risk factors, Fitch will analyze the
proposed change and may provide a rating action commentary if the
change has a negative impact on the then current ratings.  Such
amendments may delay the repayment of the notes as long as
Fitch's analysis confirms the expected repayment of principal at
the legal final maturity.

If in the agency's opinion the amendment is risk-neutral from a
rating perspective, Fitch may decline to comment.  Noteholders
should be aware that the structure considers the confirmation to
be given if Fitch declines to comment.

RATING SENSITIVITIES

A 25% increase in the expected obligor default probability would
lead to a downgrade of one to three notches for the rated notes.

A 25% reduction in expected recovery rates would lead to a
downgrade of one to four notches for the rated notes.



=========
I T A L Y
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WASTE ITALIA: Moody's Assigns 'B2' Corporate Family Rating
----------------------------------------------------------
Moody's Investors Service, has assigned a definitive corporate
family rating (CFR) of B2 and a B2-PD Probability of Default
rating (PDR) to Waste Italia S.p.A. Concurrently, Moody's has
also assigned a definitive B2 rating to its EUR200 million senior
secured notes due 2019. The outlook remains stable.

Ratings Rationale

Moody's definitive ratings for the CFR and the senior secured
notes are in line with the provisional ratings assigned on
November 4, 2014. Moody's rating rationale was set out in a press
release on that date. The notes priced at an offering price of
92.29% of their par value, other than this the final terms of the
notes did not differ materially from the drafts reviewed for the
provisional instrument rating assignments.

Waste Italia's acquisition of Geotea S.p.A. was completed as
planned on November 27, 2014. Moody's notes also that Waste
Italia has successfully signed a EUR15 million revolving credit
facility following the launch of its notes.

Outlook

The stable outlook reflects Moody's expectation that Waste Italia
will manage growth in a way that will allow the company to reduce
leverage towards its stated target of reaching net debt /EBITDA
of 3.0x (on a reported basis) within the next three years. In
particular Moody's does not expect Waste Italia to upstream any
dividend to its parent, Kinexia, in the next few years.

What Could Change The Rating Up

While there is no near term upward rating pressure, the
continuing expansion of the company's operations together with a
sustained increase in landfill capacity lifespan, that would
enable the maintenance of the group's high margins and deliver
further operating cash flow growth, resulting in Moody's adjusted
leverage falling towards 3.5x, could lead to an upgrade of the
rating in the medium term.

What Could Change the Rating Down

Waste Italia's rating could come under pressure if (i) Moody's
adjusted debt/EBITDA rises above 5.0x; (ii) landfill capacity
lifespan falls below three years of utilization; (iii) the
group's expansion into other waste management operations leads to
margin dilution, resulting in pressure on its liquidity profile.

Principal Methodologies

The principal methodology used in this rating was Environmental
Services and Waste Management Companies published in June 2014.
Other methodologies used include Loss Given Default for
Speculative-Grade Non-Financial Companies in the U.S., Canada and
EMEA published in June 2009.

Corporate Profile

Headquartered in Milan, Waste Italia is a waste management
company based in Northern Italy. Its vertically integrated
business operates in the collections, processing and recycling,
landfill disposal and biogas, with a focus on non-hazardous
special (commercial) waste. Its main regions of operations are
Lombardy, Piedmont and, following the acquisition of Geotea,
Liguria, where it has 7 service centers and depots operating a
fleet of 150 vehicles (of which 65 are owned), 10 sorting and
treatment plants and 13 landfills sites of which 8 are active. In
addition to this, the group operates through third party
partnership agreements to provide waste management services
throughout Italy. In the last twelve months to June 2014, Waste
Italia had revenues of EUR127 million (pro forma its
acquisitions).



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


ALLIANCE BANK: S&P Raises Counterparty Credit Ratings to 'B/B'
--------------------------------------------------------------
Standard & Poor's Ratings Services raised its long- and short-
term counterparty credit ratings on Kazakhstan-based Alliance
Bank JSC to 'B/B' from 'D/D'.  The outlook is stable.

At the same time, S&P raised the Kazakhstan national scale rating
to 'kzBB' from 'D'.

The upgrade follows the announcement that the debt restructuring
plan, which includes a merger with Temirbank JSC and ForteBank
JSC, was approved by the court on Dec. 12, 2014.  This plan leads
to a substantial reduction of Alliance Bank's indebtedness to
approximatively Kazakhstani tenge 87 billion (US$470 million) and
therefore to restoration of its solvency.  The bank's former
controlling shareholder, the sovereign wealth fund Samruk-Kazyna,
is supporting the transaction through the conversion of existing
deposits with Alliance Bank into a 10-year special term deposit
and the placement of additional new deposits with the bank on the
same terms.  S&P thinks this will stabilize the liquidity profile
and ensure the viability of the combined entity.

By Jan. 31, 2015, Alliance Bank's merger with Temirbank and
ForteBank is expected to be complete, and the latter two entities
fully consolidated into the Alliance Bank.  S&P refers to the
combined bank as "Alliance Bank" in this report, and the 'B'
long-term rating on Alliance Bank reflects S&P's assessment of
the group credit profile of the combined entity.

S&P's ratings on Alliance Bank reflect its anchor of 'bb-', as
well as its "moderate" business position, "moderate" capital and
earnings, "weak" risk position, "average" funding, and "adequate"
liquidity, as S&P's criteria define these terms.  The stand-alone
credit profile (SACP) is 'b-'.  The ratings benefit from one
notch of extraordinary government support because S&P considers
Alliance Bank as a bank with "moderate" systemic importance in
Kazakhstan. S&P characterizes the government of Kazakhstan as
"supportive" to private sector commercial banks.  The group
credit profile is a 'b'.

The stable outlook reflects S&P's view that, following the
restructuring and merger with Temirbank and ForteBank, the new
Alliance Bank will maintain a stable competitive position in
Kazakhstan's banking sector, supported by its restored
capitalization and profitability.  Nevertheless, S&P acknowledges
that the integration of Temirbank and ForteBank presents
operational challenges and that the bank still needs to
demonstrate that the merger will result in creation of a
sustainably stronger entity than any of the three entities
individually.

S&P could take a negative rating action if the bank's loss
absorption capacity materially weakens due to faster-than-
expected balance sheet growth, creation of significant additional
provisions, or other one-off items that negatively affect
profitability and capitalization.  S&P would also view customer
deposit outflow leading to liquidity deterioration negatively.
S&P will also monitor how the bank manages inherent execution
risks related to the merger.

S&P considers ratings upside to be limited.  S&P could revise its
assessment of the bank's risk position to "moderate" from "weak"
if it saw a material reduction of legacy problem loans, combined
with asset quality of loans disbursed since 2010 being at peer
levels and adequate provisioning.  S&P would also need to see
that the new business model was proving stable and sustainable,
even over the weaker parts of the cycle, and the bank generating
positive net income and maintaining its capital with a
significant cushion above the minimum regulatory levels.


