TCREUR_Public/150128.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

                           E U R O P E

         Wednesday, January 28, 2015, Vol. 16, No. 019



SAXO BANK: Could Lose Up to $107 Million on SNB Shock


CERBA EUROPEAN: Moody's Affirms B2 CFR & Changes Outlook to Neg.
* FRANCE: Lawmakers Propose Bill to Speed Up Debt Restructurings


SUEDZUCKER AG: Moody's Cuts Junior Subordinated Rating to Ba3
TELDAFAX: Trial Against Three Former Managers Resumes


IRISH BANK: Judge to Rule on Quinns' Bid to Cross-Examine Wallace


EQUITER SRL: February 2 Expression of Interest Deadline Set


ALTICE FINANCING: S&P Rates Proposed Senior Secured Notes 'BB-'
ALTICE INTERNATIONAL: Moody's Confirms B1 CFR; Outlook Negative
STABILUS SA: Moody's Raises Corporate Family Rating to B1


PANTHER CDO III: Moody's Raises Ratings on 2 Note Classes to B3


RUSSIAN FEDERATION: S&P Lowers Sovereign Foreign Rating to BB+
RUSSIAN MORTGAGE 2006-1: Moody's Reviews B2 Rating on C Notes
RUSSNEFT OJSC: S&P Revises Outlook to Negative & Affirms 'B' CCR


OSCHADBANK: Fitch Affirms 'CCC' LT Issuer Default Ratings

U N I T E D   K I N G D O M

BOPARAN HOLDINGS: Moody's Lowers Corporate Family Rating to B2
MATTHEWS YARD: Faces Closure; Owes 100,000 Debts
MEIF RENEWABLE: Moody's Assigns (P)Ba2 Corporate Family Rating
MEIF RENEWABLE: Fitch Assigns 'BB' LT Issuer Default Rating
SHOON: Appoints BDO to Find Buyer for Business Again



SAXO BANK: Could Lose Up to $107 Million on SNB Shock
Reuters reports that Denmark's Saxo Bank faces potential losses
of up to $107 million as a result of the Swiss National Bank's
(SNB) decision to end its currency cap against the euro, the bank
said in a statement.

A number of Saxo Bank's customers ended up with insufficient
margin collateral to cover their losses on positions in the Swiss
franc and some customers will not be able to settle the balance
in full and the bank will incur losses in this respect, the bank
said, according to Reuters.

The report notes that taking the estimated maximum loss into
account the total capital of Saxo Bank Group would be 2.15
billion Danish crowns ($324 million) while its total capital
requirement is 1.71 billion crowns, the bank said.

Copenhagen-based Saxo Bank earned around two-thirds of its
revenue from currency trading last year. The bank made a profit
of 222 million Danish crowns ($33 million) in the first six
months of 2014, the report relays.

Losses from the surprise move by the SNB nearly crippled
brokerage FXCM and IronFX is in talks to buy fellow online forex
broker Alpari UK, which was forced into administration after
suffering heavy losses on the Swiss franc, the report notes.


CERBA EUROPEAN: Moody's Affirms B2 CFR & Changes Outlook to Neg.
Moody's Investors Service has changed to negative from stable the
outlook on Cerba European Lab S.A.S's ratings. At the same time,
Moody's has affirmed Cerba's B2 Corporate Family Rating (CFR),
the B2-PD Probability of Default Rating (PDR), and the B2 rating
of the senior secured notes.

Ratings Rationale

The negative outlook reflects Cerba's increased leverage and
deteriorating credit metrics following the debt-funded
acquisition of Novescia. On January 16, 2015, Cerba announced it
was to acquire Novescia for an enterprise value of approximately
EUR275 million. The management of Cerba expects Novescia to
contribute around EUR35 million of EBITDA inclusive estimated
cost-synergies resulting in a purchase multiple of around 7.9x
pro-forma for the synergies. Moody's understands the acquisition
will be financed by a combination of secured and unsecured debt,
as well as cash on hand.

Novescia is among the leading laboratory networks in France and
has a mix of town laboratories and emergency laboratories. Pro-
forma for the acquisition, Cerba will become a co-leader on the
French market for routine laboratories and a leading provider of
emergency laboratories. While the enhanced scale will allow for
the combined entity to extract scale economies, the acquisition
of Novescia is considerably larger than the bolt-on acquisitions
Cerba typically engages in and Moody's notes the acquisition
multiple of 7.9x is on the high side relative to smaller
acquisitions undertaken in the past. As the acquisition will be
fully debt-funded, Moody's expects Cerba's credit-metrics to
weaken and the rating agency expects the company's leverage --
defined as Moody's adjusted debt/ EBITDA -- to remain above 6x
until 2016.

Cerba's B2 CFR continues to reflect (1) the company's high
leverage; (2) financial policy, whereby Moody's expect that
acquisitions may surpass free cash flow (FCF) generation as
company continues to play an active role in the consolidation of
the French routine test market; and (3) high concentration upon
France and the potential for further pricing pressure. These
factors are balanced to an extent by (1) Cerba's vertical
integration within clinical pathology, allowing for synergies
between its three operating segments; (2) high barriers to market
entry as a result of complex logistics, as well as the company's
scientific competencies, brand recognition and strong competitive
positioning in some of its markets; and (3) its high profit

What Could Change The Rating DOWN/UP

Downward pressure on the ratings could develop should Cerba not
succeed in bringing down its leverage below 6x over the next 18-
24 months. Following two consecutive years in which Cerba has
undertaken debt-funded acquisitions largely exceeding its free
cash flows, downward pressure could also develop should Cerba
embark on additional debt-funded acquisitions before improving
its debt-protection metrics until levels expected for the rating-

Given the negative outlook on the ratings, any upward pressure on
the ratings is unlikely to materialize over the next 18-24
months. The ratings could be stabilized should Cerba successfully
improve its EBITDA on the back of envisaged synergies and reduced
costs of more exceptional character (ie restructuring costs and
acquisition related costs) so that the company's leverage shows a
clear trajectory towards a leverage below 6x by 2016.

The principal methodology used in this rating was Business and
Consumer Service Industry published in December 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.

Cerba is a France-based operator of clinical pathology
laboratories in Europe. In 2013, Cerba generated pro net sales of
EUR352 million and an adjusted EBITDA of EUR80 million.

* FRANCE: Lawmakers Propose Bill to Speed Up Debt Restructurings
Julie Miecamp at Bloomberg News reports that corporate debt
restructurings will become easier in France under proposals being
considered by lawmakers to restrict shareholder involvement in
the process.

France's Parliament was set to begin discussions on Jan. 26 on a
reform bill to bolster the nation's growth potential, Bloomberg
discloses.  According to Bloomberg, Economy Minister Emmanuel
Macron is proposing to speed up insolvency procedures by making
it simpler for companies to negotiate with lenders.

This is the third time France has sought to amend its insolvency
regime in the past five years to give creditors greater powers to
help rescue ailing companies and preserve jobs, Bloomberg notes.
It takes an average of 1.9 years to resolve a bankruptcy process
in France, compared with 1.5 years in the U.S. and one year in
the U.K., Bloomberg says, citing data compiled by the World Bank
as of June 2014.

Banque de France data show corporate insolvency filings in France
increased 0.9% in the year through October to 63,254, Bloomberg


SUEDZUCKER AG: Moody's Cuts Junior Subordinated Rating to Ba3
Moody's Investors Service has changed to negative from stable the
outlook on the Baa2 long-term issuer ratings of Suedzucker AG
('Suedzucker' or 'the group'). Moody's has affirmed the senior
unsecured long-term issuer rating Baa2 and the short-term Prime-2
ratings of Suedzucker and Suedzucker International Finance B.V.
Additionally Moody's has downgraded Suedzucker International
Finance B.V's junior subordinated rating to Ba3 from Ba2.

"We have revised the outlook on Suedzucker's Baa2 rating to
negative from stable, primarily as a result of the company's
ongoing weak operating performance and Moody's expectation that
the difficult trading environment in the European sugar and
ethanol markets will continue to negatively affect operating
performance in FY2015-16; we have also downgraded to Ba3 from Ba2
the Suedzucker International Finance B.V's junior subordinated
rating reflecting the diminished headroom under a cash flow event
of the hybrid instrument. If the operating performance continues
to be pressured, a cash flow event in the hybrid instrument,
would oblige the company to suspend the coupon payment posing an
impairment risk for holders" says Ernesto Bisagno, Moody's
Vice President -- Senior Analyst and lead analyst for Suedzucker.

Ratings Rationale

The change of outlook reflects Moody's expectation that recovery
in the group's operating performance in FY2015-16 will be
hampered by the negative effect of the prolonged deterioration in
pricing in the European sugar and bio ethanol markets on the
company's key Sugar and CropEnergies segments.

Moody's rating anticipated some stabilization in the operating
performance during 2014/15. However, achieving the company
guidance of EUR200 million operating profit for FY2014-15 has
proven to be more challenging and noticeable improvements in
FY2015-16 metrics have become unlikely.

EU quota sugar prices have been on a declining trend since May
2013 and dropped to EUR453 per tonne in October 2014, the lowest
level since 2006, when the current regime and respective
statistics have been introduced, owing to the high level of sugar
inventories and the expectation that the market will remain
oversupplied. Additional pressure comes from the spot markets
across Europe, with sugar prices trading around EUR400-450 per
tonne, with currently a standard deviation of EUR 50 per tonne.
Operating profit in the Sugar segment was down 89.6% in the first
9 months of FY2014-15 and, assuming EU sugar prices stay around
the current level, the Sugar segment could breakeven or possibly
generate an operating loss in FY2015-16, depending on spot market
pricing developments. The CropEnergies segment reported an
operating loss for the first 9 months of FY2014-15 reflecting
weak ethanol prices, with difficult market conditions expected to
persist in FY2015-16. The weak operating performance in the Sugar
and CropEnergies segments will be mitigated by a stable
development from the fruit segment and a stronger contribution
from the special products segment, which continues to benefit
from lower raw material costs, although they are however smaller
in scale and do not fully offset weakness in the other two units.

