TCREUR_Public/150123.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

             Friday, January 23, 2015, Vol. 16, No. 16

                            Headlines

A U S T R I A

ASAMER HOLDING: Puts Ailing Quadracir Units Under Liquidation


F R A N C E

CERBA EUROPEAN: Fitch Revises Outlook to Neg. & Affirms 'B+' IDR


G R E E C E

GREECE: Germany to Lose EUR76 Billion From 'Grexit'


I R E L A N D

RYE HARBOUR: Moody's Assigns B2 Rating to EUR11MM Class F Notes
RYE HARBOUR: Fitch Assigns 'B-sf' Rating to Class F Notes


I T A L Y

ALITALIA SPA: Aims to Return to Profitability by 2017


K A Z A K H S T A N

HALYK BANK: Fitch Affirms 'BB' Issuer Default Rating


L U X E M B O U R G

AK BARS BANK: Fitch Affirms 'BB-' IDR & Revises Outlook to Neg.


N E T H E R L A N D S

SKELLIG ROCK: Moody's Hikes Rating on EUR10MM Cl. S Notes to Ba1


P O R T U G A L

BANCO ESPIRITO: Portugal Regulators Probe Goldman Sachs Loan


R U S S I A

EURASIA DRILLING: Fitch Revises Outlook & Affirms 'BB' IDR
PROMSVYAZBANK: Moody's Assigns B2(hyb) Rating to Sub. Debt
RUSHYDRO JSC: Fitch Affirms 'BB+' IDR; Outlook Negative
SB BANK: Moody's Lowers Nat'l Scale Deposit Rating to Ba3.ru


S P A I N

ABENGOA: Equity Sales Unlikely to Lift Fitch's 'B+' Ratings
CAIXA PENEDES 1: S&P Lowers Rating on Class C Notes to 'B'


U N I T E D   K I N G D O M

ALPARI UK: Japan Unit Tells Clients to Withdraw Funds
AUSTIN REED: To Close More Than 30 Stores Under CVA Deal
BRIDGE FINCO: Moody's Assigns Caa2 Rating to Sr. Sec. Term Debt
CO-OPERATIVE BANK: Revamps Ethical Policy Following Scandals
CPUK FINANCE: Fitch Affirms 'B+' Rating on GBP280MM Class B Notes

ELLI INVESTMENTS: Moody's Lowers CFR to Caa1; Outlook Negative
HOLTS BATTLEFIELD: Goes Into Administration
SEB: Moody's Assigns Ba1(hyb) Rating to US$1.1BB Tier 1 Secs.
* UK: Supermarket Price War Could Force Food Suppliers to Go Bust


X X X X X X X X

* BOOK REVIEW: Transnational Mergers and Acquisitions


                            *********


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


ASAMER HOLDING: Puts Ailing Quadracir Units Under Liquidation
-------------------------------------------------------------
According to Bloomberg News' Alexander Weber, WirtschaftsBlatt,
citing company Asamer spokesman Werner Beninger and official
filings, reports that the badly performing units of Asamer, which
were renamed to Quadracir in July 2014, will be liquidated due to
"tax reasons".

Quadracir, Bloomberg says, still seeks buyers for parts of the
company.

The company has EUR466 million in total liabilities, EUR293
million of which are bank liabilities, Bloomberg discloses.

RLB Oberoesterreich, which also owns 23% of Quadracir, was said
to be biggest creditor, Bloomberg notes.

The company had EUR383 million loss from ordinary activities in
2013 compared to EUR107 million loss in 2012, Bloomberg relates.

Asamer Holding AG is a family business specializing in the
production of the construction materials from the gravel, stone,
cement, concrete, recycling and the processing of mineral raw
materials to finished products such as ceramics and bricks, to
the final customers.



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F R A N C E
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CERBA EUROPEAN: Fitch Revises Outlook to Neg. & Affirms 'B+' IDR
----------------------------------------------------------------
Fitch Ratings has revised the Outlook on French clinical
pathology laboratory group Cerba European Lab SAS (Cerba) to
Negative from Stable.  Its Issuer Default Rating (IDR) and senior
secured notes ratings have been affirmed at 'B+' and 'BB-'/'RR3',
respectively

The revision of the Outlook follows the announcement that Cerba
has agreed to acquire Novescia, a private laboratory testing
network in France, for EUR275 million.  The completion of the
acquisition is subject to certain conditions.

While the acquisition would increase Cerba's scale and strengthen
its position on the French laboratory testing market, the
Negative Outlook primarily reflects Fitch's expectation of weaker
financial metrics resulting from the company's intention to fund
up to the entire consideration with additional debt (both secured
and unsecured) as well as with cash on hand.

Adjusted for the transaction, Fitch estimates Cerba's funds from
operations (FFO) adjusted gross leverage would likely exceed 6.5x
and FFO interest coverage decrease towards 2.0x, reducing its
rating headroom under the 'B+' IDR.  In Fitch's view, the
Negative Outlook also reflects the initial EBITDA margin dilution
and the risks associated with the integration of a larger target
than what Cerba is accustomed to as part of its 'buy and build'
strategy.  An inability to integrate its acquisitions, including
that of Novescia, and to extract planned synergies, leading to
sustainably weaker credit metrics by 2017, could lead to a
downgrade of the IDR to 'B'.

KEY RATING DRIVERS

Reduced IDR Headroom

Following the acquisition of Novescia, Fitch expects FFO adjusted
gross leverage to remain above 6.5x for 2015-2016 (adjusted for
12 month-contribution of acquisitions).  In Fitch's view, Cerba's
weaker credit metrics over the near term reduce rating headroom
at 'B+', relative to immediate peers within the healthcare
sector, including Labco SA (B+/Stable).  In addition, Fitch
expects free cash-flow (FCF) generation to remain constrained in
the low mid-single digits (as a percentage of revenue), as a
result of higher cash interest, resulting from its debt-funded
acquisition growth strategy.

Successful Integration Critical for Deleveraging

In an environment of persistent pressure on reimbursement tariffs
from public entities, Fitch believes that Cerba is reliant on
successfully integrating its acquisitions and extracting the
planned synergies (both at Novescia and at smaller bolt-on
acquisitions) to support mild deleveraging prospects over the
medium term.  Fitch considers the operational execution risk of
the Novescia acquisition to be potentially higher than smaller
bolt-on acquisitions for which the company has a good track
record.

Continued Expansion in Routine Labs

The ratings reflect Cerba's ability to take advantage of the
fragmentation of the French routine market.  Cerba's acquisitive
strategy enables it to broaden its network around regional
platforms while realising synergies and increasing scale.  Fitch
expects Cerba to continue with this strategy over the medium term
and forecast the company will spend up to EUR50 million p.a. on
small bolt-on acquisitions over the next three years.  A larger
acquisition such as that of Novescia would be considered as event
risk.

Leading Clinical Laboratories Player

Cerba is one of the largest medical diagnostics groups in Europe.
Its resilient like-for-like performance, which Fitch expects to
continue, is underpinned by growing volumes and fairly stable
profit margins.  The group benefits from a sound reputation for
scientific expertise and innovation at the specialized end of the
market (37% of 2013 reported revenue, excluding inter-company
sales).

Business and Geographical Diversification

The group's activities in its Central Lab division globally (12%
of sales) and its presence in the Belgian and Luxembourg routine
markets (23% of sales) provide some diversification and reduce
exposure to the French healthcare system.  Fitch considers that
upon expiry of the three-year agreement reached in October 2013
between the French clinical pathology laboratories unions and the
authorities (with the objective to achieve annual market growth
of 0.25%), Cerba would be at risk of further tariff pressure.

RATING SENSITIVITIES

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

   -- Inability to integrate Novescia and extract the planned
      synergies such that the FFO adjusted gross leverage remains
      above 6.5x and FFO interest coverage remains around 2.0x by
      2017 (pro forma for acquisitions)

   -- Further aggressively funded acquisition policy

Future developments that could lead to the Outlook being revised
to Stable include:

   -- Ability to integrate Novescia and smaller bolt-on
      acquisitions swiftly such that FFO adjusted gross leverage
      falls below 6.5x and FFO interest coverage increases
      towards 2.5x by 2017 (pro forma for acquisitions)

   -- EBITDA margin above 23% along with FCF in the mid to high
      single digit on a sustained basis



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G R E E C E
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GREECE: Germany to Lose EUR76 Billion From 'Grexit'
---------------------------------------------------
FinancialMirror.com reports that if Greece declares insolvency
and is obliged to leave the Eurosystem, Germany will have to
reckon with a loss of up to EUR76 billion, according to Ifo
Institut calculations. If, on the other hand, Greece declares
insolvency and remains in the euro area, Germany stands to lose
up to EUR77 billion.

These figures include the sums already paid out by both of the
bail-out packages for Greece, purchases of Greek government bonds
by the central banks of the euro countries, the Greek central
bank's Target liabilities, Greece's liabilities arising from the
more than proportionate issue of bank notes and the central
bank's claims against the Greek banking system,
FinancialMirror.com says. The figures do not include the write-
off losses sustained by German private investors, and
particularly those of German banks and insurance companies, the
report notes.

FinancialMirror.com relates that in the first figures, the losses
are calculated in the case that Greece becomes insolvent and
exits the euro. Should this happen, the legal relationship of the
European Central Bank to the Greek banking system would be
terminated, but the ECB's Target claims against Greece, as well
as the claims arising due to its disproportionate issue of bank
notes would remain. Germany would lose its share of these ECB
claims.

FinancialMirror.com says the second figures relate to the
scenario whereby Greece becomes insolvent, but remains within the
euro. The calculation is slightly different because in this case
the ECB system as a whole still holds claims against the Greek
banks, as well as the emergency liquidity assistance (ELA)
programme, claims against the Greek Central Bank, which overlap
with Target claims.

If the private banks are also assumed to be insolvent when a
government declares insolvency, and the securities that these
banks have given their central bank are assumed to be mainly
government bonds or state-guaranteed bonds anyway, then Germany's
losses are even higher, FinancialMirror.com states.

If no refinancing credit is repaid, losses relating to the
refinancing credit in Greece (used to ensure the country's
liquidity) also need to be added to the total. In this case,
Germany's share of the Target credit losses needs to be replaced
in the calculation by Germany's share of all of the Greek central
bank's claims against Greek banks, according to the report.

Since the latter total EUR46.4 billion and Germany's share of
this amount amounts to 26.5%, the EUR9.9 billion in Target losses
and the EUR1.1 billion euros from the issue of bank notes in the
calculation are replaced by EUR12.3 billion, which amounts to a
total loss of EUR77.1 billion, adds FinancialMirror.com.



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I R E L A N D
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RYE HARBOUR: Moody's Assigns B2 Rating to EUR11MM Class F Notes
---------------------------------------------------------------
Moody's Investors Service announced that it has assigned the
following definitive ratings to notes issued by Rye Harbour CLO,
Limited:

  EUR211,750,000 Class A Senior Secured Floating Rate Notes due
  2028, Definitive Rating Assigned Aaa (sf)

   EUR5,000,000 Class B-1 Senior Secured Floating Rate Notes due
   2028, Definitive Rating Assigned Aa2 (sf)

   EUR10,000,000 Class B-2 Senior Secured Fixed Rate Notes due
   2028, Definitive Rating Assigned Aa2 (sf)

   EUR20,000,000 Class B-3 Senior Secured Fixed/Floating Rate
   Notes due 2028, Definitive Rating Assigned Aa2 (sf)

   EUR12,000,000 Class C-1 Senior Secured Deferrable Floating
   Rate Notes due 2028, Definitive Rating Assigned A2 (sf)

   EUR10,750,000 Class C-2 Senior Secured Deferrable Floating
   Rate Notes due 2028, Definitive Rating Assigned A2 (sf)

   EUR20,125,000 Class D Senior Secured Deferrable Floating Rate
   Notes due 2028, Definitive Rating Assigned Baa3 (sf)

   EUR22,000,000 Class E Senior Secured Deferrable Floating Rate
   Notes due 2028, Definitive Rating Assigned Ba2 (sf)

   EUR11,000,000 Class F Senior Secured Deferrable Floating Rate
   Notes due 2028, Definitive Rating Assigned B2 (sf)

Ratings Rationale

Moody's definitive rating of the rated notes addresses the
expected loss posed to noteholders by legal final maturity of the
notes in 2028. The definitive 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, Sankaty Advisors,
Limited ("Sankaty"), has sufficient experience and operational
capacity and is capable of managing this CLO.

Rye Harbour is a managed cash flow CLO. At least 90% of the
portfolio must consist of senior secured obligations and up to
10% of the portfolio may consist of senior unsecured obligations,
second-lien loans, mezzanine obligations and high yield bonds.
The portfolio is approximately 55% ramped up at the closing date
and is 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.

Sankaty 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 or credit improved obligations, and are subject
to certain restrictions.