FORTEBANK JSC: S&P Affirms 'B/B' Counterparty Credit Ratings
------------------------------------------------------------
Standard & Poor's Ratings Services said that it had affirmed its
'B/B' long- and short-term counterparty credit ratings on
Kazakhstan-based ForteBank JSC.  The outlook is stable.  At the
same time, S&P lowered its Kazakhstan national scale rating on
ForteBank to 'kzBB' from 'kzBB+'.

The affirmation reflects the announcement that Alliance Bank's
debt restructuring plan, which includes a merger with Temirbank
JSC and ForteBank JSC, was approved by the court on Dec. 12,
2014. This plan leads to a substantial reduction of Alliance
Bank's indebtedness and restoration of its solvency.

By Jan. 31, 2015, Alliance Bank's merger with Temirbank and
ForteBank is expected to be complete.  ForteBank will become a
wholly-owned and fully integrated subsidiary of Alliance Bank.

S&P therefore will consider ForteBank as a "core" subsidiary of
Alliance Bank.  According to S&P's Group Rating Methodology,
"core" subsidiaries are rated at the level of the group credit
profile, which S&P assess at 'b'.  As S&P also assess ForteBank's
stand-alone credit profile (SACP) at 'b', it do not factor any
notches of uplift into the rating on the bank because S&P
typically do not rate a subsidiary above the group credit
profile.

ForteBank's "core" status within the combined Alliance Bank Group
reflects S&P's treatment of this combination as a merger rather
than an acquisition by Alliance Bank of the other two banks.  S&P
expects that Temirbank and ForteBank will cease to exist as legal
entities in early 2015.  S&P expects the integration of the three
banks to take place in 2015-2016, resulting in a common
information technology platform, risk management systems, and
policies.

The new bank will likely be rebranded as ForteBank in 2015, as
the reputation of the Alliance Bank and Temirbank brands had been
tarnished after years of financial difficulties following debt
restructurings.

The lowering of the national scale rating to 'kzBB' from 'kzBB+'
reflects ForteBank's incorporation in a group with a weaker
financial profile, although its SACP is higher than those of
Alliance Bank and Temirbank.

The stable outlook on ForteBank reflects that on Alliance Bank,
given ForteBank's "core" status.

The stable outlook on Alliance Bank reflects S&P's view that,
following the restructuring and merger with Temirbank and
ForteBank, the new bank will maintain a stable competitive
position in Kazakhstan's banking sector, supported by its
restored capitalization and profitability.

S&P expects ForteBank to keep its "core" status within the
Alliance Bank Group and that the ratings and outlook on ForteBank
will therefore move in tandem with the group credit profile.
After the court decision, S&P sees only a marginal risk that the
combination of the three banks and the full integration of
Temirbank and ForteBank into Alliance Bank will not go through.
But if this risk materializes, S&P would reassess its view of the
group support ForteBank receives.



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


BREEZE FINANCE: Moody's Lowers Rating on Class B Bonds to 'Caa2'
----------------------------------------------------------------
Moody's Investors Service has taken the following rating actions
for the respective debt facilities raised by Breeze Finance S.A.:

  -- Downgraded to B1 from Ba3 the rating of the EUR287 million,
     4.524% Class A Secured Bonds due in 2027 (the "Class A
     Bonds")

  -- Downgraded to Caa2 from Caa1 the rating of the EUR84
     million, 6.708% Class B Subordinated Bonds due in 2027 (the
     "Class B Bonds" and, together with the Class A Bonds, the
     "Bonds")

The outlook on the Bonds is stable.

Ratings Rationale

The downgrades are primarily driven by continued worse-than-
expected wind flow in 2013 and year to date 2014, a deterioration
in liquidity, and the increasing debt burden on the Class B
Bonds.

"As a result of unusually low wind speeds in the summer of 2014
and a later than usual receipt of September's revenues from the
German grid operators (who have 30 days to pay the invoice), the
Issuer withdrew EUR1 million from the debt service reserve
account to service the Class A Bonds at the October 19, 2014
payment date and Moody's do not expect this amount to be
replenished," explains Christopher Bredholt, an Assistant Vice
President - Analyst in Moody's Infrastructure Finance Group, and
lead analyst for the Issuer. The Class B Bonds continue to defer
payments of principal and interest as allowed under the finance
documentation.

The ratings of the Class A Bonds and Class B Bonds are
constrained by weak credit metrics as a consequence of (1) low
wind levels experienced across the portfolio of wind farms,
resulting in energy production levels that since 2009 have
largely been substantially below the original forecasts; and (2)
higher-than-budgeted operating costs due to aging portfolio of
wind farms. However the ratings are supported by (1) satisfactory
availability; and (2) a supportive legal framework both in
Germany and France, underpinning guaranteed electricity feed-in
tariffs for all wind-farms in the portfolio.

The B1 rating of the Class A Bonds takes into account the senior
position of the debt but also, as negatives, (1) that the Class A
Bonds debt service reserve account (DSRA), once drawn, is
subordinated to repayments of principal and interest on the Class
B Bonds; and (2) that the Class A Bonds are subject to heightened
liquidity risk around the October semi-annual payment date, as
this follows the seasonally low wind summer period. Given the
continued deferral of principal and interest on the Class B
Bonds, it is highly unlikely that withdrawals from the DSRA will
be replenished.

The Caa2 rating of the Class B Bonds reflects (1) their
subordinated position relative to the Class A Bonds; (2) the
partial deferral of principal and interest since 2010, leading to
a higher debt service burden (at October 2014, the cumulative
deferred principal and interest payments were EUR18.4 million and
EUR4.7 million, respectively); (3) the increasing likelihood that
the Class B Bonds will not be repaid in full, even under a
sustained improvement in wind conditions (i.e. production at P50
levels); and (4) the full utilization of the DSRA for the Class B
Bonds.

Unrelated to the rating action, Moody's notes that at the
adjourned Meeting of Class A Bondholders held on December 1,
2014, an Extraordinary Resolution to terminate the financial
guarantee policy provided by MBIA was duly passed. Therefore the
Class A Bonds no longer benefit from an unconditional and
irrevocable guarantee of scheduled principal and interest under a
financial guarantee insurance policy issued by MBIA UK Insurance
Limited ("MBIA"; rated Ba2, stable outlook).

What Could Change the Rating UP/DOWN

The stable outlook for the Bonds reflects the long-term nature of
the energy production forecast for wind. Although wind conditions
have been poor over recent years, wind resource is expected to
fluctuate around long-term historical averages.

Downward pressure would likely be exerted on the ratings
following (1) wind levels consistently below the updated
projections; (2) a material decrease in the availability of the
portfolio below 95%; or (3) a sharp increase in operating costs
for a sustained period of time. Additionally, for the Class A
Bonds, downward rating pressure could develop if future
withdrawals from the DSRA materially impair the liquidity
available for scheduled debt service.

Upward pressure would be exerted on the ratings of the Bonds as a
result of a sustained increase in revenues or reduction in costs
resulting in a material improvement in the debt service cover
ratios above 1.30x and 1.10x for the Class A Bonds and Class B
Bonds respectively.