As a result, it might be difficult for the group to maintain
adjusted leverage below 3.5x in FY2015-16 and current visibility
is low on when improvements in the group operating performance
will occur. Moody's would however consider to revise the outlook
back to stable should EU sugar prices start to reverse the
negative trend. That would be driven by more balanced
supply/demand dynamics, with a potential return of a global
deficit in 2015-16, according to the International Sugar

More positively, whilst the abolishment of the sugar quota-regime
in September 2017 adds an element of uncertainty, Suedzucker
would have more room to cope with low sugar prices as, after
September 2017, the obligation for EU sugar producers to pay
farmers the minimum beet price of EUR26.29 per tonne will end
under the new regime.

The Baa2 senior unsecured long-term issuer rating and Prime-2
short-term ratings of Suedzucker and its guaranteed subsidiary,
Suedzucker International Finance, reflect the group's scale and
leading position in European beet sugar production. The ratings
also reflect the group's diversification through four business
segments: Sugar, Special Products, CropEnergies and Fruit,
although Moody's notes that sugar processing remains the group's
main activity (representing approximately 52% of FY2013-14 group
revenues). The current rating assumes that (1) conservative
financial policies and liquidity management will be maintained;
and (2) any potential sizeable acquisition should not be fully

Structural Considerations

The downgrade to Ba3 from Ba2 brings the Suedzucker International
Finance B.V's junior subordinated rating to four notches lower
than Suedzucker's Baa2 issuer rating reflecting the diminished
headroom under the cash flow trigger. Whilst historically
Suedzucker has maintained ample headroom under the trigger (which
becomes effective if consolidated cash flow of the company is
less than 5% of the consolidated revenues) there is now increased
risk that the trigger could be breached as a result of the
ongoing weak operating performance. Should the trigger be
breached, Suedzucker would be required to suspend the coupon
payment posing an impairment risk for holders

Despite the downgrade, the Ba3 subordinated instrument rating
continues to reflect the loss absorption characteristics of the
rated instrument (which continues to receive Basket D treatment),
including (1) its deeply subordinated and perpetual nature; (2)
the presence of a mandatory non-cumulative coupon suspension
linked to a breach of the strong trigger (defined as above); and
(3) an optional cumulative deferral if no dividends are paid.

Principal Methodology

The principal methodology used in these ratings was Global
Protein and Agriculture Industry published in May 2013. Other
factors used in these ratings are described in Revisions to
Moody's Hybrid Tool Kit, published in July 2010.

TELDAFAX: Trial Against Three Former Managers Resumes
Deutsche Welle reports that the trial against three former
managers of the independent utilities discounter Teldafax resumed
on Jan. 26, putting an end to a nearly year-long suspension.

Last February, Teldafax's former senior executives, Klaus Bath,
Gernot Koch and Michael Josten, had stood before a Bonn district
court and were facing charges of delayed filing for insolvency,
unlawful bookkeeping and organized fraud to cover up a
bankruptcy, Deutsche Welle recounts.

But shortly after the start of the trial, the hearings went into
hiatus because the court declared itself not responsible for the
case, Deutsche Welle relays.

Allegations against the Teldafax managers included concealing
evidence and continuing business despite the company being
bankrupt until 2011 at the expense of its roughly 700,000
customers, who lost an estimated EUR500 million (US$563 million),
Deutsche Welle discloses.  Those customers had made payments in
advance for services they then did not receive, Deutsche Welle

In 2011, Teldafax, Germany's largest independent utility at the
time, had gone bust as accusations surfaced about questionable
accounting practices and the company's practice of rapidly
attracting new customers to stay afloat, Deutsche Welle relates.


IRISH BANK: Judge to Rule on Quinns' Bid to Cross-Examine Wallace
Mary Carolan at The Irish Times reports that a judge will rule
later on an application by members of the family of Sean Quinn
for orders permitting them to cross-examine Irish Bank Resolution
Corporation special liquidator Kieran Wallace regarding claims
they may be hiding up to EUR500 million in undisclosed assets
from the bank.

The Quinns claim Mr. Wallace made serious and prejudicial
comments in an affidavit, based on claims from unidentified
informants, presented in a "peculiar, unorthodox and improper
manner" before the Commercial Court last May, The Irish Times

IBRC opposed the application to cross-examine Mr. Wallace as
"unreal" in a context where, the bank argued, there was evidence
of a scheme to strip substantial assets from the family's
international property group, The Irish Times relays.

According to The Irish Times, at the May 30 hearing, the
Commercial Court was told IBRC had obtained discovery orders at
the Commercial Court in London and a bankruptcy court in the US
on foot of information from two informants.

In the London proceedings, the bank got orders for disclosure of
documents by Investec Bank and an employee which IBRC believed
would show some EUR300 million in gold was bought on behalf of
the Quinns, The Irish Times relays.

Last July, the Quinns sought the documents in connection with
IBRC's claims and they want to cross-examine Mr. Wallace about
various matters in his affidavit, The Irish Times recounts.

Moving the application, Ross Aylward, as cited by The Irish
Times, said the informants' claims were put ex parte before the
Commercial Court on May 30 without advance notice to the Quinns.

                 About Irish Bank Resolution

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

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

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

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

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


EQUITER SRL: February 2 Expression of Interest Deadline Set
Prof. Daniela Saitta, the Extraordinary Commissioner of Equiter
S.r.l., with registered offices in Rome, Via Catania 9, admitted
to the receivership pursuant to Law Decree 347/03, authorized by
the Ministry of Economic Development with the measure n. 0001465
of January 9, 2015, invites any interested party to purchase the
Equiter's Business Complex until 6:00 p.m. (Italian time) on
February 2, 2015, pursuant to the conditions and terms provided
under the invitation to express interest attached to the plan for
the sale of the business complex of Equiter, authorized by the
Ministry of Ecomic Development on August 7, 2014, previously
published in its entirety on the website

The sale concerns the entire business complex of Equiter.

The list of tangible and intangible assets and contracts included
in the Business Complex may be requested to the Extraordinary
Commissioner, after submission of the expression of interest, at
the following address: Commissario Straordinario Equiter S.r.l.,
Via Ugo De Carolis, 100, 00136 Roma, Fax: 0635341159, PEC:

All communications relating to this Invitation may be sent at the
address provided.

The invitation contains the subjective requirements that are
essentials to submit expressions of interest, the basic content
both of the expression of interest and of the documents that
shall be attached, and also other information concerning the
expressions of interest and this sale procedure.

The Extraordinary Commissioner will select, at his sole and
absolute discretion and without any obligation to state the
reasons for his selection, the individuals, legal entities and/or
Groups which will be admitted to the sale procedure.

This document is merely an extract not complete of the
Invitation.  It does not constitute an invitation to offer nor a
public offer pursuant to article 1336 of the Italian Civil Code,
nor a solicitation of investment from the public pursuant to
articles 94 and ff of Legislative Decree no. 58 of February 24,

The publication of this extract of the Invitation, as well as the
receipt of the expressions of interest, does not entail any
obligation for the Extraordinary Commissioner to admit to the
sale procedure and/or to start negotiations for the sale and/or
to sell vis-avis interested parties, nor grants any right to such
interested parties to any performance by the Extraordinary
Commissioner and/or by Equiter on whatsoever basis.

The Italian version of the invitation will be preferred to this
extract and to any other copy published in foreign languages.
The submission of the expression of interest from the interested
parties will be considered as declared acceptance of the entire
Invitation.  The interested parties shall read entirely the


ALTICE FINANCING: S&P Rates Proposed Senior Secured Notes 'BB-'
Standard & Poor's Ratings Services said that it assigned its
'BB-' issue rating to the proposed senior secured notes and
senior secured term loans issued by Altice Financing S.A., a
financing subsidiary of Altice International S.a.r.l.  S&P
assigned a recovery rating of '2' to the proposed notes,
indicating its expectation of substantial (70%-90%) recovery in
the event of a payment default.

At the same time, S&P assigned an issue rating of 'B-' and a
recovery rating of '6' to the proposed senior notes to be issued
on an unsecured basis by Altice Finco S.A.

The proceeds of the senior secured facilities will be used to
finance Altice International's acquisition of Portugal Telecom.
In addition, Altice S.A., the equity holder of Altice
International, will raise an additional EUR2 billion equivalent
to onlend to Altice International to fund the acquisition.  S&P
has assigned an issue rating of 'B' and a recovery rating of '5'
to the notes Altice S.A. will issue.

At the same time, S&P affirmed the existing issue ratings on the
senior secured loans and notes issued by Altice Financing at
'BB-'.  The recovery rating is '2'.  S&P also removed the notes
from CreditWatch with negative implications, where they had been
placed in November 2014.


The Altice International group plans to use the proceeds to
finance the acquisition of Portugal Telecom.  The proceeds will
initially be held in escrow, until the acquisition is completed.
Portugal Telecom will accede to be a guarantor for the debt
facilities issued within the Altice International group, and
lenders will benefit from an equity pledge from Portugal Telecom.
That said, S&P understands that Portugal Telecom will not pledge
any tangible asset security.  In S&P's view, there are meaningful
limitations on the collateral provided to senior secured lenders,
including a reliance on equity pledges over operating
subsidiaries and pledges over proceeds loans.

S&P values Altice International as a going concern, in view of
its valuable network assets, including those of Portugal Telecom.
S&P also anticipates that, if Altice International defaulted,
equity in its nondefaulting operating subsidiaries would retain
some value because of the diversity of Altice International's
asset pool.

In S&P's waterfall, it treats the unsecured notes at Hot
Telecommunication Systems Ltd., an Israel-based cable operator,
as priority liabilities.  However, S&P understands that lenders
of the senior secured loans have first claim on assets valued at
New Israeli shekel (NIS) 1.9 billion at Hot.

Simulated default and valuation assumptions

   -- Year of default: 2019
   -- EBITDA at emergence: EUR1.02 billion
   -- Implied enterprise value multiple: 5.5x
   -- Jurisdiction: Multijurisdictional, Luxembourg-based

Simplified waterfall

   -- Gross enterprise value at default: EUR5.61 billion
   -- Administrative costs: EUR560 million
   -- Net value available to creditors: EUR5.05 billion
   -- Priority claims: EUR530 million
   -- Secured debt claims: EUR5,045 million*
   -- Recovery expectation: 70%-90% (upper half of range)
   -- Unsecured debt claims: EUR1,230 million*
   -- Recovery expectation 0%-10%

* All debt amounts include six months' prepetition interest


S&P's 'B' issue rating and '5' recovery ratings on Altice S.A.'s
existing EUR4.2 billion-equivalent senior notes and the proposed
new senior notes reflects the notes' subordination to the
company's EUR200 million super senior revolving credit facility
and all the indebtedness of the non-guarantors (all subsidiaries
except Altice France).