In addition to the nine classes of notes rated by Moody's, the
Issuer issued EUR 41,400,000 of subordinated notes. Moody's has
not assigned rating to this class of notes.

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.

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.

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

Par Amount: EUR 350,000,000

Diversity Score: 36

Weighted Average Rating Factor (WARF): 2800

Weighted Average Spread (WAS): 3.80%

Weighted Average Coupon (WAC): 5.70%

Weighted Average Recovery Rate (WARR): 42.00%

Weighted Average Life (WAL): 8 years.

Stress Scenarios:

Together with the set of modelling assumptions above, Moody's
conducted an additional sensitivity analysis, which was an
important component in determining the definitive rating assigned
to the rated notes. This sensitivity analysis includes increased
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.

Percentage Change in WARF: WARF + 15% (to 3220 from 2800)

Ratings Impact in Rating Notches:

Class A Senior Secured Floating Rate Notes: 0

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

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

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

Class C-1 Senior Secured Deferrable Floating Rate Notes:-2

Class C-2 Senior Secured Deferrable Floating Rate Notes:-2

Class D Senior Secured Deferrable Floating Rate Notes: -1

Class E Senior Secured Deferrable Floating Rate Notes: -1

Class F Senior Secured Deferrable Floating Rate Notes:-1

Percentage Change in WARF: WARF +30% (to 3640 from 2800)

Class A Senior Secured Floating Rate Notes: -1

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

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

Class B-3 Senior Secured Fixed/Floating Rate Notes: -3

Class C-1 Senior Secured Deferrable Floating Rate Notes:-4

Class C-2 Senior Secured Deferrable Floating Rate Notes:-4

Class D Senior Secured Deferrable Floating Rate Notes: -2

Class E Senior Secured Deferrable Floating Rate Notes: -2

Class F Senior Secured Deferrable Floating Rate Notes:-3

Methodology Underlying the Rating Action:

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

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

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. Sankaty's investment decisions
and management of the transaction will also affect the notes'
performance.


RYE HARBOUR: Fitch Assigns 'B-sf' Rating to Class F Notes
---------------------------------------------------------
Fitch Ratings has assigned Rye Harbour CLO Limited's notes final
ratings as:

Class A: 'AAAsf'; Outlook Stable
Class B-1: 'AA+sf'; Outlook Stable
Class B-2: 'AA+sf'; Outlook Stable
Class B-3: 'AA+sf'; Outlook Stable
Class C-1: 'A+sf'; Outlook Stable
Class C-2: 'A+sf'; Outlook Stable
Class D: 'BBBsf'; Outlook Stable
Class E: 'BBsf'; Outlook Stable
Class F: 'B-sf'; Outlook Stable
Subordinated notes: not rated

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 has determined the
average credit quality to be in the 'B' to 'B-' range.  The
weighted average rating factor of the identified portfolio (67.8%
of target par) is 33.4.

High Expected Recoveries

At least 90% of the portfolio will comprise senior secured
obligations.  Fitch has assigned Recovery Ratings to 64 of the 66
obligations.  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 that
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%.  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 are being 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 is 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 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 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.



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I T A L Y
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ALITALIA SPA: Aims to Return to Profitability by 2017
-----------------------------------------------------
Benedikt Kammel and Christopher Jasper at Bloomberg News report
that Alitalia SpA, the Italian airline propped up with an
investment from Etihad Airways PJSC, said it aims to return to
profitability by 2017 by improving its network and cooperating
more with its new key shareholder on global routes

Among new services that will become available from May is
Venice-Shanghai, and the airline will also add flights to the
Americas, Chairman Luca di Montezemolo on Jan. 20 said in Rome,
flanked by Etihad Chief Executive Officer James Hogan and the
head of Alitalia, Silvano Cassano, who predicted a profit of
EUR100 million (US$116 million) by 2017, Bloomberg relates.

Etihad bought a 49% stake in Alitalia last year, linking it to a
growing network of airlines around the world that help the
Abu-Dhabi based company funnel more traffic through its hub,
Bloomberg recounts.  Mr. Hogan, as cited by Bloomberg, said that
Etihad can provide strategic and technological support, and
cautioned that his company is "not a bank" and needs to see a
return on its investment.

Among changes presented on Jan. 20 are closer links between
Alitalia and Air Berlin Plc, the German carrier in which Etihad
owns a stake, at Milan Linate, Bloomberg discloses

According to Bloomberg, Mr. Montezemolo, who was chairman of
Ferrari until last year, said Alitalia must refocus on assets
such as its employees, its service culture and brand, as well as
its expertise in global routes to return to profitability
following a government-led bailout.  The company has been
historically unprofitable, and previous anchor investor Air-
France KLM Group refused to participate in a capital increase
after years of losses, Bloomberg relays.

                         About Alitalia

Alitalia-Compagnia Aerea Italiana has navigated its way through
a successful restructuring.  After filing for bankruptcy
protection in 2008, Alitalia found additional investors, acquired
rival airline Air One, and re-emerged as Italy's leading airline
in early 2009.  Operating a fleet of about 150 aircraft, the
airline now serves more than 75 national and international
destinations from hubs in Fiumicino (Rome), Milan, Turin, Venice,
Naples, and Catania.  Alitalia extends its network as a member of
the SkyTeam code-sharing and marketing alliance, which also
includes Air France, Delta Air Lines, and KLM.  An Italian
investor group owns a majority of the company, while Air France-
KLM owns 25%.



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K A Z A K H S T A N
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HALYK BANK: Fitch Affirms 'BB' Issuer Default Rating
----------------------------------------------------
Fitch has affirmed Halyk Bank's (HB) and its 100%-owned
subsidiary JSC Halyk Finance's (HF) Long-term foreign and local-
currency Issuer Default Ratings (IDRs) at 'BB' with Stable
Outlook.

KEY RATING DRIVERS -- HB'S IDRS, VR and SENIOR UNSECURED DEBT
RATING

The affirmation of HB's Long-term IDRs and senior debt ratings at
'BB' reflects limited recent changes to the bank's standalone
credit profile.  HB's Long-term IDRs are driven by its VR of
'bb', which in turn reflects the bank's established nationwide
franchise, sound capitalization, robust profitability, and
adequate liquidity.  The ratings factor in HB's still high levels
of non-performing and restructured loans, high concentrations and
significant foreign-currency loans to performing but unhedged
borrowers.

The Stable Outlook reflects Fitch's view that that the bank has
considerable resilience against risks stemming from a weakening
of the operating environment, due to a fall in oil prices, and
potential further devaluation of the tenge.

Fitch views asset quality as the main rating weakness, but does
not expect it to deteriorate significantly from current levels.
The NPL/gross loans ratio fell to 14% at end-9M14 from 18% at
end-2013, due to loan write-offs, loan growth and some
recoveries. IFRS coverage of NPLs was reasonably solid at 65% by
specific reserves and at 107% by total reserves at end-2014.
However, potentially high-risk restructured loans, at further 8%
of gross loans, were only moderately covered by provisions.  A
balance sheet clean-up through sale of bad loans to the state-
controlled Problem Loan Fund is currently uncertain.

Relationship-driven lending risks may stem from some of HB's
long-term and lumpy acquisition financing loans secured by
equities, including a large high-risk loan equal to 10% of Fitch
Core Capital (FCC).  Further risks stem from foreign currency
loans extended to unhedged borrowers (about 70% of FCC at end-
9M14), which although currently performing, may be stressed if
the country devalues the tenge again.  As a moderate mitigating
factor most of these loans have hard collateral backing them.

Capitalization has further strengthened as reflected by the FCC/
risk-weighted assets ratio improving to 17.7% at end-9M14 from
14.8% at end-2013.  The regulatory total capital ratio also rose
to 20.3% from 18.2%.  The bank's pre-impairment profit is also
robust (39.5% of average equity for 9M14), supporting its solid
loss absorption capacity.

Liquidity risks stemming from the increased funding dollarization
(65% of deposits at end-2014, up from 43% at end-2013) are
mitigated by HB's highly-liquid asset buffer accounting for
KZT493bn (USD2.7bn) or 28% of customer deposits at end-2014.
Refinancing risks are also moderate (outstanding eurobonds
amounted to USD1bn at end-9M14, 8% of liabilities), with a
negligible amount of maturities before 2017.  Fitch expects the
largest depositor (17% of liabilities) to remain stable.

RATING SENSITIVITIES -- HB'S IDRS, VR and SENIOR UNSECURED DEBT
RATING

An upgrade of the ratings would result from a further loan book
clean-up, combined with a proven resilience to the depressed oil
price environment.  The ratings could be downgraded if asset
quality or capitalization deteriorates sharply.

KEY RATING DRIVERS -- HB'S SUPPORT RATING and SUPPORT RATING
FLOOR

HB's high systemic importance and political connections make
moderate state support possible, as reflected by its 'B' Support
Rating Floor and '4' Support Rating.  However, large-scale
capital support is unlikely to be forthcoming for any privately-
owned Kazakh bank, given the recent default history at medium-
sized banks.

KEY RATING DRIVERS AND RATING SENSITIVITIES -- HF

HF's Long-term IDRs are aligned with the ratings of HB reflecting
Fitch's view of the latter's high propensity to provide support
to its subsidiary, if needed.  Fitch classifies HF as a 'core
subsidiary' according to 'Rating FI Subsidiaries and Holding
Companies' criteria based on (i) HF's being an integral part of
the group, wholly owned and supervised by the parent; (ii)
significant reputational risks stemming from a potential default
of the subsidiary; and (iii) limited cost of potential support.

HF's ratings would likely change in tandem with the parent bank's
Long-term IDRs.  The ratings could also be downgraded if support
fails to be made available on a timely basis, if needed.

The rating actions were:

Halyk Bank of Kazakhstan

  Long-term foreign and local currency IDRs: affirmed at 'BB';
   Outlook Stable
  Short-term foreign and local currency IDRs: affirmed at 'B'
  Viability Rating: affirmed at 'bb',
  Support Rating: affirmed at '4'
  Support Rating Floor: affirmed at 'B'
  Senior unsecured debt: affirmed at 'BB'/'BB(EXP)'

JSC Halyk Finance

  Long-term foreign and local currency IDRs: affirmed at 'BB';
    Outlook Stable
  Short-term foreign and local currency IDRs: affirmed at 'B'
  Support Rating: affirmed at '3'



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


AK BARS BANK: Fitch Affirms 'BB-' IDR & Revises Outlook to Neg.
---------------------------------------------------------------
Fitch Ratings has revised the Outlooks on Ak Bars Bank's (ABB)
and Almazergienbank's (AEB) Long-term foreign and local currency
Issuer Default Ratings (IDRs) to Negative from Stable and
affirmed the IDRs at 'BB-'.

The rating actions follow the downgrade of the Republic of
Tatarstan (RT) to 'BBB-' from 'BBB' with a Negative Outlook and
the revision of the Outlook on the Republic of Sakha's (Yakutia)
'BBB-' rating to Negative from Stable.

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

The Negative Outlooks reflect the potential for the banks'
ratings to be downgraded if the ratings of their shareholders are
downgraded, indicating a reduced ability to provide support.

ABB's and AEB's IDRs, National and Support Ratings, and the
senior debt rating of ABB, reflect Fitch's view of the moderate
probability of support from their respective regional authorities
(RT for ABB; Yakutia for AEB), in case of need.  This view takes
into account the authorities' majority ownership (indirectly for
ABB) and operational control of the banks as well as the track
record of capital and liquidity support to date.  For ABB, the
ratings also consider the bank's significant market share in
Tatarstan, and for AEB its limited size relative to Sakha's
budget.

However, Fitch views the probability of support as only moderate
in each case, and therefore notches down the banks' ratings from
their respective parents.  The three-notch difference between the
ratings of ABB and RT reflects the region's currently indirect
and somewhat non-transparent ownership, some concerns over RT's
financial flexibility and ability to provide capital support in a
timely fashion and ABB's weak asset quality, as ABB is still
heavily exposed to highly risky corporate lending and non-core
assets.

The three-notch difference between the rating of AEB and its 77%-
owner Republic of Sakha considers the bank's limited systemic
importance in its home region.  However, the notching does not
take into account Sakha's stated intention to attract a strategic
investor, and thus to significantly dilute its stake in the bank.
This is because there are no potential investors in the bank at
present, and the disposal process could be gradual and lengthy
given the current economic environment in Russia.

The affirmation of the banks' National Long-term ratings with
Stable Outlooks reflects Fitch's view that the banks'
creditworthiness relative to other Russian banks would be
unlikely to change significantly in case of a downgrade of their
respective shareholders, as the ratings of RT and Sakha will be
likely to change in tandem with the ratings of the Russian
Federation.