The principal methodology used in this rating was Power
Generation Projects published in December 2012.

Breeze Finance S.A. is a Luxembourg-based special purpose company
ultimately owned by Renewable Energies RE Beteiligungs GmbH (5%,
or EUR 100) and Appleby Trust (Cayman) Ltd. (95%, or EUR1,900).


EURASIAN NATURAL: S&P Withdraws 'B-' CCR; Outlook Negative
----------------------------------------------------------
Standard & Poor's Ratings Services withdrew its 'B-/B' long- and
short-term corporate credit ratings on Luxembourg-registered
Eurasian Natural Resources Corporation Ltd. (ENRC).  The outlook
at the time of withdrawal was negative.

At the same time, S&P assigned its 'B-/B' long- and short-term
corporate credit ratings to the Eurasian Resources Group (ERG),
the parent company of ENRC.  The outlook is negative.

The rating on ERG reflects its weak liquidity.  It could
experience a potential liquidity shortfall in the next 12 months
as it will need to repay around $1.3 billion of maturing long-
term debt (mostly bank loans), only part of which is covered by
cash and new facilities.  S&P also anticipates that soft iron ore
prices will put further pressure on liquidity; S&P now expects
ERG to generate negative free operating cash flows (FOCF) in
2015.

Since the beginning of the year, iron ore prices -- which
contributed around 45% of EBITDA in 2013 -- have declined by 50%
to about US$70 per ton.  This sharp decline has been partly
mitigated by stable performance of the ferrochrome segment and a
more favorable exchange rate.  In S&P's view, this would result
in EBITDA dropping to US$1.7 billion in 2014 and US$1.5 billion
in 2015, compared to US$1.8 billion in 2013. If iron ore prices
stabilize at the current level through 2015, EBITDA could fall by
a further US$0.2 billion.

S&P's base case factors in these assumptions:

   -- Average iron ore price of US$85/mt in the second half of
      2014 and in 2015;

   -- Average aluminum price of US$0.85 per pound in the second
      half of 2014, improving to US$0.90 in 2015;

   -- Relatively stable shipping volumes for the key metals;

   -- Interest expenses of over US$600 million per year;

   -- Capex of US$800 million-US$900 million per year;

   -- No dividends; and

   -- No proceeds from asset sales.

These assumptions translate into adjusted debt to EBITDA
exceeding 4.5x in 2014 and over 5.0x in 2015, and negative FOCF.

As of December 2013, the ERG's adjusted debt was $8 billion, most
of which was associated with the leveraged buyout of ENRC.  Under
S&P's base-case scenario, the leverage is expected to further
increase by the end of 2015.  S&P understands that the company is
considering taking some measures to improve the capital
structure. However, this is not part of our base case.

S&P's assessment of ERG's "fair" business risk profile reflects
the company's diversified portfolio, long-life asset base, and
robust position in ferrochrome production globally.  At the same
time, S&P's assessment is constrained by high country risk in
Kazakhstan where ERG's key operations are located, and also the
cyclical and volatile nature of the metals and mining industry.

S&P views management and governance as weak because of the risks
related to an ongoing investigation of ENRC by the U.K.'s Serious
Fraud Office.  S&P also factors into its assessment the fact that
ENRC has not yet finalized the review of IFRS accounts for first-
half 2014, although S&P do have access to management accounts.

The negative outlook reflects S&P's view that ERG's liquidity
position might further deteriorate in the coming 12 months as a
result of weaker cash generating capacity, on the back of lower
EBITDA.

Downside scenario

S&P may downgrade ERG if its liquidity position further
deteriorates, or if its adjusted debt to EBITDA exceeds 6.0x.

Upside scenario

S&P may revise the outlook to stable if ERG's liquidity position
improves.

S&P could also consider a stable outlook if it sees improvement
in the operating performance or evidence of state support.



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


CID FINANCE: S&P Raises Rating on EUR2.5 Million Notes to 'BB'
--------------------------------------------------------------
Standard & Poor's Ratings Services raised its credit ratings on
four repackaging transactions.

The rating actions on these four transactions follow S&P's recent
rating actions on their reference obligations.  Under S&P's
criteria applicable to transactions such as these, it would
generally reflect changes to the rating on the collateral in its
rating on the tranche.

RATINGS LIST

Ratings Lowered

Class       Rating            Rating
            To                From

CID Finance B.V.
EUR10 Million Credit-Linked Secured Limited Recourse Notes
Series 48

            BB                B+

CID Finance B.V.
EUR2.5 Million Credit-Linked Secured Limited Recourse Notes
Series 47

            BB                B+

CID Finance B.V.
EUR2.5 Million Credit-Linked Secured Limited Recourse Notes
Series 46

            B                 B-

Willow No. 2 (Cayman) Ltd.
$20 Million Fixed-Rate Credit-Linked Secured Limited Recourse
Notes Series 7

            BB+               B+



===========
N O R W A Y
===========


NORWEGIAN ENERGY: Faces Cash Shortfall; Seeks Bond Conversion
-------------------------------------------------------------
Mikael Holter at Bloomberg News reports that Norwegian Energy Co.
ASA said it will need to convert about NOK3.1 billion (US$426
million) in bond debt to equity as its financial woes deepened
amid plunging oil prices and production delays.

Bloomberg relates that Noreco said in a statement on Dec. 15 the
board will seek an accord with bondholders as underlying cash
flow and asset values can't support debt and accumulated
interest.  Noreco, as the company is known, said it faces a cash
shortfall of about NOK1.4 billion at the end of 2015 with the
current debt schedule, Bloomberg notes.

Noreco, as cited by Bloomberg, said its proposal, which assumes a
market value of NOK900 million for the company, would give a
relatively higher recovery for the owners of its 2017 and 2016
secured bonds, while existing shareholders will receive 5%.

"Noreco's financial situation and outlook has continued to
deteriorate due to the significant and continued drop in oil
prices, increases in projected operating costs and accelerated
retention of cash to cover future abandonment costs," Bloomberg
quotes Tommy Sundt, Noreco's chief executive officer, as saying
in the statement.  "While we continue to pursue opportunities to
best preserve values for all stakeholders, we need to accelerate
work on an overall financial restructuring."

Less than a year after a previous restructuring, Noreco said on
Oct. 1 it might not meet financial commitments and covenants
because of a production shutdown at its Huntington oil field and
reserves writedowns, Bloomberg relays.  Since then, the benchmark
Brent crude contract has dropped more than 30%, worsening
Noreco's liquidity, Bloomberg recounts.

Noreco's Chairman Erik Henriksen on Dec. 15 gave notice of his
resignation from the board, Bloomberg discloses.

Norwegian Energy Company ASA, an independent oil and gas company,
focuses on the exploration, development, and production in the
North Sea region.  It has a portfolio of 48 exploration and
production licenses in Norway, Denmark, and the United Kingdom.
The company was founded in 2005 and is headquartered in
Stavanger, Norway.