S&P views the security package as weak because it only comprises
pledges over shares of Altice France and Altice International.

S&P's default scenario assumes that either Numericable or Altice
International are unable to upstream sufficient cash to service
the interest on Altice's senior notes due to operating

Numericable's debt documentation offers greater flexibility to
upstream dividends to Altice than Altice International's debt
documentation.  In S&P's hypothetical default scenario, it
assumes that deterioration in Altice International's operational
performance would lead to an increase in Altice International's
net leverage to above 4x and that Altice International would
therefore be unable to upstream dividends to Altice.

S&P anticipates that there would be sufficient equity value from
either entity for recovery prospects of at least 10% for these
noteholders.  However, in S&P's view, if additional unsecured
debt was raised at Altice France, for example, it could reduce
the recovery prospects for lenders to Altice S.A.

Simulated default and valuation assumptions

   -- Year of default: 2018
   -- Jurisdiction: Luxembourg

Simplified waterfall

   -- Stressed equity value: EUR1,870 million
   -- Super senior debt claims: EUR175 million
   -- Secured debt claims: EUR6,640 million
   -- Recovery expectation: 10%-30%

ALTICE INTERNATIONAL: Moody's Confirms B1 CFR; Outlook Negative
Moody's Investors Service confirmed the B1 Corporate Family
Rating (CFR) and the B1-PD Probability of Default Rating (PDR) of
Altice International S.a.r.l. ("Altice International") and
assigned a definitive B1 CFR and a B1-PD PDR rating to Altice
S.A. ("Altice"), Altice International's corporate parent. The B1
senior secured debt ratings at Altice International's Altice
Financing S.A. ("Altice Financing") financing subsidiary and the
B3 senior notes ratings at Altice Finco S.A. ("Altice Finco")
another financing vehicle of Altice International have also been
confirmed. In addition Moody's assigned (i) a definitive B3
rating to Altice's existing senior notes due 2022; (ii) a (P)B3
rating to Altice's proposed new issuance of USD1.8 billion and
EUR500 million of senior notes due 2025; (iii) a (P)B1 rating to
the proposed issuance of USD 2.1 billion and EUR500 million of
senior secured notes due 2023 and to the proposed EUR 825
million-equivalent senior secured bank credit facility at Altice
Financing and (iv) a (P)B3 rating to the proposed issuance of
USD385 million senior notes due 2025 at Altice Finco S.A. The
outlook for all ratings is negative. This concludes the review of
Altice and Altice International's ratings initiated on
December 10, 2014.

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

The rating actions follow confirmation that Altice's purchase of
the Portuguese assets of Portugal Telecom from Oi S.A. ("Oi",
Ba1, negative) was approved by the shareholders of Portugal
Telecom, SGPS, S.A. ("PT SGPS"; unrated) on January 22, 2015. PT
SGPS owns a substantial minority stake in Oi. The purchase can
now go ahead subject to standard regulatory reviews for a
transaction of this nature. The new financing to be raised will
be held in escrow pending closing of the transaction, which
Altice expects to occur by the second quarter of 2015.

In December 2014, Altice had signed, through its Altice Portugal
S.A. subsidiary ("Altice Portugal", unrated), a binding agreement
to purchase the Portugal Telecom assets, which comprises the
existing business of Portugal Telecom outside of Africa and
excludes Portugal Telecom's Rio Forte debt securities for a
headline purchase price of EUR7.4 billion on a cash and debt free
basis. Altice Portugal is indirectly wholly owned by Altice
International and ultimately by Altice and holds Altice's
currently owned assets in Portugal.

Ratings Rationale

The rating actions acknowledge the further increase in scale and
scope for Altice and Altice International from the planned
acquisition of the Portugal Telecom assets and reflect Moody's
expectation that leverage for Altice and Altice International
while elevated for the B1 category will remain broadly in line
with Moody's guidance for a B1 CFR for both credit pools.
Leverage is around 5.6x Debt/EBITDA (as calculated by Moody's
before synergy benefits) for Altice and 4.9x for Altice
International, both on a last-twelve-months to September 30, 2014
pro forma basis. In the case of Altice International debt
excludes the company's proposed issuance of mandatory convertible
notes which Moody's regards as equity-equivalent. The ratings
assigned assume that the companies can achieve a degree of
deleveraging over the next 12-24 months, driven by EBITDA growth
from cost cutting and synergies at recent acquisitions.
Acquisitions include those in the Dominican Republic, in the
French Overseas Territories and eventually the Portugal Telecom
assets and in the case of Altice the transformative acquisition
of SFR S.A. (unrated) in France. Moody's believes that the
Portugal Telecom acquisition should yield material synergies from
areas such as outsourcing, purchasing and simplification of
operating processes, although management's total synergy target
(EBITDA and capex) of EUR140 million over the medium term appears

However, Moody's also continues to see considerable risks from
(i) the rapid pace of Altice and Altice International's
acquisition activity and geographic expansion, (ii) the all-debt-
financed nature of the Portugal Telecom acquisition and the
strong reliance on debt-financing for the companies' other, often
opportunistic acquisitions, (iii) the significant challenge for
the company's small entrepreneurial central management group to
effectively supervise and enact the ongoing rationalization and
business development processes in the companies' various
operations, in particular at SFR, (iv) Altice's lack of full
economic control of SFR; (v) Altice's significant exposure to the
highly competitive French telecoms market and (vi) a difficult
macro-economic environment in France and Portugal.

Moody's notes that the ability of all credit pools within the
Altice Group to incur additional debt is ultimately governed by
the Altice S.A. indentures, under which Altice has currently
essentially exhausted its debt capacity. The company now needs to
produce EBITDA growth to create incremental incurrence capacity.

Drivers of Rating Change

Negative rating pressure would ensue, if leverage (as measured by
Moody's Debt/EBITDA ratio) were to exceed 5.5x (on a fully
consolidated basis) for Altice and 5.0x for Altice International
for a sustained period of time. Ratings pressure could also
develop for either credit pool as a result of (i) signs of
deteriorating liquidity, both at the holdco and at the subsidiary
level either as a result of operating performance or due to the
company's inability to circulate and distribute cash as planned;
(ii) material setbacks in integrating acquired assets and
achieving targeted synergies and (iii) any additional material

While Moody's sees no near-term upward pressure on the ratings,
such pressure could develop over time should Altice's leverage
fall well below 4.5x (on a fully-consolidated basis) and Altice
International's well below 4.0x, both on an ongoing basis
combined with material free cash flow generation. Demonstrable
and sustained success in acquisition integration would also be a
pre-condition for upward ratings movement.

Outlooks could be stabilized, if upcoming quarterly results
establish positive trends in operational and intergration KPIs
and evidence some deleveraging.

Moody's views Altice and Altice International's liquidity
provision as adequate for their near-term operational
requirements. At the Altice parent level liquidity will be
supported by cash holdings of EUR329 million as of 30 September
2014 (pro forma for amounts payable to Cinven/Carlyle). Moody's
expects Altice to maintain cash reserves close to that level and
the company also has access to a EUR200 million revolving credit
facility (subject to covenant compliance). Ongoing interest
payments on Altice's debt are expected to be funded via
subsidiary distributions, initially predominantly from the
Numericable Group. However, Moody's expects that Altice
International will also make distributions following closing of
the Portugal Telecom acquisition. Both Numericable's and Altice
International's distribution capacities are subject to
restrictions under their respective indentures and the
availability of distributable reserves.

Altice International had cash holdings of EUR141 million as of
September 30, 2014. This, combined with amounts available under
the group's new undrawn revolving credit facility of EUR501
million, around USD24 million current availability under the
company's existing USD80 million and EUR80 million RCFs and the
expected cash generation at the operating subsidiary level should
cover the company's near-term operational and financial needs in
the ordinary course of business. Moody's also expects the company
to use any near-term free cash flow generation to pay down
drawings under the existing RCFs and once the Portugal deal has
closed to reduce amounts borrowed under its new super senior
EUR330 million RCF, which is expected to be fully drawn at

The principal methodology used in these ratings was Global
Telecommunications Industry published in December 2010. Other
methodologies used include Loss Given Default for Speculative-
Grade Non-Financial Companies in the U.S., Canada and EMEA
published in June 2009.

Altice S.A. is a Luxembourg-based holding company, which through
its subsidiaries Numericable Group S.A. and Altice International
S.a.r.l operates a multinational cable and telecommunications
business. Numericable Group operates in France while Altice
International currently has a presence in four regions --
Dominican Republic, Israel, Western Europe and the French
Overseas Territories. Altice S.A. is controlled indirectly by
French entrepreneur Patrick Drahi. Pro forma for the 2014
acquisitions and for the Portugal Telecom acquisition Altice S.A.
generated revenue of EUR15.8 billion and Altice International
generated EUR4.6 billion in revenue on a last-twelve- months to
30 September 2014 basis.

STABILUS SA: Moody's Raises Corporate Family Rating to B1
Moody's Investors Service, upgraded the Corporate Family Rating
(CFR) of Stabilus S.A. to B1 from B2 and the Probability of
Default Rating (PDR) to B1-PD from B2-PD. At the same time the
rating agency upgraded the instrument ratings assigned to the
Senior Secured Notes issued by Servus Luxembourg Holding S.C.A.
to B1 from B2. The outlook on all ratings remains positive.

List of Affected Ratings


Issuer: Stabilus S.A.

  Probability of Default Rating, Upgraded to B1-PD from B2-PD

  Corporate Family Rating, Upgraded to B1 from B2

Issuer: Servus Luxembourg Holding S.C.A.

  EUR315M 7.75% Senior Secured Regular Bond/Debenture (Local
  Currency) Jun 15, 2018, Upgraded to B1 from B2

Outlook Actions:

Issuer: Servus Luxembourg Holding S.C.A.

  Outlook, Remains Positive

Issuer: Stabilus S.A.