RATING SENSITIVITIES: IDRS, NATIONAL LONG-TERM RATINGS, SENIOR
DEBT RATING AND SUPPORT RATINGS

Any potential downgrade of RT would be likely to result in a
downgrade of ABB's support-driven ratings.  The Outlook on ABB
may be revised to Stable, thereby potentially reducing the
notching between RT and ABB to two notches, if (i) ABB's
shareholder structure is streamlined to provide for direct
control by RT and Sviazinvestneftekhim (SINEK, BBB-/Negative, a
holding company for RT-owned assets) of at least a 50% stake in
the bank; (ii) ABB's loss absorption capacity significantly
improves as a result of Tier 1 capital injections; and (iii) the
amount of problem/non-core assets does not increase
significantly.

AEB's ratings could be downgraded if (i) Sakha is downgraded;
(ii) Fitch changes its view on the authority's propensity to
support the bank in anticipation of the planned dilution of the
stake; or (iii) if the bank is sold to a less creditworthy owner.
Upside potential for AEB's ratings is limited due to Sakha's plan
to dilute its stake in the bank.

KEY RATING DRIVERS AND SENSITIVITIES: ABB'S SUBORDINATED DEBT

ABB's 'old-style' (without mandatory conversion triggers)
subordinated debt is rated two notches below its Long-term IDR.
The rating differential reflects one notch for incremental non-
performance risk (in Fitch's view, the risk of default on
subordinated debt could be moderately higher than on senior
obligations in a stress scenario) and one notch for potential
loss severity (lower recoveries in case of default).  Any changes
to the bank's Long-term IDR would likely impact the rating of the
subordinated debt.

The rating actions are:

Ak Bars Bank (ABB)

  Long-term foreign and local currency IDR: affirmed at 'BB-';
  Outlook revised to Negative from Stable
  Short-term foreign currency IDR: affirmed at 'B'
  National Long-term rating: affirmed at 'A+(rus)'; Outlook
   Stable
  Viability Rating: 'b-', unaffected
  Support Rating: affirmed at '3'
  Senior unsecured debt: affirmed at 'BB-'
  Senior unsecured debt National rating: affirmed at 'A+(rus)'

AK BARS Luxembourg S.A

  Senior unsecured debt: affirmed at 'BB-'
  Subordinated debt: affirmed at 'B'

Almazergienbank (AEB)

  Long-term foreign and local currency IDRs affirmed at 'BB-';
  Outlook revised to Negative from Stable
  Short-term foreign currency IDR affirmed at 'B'
  National Long-term rating affirmed at 'A+(rus)'; Outlook Stable
  Viability Rating: 'b', unaffected
  Support Rating affirmed at '3'



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


SKELLIG ROCK: Moody's Hikes Rating on EUR10MM Cl. S Notes to Ba1
----------------------------------------------------------------
Moody's Investors Service announced that it has taken rating
actions on the following classes of notes issued by Skellig Rock
B.V.:

  EUR101 million (current balance EUR 14.6M) Class A-1 Senior
  Floating Rate Notes due 2022, Affirmed Aaa (sf); previously on
  Mar 31, 2014 Affirmed Aaa (sf)

  EUR32.5 million (current balance EUR 23.4M) Class A-2b Senior
  Floating Rate Notes due 2022, Affirmed Aaa (sf); previously on
  Mar 31, 2014 Affirmed Aaa (sf)

  EUR6.5 million (current balance EUR 0.9M) Class A-3 Senior
  Fixed Rate Notes due 2022, Affirmed Aaa (sf); previously on Mar
  31, 2014 Affirmed Aaa (sf)

  EUR38 million Class B Senior Floating Rate Notes due 2022,
  Affirmed Aaa (sf); previously on Mar 31, 2014 Upgraded to Aaa
  (sf)

  EUR34 million Class C Deferrable Interest Floating Rate Notes
  due 2022, Upgraded to Aa1 (sf); previously on Mar 31, 2014
  Upgraded to Aa3 (sf)

  EUR27 million Class D Deferrable Interest Floating Rate Notes
  due 2022, Upgraded to Baa1 (sf); previously on Mar 31, 2014
  Upgraded to Ba1 (sf)

  EUR13.5 million Class E Deferrable Interest Floating Rate Notes
  due 2022, Upgraded to Ba3 (sf); previously on Mar 31, 2014
  Affirmed B2 (sf)

  EUR7 million Class Q Combination Notes due 2022, Upgraded to
  Aa2 (sf); previously on Mar 31, 2014 Upgraded to A2 (sf)

  EUR10 million Class S Combination Notes due 2022, Upgraded to
  Ba1 (sf); previously on Mar 31, 2014 Affirmed B1 (sf)

Skellig Rock B.V., issued in November 2006, is a single currency
Collateralised Loan Obligation ("CLO") backed by a portfolio of
mostly high yield European senior secured loans managed by GSO
Capital Partners International LLP. This transaction's
reinvestment period ended in November 2012.

The ratings of the Combination Notes address the repayment of the
Rated Balance on or before the legal final maturity. For Class Q
notes, the 'Rated Balance' is equal at any time to the principal
amount of the Combination Note on the Issue Date increased by the
Rated Coupon of 0.25% per annum, accrued on the Rated Balance on
the preceding payment date minus the aggregate of all payments
made from the Issue Date to such date, either through interest or
principal payments. For Class S notes, the 'Rated Balance' is
equal at any time to the principal amount of the Combination Note
on the Issue Date minus the aggregate of all payments made from
the Issue Date to such date, either through interest or principal
payments. The Rated Balances may not necessarily correspond to
the outstanding notional amounts reported by the trustee.

Ratings Rationale

According to Moody's, the rating actions are primarily a result
of the amortization of the portfolio and subsequent increase in
collateralization ratios. Moody's notes that rated liabilities
paid down by EUR93.4 million on the last two semi-annual payment
dates, leading to a significant increase in the
overcollateralization ratios (or "OC ratios") of the senior
notes. As per the trustee report dated November 2014, the Class
A/B,C, D, and E OC ratios are reported at 171.04%, 136.32%,
117.40%, and 109.78%, compared to January 2014 levels of 150.13%,
125.15%, 110.54%, and 104.45% respectively. The reported November
OC ratios above do not incorporate EUR56.6 million repayment of
rated liabilities on the 01 Dec 2014 payment date.

Reported WARF has remained steady at around 3180 between January
2014 and November 2014, the proportion of Caa rated assets has
fallen from 21.0% to 11.9% of reported par, and there are no
reported defaults as at November 2014 compared to defaults of
EUR11.1 million in January 2014.

The key model inputs Moody's uses in its analysis, such as par,
weighted average rating factor, diversity score and the weighted
average recovery rate, are based on its published methodology and
could differ from the trustee's reported numbers. In its base
case, Moody's analyzed the underlying collateral pool as having a
EUR pool with performing par and principal proceeds balance of
EUR172.904 million and defaulted par of EUR3.329 million, a
weighted average default probability of 23.51% (consistent with a
WARF of 3500 over a weighted average life of 3.80 years), a
weighted average recovery rate upon default of 47.39% for a Aaa
liability target rating, a diversity score of 21 and a weighted
average spread of 3.93%.

The default probability derives from the credit quality of the
collateral pool and Moody's expectation of the remaining life of
the collateral pool. The estimated average recovery rate on
future defaults is based primarily on the seniority of the assets
in the collateral pool. For a Aaa liability target rating,
Moody's assumed that 92.5% of the portfolio exposed to senior
secured corporate assets would recover 50% upon default, while
the non first-lien loan corporate assets would recover 15%. In
each case, historical and market performance and a collateral
manager's latitude to trade collateral are also relevant factors.
Moody's incorporates these default and recovery characteristics
of the collateral pool into its cash flow model analysis,
subjecting them to stresses as a function of the target rating of
each CLO liability it is analyzing.

Methodology Underlying the Rating Action:

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

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

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

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

Additional uncertainty about performance is due to the following:

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

2) Around 43% of the collateral pool consists of debt obligations
whose credit quality Moody's has assessed by using credit
estimates.

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

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



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


BANCO ESPIRITO: Portugal Regulators Probe Goldman Sachs Loan
------------------------------------------------------------
Margot Patrick and Patricia Kowsmann at The Wall Street Journal
report that when Goldman Sachs Group Inc. arranged an $835
million loan to Banco Espirito Santo SA last summer, it was the
result of a concerted, month-long effort by senior Goldman
officials to win business with the large Portuguese company,
according to people familiar with the matter.

Weeks after Goldman arranged the loan, Banco Espirito Santo
collapsed amid allegations of fraud. Goldman now is in an unusual
public fight with Portugal's central bank, which bailed out
Espirito Santo, over whether the loan should be fully repaid, the
Journal relays.  Anticipated losses linked to the loan took a
bite out of Goldman's already weak fourth-quarter results, the
Journal states.

According to the Journal, a person familiar with the inquiry said
the Goldman loan is under review by Portuguese regulators, which
are trying to untangle the web of financial arrangements
surrounding Banco Espirito Santo at the time of its implosion.

The loan was approved by at least three Goldman committees, which
are composed of senior bank executives and are designed to
rigorously assess transactions for their credit risk and their
potential to harm the bank's reputation, the Journal says, citing
people familiar with the matter.  And the Bank of Portugal moved
the loan toward the back of the line for repayment because
Goldman last summer briefly amassed more than 2% of Banco
Espirito Santo shares, the Journal recounts.

Goldman's involvement in the Espirito Santo saga, which The Wall
Street Journal first reported in September, got under way last
spring -- just as the wheels were starting to come off the
family-controlled business empire, the Journal notes.

                  About Banco Espirito Santo

Banco Espirito Santo is a private Portuguese bank based in
Lisbon, Portugal.  It is 20% owned by Espirito Santo Financial
Group.

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

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

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

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



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


EURASIA DRILLING: Fitch Revises Outlook & Affirms 'BB' IDR
----------------------------------------------------------
Fitch Ratings has revised the Outlook for Russia-based Eurasia
Drilling Company Limited's (EDC) Long-term foreign and local
currency Issuer Default Ratings (IDR) to Stable from Positive and
affirmed the IDRs at 'BB'.

Fitch believes the announcement made on Jan. 20, 2015, that
Schlumberger Ltd. will take a 45.65% stake in EDC will ultimately
benefit the company, but that risks, including the impact of the
current low oil price and weak rouble, mean that a positive
rating action is not foreseen in the short term.  There remains a
risk that the company will adopt more aggressive financial
policies under its new ownership structure, although we consider
this unlikely.

For 2014 to 2017, Fitch expects expect EDC to maintain leverage
and coverage ratios commensurate with a mid-'BB' rating category,
ie, funds from operations (FFO) adjusted net leverage of under
1.5x and FFO interest of cover above 8x.

On Jan. 20, 2015, Schlumberger, one of the world's largest
oilfield services (OFS) companies, announced it had agreed to pay
USD1.7bn for a 45.65% stake in EDC.  EDC will be de-listed from
the London Stock Exchange and thereafter Schlumberger will become
its largest single minority shareholder, while core existing
shareholders, including the company's CEO, will control the
remaining shares.  The agreement includes an option for
Schlumberger to purchase the remaining shares in EDC during a
two-year period commencing three years from the closing of the
transaction, which the parties expect to take place in 1Q15.

KEY RATING DRIVERS

Medium-Term Synergies

Fitch expects closer cooperation between EDC and Schlumberger to
improve EDC's operations and profitability in the medium term, by
introducing technological, operational and financial synergies.
The agreement between EDC and Schlumberger provides that the
EDC's existing management will stay in place for at least three
more years following the deal close.  The companies have been
working together in Russia prior to the announced transaction
under their five-year strategic alliance agreement signed in
2011.

Stronger Operations, Weaker Financials

In 9M14, EDC drilled nearly 4.4 million meters, 7% down on 9M13.
EDC reported 9M14 revenues of USD2.37 billion, nearly 10% down
yoy and EBITDA margin of 28.3%, up from 26.9% a year ago.   This
was partially due to lower total drilling volumes but also as a
result of rouble depreciation against the US dollar, which
averaged 35.4 roubles per one US dollar in 9M14, down from 31.6
roubles per one US Dollar in 9M13.  Further depreciation of
rouble to over 56 roubles per one USD dollar by the end of 4Q14
weakened EDC's results reported in USD even more.  EDC faces a
challenging market in 2015 as Russian oil companies optimize
their drilling programs and cap drilling rate increases,
following the sharp oil price fall of more than 50% in US dollar
terms over the last nine months.

Customer Concentration Increases

Following a significant reduction of EDC's activity with OJSC OC
Rosneft since early 2014, EDC's customer concentration is
increasing.  In 9M14 OAO Lukoil (BBB-/Negative) and JSC Gazprom
Neft (BBB-/Negative) accounted for 62% and 20% of EDC's total
metres drilled respectively, compared with 56% and 12% in 9M13,
respectively.  EDC remains Russia's largest OFS company, with a
market share of about 28%, based on onshore metres drilled in
9M14.