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


HIPOTEBANSA X: S&P Lowers Rating on Class B Notes to 'B-'
---------------------------------------------------------
Standard & Poor's Ratings Services took various credit rating
actions in Fondo de Titulizacion de Activos, Hipotebansa X and
Fondo de Titulizacion de Activos, Hipotebansa 11.

Specifically, S&P has:

   -- Affirmed its 'AA (sf)' rating on Hipotebansa 11's class A
      notes;

   -- Lowered to 'AA- (sf)' from 'AA (sf)' and to 'B (sf)' from
      'BB (sf)' its ratings on Hipotebansa X's class A and B
      notes, respectively; and

   -- Lowered to 'B- (sf)' from 'B+ (sf)' its rating on
      Hipotebansa 11's class B notes.

Upon publishing its updated criteria for Spanish 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"

Following S&P's review of these transactions, 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 it has received--the
September 2014 payment date for Hipotebansa X and the November
2014 payment date for Hipotebansa 11.  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
maturity.

S&P's RAS criteria designate the country risk sensitivity for
RMBS as 'moderate'.  Under S&P's RAS criteria, these
transactions' 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 all six of the
conditions in paragraph 48 of the RAS criteria are met, S&P could
assign ratings in these transactions up to a maximum of six
notches (two additional notches of uplift) above the sovereign
rating, subject to credit enhancement being sufficient to pass an
"extreme" stress.

As S&P's long-term rating on the Kingdom of Spain is 'BBB', its
RAS criteria cap at 'AA (sf)' the maximum potential rating in
these transactions for the class A notes.  The maximum potential
rating for all other classes of notes is 'A+ (sf)'.

Credit enhancement in both transactions have not changed since
S&P's previous review, as the notes are amortizing pro rata.  On
the September 2014 payment date, Hipotebansa X's class B notes
reached their minimum required level to be able to amortize pro
rata with the class A notes.  From the next payment date,
Hipotebansa X's class A and B notes will be paid sequentially
until the legal amortization of the notes.

Class         Available Credit
               Enhancement (%)
       --Hipotebansa X--
A                         6.77
B                         0.00
       --Hipotebansa 11--
A                         5.66
B                         0.00

Credit enhancement only takes into account the subordination of
the notes.  Each of these transactions features two amortizing
reserve funds.  These reserve funds have never been drawn and are
at their required levels in both transactions.  However, contrary
to what S&P typically sees in the Spanish RMBS market, they can
only be used to pay interest amounts and cannot be considered as
credit enhancement.

As the class A notes in both transactions are protected in the
priority of payments by the complete subordination of the class B
notes, in terms of both interest and principal payments, the
class B notes are directly exposed to any deterioration in the
assets' performance.

Performance has been stable in these transactions.  Severe
delinquencies of more than 90 days, including defaults and
repossessions, at 0.16% in Hipotebansa X and 0.95% in Hipotebansa
11 are on average lower for these transactions than S&P's Spanish
RMBS index.  Defaults are defined as mortgage loans in arrears
for more than 18 months in these transactions.

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

Hipotebansa X
Rating level    WAFF (%)    WALS (%)
AAA                17.78        2.00
AA                 14.74        2.00
A                  13.06        2.00
BBB                10.97        2.00
BB                  8.75        2.00
B                   8.08        2.00

Hipotebansa 11
Rating level    WAFF (%)    WALS (%)
AAA                10.50        2.00
AA                  7.97        2.00
A                   6.59        2.00
BBB                 4.82        2.00
BB                  3.24        2.00
B                   2.76        2.00

The pools attributes indicate better credit quality than the
archetype.  S&P has therefore increased the projected losses that
it modeled to meet the minimum floor under S&P's RMBS criteria.
Hipotebansa X has a higher WAFF than Hipotebansa 11 due to the
original loan-to-value (LTV) ratio distribution.  The weighted-
average original LTV ratio in Hipotebansa X is 83.43%, compared
with 72.06% in Hipotebansa 11.

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 these transactions 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.  In
these transactions, the ratings on the class A notes are
constrained by the rating on the sovereign.

The interest rate swaps comply with S&P's current counterparty
criteria at its current ratings on the notes.  Therefore, S&P
gave benefit to the swaps in its analysis.

There are two swaps in Hipotebansa X, which are structured in the
priority of payments so that swap A is only used to cover the
class A notes' interest rate risk and swap B is only used to
cover the class B notes' interest rate risk.

There is only one swap in Hipotebansa 11, which is at the top of
the priority of payments.  If there are defaults in the
transaction, as the class B notes' interest payment is
subordinated to the amortization of the class A and B notes,
interest rate risk is not covered for the class B notes.

Taking into account the results of S&P's updated credit and cash
flow analysis, and the application of its RAS criteria, S&P has
lowered to 'AA- (sf)' from 'AA (sf)' and to 'B (sf)' from 'BB
(sf)' its ratings on Hipotebansa X's class A and B notes,
respectively.  S&P has lowered to 'B- (sf)' from 'B+ (sf)' its
rating on Hipotebansa 11's class B notes.  At the same time, S&P
has affirmed its 'AA (sf)' rating on Hipotebansa 11's class A
notes.

S&P also considers credit stability in its analysis.  To reflect
moderate stress conditions, S&P adjusted its WAFF assumptions by
assuming additional arrears of 8%, split equally between the one-
month and the three-month buckets for a one-year horizon, and 8%
arrears concentrated in the three-month bucket for the three-year
horizon.  This did not result in S&P's ratings deteriorating
below the maximum projected deterioration that it would associate
with each relevant rating level, as outlined in S&P's credit
stability criteria.

In S&P's opinion, the outlook for the Spanish residential
mortgage and real estate market is not benign and S&P has
therefore increased its expected 'B' foreclosure frequency
assumption to 3.33% from 2.00%, when it applies its RMBS
criteria, to reflect this view.  S&P bases these assumptions on
its expectation of modest economic growth, continuing high
unemployment, and further falls in house prices for the remainder
of 2014, which will then level off in 2015.

On the back of improving but still depressed macroeconomic
conditions, S&P don't expect the performance of the transactions
in its Spanish RMBS index to improve in 2014 and into 2015.

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

Hipotebansa X and Hipotebansa 11 are Spanish RMBS transactions,
which closed in March and November 2002, respectively.  They both
securitize pools of first-ranking mortgage loans over residential
properties granted to individuals and originated by Banco
Santander S.A.  The mortgage loans are mainly located in
Catalonia, Madrid, and Andalucia.