  Outlook, Remains Positive

Ratings Rationale

The rating action was prompted by (1) the strong operational
performance Stabilus has achieved in its FY2014, (2) 12 product
launches in Powerise, an automated vehicle tailgate opening
system, in 2014 and a pipeline of another 20 for 2015 which
should result in further revenue growth and (3) by the
expectation of substantially reduced interest expense following
the assumed early redemption of the outstanding 2018 bonds, most
likely in mid 2015, as indicated in December 2014.

"With the achievement of more than 10% revenue growth in FY2014,
together with improving profitability -- operating margin
increased to 8.6% from 7.0% year-over-year -- and a solid
pipeline of new product launches Stabilus has further
strengthened its position in its market niche," commented Oliver
Giani, Moody's lead analyst for the European automotive supplier
industry. "In particular the market share win in automated
systems, where Stabilus reported 55% revenue growth, provides
comfort for a continuation of the company's solid performance."

The rating is mainly supported by (i) Stabilus' very strong
market position for gas springs across most geographical regions
and end market applications in a very consolidated market
environment, (ii) the high barriers to entry to Stabilus' markets
through (a) the capital intensity of the business, which would
require sizeable investments to replicate the company's business
model, (b) the long standing customer relationships of Stabilus
with major auto OEMs and industrial customers, (c) the very
consolidated nature of the gas spring market, which would leave
very little market space for new entrants, and (d) the economies
of scale required to be able to be profitable in a price
competitive market, which would make it difficult for new
entrants to penetrate the market on a small scale and which is
reflected by the high profitability with an EBITDA margin of
17.9% (FY 2014), (iii) the group's geographically diversified and
large scale production base with a high level of automation in
high labor countries, and (iv) its exposure to non-automotive
related applications accounting for one third of total turnover,
which should help reducing somewhat the dependency on the
automotive industry for Stabilus.

The rating of Stabilus remains constrained by (i) the group's
relatively small size with revenues of EUR507 million during FY
2014, and the limited product diversification, (ii) a
geographical concentration on developed economies with Europe and
the Americas accounting for 88% of turnover notwithstanding that
some of the turnover realized in Europe is ultimately exported by
customers of Stabilus to emerging markets, (iii) the group's
exposure to cyclical end industries, and (iv) its capital
intensity due to the high automation level of its production
asset base notwithstanding that Stabilus' capital expenditures
have been significantly above depreciation levels over the last
five years to 30 September 2014. The increased market share of
various designs of automatic tailgate opening system is a threat
to core gas spring applications. Stabilus has entered the market
of automatic tailgate systems already back in 2002 and since
refined the product offering and is selling these systems under
the product name Powerise. However, the appearance of automatic
tailgate systems has also opened the market to new competitors,
which are not competing with Stabilus in gas springs. This is
also highlighted by the lower market share of Stabilus in the
Powerise market. The rating incorporates the expectation that
Stabilus will further grow its market share in Powerise going
forward. Stabilus' leverage of 4.0x positions the company solidly
in the B1 rating category.

Stabilus' liquidity profile for the twelve months period ending
in September 2015 is considered to be adequate. Estimated
liquidity needs of EUR65 million, primarily comprising of Capital
expenditures, working capital needs and working cash required to
run the business, are well covered by approximately EUR52 million
funds from operations, EUR33 million cash on hand, and full
availability under the company's EUR25 million super senior
revolving credit facility.

In December 2014 the company signed a new term loan facility of
EUR270 million which Moody's assumes will be used to prematurely
call the high yield bond with a total outstanding amount of
EUR256 million in mid 2015. The interest rate for the new loan
would be 2.0% above Euribor at the current leverage level versus
the 7.75% interest rate of the corporate bond. In addition the
company signed a new Revolving Credit Facility (RCF) of EUR50
million that carries a variable interest rate depending on
Stabilus' current leverage. Both, the EUR270 million term loan
and the EUR50 million RCF mature in 2020. Overall, net interest
expense would be significantly reduced by EUR13 million per year
through the new financing package.

The positive outlook incorporates Moody's expectation that
Stabilus' operating performance and cash flow generation will be
sustained at the levels seen in 2013/14. It also assumes that the
capital structure of the group will gradually improve from
current levels assuming limited external growth activities and
taking into account the announced dividend policy with a 20-40%
payout ratio. If Stabilus moves towards an all-bank structure
this could have implications on the assumed recovery rate of its
debt, and therefore, Moody's will revisit the underlying LGD
assumptions, once this has been achieved.

Moody's would consider upgrading Stabilus in case the company is
able to maintain an EBITA margin of above 10% (13.3% per
September 2014) on a sustainable basis and interest coverage well
above 3.0x EBITA / Interest expense (1.5x per September 2014;
proforma for the bond redemption 3.9x). In addition, a
consistently positive Free Cash Flow generation in the mid single
digit percentage points of net debt and a permanent reduction in
leverage well below 4.0x debt/EBITDA (4.0x per September 2014)
could be positive for the rating. Negative pressure on the rating
would build if leverage would materially exceed 4.5x debt /
EBITDA, if EBITA margin drops below 9% or if Stabilus would
generate negative free cash flow leading to a deterioration of
the liquidity position of the group (all figures in this
paragraph are as adjusted by Moody's).

The principal methodology used in these ratings was Global
Automotive Supplier Industry published in May 2013. Other
methodologies used include Loss Given Default for Speculative-
Grade Non-Financial Companies in the U.S., Canada and EMEA
published in June 2009.

Established in 1934, Stabilus S.A. (formerly known as Servus
HoldCo S.a.r.l) is a leading manufacturer of gas springs,
hydraulic vibration dampers and electromechanical opening and
closing systems for the automotive industry and other industrial
/consumer products applications. Stabilus operates 11
manufacturing plants in nine countries, employs around 4,055
people, generated revenues of EUR507.3 million and an EBITDA of
EUR91 million (as adjusted by Moody's) during its financial year
2013/14 (September 30, 2014).


PANTHER CDO III: Moody's Raises Ratings on 2 Note Classes to B3
Moody's Investors Service announced that it has taken rating
actions on the following classes of notes issued by Panther CDO

  EUR326.5 Million (currently EUR111.45M rated balance
  outstanding) Class A Senior Secured Floating Rate Notes due
  December 2080, Upgraded to Aaa (sf); previously on Mar 31, 2009
  Upgraded to Baa2 (sf)

  EUR28.5 Million Class B Senior Secured Deferrable Floating Rate
  Notes due December 2080, Upgraded to Baa1 (sf); previously on
  Mar 31, 2009 Upgraded to Caa2 (sf)

  EUR4.6 Million Class C1 Senior Secured Deferrable Floating Rate
  Notes due December 2080, Upgraded to B3 (sf); previously on
  Mar 11, 2009 Downgraded to Ca (sf)

  EUR5.4 Million Class C2 Senior Secured Deferrable Fixed Rate
  Notes due December 2080, Upgraded to B3 (sf); previously on
  Mar 11, 2009 Downgraded to Ca (sf)

Panther CDO III B.V., issued in September 2005, is a Cash SF CDO
backed by a portfolio European structured finance assets,
leveraged loans and corporate bonds.

Ratings Rationale

The rating actions on the notes are a result of a combination of
factors including a material improvement of the collateral credit
quality, the deleveraging of the Class A notes and the correction
of an error in the previous modelling of the transaction.

In the last 12 months more than 50% of the assets in the
portfolio had a rating upgrade. In particular EUR41.8 million of
structured finance assets, which represent 24.2% of the current
performing par amount, have been upgraded between 1 and 5
notches. Over the same period, EUR48.2 million of leveraged loans
and corporate bonds had their ratings upgraded by 2.5 notches on
average. Additionally, the amount of assets rated Caa1 or lower
by Moody's has significantly decreased to 9% from 18% of the
performing par while the defaulted assets have remained stable at
the current EUR 6.7m as reported in the December 2014 trustee

In the last two interest payment dates of June and December 2014,
the Class A has been repaid by EUR61.7 million or 18.9% of the
tranche original balance. The amortization of class A has also
marginally improved the overcollateralization ratios ("OC
ratios") across the capital structure. As per the December 2014
trustee report, the Class A/B, Class C and Class D
overcollateralization ratios are reported at 116.42%, 109.95% and
102.54% respectively, compared to 113.48%, 108.12% and 101.86% as
per the January 2014 trustee report.

Moody's has also corrected an error in the modeling of the
interest rate swap present in the transaction. The interest rate
swap payments modeled in previous reviews of this transaction
were computed on the basis of a swap whose notional amount was
not amortizing over time. This was negatively impacting the flows
paid under this swap agreement and ultimately the rating on the

Methodology Underlying the Rating Action:

The principal methodology used in this rating was "Moody's
Approach to Rating SF CDOs" published in March 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:

Amounts of defaulted assets -- Moody's considered a model run
where all the Caa assets in the portfolio were assumed to be
defaulted. The model outputs for these runs are consistent with
the ratings.

Weighted average spread (WAS) -- Moody's considered a model run
where the WAS generated by the collateral was reduced to 1.02%
from 1.56%. The model outputs for these runs are consistent with
the ratings.

This transaction is subject to a high level of macroeconomic
uncertainty, which could negatively affect the ratings on the
notes, in light of 1) uncertainty about credit conditions in the
general economy 2) divergence in the legal interpretation of CDO
documentation by different transactional parties due to or
because of embedded ambiguities.

    * 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 prepayment
levels or collateral sales by the collateral manager. Fast
amortization would usually benefit the ratings of the notes
beginning with the notes having the highest prepayment priority.

   * Recovery of defaulted assets: Market value fluctuations in
trustee-reported defaulted assets and those Moody's assumes have
defaulted can result in volatility in the deal's over-
collateralization levels. Further, the timing of recoveries and
the manager's decision whether to work out or sell defaulted
assets can also result in additional uncertainty. 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.


RUSSIAN FEDERATION: S&P Lowers Sovereign Foreign Rating to BB+
As a "sovereign rating" (as defined in EU CRA Regulation
1060/2009 "EU CRA Regulation"), the ratings on the Russian
Federation are subject to certain publication restrictions set
out in Art 8a of the EU CRA Regulation, including publication in
accordance with a pre-established calendar.  Under the EU CRA
Regulation, deviations from the announced calendar are allowed
only in limited circumstances and must be accompanied by a
detailed explanation of the reasons for the deviation.