RATING SENSITIVITIES

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

   -- Funds from operations (FFO) adjusted net leverage below
      1.5x and FFO interest cover above 8x on a sustained basis
   -- Positive free cash flows (FCF) starting from 2015.
   -- Onshore drilling volumes down by no more than 15% yoy in
      2014, and up by at least 5% yoy in 2015

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

   -- FFO adjusted net leverage above 2.5x on a sustained basis
      due to M&A, high dividend pay-out, and weak operating
      performance

DEBT AND LIQUIDITY

EDC needs to repay USD69 million in debt in 2015 and another
USD194 million in 2016, mainly in US dollars.  At end-2014, about
91% of EDC's debt totalling USD976 million was denominated in US
dollars, while about two thirds of its cash balance, which was
close to USD330 million, were held in roubles.  Although the weak
rouble exposes EDC to further currency risks, we estimate that
its USD-denominated revenues from offshore operations are
sufficient to service EDC's USD-denominated debt.  In addition,
EDC has about USD150m in undrawn available short-term credit
lines with large international banks.

FULL LIST OF RATINGS

Eurasia Drilling Company Limited

  Long-term foreign and local currency IDRs: affirmed at 'BB';
    Outlook revised to Stable from Positive
  Short-term foreign and local IDRs: affirmed at 'B'
  National Long-term rating: affirmed at 'AA-(rus), Outlook
    revised to Stable from Positive

Burovaya Kompaniya Eurasia

  Senior unsecured rating: affirmed at 'BB'
  National senior unsecured rating: affirmed at 'AA-(rus)'

EDC Finance Limited

   Senior unsecured rating: affirmed at 'BB'


PROMSVYAZBANK: Moody's Assigns B2(hyb) Rating to Sub. Debt
----------------------------------------------------------
Moody's Investors Service has assigned a B2 (hyb) rating to
Promsvyazbank's non-viability subordinated debt. This debt was
issued in the form of $333 million, 10.5% loan participation
notes (maturing in 2021) that are subject to contractual loss
absorption upon the breach of a predefined trigger and/or the
start of the bank's planned financial rehabilitation. At the same
time, Moody's placed the B2 (hyb) rating on review for
downgrade -- reflecting the status of Promsvyazbank's long-term
ratings, which were placed on review for downgrade on 23 December
2014.

The aforementioned notes are Basel-III-compliant debt
instruments, which qualify as regulatory Tier 2 capital. The
notes were issued by PSB Finance S.A. (a special purpose vehicle)
on a limited recourse basis for the sole purpose of financing a
subordinated loan to Promsvyazbank (the ultimate borrower).

Ratings Rationale

In line with Moody's "Global Banks" rating methodology, the
assigned B2 (hyb) rating is positioned two notches below
Promsvyazbank's ba3 adjusted baseline credit assessment (adjusted
BCA). This approach is in line with Moody's notching guidance for
subordinated debt, with loss triggered at the point of non-
viability, i.e., in the event that the bank is subject to
financial rehabilitation and/or upon the breach of capital
triggers set at, or close to the point of non-viability, both on
a contractual basis.

In accordance with the terms of the subordinated notes, their
principal will be written down (partially or in full) in the
event that Promsvyazbank's core Tier 1 ratio falls below 2%, or
if the Central Bank of Russia together with the Deposit Insurance
Agency implements bankruptcy prevention procedures. In case of a
write-down event, the accrued interest on the notes is cancelled
(partially or in full, depending on the write-down of the
principal).

Principal Methodology

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


RUSHYDRO JSC: Fitch Affirms 'BB+' IDR; Outlook Negative
-------------------------------------------------------
Fitch Ratings has affirmed Russia-based utilities company JSC
RusHydro's (RusHydro) Long-term foreign and local currency Issuer
Default Ratings (IDR) at 'BB+'.  The Outlook is Negative.

The Negative Outlook reflects Fitch's expectation of weakening
RusHydro's credit metrics over 2014-2017, mostly due to the
slowdown of the Russian economy and the company's extensive capex
program.  This could result in the company breaching Fitch's
revised negative rating guideline of funds flow from operations
(FFO) adjusted net leverage above 3.0x over 2015-2017, implying
limited financial headroom.

RusHydro's IDR incorporates a one-notch uplift for state support
from its standalone rating of 'BB', due to relatively strong
strategic, operational and, to a lesser extent, legal ties
between the company and its majority shareholder, the Russian
Federation (BBB-/Negative).  The notching uplift is a bottom-up
approach and revised from the previously applied top-down method
to align Rushydro's rating approach with that of its Russian
utilities peers.

KEY RATING DRIVERS

Shift to a Bottom-up Rating Approach

To align it with Russian utilities peers with comparable links
with the sovereign, Fitch has revised RusHydro's rating approach
to bottom-up, which reflects both the standalone profile of the
company and state support, from the previously applied top-down
approach.  Fitch has also tightened its negative rating guideline
of FFO-adjusted net leverage to 3.0x from 3.5x and FFO interest
cover to 5x from 4.0x.  This is to align RusHydro's rating
guidelines with those of Russian sector peers as we assess the
company's business profile to be comparable to that of similarly
rated Russian utilities.

Negative Outlook Remains

The Negative Outlook reflects Fitch's expectation of
deterioration in RusHydro's credit metrics over 2014-2017, mostly
due to high capex at a time when the Russian economy is slowing
down, which in turn would put the company at a disadvantage to
its Russian sector peers.  Fitch expects FFO adjusted net
leverage to have deteriorated to about 3x by 2014 from 2.2x in
2013 and exceed Fitch's revised negative rating guideline of 3x
over 2015-2017, which implies limited financial headroom for the
ratings.  However, we believe that RusHydro has some capex
flexibility to cancel or defer some projects if there is a risk
of a substantial deterioration of its credit metrics.

State Support Continues

RusHydro's rating benefits from a one-notch uplift for state
support to its standalone rating of 'BB', due to the relatively
strong strategic, operational and, to a lesser extent, legal ties
between the company and the state.  RusHydro continues to receive
tangible state support, albeit diminished since 2012.  In 2012-
9M14 the company received tangible state support of around RUB83
billion, including a RUB50 billion equity injection for the
construction of four thermal power plants in the Far East and
direct subsidies of RUB32 billion as compensation for low tariffs
in the Far East.  In 2012 RusHydro was included in the list of
strategic enterprises. At end-May 2014 President Vladimir Putin
signed a decree which stipulated that direct state ownership must
not fall below 60.5%. The consolidation of RusHyrdo's 69% stake
in the financially weaker OJSC RAO Energy System of the East (RAO
UES East) in 2011 worsened its operating and financial profile,
underlining the negative implications of state involvement.

BB Standalone Rating

RusHydro's standalone rating of 'BB' reflects its solid market
position as a leading, low-cost electricity producer in Russia on
the back of its large portfolio of hydro power plants with
installed electric power capacity of about 38GW.  The standalone
profile also reflects the company's exposure to regulated, but
insufficient "cost plus" tariffs (particularly in the case of RAO
UES East) that will remain a drag on RusHydro's profitability and
cash flows.  The standalone rating also factors in an uncertain
regulatory framework in the medium-term and corporate governance
limitations in the operating environment in Russia.

For 9M14, RusHydro reported revenue of RUB241 billion, a 3.6% yoy
growth, and EBITDA of RUB52 billion, down 2% yoy, mainly driven
by lower hydro power production, higher payroll expenses,
including one-off bonus payments, higher electricity transmission
tariffs and others.

Uncertainty in Regulatory Framework

The Russian regulatory regime for the utilities sector suffers
from a limited track record of consistent implementation, is less
transparent and more unpredictable than the regulatory regimes in
western Europe.  Although we expect the impact of a recent
certain tariffs freeze for 2014-2015 on the company's credit
metrics to be limited, it undermines the predictability of the
regulatory framework and increases uncertainty over operations.
Regulatory uncertainty is a key factor why Russian utilities'
standalone ratings are capped at speculative-grade.

RATING SENSITIVITIES

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

   -- Evidence of weaker state support
   -- Regulatory framework deterioration
   -- Tariffs freeze, aggressive debt-funded acquisitions and/or
      a more ambitious capex program resulting in deterioration
      of the financial profile (eg FFO adjusted net leverage
      above 3.0x and FFO interest cover below 5x on a sustained
      basis), which could be negative for the standalone rating

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

   -- An ability to implement expansionary capex while
      maintaining adequate credit metrics without breaching
      Fitch's negative rating guidelines, which would result in
      the Outlook being revised to Stable

   -- An upgrade is not likely in the next 12 - 18 months due to
      expected deterioration of the financial profile.  However,
      if there is evidence of stronger state support (eg
      significant and consistent equity injections, state
      guarantees for RusHydro's debt, cross default provisions)
      or the company manages to improve its financial standing
     (eg FFO adjusted net leverage below 1.5x and FFO fixed
      charge coverage above 6.5x on a sustained basis), a
      positive rating action could be considered

   -- A more transparent and predictable regulatory framework,
      which could be positive for the standalone rating

LIQUIDITY AND DEBT STRUCTURE

At end-3Q14 RusHydro reported cash and deposits of around RUB45
billion (excluding the remaining RUB37 billion of cash injection
received from the state in December 2012 for financing the Far
East projects) that are sufficient to cover short-term debt of
RUB34 billion.  Fitch expects RusHydro to continue to generate
negative free cash flow in the medium term, owing to its
substantial capex program, which will, consequently, lead to new
external funding needs. However, RusHydro has certain flexibility
in its investment program implementation and lack of available
funding and/or material deterioration of the credit metrics would
likely result in capex curtailment.

RusHydro has limited exposure to foreign currency risks; at end-
3Q14 only 8% of RusHydro's debt is denominated in foreign
currencies, mainly in USD, while almost all its revenues are in
the local currency.

FULL LIST OF RATING ACTIONS

JSC RusHydro

  Long-term foreign and local currency IDRs affirmed at BB+,
  Outlook Negative

  Long-term National rating affirmed at AA(rus), Outlook revised
  to Negative from Stable

  Local currency senior unsecured rating affirmed at 'BB+'

RusHydro Finance Limited

  Local currency senior unsecured rating affirmed at BB+


SB BANK: Moody's Lowers Nat'l Scale Deposit Rating to Ba3.ru
------------------------------------------------------------
Moody's Interfax Rating Agency (MIRA) has downgraded to Ba3.ru
from Baa2.ru the national scale long-term deposit rating (NSR) of
SB Bank (formerly Sudostroitelny Bank, Russia). The downgrade
primarily reflects substantial liquidity pressure that the bank
is experiencing. The NSR is under review for further downgrade.

The rating action also reflects persistent weaknesses in SB
Bank's financial fundamentals, such as (1) modest capitalization;
(2) weak and volatile profitability; and (3) the limited
diversification and scale of its business model.

The rating action is based on SB Bank's audited IFRS accounts for
2013, 2012 and 2011, statutory accounts as at end-November 2014,
and information provided by the bank.

Ratings Rationale

--- Liquidity Pressures

The key driver of the rating action is substantial liquidity
pressure experienced by SB Bank, reflected, among other factors,
in the bank's recent decision to significantly limit all cash
withdrawals. The aforementioned liquidity strain arose from the
bank's overstretched security repo operations with the Central
Bank of Russia (CBR). These repo transactions led to material
erosion of the bank's liquidity profile following turbulence in
Russia's financial markets in December 2014, against the
background of rapid rouble depreciation and a concurrent slump in
securities prices. Moody's notes that, according to regulatory
statements, the SB Bank's liquid assets (minus repo operations
and investments to mutual funds and subsidiaries) accounted for
only around 8% of its total assets as of end-November 2014 (15%
as at year-end 2013).

Moody's adds that SB Bank could also face additional liquidity
pressure as a result of a potential decline in customer funding,
caused, in turn, by the negative publicity associated with the
cash withdrawal restrictions and media publicity highlighting the
bank's recent delays in customer transactions.

--- Persistent Weaknesses in Financial Metrics

Moody's notes that SB Bank's capitalization has remained at
modest levels, with the regulatory capital ratio (N1) of 11.9%
(only 190 basis points above the regulatory minimum) at end-
November 2014. This positioning is the result of low recurring
internal capital generation which has lagged significantly behind
the pace of growth in risk-weighted assets. In turn, SB Bank's
profitability has been weak and volatile, with return on average
assets (ROAA) of 0.6% in 2013, mainly because of low yields on a
large securities portfolio and a large share of low-yielding cash
equivalents.

SB Bank's limited sector diversification is reflected in its
focus on lending to second-tier companies and small and medium-
sized companies (SMEs), and its modest retail operations.