RATINGS LIST

Class              Rating
            To                From

Fondo de Titulizacion de Activos, Hipotebansa X
EUR917 Million Mortgage-Backed Floating-Rate Notes

Ratings Lowered

A           AA- (sf)          AA (sf)
B           B (sf)            BB (sf)

Fondo de Titulizacion de Activos, Hipotebansa 11
EUR1.062 Billion Mortgage-Backed Floating-Rate Notes

Rating Affirmed

A           AA (sf)

Rating Lowered

B           B- (sf)           B+ (sf)



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


CB PRIVATBANK: Fitch Affirms 'CCC' Issuer Default Rating
--------------------------------------------------------
Fitch Ratings has downgraded the Viability Ratings (VRs) of two
Ukrainian banks, PJSC CB PrivatBank's (Privat) and ProCredit Bank
(Ukraine) (PCBU) to 'ccc' from 'b-'. A t the same time, the
agency has affirmed the VR of PJSC Credit Agricole Bank (CAB) at
'b-'.

The VRs of the three banks have been removed from Rating Watch
Negative (RWN).  Fitch placed these ratings on RWN in August 2014
following the downgrade of Ukraine's Long-term local currency
Issuer Default Rating (IDR) to 'CCC'.  Following today's actions,
Privat and PCBU's VRs are in line with the sovereign's IDRs,
whereas CAB's is a notch higher, implying moderate resilience of
the bank's stand-alone profile to a sovereign default.

The Long-term foreign currency IDRs of all three banks have been
affirmed at 'CCC'.  CAB and PCBU's IDRs are underpinned by
potential support from foreign shareholders, whereas Privat's are
driven solely by the bank's stand-alone strength.

KEY RATING DRIVERS -- VIABILITY RATINGS (VRs)

The downgrade of Privat's VR to 'ccc' from 'b-' reflects
weaknesses in the bank's key financial metrics, as a result of
which Fitch does not believe it is appropriate to rate the bank
above the sovereign.

The bank's deposit base contracted by 21% (net of exchange rate
effects) in 9M14, and the bank has utilized funding from the
National Bank of Ukraine (NBU) to support is liquidity position.
Highly liquid assets (cash and equivalents and short-term
unencumbered interbank placements), net of wholesale repayments
in the next 12 months, were equal to a moderate 14% of total
customer deposits at end-10M14.  Foreign currency (FC) liquidity
of USD1bn at end-10M14 comfortably covered the USD200 million
eurobond due in September 2015, but is dependent on deposit
stability.

Pressure on capital has been considerable due to asset inflation
following devaluation, and higher funding and credit risk costs,
which have hit bottom line performance.  The regulatory total
capital ratio was 10.96% at end-3Q14 (minimum level: 10%), and
the planned equity injection of UAH4bn in 4Q14-2015 (equal to 19%
of current equity) will provide only moderate capital support.

Under local GAAP, Privat became loss-making on a quarterly basis
in 3Q14 but still reported positive 9M14 results; pre-impairment
profit, adjusted for accrued revenues not paid in cash, became
negative in 1H14 IFRS.  Performance will remain subdued in the
near term due to continued margins pressure and further loan
impairment charges.

Reported non-performing loans (NPLs; loans overdue by more than
90 days) were a moderate 6.6% of loans at end-1H14, slightly up
from 5.9% from end-2013, and reported restructured exposures
contributed a further 2.8% (end-2013: 2.7%).  At the same time,
individually impaired loans not yet past due (18.5% of gross
loans), are a source of additional risk, as is the bank's large
exposure to the oil trading sector (22%).  Total loan impairment
reserve (LIR) coverage of problem exposures (NPLs and
restructured) and individually impaired loans was a modest 43% at
end-1H14.

The downgrade of PCBU's VR to 'ccc' from 'b-' reflects
deterioration in the bank's asset quality and the potential for
further impairment, given significant exposure to Donetsk region
(9.5% of end-3Q14 loans), the material portion of FC-lending (35%
of net loans), recent rapid lending growth (up by 51% in 11M14,
adjusted for exchange rate effects) and the weakening operating
environment.  NPLs were a moderate at 3.2% of loans at end-3Q14,
but restructured loans (split evenly between standard exposures
and 'watch and impaired' categories) comprised a further 20%, up
from 12.4% at end-2013.

Reserves provided modest 43% coverage of NPLs and 'watch and
impaired' loans at end-3Q14, and the regulatory capital ratio of
10.5% at end-11M14 provided limited loss absorption capacity.
Annualized pre-impairment profit (adjusted for interest income
accrued but not received in cash, equal to 3.3% of average gross
loans in 9M14)and capital support measures, both equity and
subordinated debt, a total of EUR9 million in 4Q14-1Q15 could
provide moderate support for capital ratios.  The liquidity
position remains stable, underpinned by a growing deposit and
limited wholesale refinancing risks.

The affirmation of CAB's VR at 'b-' reflects the bank's
materially lower levels of loan impairment compared with most
Ukrainian peers, in part reflecting the low-risk nature of its
business with parent group clients (36% of end-3Q14 loans) and
limited exposure to Eastern Ukraine/Crimea (below 7% of loans).
The affirmation also takes into account low recent growth;
manageable exposure to FX risks; solid financial performance and
reasonable liquidity.  At the same time, the VR also reflects the
high-risk operating environment and significant dollarization of
lending (end-3Q14: 44% of loans), although in most cases to
exporting borrowers.

CAB's NPLs and restructured loans accounted for 3% and 5% of
gross loans, respectively, at end-3Q14, each up from 1.9% at end-
2013. Impairment reserves at 6.6% of end-3Q14 loans were
sufficient to cover all of these problem exposures by 82%; the
regulatory capital ratio stood at 12.6% at end-3Q14.  Sizeable
pre-impairment profit (a non-annualized 7.7% of average gross
loans in 9M14; 5.3% in 2013) provide a large additional loss
absorption buffer.  CAB's liquidity is comfortable and the
deposit base has grown in 2014, underpinned by stable long-term
relationships with core clientele.

KEY RATING DRIVERS -- IDRS, NATIONAL RATINGS, SENIOR DEBT AND
SUPPORT RATINGS

The downgrade of Privat's Long-term local currency IDR to 'CCC'
from 'B-' is driven by the downgrade of its VR.  The Long-term
foreign currency IDR of 'CCC' is also in line with the bank's VR,
and capped by Ukraine's Country Ceiling.  The affirmation of
Privat's senior debt rating at 'CC'/'RR5' reflects potentially
below average recovery prospects for senior creditors given
bondholders subordination to retail deposits (56% of non-equity
funding at end-3Q14) and significant asset encumbrance (31% of
gross loans pledged against NBU funding).

Privat's Support Rating of '5' and Support Rating Floor of 'No
Floor' reflect Fitch's view that support cannot be relied upon
given the limited ability of the sovereign to provide support and
limited transparency on the ability of the bank's shareholders to
provide assistance.

The IDRs, Support Ratings, National Ratings and, where assigned,
senior unsecured debt ratings of PCBU and CAB are underpinned by
the support the banks may receive from their majority
shareholders.  PCBU is controlled (60% of voting stock) by
ProCredit Holding AG & Co. KGaA. (BBB/Stable), and CAB is fully
owned by Credit Agricole S.A. (A/Stable).  The 'CCC' Long-term
foreign currency IDRs are capped at Ukraine's Country Ceiling,
and the 'B-' Long-term local currency IDRs also take account of
country risks.