In this case, the reason for the deviation is a significant
change in S&P's perception of Russia's monetary flexibility over
the 2015-2018 forecast horizon and the effect S&P expects
Russia's weakening economy to have on its financial system.  As a
result, S&P has revised downward its expectations on key
macroeconomic indicators.

The next rating publication on Russia is scheduled for April 17,
2015, according to S&P's calendar.


On Jan. 26, 2015, Standard & Poor's Ratings Services lowered its
long- and short-term foreign currency sovereign credit ratings on
the Russian Federation to 'BB+/B' from 'BBB-/A-3'. S&P also
lowered the long- and short-term local currency sovereign credit
ratings to 'BBB-/A-3' from 'BBB/A-2'.  In addition, S&P removed
these ratings from CreditWatch, where they were placed with
negative implications on Dec. 23, 2014.  The outlook on the long-
term ratings is negative.

At the same time, S&P revised the transfer and convertibility
(T&C) assessment on Russia to 'BB+' from 'BBB-'.  S&P affirmed
the long-term national scale rating on Russia at 'ruAAA'.


The downgrade reflects S&P's view that Russia's monetary policy
flexibility has become more limited and its economic growth
prospects have weakened.  S&P also sees a heightened risk that
external and fiscal buffers will deteriorate due to rising
external pressures and increased government support to the

S&P believes that Russia's financial system is weakening and
therefore limiting the Central Bank of Russia's (CBR's) ability
to transmit monetary policy.  In S&P's opinion, the CBR faces
increasingly difficult monetary policy decisions while also
trying to support sustainable GDP growth.  These challenges
result from the inflationary effects of exchange-rate
depreciation and sanctions from the West as well as counter-
sanctions imposed by Russia.  S&P projects Russia's real GDP per
capita growth to average less than economies with comparable
levels of per-capita income over our 2015-2018 rating horizon.

In December 2014, the CBR increased its key interest rate by 750
basis points over five days to 17%.  This was to stem the sharp
depreciation of the ruble and curb inflation.  The ruble briefly
appreciated against the dollar but has since continued to
depreciate, reaching about 66 rubles to the dollar (as of Jan.
26, 2015), compared to about 35 a year ago.  The interest rate on
interbank loans increased substantially, to well above the key
rate--although it has since moderated.  S&P sees such movements
in financial instrument rates as strong indicators of a weakening
monetary transmission mechanism.  S&P expects that credit to the
economy will be curtailed, which will likely further undermine

S&P also understands that during 2014 the Russian public had been
converting rubles into foreign currency, thereby fueling
depreciation.  Given the pass-through of more expensive imports
to domestic prices generally, S&P now expects that inflation will
rise above 10% in 2015.

S&P anticipates that asset quality in the financial system will
deteriorate given the weaker ruble; restricted access of key
areas of the economy to international capital markets due to
sanctions; and economic recession in 2015.  Asset quality
deterioration may not be immediately apparent in reported
figures, however, due to temporary measures introduced by the CBR
that allow Russian banks to apply more favorable exchange rates
when valuing foreign-currency denominated assets and apply more
flexible provisioning policies.

S&P projects that the economy will expand by about 0.5% annually
in 2015-2018, below the 2.4% of the previous four years.  S&P
sees this muted projected growth partly as a legacy of a secular
economic slowdown that had already begun before the recent
developments in the Ukraine.  It also reflects a lack of external
financing due to the introduction of economic sanctions and the
sharp decline in oil prices.  Ruble depreciation will subdue GDP
per capita in dollar terms, which S&P forecasts at $8,600 in
2015. S&P also expects that declining domestic purchasing power
as a result of exchange rate depreciation and rising inflation
will likely hamper Russia's growth prospects.

Balance-of-payment pressures have hit the economy; Russia is
experiencing a severe terms-of-trade shock.  S&P nevertheless
expects that Russia's current account will remain in surplus over
2015-2018 due to import compression (a consistent drop in import

In S&P's view, balance-of-payment pressures center on the
financial account.  Private-sector net capital outflows averaged
$57 billion annually during 2009-2013; they increased to $152
billion in 2014.  Stresses could mount for Russian corporations
and banks that have foreign currency debt service requirements
without a concomitant foreign currency revenue stream.

S&P estimates Russia's gross external financing requirement for
2015 at close to 85% of current account receipts (CARs) plus
usable reserves.  S&P expects that some of this requirement will
be accommodated by dollar sales by the CBR, potentially exerting
additional downward pressure on CBR reserves.  S&P's figure for
CBR usable reserves deducts from the CBR's reported foreign
currency reserves:

   -- Investments made by the CBR on behalf of the government;
   -- The CBR's foreign currency swaps;
   -- Funds received under repos with nonresidents; and
   -- Accounts of domestic banks that are counted as reserves.

By this definition, S&P forecasts that reserve coverage of
current account payments will decline to about three months by
2017, from seven months in 2014.

That said, Russia maintains a net external asset position.  S&P
expects a narrow net external asset position of about 9% of CARs
over the 2015-2018 forecast horizon (liquid external assets held
by the public and banking sector minus external debt).

On Nov. 10, 2014, the CBR modified its exchange rate regime.  It
moved from an operational band--with regular interventions on and
outside the borders of the band against a dual currency basket--
to a freer float, with foreign currency interventions permissible
in case of financial stability threats.  This change should
afford the CBR greater ability to conserve reserves.
Historically, there is usually a strong correlation between the
external value of the ruble and oil prices; this has once again
been the case over the past 12 months.

To mitigate oil-price vulnerability, in 2013 the government
instituted a fiscal rule that caps government spending based on
long-term historical oil prices, while targeting a central
government deficit of less than 1% of GDP.  This rule is designed
to lead to asset accumulation when oil prices are high, and to
allow the government to draw on assets when prices are low,
thereby reducing the pro-cyclicality of fiscal policy.  S&P
expects fiscal policy to significantly loosen as the sharp
decline in oil prices, compared to historical prices, allows for
higher deficits.

Ruble depreciation supported the government's fiscal position in
2014 because about half its revenues come from hydrocarbons and
are priced in U.S. dollars.  The U.S. dollar oil price decline of
55% since the start of 2014 was only 10% in ruble terms.  As a
result, S&P estimates that the central government posted a small
deficit of 0.5% of GDP last year.  However, S&P expects a
deterioration in local and regional government balances, which
bear the brunt of the government's increased spending on public-
sector wages.  Overall, S&P estimates that the general government
will post a deficit of 1.3% of GDP in 2014 and an average annual
deficit of 2.5% over 2015-2018.  Support to the banks through the
placement of RUB1 trillion (about 1.4% of GDP) in government
bonds was approved in 2014 and is accounted for in government
expenditure, though not yet utilized.

"We view the modest general government net debt position as a
rating strength, as we do its low interest burden as a percentage
of revenues.  The central government's Reserve Fund and National
Wealth Fund, together total about 14% of GDP (although we believe
about 1% of GDP of this is invested in non-liquid domestic
assets).  In our opinion, the central government will
progressively use these two funds to increase its support to the
economy and the financial system.  We understand that RUB500
billion (about 0.7% of GDP) will be taken from the Reserve Fund
and put on Ministry of Finance deposit accounts with the domestic
banks to improve their liquidity.  In our view, this will add to
the non-liquid portion of the government's reserve assets,
although we understand that at some point in the future these
funds could be used for deficit financing," S&P said.

"We view Russia's institutional and governance effectiveness as a
rating weakness.  Political power is highly centralized with few
checks and balances, in our opinion.  We do not currently expect
that the government will be able to effectively tackle the long-
standing structural obstacles (perceived corruption, the weak
rule of law, the state's pervasive role in the economy, and the
challenging business and investment climate) to stronger economic
growth over our 2015-2018 forecast horizon," S&P added.


The negative outlook reflects S&P's view that Russia's monetary
policy flexibility could diminish further.

For example, the imposition of exchange controls, if implemented,
could further hamper monetary flexibility.  S&P could also lower
the ratings if external and fiscal buffers deteriorated at a
materially faster pace over the next 12 months than S&P currently

S&P could revise the outlook to stable if Russia's financial
stability and economic growth prospects were to improve.

In accordance with S&P's relevant policies and procedures, the
Rating Committee was composed of analysts that are qualified to
vote in the committee, with sufficient experience to convey the
appropriate level of knowledge and understanding of the
methodology applicable.  At the onset of the committee, the chair
confirmed that the information provided to the Rating Committee
by the primary analyst had been distributed in a timely manner
and was sufficient for Committee members to make an informed

After the primary analyst gave opening remarks and explained the
recommendation, the Committee discussed key rating factors and
critical issues in accordance with the relevant criteria.
Qualitative and quantitative risk factors were considered and
discussed, looking at track-record and forecasts.

The committee agreed that economic structure and growth and
monetary policy flexibility had weakened.  All other key rating
factors were unchanged.

The chair ensured every voting member was given the opportunity
to articulate his/her opinion.  The chair or designee reviewed
the draft report to ensure consistency with the Committee
decision. The views and the decision of the rating committee are
summarized in the above rationale and outlook.  The weighting of
all rating factors is described in the methodology used in this
rating action.


Downgraded; CreditWatch/Outlook Action

                                   To                 From
Russian Federation
Sovereign Credit Rating
  Foreign Currency          BB+/Negative/B     BBB-/Watch Neg/A-3
  Local Currency            BBB-/Negative/A-3  BBB/Watch Neg/A-2
Transfer & Convertibility
  Assessment                BB+                BBB-
Senior Unsecured           BB+                BBB-/Watch Neg
Senior Unsecured           BBB-               BBB/Watch Neg

Ratings Affirmed

Russian Federation
Russia National Scale      ruAAA/--/--

RUSSIAN MORTGAGE 2006-1: Moody's Reviews B2 Rating on C Notes
Moody's Investors Service has downgraded 15 tranches in 11
transactions and placed on review for downgrade three tranches in
one transaction, Russian Mortgage Backed Securities 2006-1 S.A.

The rating actions follow the weakening of Russia's credit
profile as reflected in Moody's decision on January 16, 2015 to
lower Russia's government bond rating to Baa3, and the lowering
of the local-currency bond and deposit ceilings to Baa2 from

The rating action also reflects the long-term senior unsecured
debt ratings of the Agency for Housing Mortgage Lending OJSC
(Baa3/P-3, both ratings on review for downgrade, "AHML") and the
long-term domestic bank deposit rating of VTB24 (Baa3 on review
for downgrade/NP) being lowered on January 19, 2015 and put on
review on December 29, 2014, respectively.