The aforementioned pressures are only partially mitigated by the
bank's moderate borrower concentration and its adequate asset
quality. According to SB Bank, its top 20 exposures accounted for
1.4 times regulatory capital as at H1 2014 which is lower than
many of its peers in Russia. In turn, the bank's non-performing
loans (NPLs, defined as 90+ days overdue) accounted for 3.5% of
gross loans as at H1 2014, which was also superior to the metrics
reported by the bank's B3-rated peers.

What Could Move the Ratings UP/DOWN

Given that SB Bank's ratings are under review for further
downgrade, upward pressure on the ratings is unlikely in the next
12 months. Moody's review will focus on the bank's capacity to
manage current liquidity pressures over next two-three weeks.

Any further evidence of deterioration in SB Bank's liquidity
profile would put significant pressure on the bank's ratings and
could result in the review being concluded with a downgrade of
the bank's ratings. The bank's ratings could also be downgraded
as a result of a significant decline in capital adequacy metrics,
a material increase in borrower concentration, or deterioration
in its asset quality.

Principal Methodology

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

Headquartered in Moscow, Russia, SB Bank reported total assets of
RUB68 billion (around $2 billion) under IFRS (unaudited) as of
end-June 2014. The bank recorded a net profit of RUB206 million
(US$6 million) in the first six months of 2014.

Moody's Interfax Rating Agency's National Scale Ratings (NSRs)
are intended as relative measures of creditworthiness among debt
issues and issuers within a country, enabling market participants
to better differentiate relative risks. NSRs differ from Moody's
global scale ratings in that they are not globally comparable
with the full universe of Moody's rated entities, but only with
NSRs for other rated debt issues and issuers within the same
country. NSRs are designated by a ".nn" country modifier
signifying the relevant country, as in ".ru" for Russia. For
further information on Moody's approach to national scale
ratings, please refer to Moody's Rating Methodology published in
June 2014 entitled "Mapping Moody's National Scale Ratings to
Global Scale Ratings".

About Moody's and Moody's Interfax

Moody's Interfax Credit rating Agency (MIRA) specializes in
credit risk analysis in Russia. MIRA is a joint-venture between
Moody's Investors Service, a leading provider of credit ratings,
research and analysis covering debt instruments and securities in
the global capital markets, and the Interfax Information Services
Group. Moody's Investors Service is a subsidiary of Moody's
Corporation (NYSE: MCO).



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


ABENGOA: Equity Sales Unlikely to Lift Fitch's 'B+' Ratings
-----------------------------------------------------------
IPOs and equity sales in the European engineering and
construction sector should offset the impact of deteriorating
cash flows, but on their own are unlikely to result in positive
rating action, Fitch Ratings says.

In the past few days, Abengoa (B+/Negative), Isolux Corsan
(B+/Stable) and ACS (not rated) have announced equity
transactions whose proceeds may be used to reduce debt or fund
future projects.

"We believe equity issuance in the sector is becoming
increasingly common because some companies are unable to reduce
leverage organically.  This mainly affects non-investment grade
companies in the European periphery and is due to structural
working capital outflows, challenging end-markets and high debt
costs.  These problems have stemmed from the drop in construction
activity in many companies' home markets and from contract
disputes and delays as they have expanded into emerging markets,"
Fitch said.

The final impact on credit profiles and ratings will depend on
the use of cash proceeds.  But generally Fitch sees debt
reduction in these cases as helping to offset the impact of
weaker operating performance and avoiding negative rating action.
Continued access to equity markets and the ability to dispose of
assets are positive, but are already factored into current
ratings.  Upgrades would probably require an improvement in cash
flows and core business performance.

Among recent transactions, Abengoa has announced the sale of
another stake in Abengoa Yield for a total USD285 million to
reinforce liquidity.  Isolux intends to float and use the EUR600
million of issued equity primarily to reduce group's indebtedness
and improve liquidity.  ACS plans to sell up to 51% of Saeta
YieldCo, which owns the group's renewable energy concessions,
through an IPO as part of its plan to reduce group leverage.

In Q414, Astaldi ('B+'/Stable) announced that a special purpose
vehicle would be created to hold some concession assets with the
objective of accelerating the disposal process.  Earlier this
week, OHL Mexico, OHL's ('BB-'/Stable) non-recourse subsidiary,
sold 24.99% of Concesionaria Mexiquense to an infrastructure fund
for EUR510 million to strengthen its balance sheet to fund future
concession projects.


CAIXA PENEDES 1: S&P Lowers Rating on Class C Notes to 'B'
----------------------------------------------------------
Standard & Poor's Ratings Services took various credit rating
actions in CAIXA PENEDES 1 TDA Fondo de Titulizacion de Activos
and CAIXA PENEDES 2 TDA, Fondo de Titulizacion de Activos.

Specifically, S&P has:

   -- Affirmed its 'AA (sf)' ratings on CAIXA PENEDES 1's and
      CAIXA PENEDES 2's class A notes; and

   -- Lowered its ratings on CAIXA PENEDES 1's and PENEDES 2's
      class B and C notes.

Upon publishing S&P's 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 S&P has received as
of September 2014.  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 can
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 in both transactions is 'A+
(sf)'.

The interest rate and basis swaps for both transactions do not
satisfy S&P's current counterparty criteria, so it gave no
benefit to the swaps in its analysis at rating levels above its
long-term issuer credit rating on JPMorgan Chase Bank N.A. as the
swap counterparty plus one notch.  S&P has therefore performed
its credit and cash flow analysis without giving benefit to the
swap provider at rating levels above 'AA-', to determine if the
notes could achieve a higher rating when giving no benefit to the
swap provider.  S&P considered appropriate cash flow stresses to
address interest rate and basis risk in both transactions.

The available credit enhancement for CAIXA PENEDES 1 and CAIXA
PENEDES 2's class A notes (based on the performing balance,
including arrears of up to 90 days plus the reserve balance) has
increased to 13.0% from 12.9% and to 11.6% from 11.4%,
respectively, since S&P's previous review.

CAIXA PENEDES 1

Class         Available credit
               enhancement (%)
A                         13.0
B                          6.8
C                          2.3

CAIXA PENEDES 2

Class         Available credit
               enhancement (%)
A                         11.6
B                          9.4
C                          4.4

Both transactions feature amortizing reserve funds, which
currently represent 2.3% and 4.4% of CAIXA PENEDES 1's and CAIXA
PENEDES 2's outstanding performing balances, respectively.  The
cash reserves are at their target amounts for both transactions
and started to amortize three years after closing.  Currently,
CAIXA PENEDES 1's cash reserve is not amortizing as severe
delinquencies of more than 90 days have breached one of the
amortization conditions.  It may start amortizing again, once all
conditions are met.

Both transactions have a combined interest and principal priority
of payments with deferral triggers based on cumulative gross
defaults.  If the transactions breach their triggers (4.90% and
5.00% for the class C notes in CAIXA PENEDES 1 and CAIXA PENEDES
2, respectively), they will divert interest on the subordinated
notes to amortize the senior notes' principal.  In S&P's view,
both transactions are unlikely to breach their triggers.

Severe delinquencies of more than 90 days at 0.63% and 0.83% for
CAIXA PENEDES 1 and CAIXA PENEDES 2, respectively, are on average
lower for this transaction than S&P's Spanish RMBS index.
Defaults are defined as mortgage loans in arrears for more than
12 months in these transactions.  Cumulative defaults for CAIXA
PENEDES 1 and CAIXA PENEDES 2 at 2.65% and 1.88%, respectively,
are also lower than in other Spanish RMBS transactions that S&P
rates.  S&P expects cumulative defaults to continue to increase,
as long-term delinquencies roll into defaults.  Prepayment levels
remain low and the transaction is unlikely to pay down
significantly in the near term, in our opinion.  For both
transactions, S&P observed a significant increase in prepayment
levels on the June 2014 payment date.  S&P's analysis indicates
that some of the loans that were paid off were in arrears for
more than one payment date and we estimate that the originator
has repurchased these nonperforming loans.  S&P has taken this
into account as part of its analysis by increasing its arrears
projection.

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

CAIXA PENEDES 1

Rating level    WAFF (%)    WALS (%)
AAA               18.26        18.38
AA                13.83        14.76
A                 11.38         9.25
BBB                8.35         6.73
BB                 5.59         5.24
B                  4.71         4.01

CAIXA PENEDES 2

Rating level    WAFF (%)    WALS (%)
AAA               15.52        16.16
AA                11.99        13.24
A                 10.02         8.80
BBB                7.36         6.74
BB                 5.13         5.46
B                  4.40         4.38

The increases in the WAFF is mainly due to the adjustments that
S&P applies to the original loan-to-value ratios, seasoned loans,
geographical province concentration, and adjustments that S&P
applies to jumbo loans under its updated RMBS criteria.  The
increases in the WALS are mainly due to the application of S&P's
revised market value decline assumptions and the indexing of its
valuations under its RMBS criteria.  The overall effect is an
increase in the required credit coverage for each rating level in
both transactions compared to S&P's previous review.

Following the application of S&P's RAS criteria and its RMBS
criteria, S&P has determined that its assigned rating on each
class of notes in this transaction should be the lower of (i) the
rating as capped by S&P's RAS criteria and (ii) the rating that
the class of notes can attain under S&P's RMBS criteria.  In both
transactions, the ratings on the class A and B notes are
constrained by the rating on the sovereign.

CAIXA PENEDES 1's and CAIXA PENEDES 2's class A notes meet all of
the conditions under S&P's RAS criteria to permit a six-notch
uplift from its long-term sovereign rating on Spain.  S&P has
therefore affirmed its 'AA (sf)' ratings on the class A notes in
both transactions.

The available credit enhancement for CAIXA PENEDES 1's class B
notes cannot pass a "severe" stress.  Therefore, the maximum
notches of uplift for this class of notes is one notch above the
sovereign rating.  Consequently, S&P has lowered to 'BBB+ (sf)'
from 'A (sf)' its rating on CAIXA PENEDES 1's class B notes.

CAIXA PENEDES 2's class B notes do not meet all of the conditions
in paragraph 48 of the RAS criteria.  Therefore, the maximum
notches of uplift is four notches above the sovereign rating.
Consequently, S&P has lowered to 'A+ (sf)' from 'AA- (sf)' its
rating on CAIXA PENEDES 2's class B notes.

In both transactions, the pro rata conditions are currently met
and the notes are therefore repaying pro rata.  S&P has therefore
also tested the cash flow outcomes under these conditions by
applying delayed recession timing and commingling loss.  S&P's
cash flow analysis results indicate that these delayed
assumptions are less beneficial for all classes of notes, as the
notes would only withstand these stresses at lower rating levels.

Following the application of S&P's RMBS criteria, and after it
applied its delayed recession timing and commingling loss, CAIXA
PENEDES 1 and CAIXA PENEDES 2's class C notes' cash flow results
indicate that they can only withstand our stresses at 'B (sf)'
and 'BB- (sf)' rating levels, respectively.  Consequently, S&P
has lowered its ratings on CAIXA PENEDES 1 and CAIXA PENEDES 2's
class C notes to these rating levels.

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% for one-year and three-year
horizons.  This did not result in S&P's rating deteriorating
below the maximum projected deterioration that it would associate
with each relevant rating level, as outlined in its credit
stability
criteria.

"In our opinion, the outlook for the Spanish residential mortgage
and real estate market is not benign and we have therefore
increased our expected 'B' foreclosure frequency assumption to
3.33% from 2.00%, when we apply our RMBS criteria, to reflect
this view.  We base these assumptions on our expectation of
modest economic growth, continuing high unemployment, and further
falls in house prices in 2015," S&P said.

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 2015.

S&P expects severe arrears in the portfolio 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.

CAIXA PENEDES 1 and CAIXA PENEDES 2 are Spanish RMBS
transactions, which closed in November 2006 and September 2007,
respectively, and securitize first-ranking mortgage loans.  Caixa
d'Estalvis del PENEDES, now merged with Banco de Sabadell S.A.,
originated the pools, which comprise loans granted to Spanish
residents, mainly located in Catalonia.

RATINGS LIST

Class       Rating            Rating
            To                From

CAIXA PENEDES 1 TDA Fondo de Titulizacion de Activos
EUR1 Billion Mortgage-Backed Floating-Rate Notes

Rating Affirmed

A           AA (sf)

Ratings Lowered

B           BBB+ (sf)         A (sf)
C           B (sf)            BB (sf)

CAIXA PENEDES 2 TDA, Fondo de Titulizacion de Activos
Million Mortgage-Backed Floating-Rate Notes

Rating Affirmed

A           AA (sf)

Ratings Lowered

B           A+ (sf)           AA- (sf)
C           BB- (sf)          BBB (sf)



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


ALPARI UK: Japan Unit Tells Clients to Withdraw Funds
----------------------------------------------------
Andrew Saks-McLeod at LeapRate reports that Alpari's Japanese
operation has advised clients that it will be returning all
funds, plus not opening new positions as a result of the capital
position of its parent company Alpari UK.