The affirmation of the three banks' National ratings reflects
Fitch's view that their creditworthiness relative to other
Ukrainian issuers has not changed significantly.

RATING SENSITIVITIES -- ALL RATINGS

The IDRs, debt ratings (Privat, PCBU) and VRs of all three banks
remain highly correlated with the sovereign credit profile.  The
ratings could be downgraded in case of a further downgrade of the
sovereign, or stabilize at their current levels if downward
pressure on the sovereign ratings abates.  The banks' IDRs and
debt ratings could also be downgraded in case of restrictions
being imposed on their ability to service their obligations.  The
VRs are likely to be downgraded if further deterioration in the
economic environment materially affects the banks' credit
metrics, without sufficient support being provided by
shareholders.

The Stable Outlook on the National Ratings reflects Fitch's view
that any future deterioration in these banks' credit profiles is
likely to be broadly in line with that of other Ukrainian
issuers, meaning that the banks' default risk relative to other
issuers will remain broadly unchanged.

The 'CCC' LC IDR for Ukraine implies that Fitch considers a
sovereign default a real possibility.  This indicates heightened
cliff risk for high ratings on the National scale as, by
definition, National and International ratings converge at 'D'
(default), and hence National Ratings may be downgraded sharply
from 'AAA(ukr)'.

Fitch's rating actions are:

PJSC CB PrivatBank:

Long-term foreign currency IDR: affirmed at 'CCC'

Long-term local currency IDR: downgraded to 'CCC' from 'B-', off
RWN

Senior unsecured debt of UK SPV Credit Finance plc: affirmed at
'CC'/'RR5'

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

Support Rating: affirmed at '5'

Support Rating Floor: affirmed at 'No Floor'

Viability Rating: downgraded to 'ccc' from 'b-', off RWN

National Long-term rating: affirmed at 'A-(ukr)'; Outlook
Stable, off RWN

ProCredit Bank (Ukraine):

Long-Term foreign currency IDR: affirmed at 'CCC'

Long-term local currency IDR: affirmed at 'B-', Outlook Negative

Senior unsecured local currency debt: affirmed at 'B-'/ 'RR4'/
'AAA(ukr)'

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

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

Support Rating: affirmed at '5'

Viability Rating: downgraded to 'ccc' from 'b-', off RWN

National Long-Term rating: affirmed at 'AAA(ukr)'; Outlook
Stable

CAB:

Long-term foreign currency IDR: affirmed at 'CCC'

Long-term local currency IDR: affirmed at 'B-', Outlook Negative

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

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

Support Rating: affirmed at '5'

Viability Rating: affirmed at 'b-', off RWN

National Long-term Rating: affirmed at 'AAA(ukr)'; Outlook
Stable


DNIPROAVIA AIRLINE: Airport Closure Prompts Bankruptcy
------------------------------------------------------
Interfax-Ukraine reports that Dniproavia Airline (Dnipropetrovsk)
could be declared bankrupt by the end of this year due to the
closure of Dnipropetrovsk airport and the inability to work.

"The decisions of the State Aviation Service of November 28 and
December 12 on banning flights between Moscow and Dnipropetrovsk
and the prohibition of flights from Dnipropetrovsk airport
completely paralyzed the work of Dniproavia.  The airline,
which still performs Ukrainian interregional transportation, will
be forced by the New Year to declare bankruptcy.  Some 400
employees with an average salary of UAH15,000 will remain without
job," Interfax-Ukraine quotes a statement as saying.

In addition, the air carrier reported it has not received
explanation for the ban on flights and the time for which they
are limited, Interfax-Ukraine relays.

"Therefore a lot of questions appear, but one of the most
important is whether the competent authorities of the National
Security and Defense Council and the Security Service, which are
hinted at as the initiators of these actions, know why and for
what reason these restrictions are introduced and to what they
must lead," Interfax-Ukraine quotes the airline as saying.

Dniproavia is an airline headquartered at Dnipropetrovsk
International Airport in Dnipropetrovsk, Ukraine, operating
scheduled and chartered passenger flights.



SUMYKHIMPROM PJSC: Court Extends Reorganization for Six Months
--------------------------------------------------------------
According to Interfax-Ukraine, Ilyashev and Partners law firm,
citing the manager of Sumykhimprom's property, Roman Marchenko,
said the Economic Court of Sumy region has extended for six
months the reorganization of PJSC Sumykhimprom.

Thus, the court satisfied the joint petition of the creditors'
committee, the plant and the arbitration manager, Interfax-
Ukraine relates.

According to Interfax-Ukraine, Mr. Marchenko said the court took
into account that during bankruptcy proceedings no production
assets were sold.  Positive results of reorganization were also
recorded: more than 4,500 employees are paid wages, which are 25%
higher than the average one in Sumy region, without delay,
Interfax-Ukraine states.

In addition, for the period of reorganization more than UAH100
million was used in capital investment, UAH140 million -- for
repairs, Interfax-Ukraine relays.  Taxes and fees exceeding
UAH300 million were paid to the budgets of all levels and social
funds, Interfax-Ukraine notes.

JSC Sumykhimprom produces phosphate mineral fertilizers and other
goods of inorganic chemistry.



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


AA BOND CO: S&P Puts 'BB' Rating on Class B Notes on Watch Neg.
---------------------------------------------------------------
Standard & Poor's Ratings Services placed on CreditWatch negative
its 'BB (sf)' credit rating on AA Bond Co. Ltd.'s class B notes.

AA Bond Co. blends a corporate securitization of its operating
business with a subordinated high-yield issuance (the class B
notes) which, if not refinanced on its expected maturity date,
would defer interest for as long as the senior debt remains
outstanding.

S&P continues to view the AA group's business risk profile as
"satisfactory" and its projected operating cash flows as
sufficient to repay the deferred interest on the class B notes by
its legal final maturity date under S&P's cash flow stresses.
However, S&P believes that under the transaction documents, a
class B event of default could be triggered before the class B
notes' legal final maturity date.  This would occur if the issuer
did not have sufficient funds to pay the deferred interest,
together with the then current interest on the class B notes, as
soon as the senior debt is fully repaid.

In such a scenario, it is questionable whether the cash flows
generated by the business will be undisrupted and continue beyond
the class B notes' event of default to repay the deferred
interest and service the notes through legal final maturity,
including the full repayment of principal.  This uncertainty
requires S&P to place greater emphasis on the cash flow available
to pay the amounts then due and payable under the terms of the
class B notes when the senior debt has been redeemed.

S&P currently estimates that, at the current rating level for the
class B notes, the amount becoming due and payable on the class B
notes immediately after the senior notes have been repaid is
likely to exceed the cash flow available for debt service.

S&P has therefore placed its 'BB (sf)' rating on the class B
notes on CreditWatch negative, pending S&P's assessment of the
impact of an event of default for the notes.  S&P expects to
resolve the CreditWatch placement within three months.