In CJSC Mortgage Agent of AHML 2013-1 and 2014-1 transactions,
AHML acts as a surety provider for the senior notes. In the CJSC
Mortgage Agent VTB 2013-1, VTB24 acts as a provider of financial
assistance for the transaction.

The downgrade of AHML Insurance Company on 21 January 2015 does
not have an immediate rating effect on any of the Russian RMBS
transactions, rated by Moody's.

Ratings Rationale

Because of the increase in country risk associated with the
lowering of Russia's local-currency bond ceiling to Baa2 from
Baa1, Moody's downgraded the ratings in the Closed Joint Stock
Company Mortgage Agent series of deals of AHML 2010-1, AHML 2011-
2, AHML 2012-1, AHML 2013-1, AHML 2014-1, Second Mortgage Agent
of AHML; in Closed Joint Stock Company Mortgage Agent VTB 24-1
and VTB 2013-1; as well as in Closed Joint Stock Company Mortgage
Agent Raiffeisen 01.

The reduction of the local-currency bond ceiling reflects an
increased probability of high losses on the underlying collateral
resulting from any political, economic or financial dislocation
accompanying a material deterioration in Russia's credit

The ratings in Closed Joint Stock Company Mortgage Agent of AHML
2013-1 and AHML 2014-1 remain on review for further downgrade due
to linkage to AHML as a surety provider.

The ratings of the notes in CJSC Mortgage Agent VTB 2013-1 remain
on review for downgrade due to linkage to VTB24 (long-term
domestic bank deposit rating of Baa3 on review for downgrade/NP)
acting as a provider of financial assistance.

Moody's has also reviewed the ratings in two USD-denominated
transactions and downgraded the ratings of the class A notes in
Red & Black Prime Russia MBS No. 1 and of the class A notes in
Russian Mortgage Backed Securities 2006-1 owing to the increase
in country risk associated with the decrease in the local-
currency bond ceiling to Baa2 from Baa1.

In addition, all ratings in Red & Black Prime Russia MBS No. 1
remain on review, as this transaction is exposed to foreign
exchange rate volatility and redenomination risk. All ratings in
Russian Mortgage Backed Securities 2006-1 have been placed on
review for downgrade due to increased redenomination risk.

Factors That Would Lead to an Upgrade Or Downgrade of The

Factors or circumstances that could lead to an upgrade of the
ratings include (1) a reduction in sovereign risk; (2) improved
performance of the underlying collateral that exceeds Moody's
expectations; (3) deleveraging of the capital structures; and (4)
improvements in the credit quality of the transaction

Factors or circumstances that could lead to a downgrade of the
ratings include (1) further increase in sovereign risk; (2)
performance of the underlying collateral that is worse than
Moody's expects; (3) deterioration in the notes' available credit
enhancement; and (4) further deterioration in the credit quality
of the transaction counterparties.

Principal Methodology

The principal methodology used in these ratings was "Moody's
Approach to Rating RMBS Using the MILAN Framework" published in
January 2015.

List of Affected Ratings

--- Closed Joint Stock Company Mortgage Agent Raiffeisen 01

     RUR4,070 million A Notes, downgraded to Baa2 (sf);
     previously on 29 December 2014 downgraded to Baa1 (sf)

--- Closed Joint Stock Company Mortgage Agent of AHML 2010-1

     RUR6,096 million A2 Notes, downgraded to Baa2 (sf);
     previously on 29 December 2014 downgraded to Baa1 (sf)

--- Closed Joint Stock Company Mortgage Agent of AHML 2011-2

     RUR7,457 million A2 Notes, downgraded to Baa2 (sf);
     previously on 1 October 2013 upgraded to Baa1 (sf)

--- Closed Joint Stock Company Mortgage Agent of AHML 2012-1

     RUR5,932 million, A1 Notes, downgraded to Baa2 (sf);
     previously on 29 December 2014 downgraded to Baa1 (sf)

     RUR5,932 million A2 Notes, downgraded to Baa2 (sf);
     previously on 1 October 2013 upgraded to Baa1 (sf)

--- Closed Joint Stock Company Mortgage Agent of AHML 2013-1

     RUR8,916 million A1 Notes, downgraded to Baa3 (sf) and
     remains on review for downgrade; previously on December 30,
     2014 downgraded to Baa2 (sf) and placed under review for
     possible downgrade

     RUR4,978 million A2 Notes, downgraded to Baa3 (sf) and
     remains on review for downgrade; previously on December 30,
     2014 Baa2 (sf) placed under review for downgrade

--- Closed Joint Stock Company Mortgage agent of AHML 2014-1

     RUR6,323 million A1 Notes, downgraded to Baa2 (sf) and
     remains on review for downgrade; previously on December 30,
     2014 Baa1 (sf) placed under review for downgrade

     RUR6,323 million A2 Notes, downgraded to Baa2 (sf) and
     remains on review for downgrade; previously on Dec 30, 2014
     Baa1 (sf) placed under review for downgrade

    RUR6,323 million A3 Notes, downgraded to Baa3 (sf) and
    remains on review for downgrade; previously on December 30,
    2014 Baa2 (sf) placed under review for downgrade

--- Closed Joint Stock Company Mortgage agent VTB 2013-1

     RUR25,937 million A Notes, downgraded to Baa3 (sf) and
     remains on review for downgrade; previously on December 30,
     2014 Baa2 (sf) placed under review for downgrade

--- Closed Joint Stock Company Mortgage Agent VTB24-1

     RUR15,800 million A Notes, downgraded to Baa2 (sf);
     previously on December 28, 2012 definitive rating assigned
     Baa1 (sf)

--- Closed Joint Stock Company Second Mortgage Agent of AHML

     RUR9,440M A notes, downgraded to Baa2 (sf); previously on
     December 29, 2014 downgraded to Baa1 (sf)

--- Red & Black Prime Russia MBS No. 1 Limited

     $173.2 million A notes, downgraded to Baa2 (sf) and remains
     on review for downgrade; previously on December 29, 2014
     Baa1 (sf) placed under review for downgrade

--- Russian Mortgage Backed Securities 2006-1 S.A.

     $74.2 million A Notes, downgraded to Baa2 (sf) and placed
     under review for downgrade; previously on July 20, 2010
     confirmed at Baa1 (sf)

     $10.6 million B Notes, Baa2 (sf) placed under review for
     downgrade; previously on July 20, 2010 confirmed at
     Baa2 (sf)

     $3.5 million C Notes, B2 (sf) placed under review for
     downgrade; previously on July 20, 2010 confirmed at B2 (sf)

RUSSNEFT OJSC: S&P Revises Outlook to Negative & Affirms 'B' CCR
Standard & Poor's Ratings Services said that it had revised its
outlook on Russia-based Oil and Gas Company Russneft OJSC to
negative from stable and affirmed the 'B' long-term corporate
credit rating.  At the same time, the Russia national scale
rating was lowered to 'ruBBB+' from 'ruA-'.

S&P subsequently withdrew all the ratings at Russneft's request.

The outlook revision reflected S&P's expectation that the
company's high leverage (estimated debt to EBITDA of more than
6.5x at year-end 2014) could increase further, owing to negative
free cash flow generation in 2015 following the declining oil
price.  S&P thinks the company has lower flexibility to cut
capital spending than its peers, due to lower quality of its key
oil fields.  At the same time, S&P believes that the impact of
the decline in the oil price will be largely offset by the
current almost 50% depreciation of the Russian ruble, which
should support the company's profitability at current levels.

S&P do not factor Russneft's conversion of promissory notes into
equity in S&P's base-case scenario.  If this were to happen, S&P
believes it could support meaningful improvement in Russneft's
credit metrics.

S&P continues to view Russneft's business risk profile as "weak,"
owing to its much smaller size compared with many other rated
Russian oil companies, and its somewhat higher per unit cost.
Russneft's financial risk profile is "highly leveraged,"
reflecting its high adjusted leverage and S&P's expectation of
negative free operating cash flow.  S&P assess Russneft's
liquidity as "less than adequate" under S&P's criteria, with the
ratio of liquidity sources to liquidity uses over the next 12
months at close to 1.0x.


OSCHADBANK: Fitch Affirms 'CCC' LT Issuer Default Ratings
Fitch Ratings has affirmed JSC The State Export-Import Bank of
Ukraine (Ukreximbank), JSC State Savings Bank of Ukraine
(Oschadbank) and privately-owned Pivdennyi Bank's (PB) Long-term
foreign currency Issuer Default Ratings (IDRs) at 'CCC'.

The banks' IDRs are driven by their standalone strength, as
reflected in their 'ccc' Viability Ratings. However, the IDRs of
Ukreximbank and Oschadbank are also underpinned by potential
state support.


The banks' 'CCC' Long-term IDRs and 'ccc' VRs primarily reflect
the highly stressed operating environment, which has resulted in
weaker asset quality, greater deposit instability, higher funding
costs and weaker performance. Ukreximbank and Oschadbank's
foreign currency liquidity positions are tight, given upcoming
bond repayments, although their capital positions are somewhat
better than at other Ukrainian banks. PB has lower refinancing
risks, but a significantly weaker capital position.

Ukreximbank faces a USD750 million Eurobond repayment in April
2015. Management has informed Fitch that as of today, the bank
has not yet accumulated sufficient foreign currency liquidity to
repay the Eurobond in full. The bank plans to source additional
foreign currency from loan repayments in 1Q15. However, in case
of lower than expected repayments and/or foreign currency deposit
outflows, in Fitch's view, the bank would be reliant on open
market purchases or the availability of foreign currency
liquidity from the National Bank of Ukraine (NBU) in order to
repay the Eurobond.

Oschadbank has a USD700 million Eurobond maturing in March 2016,
and will also need to accumulate additional foreign currency
liquidity in order to make this payment.

Recent deposit outflows have generally been manageable for each
of the three banks, helped by previously accumulated cash
cushions, regulatory restrictions on cash withdrawals and so far
available UAH-liquidity support from the NBU.