According to the report, Alpari's Japanese division has published
a notice on its corporate website, advising that all clients
should withdraw their funds, as the Japanese division of Alpari's
parent company is insolvent.

LeapRate relates that this follows the declaration of insolvency
by Alpari UK last week, following the extreme volatility which
arose from the Swiss National Bank's abandonment of the 1.20
floor on the EUR/CHF pair.

The Japanese subsidiary of the British division of Alpari advises
that, as client funds are segregated from operating and trading
capital, they will be returned in due course to clients, however
operations have ceased, meanwhile Alpari UK has stated that it
continues to explore its options and is in search of a potential
purchaser, according to the report.

Alpari Japan is closing open positions in preparation for
returning client funds, and no new positions are able to be
opened and has received a warning by the Kanto bureau, the
Japanese regulatory authority, about the handling of capital and
with regard to the necessity to follow certain procedures
regarding client funds, LeapRate reports.

LeapRate in a separate report says Japan's Financial Services
Agency has confirmed that the Japanese division of Alpari has
gone into administration and customer funds will be returned in
full.

                            About Alpari

Alpari Group is a UK-based foreign exchange, precious metals and
CFD broker headquartered in London.  The company employs around
170 employees at its offices in Bishopsgate, London.


Upon the application of the directors of Alpari (UK) Ltd, on
Monday, Jan. 19, 2015, the High Court appointed Richard Heis --
richard.heis@kpmg.co.uk -- Samantha Bewick --
samantha.bewick@kpmg.co,uk -- and Mark Firmin --
mark.firmin@kpmg.co.uk -- of KPMG LLP as joint special
administrators of Alpari (UK) Ltd, under the Special
Administration Regime (SAR).  Alpari (UK) Ltd is a company
incorporated in the UK.

Alpari (UK) Ltd applied for insolvency on Jan. 19, 2015,
following the decision on Jan. 15, by the Swiss National Bank to
remove the informal peg to the euro at around 1.20 Swiss francs.
"The announcement by the SNB prompted volatility across the
foreign exchange markets which saw the company and many of its
clients make large losses. After a weekend spent in urgent
discussions with various parties with a view to selling the
company, these efforts were ultimately unsuccessful," KMPG said
in a statement.


AUSTIN REED: To Close More Than 30 Stores Under CVA Deal
--------------------------------------------------------
Insider Media reports that Austin Reed is to close more than 30
stores as part of restructure it plans to carry out through a
company voluntary arrangement.

Neville Kahn and Rob Harding of Deloitte, the business advisory
firm, have been appointed as nominees for the CVA proposed by the
Austin Reed Group, Insider Media relates.

The two CVA proposals are for Country Casuals Ltd (CC) and Austin
Reed Ltd and are part of a broader operational restructuring,
which includes a material investment from the group's
shareholders and further investment in the group's online
offering, Insider Media discloses.

According to Insider Media, the key terms for landlords are:

   -- 166 stores, representing 72 per cent of the group's 232
      total stores, will be operationally unaffected under the
      CVAs. This group of stores includes the Austin Reed Group's
      flagship store on London's Regent Street.

   -- 35 stores, which are currently underperforming, are
      expected to remain part of the business going forward, but
      will be subject to a 20 per cent rent reduction for 12
      months.

   -- Following the strategic review it has been decided that it
      is no longer viable to operate 31 stores (22 CC; 9 Austin
      Reed stores).  These sites will be subject to a 50 per cent
      rent reduction ahead of likely closure after six months.

Austin Reed is a Thirsk-based fashion retailer.


BRIDGE FINCO: Moody's Assigns Caa2 Rating to Sr. Sec. Term Debt
---------------------------------------------------------------
Moody's Investors Service has assigned a definitive B2 (LGD3,
38%) rating to the senior secured first lien term loan and senior
secured revolving credit facility and a definitive Caa2 (LGD 6,
90%) rating to the senior secured second lien term loan borrowed
by Bridge Finco LLC. Bridge Finco LLC is a financing vehicle
subsidiary of Bridge HoldCo 4 Ltd, the ultimate parent company
for the Bridon restricted group. The B3 corporate family rating
(CFR) and B3-PD probability of default rating (PDR) of Bridge
HoldCo as well as the positive outlook remain unchanged.

Moody's definitive ratings are in line with the provisional
ratings assigned on November 12, 2014.

Ratings Rationale

Bridon's B3 rating is supported by the group's market position as
a leading manufacturer of wire ropes that are safety and/or
mission critical for asset performance in a diverse range of end
markets. Moody's note however that demand in the majority of end
markets is cyclical and might therefore negatively impact
operating profitability adversely if one or multiple sectors are
in a downturn. Balancing this exposure is its low dependence on
new projects as the majority of demand is driven by replacement
activities, which brings some visibility to revenues. Strong ties
with leading global engineering companies and the fact that
Bridon's ropes represent a small portion of operational costs of
major miners and oil & gas companies further support Bridon's
business profile. The rating also positively considers historical
earnings stability.

On a more negative note, the rating is constrained by the fairly
small scale of Bridon as indicated by sales of about GBP262
million in the LTM period as of June 2014, albeit with solid
geographic diversification. The rating also considers that
forecasted growth in sales and profitability might be challenging
to achieve considering current weakness in oil prices which could
trigger capex cuts at major oil companies and subsequently stable
or even slightly reducing number of rigs. Also, Moody's do not
foresee a major recovery in mining, which could prevent
forecasted restocking activities of certain miners that are
strained for cash. In addition, Moody's caution that volatility
of raw material prices, in particular for steel rod could result
in some margin volatility should Bridon not be able to pass these
on through selling price increases in a timely fashion. Given
these factors, Bridon's leverage is considered high at this point
in time but positions the group solidly in the B3 rating
category, as evidenced by pro forma debt/EBITDA as adjusted by
Moody's of around 7x.

The positive outlook reflects Moody's expectation that Bridon
will be able to show profit improvements over the next 12-18
months, largely on the back of a recovery in the group's mining
revenues and continued support from oil & gas as well as
industrial activities. In addition, restructuring and cost
savings as well as incremental profit generation from the
acquisition of Scanrope should further support increasing profit
levels. This should allow Bridon to improve its financial risk
profile such that its debt/EBITDA as defined by Moody's improves
towards 6x.

Moody's views Bridon's liquidity profile as adequate. Internal
sources include cash on hand of around GBP10 million following
the refinancing and operating cash flow before working capital
requirements expected at around GBP20 to 25 million for the next
twelve months. In addition, Moody's notes that Bridon has access
to a revolving credit facility amounting to USD40 million.

These sources should be sufficient to fund working cash
requirements, estimated at around 3% of sales, as well as capex
forecasted at around GBP8-GBP10 million per year, with the RCF in
place to support seasonal working capital swings and issuance of
LoCs.

The B2 ratings assigned to the USD286 million senior secured
first lien term loan and the USD40 million revolving credit
facility is one notch above the group's corporate family rating.
The rating on these instruments reflect their contractual
seniority in the capital structure and benefits from a collateral
package, consisting of a pledge over the majority of the group's
assets as well as upstream guarantees from most of the group's
operating subsidiaries, representing more than 80% of aggregate
EBITDA. Lenders of the second lien term loan benefit from the
same collateral and guarantee package, but on a subordinated
basis, therefore the rating of the second lien term loan is two
notches below the group's B3 corporate family rating at Caa2.

A higher rating would require a track record of profitability
improvements that allows the group to materially deleverage.
Quantitatively, Moody's would consider a positive rating action
if Moody's adjusted debt/EBITDA were to decline to 6x times with
consistently positive free cash flow generation. Negative
pressure would build should Bridon's operating profitability
decline from current levels of around GBP40 million of EBITDA
with subsequently deteriorating leverage. A negative rating
action could also be triggered by a weakening liquidity profile
due to Bridon incurring material amounts of negative free cash
flow and/or tightening covenant headroom.

Assignments:

Issuer: Bridge Finco LLC

  Backed Senior Secured Bank Credit Facility (Foreign Currency)
  Nov 12, 2019, Assigned B2

  Backed Senior Secured Bank Credit Facility (Foreign Currency)
  Nov 12, 2021, Assigned B2

  Backed Senior Secured Bank Credit Facility (Foreign Currency)
  Nov 12, 2022, Assigned Caa2

The principal methodology used in this rating was Global
Manufacturing Companies published in July 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.

Bridon is a globally active manufacturer and supplier of
specialist high quality wire rope. Key product lines include wire
rope and strand, fibre rope and wire, specialist installations
and inspection services, supplying global customers in the oil &
gas, mining, industrial, marine and infrastructure sectors. The
company focuses on safety or mission/performance critical ropes,
requiring high technological know-how and innovation
capabilities. In 2013, Bridon generated revenues of GBP 263
million. Bridon is currently in the process of being acquired
through funds managed by Ontario Teachers' Pension Pla


CO-OPERATIVE BANK: Revamps Ethical Policy Following Scandals
------------------------------------------------------------
Emma Dunkley at The Financial Times reports that Co-operative
Bank has said it will not provide finance to payday lenders, some
gambling firms or companies that do not "responsibly" pay tax in
the UK, under a revamp of its ethical policy following a series
of high-profile scandals.

Its new pledges -- which have been based on the views of 74,000
customers and stakeholders -- form part of the first update to
the bank's ethical code in more than five years, the FT notes.
Since the policy was introduced in 1992, the bank has turned down
GBP1.4 billion of business on ethical grounds, the FT relays.

Co-op Bank's policy overhaul comes after a torrid period for the
once mutually-owned lender, in which it was bailed out twice by a
consortium of investors that included a group of hedge funds,
following the discovery of a GBP1.5 billion capital shortfall in
2013, the FT states.

Niall Booker, chief executive, said that the bank's change in
ownership structure had sparked concerns among customers that it
would veer away from its previous ethical stance -- and that this
partly prompted the policy refresh, the FT relates.

The Co-op Bank, as cited by the FT, said it had already started
reviewing its corporate clients and would provide "ample time"
for any who did not comply with its new ethical framework to
transfer to another bank.

Some 80% of customers told the bank that not doing business with
companies that fail to meet certain principles is the best way to
maintain an ethical approach, the FT relays.  But Co-op Bank has
decided to extend its ethical framework further, after customers
said it needed to operate "with honesty and transparency", the FT
notes.

Co-op Bank's ethical policy will for the first time include a
framework for how the bank operates, the FT says.  This will
codify the bank's promotion of ethical products, business
relationships and work culture, according to the FT.

In 2013, the lender's ethical image was tarnished after former
chairman Paul Flowers was fined for possessing illegal drugs,
triggering a storm of negative publicity, the FT recounts.

The Co-operative Bank is a retail and commercial bank in the
United Kingdom, with its headquarters in Balloon Street,
Manchester.

                           *     *     *

As reported by the Troubled Company Reporter-Europe on April 25,
2014, Moody's Investors Service downgraded by one notch to Caa2
the Co-Operative Bank Plc's senior unsecured debt and deposit
ratings, and maintained the negative outlook on the ratings.  The
bank's standalone bank financial strength rating (BFSR) was
affirmed at E, which is equivalent to a baseline credit
assessment (BCA) of ca.  The BFSR has a stable outlook.


CPUK FINANCE: Fitch Affirms 'B+' Rating on GBP280MM Class B Notes
-----------------------------------------------------------------
Fitch Ratings has affirmed CPUK Finance Ltd.'s notes:

  GBP300 million class A1 fixed-rate secured notes due 2042:
  affirmed at 'BBB'; Outlook Stable

  GBP440 million class A2 fixed-rate secured notes due 2042:
  affirmed at 'BBB'; Outlook Stable

  GBP280 million class B fixed-rate secured notes due 2042:
  affirmed at 'B+'; Outlook Stable

The affirmation is driven by the on-going stable performance of
Center Parcs Limited (CPL; the operating and borrower group
company, which consists of four holiday sites) with 1H15 revenue
(24 weeks) rising by 1.9% to GBP153.9 million and EBITDA by 1.6%
to GBP76.0 million.  Growth was slightly hindered by the effect
of the new Woburn site (which opened in June 2014), but was
supported by the continuation of CPL's capex program with GBP39.6
million of total capex invested in 2014 (representing 12.6% of
sales) and GBP12.5 million in 1H15.

The Stable Outlook reflects Fitch's expectation that the
relatively good quality estate and proactive (and experienced)
management will continue to deliver steady performance over the
next few years.

CPUK Finance Ltd. is a whole business securitization (WBS) of
four purpose-built holiday villages in the UK: Sherwood Forest in
Nottinghamshire; Longleat Forest in Wiltshire; Elveden Forest in
Suffolk and Whinfell Forest in Cumbria.