The debt issued by AA Bond Co is secured by the Automobile
Association's (AA) operating business.  The AA operates a
roadside assistance service in the U.K. and Ireland and provides
complementary services such as insurance, driving services, and
home emergency response.


EQUINOX ECLIPSE: Moody's Affirms Caa1 Rating on GBP329MM A Notes
----------------------------------------------------------------
Moody's Investors Service has affirmed the ratings of the Class A
Notes issued by EQUINOX (ECLIPSE 2006-1) plc.

Moody's rating action is as follows:

  GBP329 million A Notes, Affirmed Caa1 (sf); previously on
  Apr 5, 2013 Downgraded to Caa1 (sf)

Moody's does not rate the Class B, Class C, Class D, Class E, and
the Class F Notes.

Ratings Rationale

The affirmation action reflects Moody's latest review of the loan
portfolio that results in unchanged loss expectations mostly on
the Ashbourne loan. Following the allocation of losses for the
Royal Mint Court loan, the subordination for Class A has
decreased significantly. The Ashbourne loan is now the main
driver of the pool's loss expectation.

Moody's affirmation reflects a base expected loss in the range of
20% -- 30% of the outstanding balance, compared with 40% -- 50%
at the last review, mainly because the Royal Mint Court loan has
been worked out with a loss to the transaction. Moody's derives
this loss expectation from the analysis of the default
probability of the securitized loans (both during the term and at
maturity) and its recovery expectation for the collateral.

Realised losses have increased to 12.77% from 5.49% of the
original securitized balance compared to the last review. Moody's
estimate of the base expected loss plus realized losses is now in
the range of 10%-20% of the original pool balance compared with
20%-30% at the last review.

Methodology Underlying the Rating Action:

The principal methodology used in this rating was Moody's
Approach to Rating EMEA CMBS Transactions published in December
2013.

Other factors used in this rating are described in European CMBS:
2014-16 Central Scenarios published in March 2014.

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

Main factors or circumstances that could lead to a downgrade of
the rating are generally (i) a decline in the property values
backing the underlying loans or (ii) an increase in default risk
assessment.

Main factors or circumstances that could lead to an upgrade of
the rating are generally (i) an increase in the property values
backing the underlying loans, (ii) repayment of loans with an
assumed high refinancing risk, (iii) a decrease in default risk
assessment.

Moody's Portfolio Analysis

As of the October 2014 IPD, the transaction balance has declined
by 76% to GPB96.8 million from GPB401.3 million at closing in
2006 due to the pay off / loss allocations of 10 loans originally
in the pool. Since the last review the Royal Mint Court loan has
been worked out with a loss. The pool is concentrated in the UK,
and property type concentration is on care homes with the
Ashbourne loan being the largest loan in the pool. Moody's uses a
variation of the Herfindahl Index, in which a higher number
represents greater diversity, to measure the diversity of loan
size. Large multi-borrower transactions typically have a Herf of
less than 10 with an average of around 5. This pool has a Herf of
1.7, the same higher than at Moody's prior review.

Moody's WA securitized LTV is 112%, compared to 173% at last
review.

After the Portland Place loan repaid and the Royal Mint Court
loan and the St. Mary's Court loan were worked out with a loss,
the Ashbourne loan now dominates the remaining pool. The loan is
a participation of a senior tranche of the Ashbourne whole loan
(26.99% participation, or 50% of the Priority A loan). The loan
is secured against 84 care homes (plus day care centre) across
the UK as of the July 2014 IPD. In total, five houses were sold
since closing. Southern Cross surrendered the leases to the
Borrower in 2011 and in consequence two operators were identified
and selected to run the homes which were rebranded "Larchwood
Care". Contracts with care home operators are now consolidated
largely to one provider with further arrangements with a local
operator in Northern Ireland. The borrower currently
underperforms the business plan that aimes to improve the
profitability of the underlying care home business. Moody's
expects the loan to default at the loan maturity in January 2016.

The Holland Park Towers loan is secured against a 61,397 square
foot, single-let office building located on Kensington High
Street near Kensington Olympia Underground & Railway Station.
Moody's securitized LTV has been stable since the last review at
around 100%. Despite the reported whole loan LTV being above 115%
Moody's believes there is still a chance the loan might not
suffer a loss. The low remaining lease term of just under three
years is a key obstacle to a refinancing of the loan. The loan
matures in January 2016.


FOLKESTONE INVICTA: To Become Debt-Free Within Next Month
---------------------------------------------------------
Steve Tervet at Kent Online reports that Folkestone Invicta are
set to become debt-free within the next month.

Folkestone Invicta Dec. 8 revealed that the Company Voluntary
Arrangement (CVA), which has hung over the club since 2010 is
almost completely paid off, Kent Online relates.

"The club is hoping everyone -- supporters and friends (and foes)
alike -- will turn up, and if so, as a result the club can pay
off the last part of its CVA three months early.  Not only that,
but also clear what are only current debts, so that it can
declare itself completely debt-free by the turn of the year.

"Although we have a ground grading already for this level, once
the CVA is paid up, we will be looking to prepare for possible
promotion over the next couple of seasons, and will be able to
give Neil (Cugley) better support on the playing side.  We want
to prepare now, and to achieve a ground grading for Ryman
Premier, we need to re-lay the walkways and areas surrounding the
pitch, and complete some other minor works," Kent Online quotes a
club statement as saying.  "In anticipation the club has applied
to the FA, supported by local MP Damian Collins, for a grant of a
maximum of 50% of the estimated cost.  Our part will cost around
GBP6500 and with pledges already received of around GBP2000,
towards our 50% we look forward to completing the work in the New
Year."

Folkestone Invicta is a football club.


TAYLOR WIMPEY: Fitch Raises Issuer Default Rating From 'BB+'
------------------------------------------------------------
Fitch Ratings has upgraded Taylor Wimpey's (TW) Long-term Issuer
Default Rating (IDR) and senior unsecured rating to 'BBB-' from
'BB+'.  Fitch has also upgraded TW's Short-term IDR to 'F3' from
'B'.  The Outlook is Stable.

The upgrade reflects the continued operational improvement, solid
market outlook derived from an under-supplied domestic market,
and conservatively managed balance sheet.  During the last year
an increased level of pre-selling relative to working capital
deployed provides improved cash flow visibility, and somewhat
smoothens out the cyclical nature of the business.  Commitment to
financial balance sheet targets should allow management financial
flexibility through the cycle.  Although Fitch expects a higher
future dividend this is likely to be paid from free cash flow.
Fitch's expectation is for FFO adjusted leverage to remain below
1.0x into 2015 and 2016.  Fitch expect management to successfully
manage and pre-empt inevitable housing cycles by continuing to
forward sell, and show financial discipline by restraining from
using debt capital to support material land acquisitions.