Problem assets are large at each of the three banks, including
non-performing loans (NPLs, loans more than 90 days overdue) at
9% (PB), 15% (Ukreximbank) and 21% (Oschadbank), and
restructured/rolled over exposures in the range of 25%-40% of
end-9M14 loans. In most cases NPLs have been reasonably
provisioned and/or collateralised. Downside risks stem from
restructured/rolled over portfolios, including moderately
provisioned exposures to borrowers from the Donetsk and Luhansk
regions and the Crimea (13%-14% of loans at Oschadbank and
Ukreximbank; a much smaller proportion at PB), creating potential
for further increases in credit losses. Lending in foreign
currencies was in the range of 42%-64% of end-9M14 net loans for
the three banks, and most borrowers are effectively unhedged.

Ukreximbank and Oschadbank's asset quality also remains
significantly correlated with the sovereign's credit profile due
to the banks' large exposure to sovereign debt (1.1x Fitch core
capital, FCC, at end-1H14 for Oschad and 1.7x FCC for Ukrexim),
both in local and foreign currencies, and to the public sector
more generally (more notably at Oschadbank, given its lending to
NJSC Naftogaz of Ukraine; CCC), and some risk that this exposure
could grow further given pressure on government finances.

Performance has been weak at all three banks, with large loan
impairment charges affecting bottom line performance in 2014 at
Ukreximbank and Oschadbank. Following capital injections in 4Q14
(in the form of sovereign bonds), the two state-owned banks could
have provisioned around 42%-45% of loans without breaching
regulatory capital ratios (CAR). However, this buffer should be
viewed in light of the large sovereign debt exposure, while asset
quality continues to deteriorate rapidly in the high-risk
operating environment.

PB's capital is under pressure, with the regulatory CAR of 10.8%
at end-11M14 close to the regulatory minimum level of 10%, while
the bank is trying to attract subordinated debt in order to
support its solvency.


The affirmation of the Support Rating Floors and Support Ratings
of Ukreximbank and Oschadbank reflects Fitch's view of the
Ukrainian authorities' still quite high propensity to provide
support to these two banks. This view takes into account the
banks' 100%-state ownership, policy roles, high systemic
importance, and the track record of capital support for the banks
under different governments. However, the authorities' ability to
provide support, in case of need, remains limited, as indicated
by the sovereign's 'CCC' IDRs.


The affirmation of Ukreximbank's subordinated debt rating at 'C',
the lowest possible issue rating, reflects the affirmation of the
bank's VR. The two-notch differential between the bank's VR of
'ccc' and the subordinated debt rating of 'C' reflects one notch
for incremental non-performance risk (resulting from the
flexibility to defer coupons in certain circumstances, for
example if the bank reports negative net income for a quarter)
and one notch for potentially weaker recoveries due to the
instrument's subordination. To date, the bank has not deferred a
coupon payment on its subordinated debt. The rating could be
upgraded in case of an upgrade of the bank's VR.


The banks' IDRs and VRs would not automatically be downgraded in
case of a further sovereign downgrade/debt restructuring, as the
banks' low ratings already reflect very high levels of credit
risk. However, the banks' IDRs and debt ratings could be
downgraded in case of transfer and convertibility restrictions
being imposed which would restrict their ability to service their

The ratings of Ukreximbank and Oschadbank could be downgraded if
they fail to accumulate sufficient foreign currency to meet
upcoming debt repayments. Conversely, a strengthening of their
foreign currency liquidity would significantly reduce near-term
default risk and help the ratings stabilise at their current

PB could be downgraded if its capitalization suffers a further
sharp deterioration due to either continued UAH depreciation or
weaker asset quality. Capital injections would reduce downside
risk for the bank's ratings.

The rating actions are as follows:


  Long-term foreign currency and local currency IDRs: affirmed at

  Senior unsecured debt of Biz Finance PLC: affirmed at
  'CCC'/Recovery Rating 'RR4'

  Subordinated debt: affirmed at 'C'/Recovery Rating 'RR5'

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

  Support Rating: affirmed at '5'

  Support Rating Floor: affirmed at 'CCC'

  Viability Rating: affirmed at 'ccc'

  National Long-term rating: affirmed at 'AA-(ukr)'; Outlook


  Long-term foreign currency and local currency IDRs: affirmed at

  Senior unsecured debt of SSB No.1 PLC: affirmed at
  'CCC'/Recovery Rating 'RR4'

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

  Support Rating: affirmed at '5'

  Support Rating Floor: affirmed at 'CCC'

  Viability Rating: affirmed at 'ccc'

  National Long-term rating: affirmed at 'AA-(ukr)'; Outlook

Pivdennyi Bank:

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

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

  Support Rating: affirmed at '5'

  Support Rating Floor: affirmed at 'No Floor'

  Viability Rating: affirmed at 'ccc'

U N I T E D   K I N G D O M

BOPARAN HOLDINGS: Moody's Lowers Corporate Family Rating to B2
Moody's Investors Service downgraded Boparan Holdings Limited
corporate family rating (CFR) to B2 from B1 and probability of
default rating (PDR) to B2-PD from B1-PD. Concurrently, Moody's
downgraded to B2 from B1 the ratings on the senior notes issued
by Boparan Finance plc due 2019 and 2021. The outlook is stable.

Ratings Rationale

The rating action reflects Moody's expectations that Boparan's
earnings, as measured by EBITDA, will fail to improve in FY15
compared to FY14 due to deteriorating market conditions in
several of its business segments.

Volumes in the Protein segment (68% of FY14 sales) declined in Q1
FY15. Like-for-like (LfL) sales were down 4.7% due to the lower
volumes and commodity price deflation but operating profits
increased to GBP15.5 million from GBP13.1 million in Q1 FY14
thanks to efficiency improvements. However, profitability in Q2
is expected to be negatively affected by the impact of the Avian
flu outbreaks in the UK and the Netherlands which happened in
November 2014 as well as consumers' negative reactions following
the FSA Campylobacter reporting. Whilst the Avian flu outbreaks
seems to be now confined, there is less visibility around the
campylobacter investment. Because poultry producers in the UK are
currently under public pressure to significantly reduce the level
of contamination in chicken sold in the UK, Boparan recently
launched a GBP10m initiative that covers approximately 20% of its
annual poultry volume but could be extended if the trial is
successful. Whilst Moody's believes that campylobacter is an
industry-wide issue and notes that Boparan has been at the
forefront in tackling this issue, at this stage there is
uncertainty around the eventual cost implications, especially
with respect to retailer contributions. However, it is Moody's
understanding that further investment and timing of investment is
at the discretion of Boparan.

Trading conditions in the Chilled segment (21% of FY14 sales)
continue to be challenging but the segment has recently shown
some signs of stabilization. However, Moody's expects material
margin improvement to be hampered by additional capacity
investments as customer volumes increase. In the Branded segment
(11% of sales), margins will be impacted by increased
expenditures in marketing and product quality to reinvigorate the
Fox's brand, which has been losing market shares due to fierce
competition in the UK biscuit market.

More positively, the rating also reflects Moody's positive view
that Boparan (1) is a leading food manufacturer with considerable
scale and product diversification; (2) has leading market
positions across nearly all of its segments, especially within
its poultry and private-label offerings; (3) long-standing
relationships with key customers; and (4) has a resilient
business model, as demonstrated by the group's ability to pass
through raw material price changes and maintain a good liquidity
position despite a tough trading environment.

Moody's expects Boparan to generate negative free cash flow in
FY15 but sees the company's liquidity position as good. As at 1
November 2014, Boparan had cash balance of GBP150 million, an
undrawn revolving credit facility (RCF) of GBP60 million, and no
mandatory debt amortization prior to 2019. Moody's also assumes
that the company will maintain sufficient headroom under its
single financial covenant only applicable to its RCF and only
tested when drawn above a certain threshold.


The stable outlook reflects Moody's expectations that Boparan
will be able to stabilise its current operating performance over
the next 12 months and maintain its liquidity profile. The stable
outlook also assumes that the cost implications of the
campylobacter investments will remain manageable and will not
have a material impact on the company's profitability.

What Could Change the Rating Up/Down

Given rating action, a rating upgrade over the short term is
unlikely. However, over time Moody's could upgrade the rating if
there is a visible improvement in operating performance.
Quantitatively, positive pressure could materialize if Boparan
were to achieve a Moody's-adjusted EBIT margin that is
sustainably around 4% and Moody's-adjusted debt/EBITDA ratio
falling towards 5.0x, whilst generating positive free cash flow
and maintaining a good liquidity profile.

Moody's would consider downgrading Boparan's rating if the
company's liquidity profile and credit metrics deteriorate as a
result of a weakening of its operational performance,
acquisitions, or a change in its financial policy.
Quantitatively, negative pressure could materialize if the
company's Moody's-adjusted EBIT margin falls below 3.0%,
Moody's-adjusted debt/EBITDA ratio rises above 7.0x, and free
cash flow remains sustainably negative.

Principal Methodologies

The principal methodology used in these ratings was Global
Packaged Goods published in June 2013. Other methodologies used
include Loss Given Default for Speculative-Grade Non-Financial
Companies in the U.S., Canada and EMEA published in June 2009.

Boparan is the parent holding company of 2 Sisters Food Group, a
manufacturer of diversified food products in the poultry, red
meat, chilled, bakery, and frozen categories.

MATTHEWS YARD: Faces Closure; Owes 100,000 Debts
------------------------------------------------ reports that after racking up GBP100,000
of debts in just over two years, the much loved Matthews Yard
faces closure unless people dip into their pockets to help stop
it going into administration.

The cafe and co-working space in Matthew's Yard, off Surrey
Street, is set to make a small profit this year, the first time
this has happened since it opened in April 2012, according to

But despite this profit, it has GBP29,500 of urgent debts to be
paid, the report notes.

And if it is does not find at least GBP10,000 by the end of
February, it will have to shut down, the report relates.

The report discloses that owner and co-founder Saif Bonar has
spent the last year juggling debts to pay other debts and he said
it has worn him out.

The report relays that Mr. Bonar has stopped taking a salary from
the business in Matthew's Yard, off Surrey Street, Croydon, and
it has not directly employed staff since last January.

Nowadays, the staff run the food and coffee part of the business
on a concession basis, paying rent to Matthews Yard and then take
home whatever profits they make, the report says.