KEY RATING DRIVERS

Industry Profile: Weaker

Fitch views the operating environment as 'weaker'.  The UK
holiday parks sector has both price and volume risks, which makes
the projection of long-term future cash flows challenging.  It is
highly exposed to discretionary spending, and to some extent
reliant on commodity and food prices.  Event risk and weather
risks are also significant.  The regulatory environment is viewed
as stable with moderate reliance on any particular regulatory
barrier.  Fitch views the operating environment as a key driver
of the industry profile, resulting in its overall 'weaker'
assessment.

Fitch considers barriers to entry as 'midrange'.  There is a
scarcity of suitable, large sites near major conurbations, which
is a credit positive.  Sites also require significant development
time and must adhere to stringent planning permission processes.
The cost of development is also prohibitively high.  However, the
wider industry is competitive and switching costs are viewed as
relatively low.

The sustainability of the sector is viewed as 'midrange'.  A high
level of capital spending is required to maintain the quality of
the sites.  The offering is also exposed to changing consumer
behavior (e.g. holidaying abroad or in alternative UK sites).
However, technology risk is low and gradual UK population growth
should benefit the industry.

Company Profile: Stronger

Fitch views financial performance as 'stronger'.  CPL has
demonstrated strong revenue growth despite past difficult
economic environments, having generated seven-year revenue and
EBITDA CAGRs to 2014 of 3.2% and 6.3%, respectively.  Growth has
been driven by villa price increases, bolstered by committed
development funding upgrading villa amenities and increasing
capacity.  An aspect of revenue stability is the high repeating
customer base with 60% of the guests returning over a five-year
period and 35% within 14 months.

The company's operations are viewed as 'stronger'.  CPL is the
UK's leading family-orientated short break holiday village
operator, offering around 850 villas per site set in a forest
environment with significant central leisure facilities.  There
are no direct competitors and the uniqueness of its offer
differentiates the company from more basic camping and caravan
offerings or overseas weekend breaks.  Management has been
stable, with the current CEO having been in place since 2000 and
there are no known corporate governance issues.  CPL benefits
from a high level of advance bookings, which helps operations.
Operating leverage is moderate with fixed costs estimated at
around 50%.  CPL is viewed as a medium-sized operator with FY14
EBITDA of GBP146.8m, but it benefits from some economies of
scale.  The Center Parcs brand is also fairly strong and the
company benefits from other brands operated on a concession basis
at its sites.

Transparency is viewed as 'stronger'.  As the business is largely
self-operated, insight into underlying profitability is good.
Despite an increasing portion of food and beverage revenues that
are derived from concession agreements, these are mainly fully
turnover linked thereby still giving some insight into underlying
performance.  They also only make up 22% of FY14 total revenues.

Fitch views dependence on operator as 'midrange'.  Only a few
alternative operators are generally thought to be available.

Asset quality is viewed as 'stronger'.  Within the UK holiday
parks sector, the quality of the assets is viewed as stronger.
CPL is heavily reliant on relatively high capex in order to keep
its offer current.  Fitch views it as a well invested business
with around GBP360 million of capex since 2007 (around GBP215
million of investment/refurbishment capex).  As of 1H15,
refurbishments are on track with 80% of all 3,421 units having
been refurbished, leaving 696 to go with planned upgrades of a
further 167 units in the remainder of FY15.

Debt Structure: Class A - Stronger, Class B - Weaker

The debt profile is viewed as 'stronger' for the class A notes
and 'weaker' for the class B notes.  All principal is fully
amortizing via cash sweep and the amortization profile under
Fitch's base case is commensurate with the industry and company
profile.  There is an interest-only period in relation to the
class A notes, but no concurrent amortization.  The class A notes
also benefit from the deferability of the junior ranking class B.
Additionally, the notes are all fixed rate, avoiding any floating
rate exposure and swap liabilities.

The class B notes are very sensitive to small changes in
operating stress assumptions and particularly vulnerable towards
the tail end of the transaction, as large amounts of accrued
interest may have to be repaid -- assuming the class B notes are
not repaid at their expected maturity.  This sensitivity stems
from the interruption in cash interest payments upon a breach of
the class A notes' restricted payments covenant (RPC) (at 1.35x
FCF DSCR) or failure to refinance either the class A notes one
year past expected maturity or the class B notes at their
expected maturity (all for the benefit of the class A notes).

Fitch views the security package as 'stronger' for the class A
notes and 'weaker' for the class B notes.  The transaction
benefits from a comprehensive WBS security package including full
senior ranking asset and share security available for the benefit
of the noteholders.  Security is granted by way of fully fixed
and (qualifying) floating security under an issuer-borrower loan
structure.

The class B noteholders benefit from a Topco share pledge
(sitting above and hence structurally subordinate to the borrower
group), and as such would be able to sell the shares upon a class
B event of default (e.g. failure to refinance in 2018).  However,
as long as the class A notes are outstanding, only the class A
noteholders are entitled to direct the relevant trustee with
regards to the enforcement of any borrower security (e.g. if the
class A notes cannot be refinanced one year after their expected
maturity).

The structural features are viewed as 'stronger' for the class A
notes and 'weaker' for the class B notes.  The covenant package
is viewed as slightly weaker than other typical WBS deals.  The
financial covenants are effectively only based on interest cover
ratios (ICR) as there is no scheduled amortization of the notes
as typically seen in WBS transactions.  The lack of debt service
cover ratios (DSCR)-based financial RPCs and covenants is
compensated to a large extent by the full cash sweep features
triggered until the final redemption of the class A notes in the
event they do not get refinanced within 12 months after their
expected maturity.

In addition, the class A1 notes benefit from 25% cash trap in
year 3, 50% cash trap in year 4 and a full cash lock-up one year
prior to their expected maturity.  However, the class B notes
also benefit from a performance dependent RPC which is set at
quite a strict level.  As expected, as of October 2014, the class
B notes' cumulative interest cover ratio at 1.87x was still below
its RPC at 1.9x, so no dividends are being paid (except
management fees) and cash is being locked up.

At GBP80 million, the liquidity facility is appropriately sized
covering 18 months of the class A notes' peak debt service.  The
class B notes do not benefit from any liquidity enhancement.

On a standalone basis, the structural features directly
associated to the class B notes are relatively weak, being more
akin to high yield notes.  However, they benefit indirectly from
certain class A features such as the operational covenants, but
only while the class A notes are outstanding.

Peer Group - the most suitable WBS comparisons are (i) the pubs,
and (ii) Roadchef, a WBS transaction of motorway service
stations. CPL has proven to be less cyclical than Roadchef and
the leased pubs with strong performance during major economic
downturns (helped by a lower retail revenue contribution of
around 10%). However, with just four sites (within the
securitized group) CPL is considered less granular than the WBS
transactions of pubs.

RATING SENSITIVITIES

Class A - Negative: A deterioration in performance could result
in negative rating action particularly if the Fitch estimated
synthetic FCF DSCR metrics were to move below around 1.9x in
combination with a deterioration in the expected leverage
profile.

Class A - Positive: Any significant improvement in performance
above Fitch's base case, with a resulting improvement in the
Fitch estimated synthetic FCF DSCR to above 2.5x, in addition to
further deleveraging could result in positive rating action.  The
class A notes are unlikely to be rated above 'BBB+'.  This is
mainly due the sector's substantial exposure to consumer
discretionary spending and concerns as to whether the CPL concept
will remain in favor over the long term.

Class B - Negative: Under Fitch's base case, the class B notes
are expected to be repaid by around 2032, with a median synthetic
FCF DSCR of around 1.4x. Any significant deterioration in these
metrics could result in negative rating action.

Given the sensitivity of the class B notes to variations in
performance due to its deferability, the class B notes are
unlikely to be upgraded in the foreseeable future.

TRANSACTION PERFORMANCE

CPL has continued to perform well with FY14 (FYE 24 April 2014)
revenues growing by 3.7% and EBITDA by 4.9%, driven primarily by
continued average daily rate (ADR) growth, reflecting both price
increases and increased yield from the accommodation upgrades.
EBITDA was also helped by on-site spend growth and effective cost
control.

During 1H FY15, 24-week revenue and EBITDA growth were more
subdued versus the previous year at 1.9% and 1.6%, respectively -
growth at the sites of Elveden and Longleat were slightly lower
due to the effect of the opening of the Woburn site. Management
also reported that revenue growth was partly offset by payroll
and marketing cost increases.  Fitch expects the impact of the
new site to be temporary (around two years), which Fitch accounts
for in its base case.  The new site in Woburn is expected to
accede to the WBS transaction (assuming certain covenants are
met).

Under Fitch's base case, EBITDA is expected to grow at a long-
term CAGR of around -0.1% and FCF at around -1.0%.  This is
despite gradual EBTIDA growth forecast in the medium term.  This
reflects the nature of the industry risk for CPL, whereby recent
historical performance has been strong.  However, in Fitch's view
beyond around 10 years, revenue visibility reduces considerably
resulting in the forecast decline over the longer term.  The
resulting projected synthetic FCF DSCRs are expected to fluctuate
around 2.1x for the class A notes and 1.4x for the class B notes,
which is broadly in line with the previous review.

1H15 gross EBITDA leverage also improved from 5.2x and 7.2x
(1H14) to around 5.0x and 6.9x for the class A and B notes,
respectively.


ELLI INVESTMENTS: Moody's Lowers CFR to Caa1; Outlook Negative
--------------------------------------------------------------
Moody's Investors Service has downgraded the Corporate Family
Rating (CFR) and Probability of Default Rating (PDR) of Elli
Investments Limited ('Four Seasons Health Care', or 'the
company') to Caa1 and Caa1-PD from B3 and B3-PD respectively. At
the same time, Moody's has downgraded to B1 from Ba3 the rating
of the super senior bank Facility and to B3 from B2 the rating of
the senior secured notes; both of these instruments are borrowed
at Elli Finance (UK) plc. The rating of the unsecured notes
borrowed at Elli Investments Limited has been downgraded to Caa3
from Caa2. The outlook is negative.

"The downgrade reflects Moody's expectation that earnings and
cash flows in 2015 will remain depressed, and that barring a
significant upturn in profitability, Moody's believes that there
could be a significant cash burn in the coming 12-18 months",
says Richard Morawetz, a Moody's Vice President - Senior Credit
Officer and lead analyst for Four Seasons Health Care.

Ratings Rationale

In the first three quarters of 2014, the company reported EBITDA
at GBP53.3 million, which compares with GBP73.8 million the prior
year. At this time, Moody's does not believe that profits will
revive meaningfully in the near future. The general causes of
this decline in profits are the increased number of regulatory
inspections and embargoes on resident admissions (albeit these
are currently lower than the historical peak); the shortage of
qualified nurses across the sector, resulting in upward pressure
on wages; and reduced funding from local authorities in real
terms. The company continued to report a high occupancy rate of
87.2% across the group in the third quarter, reflecting the
strong demand for its services generally. With the recent
earnings trend, however, and the limited prospects for an
improved business outlook, Moody's believe that gross adjusted
leverage will remain above 6.75x, which was Moody's guidance for
possible downward pressure for the rating.

In spite of the recent resetting of covenants on the bank credit
facility, Moody's believe that the company's liquidity will
remain weak over the next 12-18 months. In December 2014, the
company announced that it had reached an agreement with its banks
to revise the covenants for its GBP40 million bank facility to a
super senior leverage covenant of 1.2x (ie the ratio of drawn
debt under the facility to EBITDA) from a gross leverage ratio
previously of 7.5x (measured as total group debt/EBITDA). Moody's
view this as a positive development as it significantly
alleviates Moody's previous concerns about a potential covenants
breach. The revised facility has been converted from a revolving
credit facility into a term loan which matures in December 2017;
and it retains the same security as previously, such that it
remains senior to both the senior secured notes due 2019 and the
unsecured notes due 2020. Moody's further believe that the GBP50
million in new equity provided by the shareholders, which was
held outside the restricted group at FSHC Group Holdings Limited
as of September 2014, will provide an essential source of
liquidity in coming quarters. Apart from these two sources of
liquidity, the company reported a cash balance of about GBP20
million as of September 2014.

At the same time, however, Moody's believe that the weaker
earnings trend and high interest burden, notably the bi-annual
interest payments on the bonds of c.GBP26 million, will result in
a significant cash burn by the company in coming quarters. The
company has completed the operational segmentation process of its
homes, whereby it has separated its business into three
functional units that focus on dementia care, self-paying
clients, and specialist care, and has appointed separate CEOs for
each segment. Moody's understand that the deployment of the
related capex is still underway. Moody's note that the company
has been closing or divesting certain care homes that it deems
uneconomic or that do not fit into its new business segmentation,
which Moody's believe will offer some support to liquidity.
However, in Moody's view, if earnings do not improve in coming
quarters, with roughly GBP52 million in bond interest per year,
in addition to interest on the bank facility, as well as the
underlying run-rate of capex, Moody's believe that the company's
cash burn could consume available liquidity over time.