KEY RATING DRIVERS

Measured Working-Capital Deployment

Fitch expects moderate volume growth into 2015 and 2016 with
moderate working capital requirements due to the ability of using
existing land bank, equivalent to providing around five years of
build volumes.  The order book/housing units under construction
(WIP) ratio should remain comfortable above 100% in the medium
term, indicative of forward selling and reducing exposure to the
pricing environment.  WIP/Turnover ratio has stabilized around
30%-35% significantly less than prior years.  This illustrates
asset efficiency with no significant unsold housing units and a
high level of phasing developments.  This allows the business
flexibility to adapt to a lower volume environment if required.

Positive Volume Outlook

The UK housing sector has grown considerably during 2013 and
2014. Our expectation is that growth rates will slow into 2015
and 2016 with a fairly benign pricing environment.  In the medium
to long term TW is well positioned to benefit from a structural
under-supply of homes in the UK.

Solid Market Position

TW is one of the largest house builders in the UK and has been
capturing around 10% of the new build market in recent years.
This scale allows for lower build and land bank costs.  The size
and relative strength of its balance sheet allows it to source
strategic land and obtain planning consent feeding the business
to build housing developments.  Overall, barriers to entry are
low for the construction side of house building, although
replicating the land bank portfolio that can provide many years
of raw material is difficult.  The latter is a characteristic of
the UK market where sourcing land and obtaining planning consent
is particularly difficult when compared to other countries.
Fitch views positively that TW does not use debt capital to fund
land. Book value equity reserves are higher than its current land
bank at cost on balance sheet, our expectation for an investment
grade UK house builder.

Robust Capital Structure

Management target net gearing through the cycle below 30% - 40%
(net debt (including land creditors) / shareholders equity).
However, during 2013 TW reached a net cash position and took this
opportunity for the early redemption of the remaining GBP150m
2015 bond.  Increased FCF during 2014 and our expectation of
solid FCF into 2015 will allow TW to fund a dividend from it
accumulated cash balances.  Fitch expects FFO leverage to remain
below 1.0x and for distributions to be funded largely with FCF.

Rating Constrained By Sector

Fitch's ratings aim to rate through the cycle.  The normal
corporate rating horizon is three to five years, thus TW's rated
debt will probably experience a housing cycle downturn.  As
investors expect ratings to remain stable rather than pro-
cyclical, TW's ratings reflect the inherent business risks of the
UK sector - however historic they seem during an upturn.  Fitch's
opinion is that a UK house builder's rating is constrained to the
'BBB' category.

Slower Operating Margin Improvements

Operating margins increased to 16.1% for 6 months ending June
2014 from 13.1% on prior period.  This reflects a combination of
low land bank costs from disciplined buying and strategic focus
on margins not volumes.  Build cost inflation has started to
increase during 2014 and expected to continue, and so far been
passed on or offset by lower land costs relative to the average
selling price. Land bank that was pre-2009 and impaired during
the crisis has largely been worked through, with operating
margins providing a clearer reflection of current operating
performance, as opposed to benefiting from a slow write-back
effect of prior years' impairments.  Fitch anticipates the pace
of margin growth to slow into 2015 and 2016.  Management can
operate under the current overhead cost base with volumes up to
around 14,000 units per year.  This provides some room for volume
growth into 2015 & 2016 while keeping overheads constant and
provide modest margin support to offset any build cost inflation.

Satisfactory Liquidity

TW is currently in a net cash positions.  However, Fitch adjusts
leverage to account for the higher seasonal working capital
requirements during the year.  Peak to trough requirement for TW
can be as high at GBP300 million.  Fitch adds GBP160 million of
net debt to replicate an average working capital usage through
the year. Following the early redemption of the 2015 bond, there
are no maturities until 2018.  Liquidity is strong with access to
a committed revolving credit facility of GBP550 million that
Fitch expects to be largely undrawn at FY14 although this is used
throughout the year to management working capital.

RATING SENSITIVITIES

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

   -- A further upgrade is unlikely, given the inherent
      cyclicality of the UK housing business and limited track
      record of pre-empting and maintaining low gearing through
      the cycle.

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

   -- Gross debt / WIP above 40% on a sustainable basis (FY13:
      14%).
   -- Order book / WIP below 100% on a sustainable basis
      indicative of conservative pre-selling (FY13: 172%).
   -- A significant increase in land bank acquisitions with the
      use of debt capital.  Land accounted on balance sheet
      should be fully supported by equity reserves.
   -- Material reduction in its current liquidity strategy.
   -- FFO adjusted leverage above 1.0x on a sustained basis
     (FY13: 0.5x).


TOWERGATE FINANCE: Fitch Lowers Issuer Default Rating to 'CC'
-------------------------------------------------------------
Fitch Ratings has downgraded Towergate Finance plc's Long-term
Issuer Default Rating (IDR) to 'CC' from 'B-'/Rating Watch
Negative.  No Outlook is assigned to the ratings. Towergate's
senior secured notes due 2018 have been downgraded to 'CCC-
'/'RR3' and senior notes due 2019 downgraded to 'C'/'RR6'.

The downgrade reflects Towergate's declining EBITDA profitability
and increasing pressure on operational cash flows as well as
limited liquidity and approaching maturities.  Fitch believes
that the declining fundamentals and increasing pressure on
liquidity mean there is an increased probability of debt
restructuring, consistent with public statements by the company.

The downgrades of the instrument ratings reflect Fitch's
expectation of a post-restructuring EBITDA and the distressed
multiple reflecting Towergate's weakened franchise.

KEY RATING DRIVERS

Tightening Liquidity and Cash Flow

Towergate's liquidity remains under pressure despite the sale of
Hayward Aviation for GBP27 million.  Whilst this will improve
Towergate's immediate liquidity position, Fitch believes that
further management actions will still be required to ensure the
company can meet its financial obligations, including GBP31m of
interest payments, falling due in 1Q15.

Poor Operating Performance

Towergate's organic operating performance continues to decline.
Fitch expects the challenging pricing environment in the UK non-
life insurance market to prevail and also believes that the
transformation plan is having a more negative effect on
profitability than expected.  Therefore, Fitch does not expect
any improvement in Towergate's operating performance in the
medium term.

Unsustainable Leverage

Fitch calculated funds from operations (FFO) adjusted gross
leverage is expected to increase above 10x as a result of the
continuing deterioration in organic performance and the
uncertainty over the benefits of the transformation plan.  Fitch
does not forecast any meaningful improvement in leverage over the
medium term.

Further Material Uncertainty

Should the current investigations by the Financial Conduct
Authority (FCA) result in a material negative cash impact for the
group, cash flow and liquidity will come under further pressure.

Approaches to Buy the Group

As previously announced, Towergate has received approaches from
parties interested in potentially acquiring the group.
Subsequently the company has also invited senior bondholders to
make an acquisition bid in exchange for writing off debt.  These
discussions have not been factored into the rating action taken
today as they are still in the early stages of development.

RATING SENSITIVITIES

Fitch believes there is a high probability of some form of debt
restructuring in 2015.  Any positive rating action would follow
improved liquidity through a combination of improved operational
efficiencies, asset sales or equity injections from a current or
third party.


                            *********

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

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

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


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

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

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

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

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

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


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