Rationale for the Negative Outlook

The negative outlook reflects mainly Moody's concern that lower
profitability and cash generation may exert pressure on the
company's overall liquidity in the coming 12-18 months.

What Could Change the Rating Up/Down

In light of the action and negative outlook, upward pressure on
the rating is unlikely in the medium term, but could be
considered if the company's earnings reversed the recent negative
trend, resulting in the adjusted leverage metric falling back
below 6.75x with EBITA/interest rising to above 1.0x on a
sustainable basis, with a stable liquidity profile and no
covenants concerns. Given the rating positioning, the rating
would likely be downgraded if liquidity concerns were to become
more pressing.

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

Four Seasons Health Care (FSHC) is a leading provider of health
and social care services in the UK, with nearly 24,000 beds and
about 500 facilities in 2013. In that year, it reported revenues
and EBITDA (before exceptional items) of c.GBP710 million and
GBP94 million, respectively. Following the acquisition of several
homes from the former Southern Cross portfolio in 2011, the
company became the largest independent provider of elderly care
services in the UK. Elli Investments Ltd. is an intermediate
holding company of FSHC Group Holdings Limited; the ultimate
owner is Elli Capital Limited, which is owned by private equity
firm Terra Firma.


HOLTS BATTLEFIELD: Goes Into Administration
-------------------------------------------
travelmole.com reports that Holts Battlefield and History Tours,
a company that has been selling trip to the battlefields of
Europe for more than 40 years, has gone into administration.

The report notes that Holts Battlefield offered battlefield and
history tours to schools as well as individual travelers.  It had
been trading for 40 years from its base in Dorking, Surrey and
comprised Holts Battlefields and Education, providing bespoke
school trips around the UK and Europe; and Holts Battlefield and
History tours aimed at adults travelling in the company of
historians and battlefield guides, the report discloses.

Holts Battlefield and History Tours appointed administrators
Andrew Duncan and Neil Bennett of Leonard Curtis Business
Solutions Group on January 9.

Shortly after, the business and certain assets were sold to Leger
Holidays for an undisclosed sum, according to travelmole.com.

"This deal has enabled the ownership of the business and certain
assets to transfer to Leger without any disruption -- the best
outcome for the tour operator as well as its clients," the report
quoted administrator Neil Bennett as saying.

"Leger is well positioned in the battlefield tour market.  It
will ensure that all 2015 bookings run smoothly and
professionally.  The company is currently in the process of
writing to all customers, seeking to reassure them that their
trips will continue as planned," Mr. Bennett added.

The report relays that Holts' previous owner Paul Adams had
posted a note on the company's website stating that he was no
longer able to run the business due to ill health, but that he
had spent 'considerable effort finding the best company to take
over this valuable legacy.'

Mr. Adams said Leger had taken over all forward bookings and that
it will continue to manage its 2015 program, the report adds.


SEB: Moody's Assigns Ba1(hyb) Rating to US$1.1BB Tier 1 Secs.
-------------------------------------------------------------
Moody's Investors Service has assigned a Ba1 (hyb) rating to the
US$1.1 billion 'high trigger' additional tier 1 (AT1) securities
issued by SEB (senior unsecured A1, negative; bank financial
strength rating (BFSR) C- stable/baseline credit assessment (BCA)
baa1). The outlook on the new rating for the AT1 securities is
stable, in line with the outlook on SEB's unsupported ratings.

These perpetual non-cumulative AT1 securities rank junior to Tier
2 capital, pari passu with any other deeply subordinated debt
securities and senior to all classes of SEB's share capital and
other capital instruments that qualify as common equity tier 1
(CET1) capital. Coupons may be cancelled in full or in part on a
non-cumulative basis at the issuer's discretion or mandatorily if
the distributable items are insufficient. The principal of the
securities is partially or fully written down if SEB's group-
level CET1 capital ratio falls below 8% or if SEB's bank-level
CET1 capital ratio falls below 5.125%.

Ratings Rationale

The Ba1(hyb) rating assigned to the securities reflects Moody's
approach to rating 'high trigger' securities. According to this
methodology, Moody's rates to the lower of a model-based outcome
and a non-viability security rating. This method takes account of
the credit risk of these securities' non-viability component and
the credit risk associated with the distance to trigger breach.
It therefore also captures the risk of coupon suspension on a
non-cumulative basis.

With regards to the AT1 securities' dual trigger structure,
Moody's based its rating assessment on the higher of the two
triggers, namely the 8% CET1 trigger point at the SEB group level
rather than the 5.125% CET1 trigger applied at the unconsolidated
bank level. This is because Moody's believes that the 8% trigger
is likely to be breached before the 5.125% trigger in many
scenarios.

According to its methodology, Moody's first applied a model to
assess the probability of SEB's group-level CET1 ratio reaching
the write-down trigger. The model is based on SEB's BCA of baa1,
which incorporates SEB group's overall intrinsic credit strength
and SEB's group-level CET1 capital ratio of 16.2% as of end-
September 2014 (SEB's bank level CET1 ratio was 17.7% at the same
date). The model gives an outcome of Ba1 (hyb). In the absence of
a non-viability security being rated, the model outcome was then
compared with the rating of a hypothetical non-viability
security. Moody's found that both the model outcome and the
hypothetical non-viability security rating suggested the same
rating, Ba1 (hyb).

In addition, Moody's ran a sensitivity analysis on SEB that
factors in changes to the group-level CET1 ratio and SEB's BCA.
The outcome of this sensitivity analysis confirms that a Ba1
(hyb) rating is resilient under the main plausible scenarios.

What Could Change the Rating Up/Down

The rating of this instrument could be upgraded if both of the
following occur: (1) SEB's BCA is raised and (2) SEB's
capitalization is strengthened.

Conversely, downward pressure on the rating of this instrument
could develop if SEB's baa1 BCA were adjusted downwards or if the
group's CET1 ratio were to reduce materially below the current
level on an ongoing basis. In addition, Moody's would also
reconsider the rating if the probability of a coupon suspension
increased.

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


* UK: Supermarket Price War Could Force Food Suppliers to Go Bust
-----------------------------------------------------------------
While most of the UK's largest supermarkets reported stronger
than expected food sales over the festive period, their ongoing
and brutal price war is pushing many food suppliers and smaller
high street grocers to the brink, warns business recovery
specialists Begbies Traynor.

According to Begbies Traynor's Red Flag Alert research for Q4
2014, which monitors the financial health of UK companies, the
UK's food retailing industry experienced one of the sharpest
increases in 'Significant' financial distress of all sectors
monitored, rising 58% to 4,552 struggling businesses compared to
the same quarter last year (Q4 2013: 2,878).

Meanwhile, the worst performing sector was the UK's food and
beverage manufacturing industry. Companies in this sector, many
of which supply the major UK headquartered supermarkets,
witnessed a colossal 92% increase in 'Significant Distress', with
1,410 businesses now struggling to make ends meet, compared to
733 at the same stage last year.

The statistics show that the UK's SME food retailers and
suppliers have been the worst casualties so far of the enduring
price war between the UK's supermarket giants, who have been
slashing prices, while squeezing suppliers' margins and
elongating payment terms in a bid to offer consumers the lowest
prices available in today's competitive retail environment.

Further analysis reveals that the number of smaller food
retailers in 'Significant' distress rose by 61% to 4,388 in Q4
2014 from 2,731 last year (representing 96% of all struggling
food retailers in the UK), while there was a 113% increase in the
number of SME food and beverage manufacturers suffering
'Significant' distress in Q4 2014 to 1,240 from 582 last year
(88% of the total).

Julie Palmer, Partner at Begbies Traynor, said:

"In recent weeks, Asda and Sainsbury's have promised oe450m worth
of price cuts between them, Morrisons has started a search for a
new CEO who can return them to growth, while Tesco has set out
major plans to reassert its dominance over the UK grocery market.
With the battle lines drawn, the supermarket price war is
intensifying and it looks like the UK's smallest food suppliers
are bearing the brunt.

"A perfect storm is brewing for SME food suppliers at the bottom
of the food supply chain, with many suffering a double hit from
larger suppliers demanding "loyalty" payments as well as
vanishing margins as a result of the inevitable aggressive
supermarket price war. Adding to their misery, the UK's food
producers and suppliers have failed to see any benefit from the
rise in popularity of the German discounters Aldi and Lidl, since
much of their canned and packaged stock is sourced from overseas.

"With shocking increases in distress among the supermarkets' main
suppliers, the largest chains need to tread very carefully if
they want to prevent a new crisis creeping up through their
supply chain. Even the Government's appointment of a grocery code
adjudicator last year seems to be having little impact, with
industry insiders reporting that the new watchdog lacks real
powers and is still failing to protect producers from being
squeezed by the supermarkets.

"Unless the supermarkets start treating their suppliers more
fairly and find longer term solutions to their cost cutting
exercise, we expect that more than 100 of these 1410
'Significantly' distressed food and beverage suppliers will fall
into administration before the year is up. Worryingly, with 3.6
million people employed in the UK food supply chain, the economic
and political risks associated with the current price war are now
reaching boiling point ahead of May's election."

Commenting on the rise in distress among food retailing SMEs,
Julie Palmer added:

"Although Tesco plans to close some of its local Express shops
this year, across the rest of the industry takings at smaller
stores in town centres are up considerably, demonstrating
consumers' preference for convenience, shopping little and often
with more frequent shops but smaller basket sizes.

"With mini-supermarkets on every corner and Aldi and Lidl opening
local shops as fast as they can find the sites, competition among
food retailers on the high street is still rife, making life all
the more difficult for smaller, independent convenience stores
who don't have the bargaining power with suppliers or the access
to premium locations afforded by their larger peers."



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X X X X X X X X
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* BOOK REVIEW: Transnational Mergers and Acquisitions
-----------------------------------------------------
Author: Sarkis J. Khoury
Publisher: Beard Books
Softcover: 292 pages
List Price: $34.95
Review by Gail Owens Hoelscher
Order your personal copy today at http://is.gd/hl7cni

Transnational Mergers and Acquisitions in the United States will
appeal to a wide range of readers. Dr. Khoury's analysis is
valuable for managers involved in transnational acquisitions,
whether they are acquiring companies or being acquired
themselves.

At the same time, he provides a comprehensive and large-scale
look at the industrial sector of the U.S. economy that proves
very useful for policy makers even today. With its nearly 100
tables of data and numerous examples, Khoury provides a wealth of
information for business historians and researchers as well.
Until the late 1960s, we Americans were confident (some might say
smug) in our belief that U.S. direct investment abroad would
continue to grow as it had in the 1950s and 1960s, and that we
would dominate the other large world economies in foreign
investment for some time to come. And then came the 1970s, U.S.
investment abroad stood at $78 billion, in contrast to only $13
billion in foreign investment in the U.S. In 1978, however, only
eight years later, foreign investment in the U.S. had skyrocketed
to nearly #41 billion, about half of it in acquisition of U.S.
firms. Foreign acquisitions of U.S. companies grew from 20 in
1970 to 188 in 1978. The tables had turned an Americans were
worried. Acquisitions in the banking and insurance sectors were
increasing sharply, which in particular alarmed many analysts.
Thus, when it was first published in 1980, this book met a
growing need for analytical and empirical data on this rapidly
increasing flow of foreign investment money into the U.S., much
of it in acquisitions. Khoury answers many of the questions
arising from the situation as it stood in 1980, many of which are
applicable today:

What are the motives for transnational acquisitions? How do
foreign firms plans, evaluate, and negotiate mergers in the U.S.?

What are the effects of these acquisitions on competition, money
and capital markets; relative technological position; balance of
payments and economic policy in the U.S.?

To begin to answer these questions, Khoury researched foreign
investment in the U.S. from 1790 to 1979. His historical review
includes foreign firms' industry preferences, choice of location
in the U.S., and methods for penetrating the U.S. market. He
notes the importance of foreign investment to growth in the U.S.,
particularly until the early 20th century, and that prior to the
1970s, foreign investment had grown steadily throughout U.S.
history, with lapses during and after the world wars.

Khoury found that rates of return to foreign companies were not
excessive. He determined that the effect on the U.S. economy was
generally positive and concluded that restricting the inflow of
direct and indirect foreign investment would hinder U.S. economic
growth both in the short term and long term. Further, he found no
compelling reason to restrict the activities of multinational
corporations in the U.S. from a policy perspective. Khoury's
research broke new ground and provided input for economic policy
at just the right time.

Sarkis J. Khoury holds a Ph.D. in International Finance from
Wharton. He teaches finance and international finance at the
University of California, Riverside, and serves as the Executive
Director of International Programs at the Anderson Graduate
School of Business.


                            *********

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
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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

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Valerie U. Pascual, Marites O. Claro, Rousel Elaine T. Fernandez,
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