Mr. Bonar is ready to step aside from the business but is not
willing to do this until the finances are sorted, the report

The report says that one of the ways Mr. Bonar has come up with
to solve the cash flow problem is restructure the debt by
inventing the Matthews Yard Loan Fund.

The fund is hoping to raise up to GBP50,000 with a minimum loan
amount of GBP250, the report notes.

For every GBP250 borrowed, Matthews Yard will repay GBP315 over
three years, with quarterly payments in arrears, the report says.

The report relays that it needs to secure at least GBP5,000 in
loan funding and GBP5,000 next month to save it from going into
administration at the end of February.

"By restructuring the debt and putting it through the loan fund,
it makes it more manageable and puts it over three years," the
report quoted Mr. Bonar as saying.  "By being profitable we can
trade our way out [of debt]," Mr. Bonar added.

The report notes that Matthews Yard opened in April 2012 and at
the time was seen as sign the area was recovering after the riots
of the previous August.  It has become a base for lots of social
events since then but Mr. Bonar said the impact of the cafe has
diminished, the report adds.

MEIF RENEWABLE: Moody's Assigns (P)Ba2 Corporate Family Rating
Moody's Investors Service has assigned a (P)Ba2 corporate family
rating (CFR) to MEIF Renewable Energy UK Plc (the Issuer or MEIF
Renewable Energy UK). Concurrently, Moody's has assigned a
provisional (P)Ba2 rating to the GBP190 million Senior Secured
Notes due 2020 (the Notes) to be issued by MEIF Renewable Energy
UK Plc. The outlook on all ratings is stable.

The proceeds of the Notes will be used to refinance existing
project finance indebtedness of the company's biomass and
landfill gas power generation subsidiaries; pay swap breakage
costs and transaction fees; and to fund a distribution of
approximately GBP78 million to the shareholder MEIF Lux
Renewables SARL, a Luxembourg-based holding company owned by the
Macquarie group.

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

Ratings Rationale

The (P)Ba2 CFR is constrained by (1) the group's small scale,
relative to rated utility and power generation peers, and asset
concentration risk, which will increase over time as the landfill
gas portfolio declines; (2) the high level of leverage (gross
debt to EBITDA of just under 4x), which would result from the
planned refinancing and (3) the limited visibility over how
equity and credit interests will be balanced in the coming years,
which could result in significant refinancing risk at the
maturity of the Notes.

It also reflects, as positives, (1) the fact that more than half
of group earnings are derived from stable and transparent
renewable energy subsidy mechanisms, controlled by the UK
Government; (2) a commercial contracting structure including fuel
procurement, access to landfill gas and sale of power and
associated benefits, which could dampen the impact of movements
in commodity prices on operating earnings; and (3) the group's
deleveraging potential, as demonstrated by strong historic levels
of free cash flow.

MEIF Renewable Energy UK Plc is the new parent company of two
businesses, Energy Power Resources Limited (EPRL) and CLP
Envirogas Limited (CLP), which own and operate, respectively,
five biomass-fired power plants (which use poultry litter, straw
and meat and bone meal as fuels) and 68 landfill gas generating
engines across 25 sites in Great Britain and with a total
installed capacity of around 174MW. Of these facilities, the two
largest biomass plants at Thetford (38.5MW) and Ely (38MW)
generated nearly 40% of group EBITDA in the year to March 31,
2014. The rating agency considers that the group has very small
scale compared to peers rated under the Unregulated Utilities and
Unregulated Power Companies methodology and even compared with
its closed rated comparator, Infinis Energy Plc (Ba3 stable),
which had total generation capacity of 610MW as at the end of
March 2014.

Moody's considers that the group's stable earnings and strong
free cash flow generation in recent years and the relatively low
levels of maintenance capital expenditure required for the fleet
mean that it has the potential to deleverage significantly over
the life of the Notes. The rating agency expects the group to
continue to generate relatively stable earnings notwithstanding
the group's exposure to changes in power prices, given that close
to 50% of revenues are currently derived from subsidy mechanisms
including Renewables Obligation Certificates (ROCs), the value of
which are linked to the Retail Price Index (RPI). While the
group's assets are eligible to receive ROCs until 2027, the group
only has contracts in place to sell them and the associated power
till 2020 and 2022. Moody's considers to be a credit positive the
fact that the group's principal counterparty, British Gas Trading
Limited, is one with strong credit quality (a subsidiary of
Centrica Plc, A3 negative).

However, the actual deleveraging profile remains uncertain given
the potential misalignment of equity and credit interests during
the life of the Notes. Moody's notes that the Group is
beneficially owned by the first Macquarie European Infrastructure
Fund (the Fund), which has recently extended its initial ten year
life to 2016. The rating agency considers it likely that the
shareholder will seek to maximize its return on investment during
the life of the Notes, in order to optimize the returns to
investors in the Fund. This is demonstrated by the planned
refinancing, which, if the proceeds are used as planned, would
result in almost GBP100 million of distributions being paid to
the shareholder in the year to March 31, 2015.

The small scale of MEIF Renewable Energy UK and its asset
concentration means that the group could be materially exposed to
a prolonged unforced outage at one of its principal generating
facilities; in this regard, Moody's notes that a number of the
biomass plants are approaching the end of their design lives.
This risk is also likely to increase over time as generation from
the existing mostly capped landfill gas portfolio declines. More
positively, the rating agency notes that management's
historically prudent approach to maintenance of the assets, if
continued, would partially mitigate the risk to earnings from
unplanned outages. Furthermore, the increasing contribution of
the biomass business to group earnings as the landfill gas
business declines should reduce the group's exposure to the UK
power price given that the biomass assets earn a higher
proportion of revenues through subsidy than the landfill gas

The terms of the proposed new Notes provide certain creditor
protections in the form of restrictions on additional
indebtedness, subject to a number of debt incurrence tests; a
limitation on the payment of dividends and other restricted
payments; and a restriction on permitted investments outside of
the restricted financing group. However, the level of carve-outs
mean that the group's actual future deleveraging profile and
hence, refinancing risk at the maturity of the Notes, remains

The provisional (P)Ba2 rating of the proposed Notes reflects the
fact that they will benefit from first-ranking security over the
shares in the Issuer and the assets of the operating companies as
well as guarantee from substantially all of the operating
companies. It also reflects the fact that the Notes will
effectively be subordinated to (1) a new GBP20 million super
senior revolving credit facility and (2) up to a maximum of GBP10
million of commodity hedging liabilities, which would have
priority of claim over the shared collateral in an enforcement

The Notes will also rank senior to a shareholder loan made to the
group by MEIF Lux Renewables SARL of approximately GBP109
million. The rating agency considers that the shareholder loan
meets the conditions to be treated as 100% equity as set out in
Moody's 2013 publication "Debt and Equity Treatment for Hybrid
Instruments of Speculative-Grade Nonfinancial Companies".

The (P)Ba2 rating of the Notes reflects the application of
Moody's Loss Given Default methodology and the fact that this is
substantially an all-bond transaction. Accordingly, Moody's LGD
estimate for the Notes is LGD 4.

Rating Outlook

The rating outlook is stable, reflecting the rating agency's base
case expectation that the business will de-lever over the life of
the notes, such that the group maintains an FFO to gross debt
ratio persistently higher than 15% and RCF to gross debt
persistently higher than 10%.

What Could Change the Rating Up/Down

Given the high initial level of leverage (nearly 4x on a net debt
to EBITDA basis) and the uncertainty around the likely
deleveraging profile, Moody's considers that upward pressure on
the ratings is unlikely to arise in the next two years.

Conversely, downward pressure could arise if the group were not
deleverage as the value of the asset portfolio declines. This
could result from (1) a material deterioration in the technical
availability of the generation portfolio or the landfill gas
yield; (2) wholesale power prices settling at a level close to
GBP40/ megawatt hour or below, which would likely cause the
group's leverage (measured on a net debt to EBITDA basis) above
4x; (3) the payment of equity distributions at a level
inconsistent with the earnings trend of the business; or (4) a
currently unforeseen change to the renewable energy subsidy
regime in the UK, which has a material adverse impact on the
value of the subsidies received.

Principal Methodologies

The principal methodology used in this rating was Unregulated
Utilities and Unregulated Power Companies published in October
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.

MEIF RENEWABLE: Fitch Assigns 'BB' LT Issuer Default Rating
Fitch Ratings has assigned MEIF Renewable Energy UK plc (MEIF
Renewable) a Long-term Issuer Default Rating (IDR) of 'BB' with a
Stable Outlook. It has also assigned the company's proposed issue
of a senior secured bond an expected rating of 'BB(EXP)'.
The final bond rating is contingent upon the receipt of final
documentation conforming materially to information already

MEIF Renewable's ratings benefit from a favorable regulatory
framework, modest diversity of operations, long-term contracted
fuel supplies, and a financial profile comparable to that of
similarly rated peers. The ratings also take into account the
company's exposure to wholesale electricity price volatility and
declining electricity output from its landfill gas division,
which is less predictable compared to conventional gas, as well
as the proposed debt funding with bullet maturity in 2020 and
restrictive covenants.


Supportive Regulatory Framework
A favorable regulatory framework for renewable energy in the UK
is the key factor supporting MEIF Renewable's business and
financial profiles and, as a result, its ratings. The framework
has generous renewable incentive schemes underpinned by
challenging medium-term targets for industry-wide renewable
energy production. In our view, the incentive mechanism in the UK
represents a transparent and reliable source of revenues for MEIF

The company's revenues are predominantly governed by the
Renewable Obligation (RO) regime. Only 1% of its revenue in the
year ended March 31, 2014 were generated under the legacy
Non-Fossil Fuel Obligation/ Scottish Renewable Obligation
(NFFO/SRO) regime, which will switch to the more favorable RO
regime in 2017 and 2018. The RO incentive regime provides
significantly higher all-in prices per MWh than the NFFO feed-in
tariff. Under the RO scheme the company receives payments related
to the regulatory renewable energy incentive and support
mechanism, in addition to the payment based on the wholesale
market electricity price. The payments linked to the RO regime
accounted for about 50% of the company's revenue in the year to
September 30, 2014, contributing to stability of its cash flow

Diversified Asset Portfolio
MEIF Renewable's business profile benefits from modest diversity
of operations across technologies, number of plants/sites and
sources of fuel used for generation compared with some of its
peers of similar scale that tend to focus on one technology or
source of renewable energy generation. However, its individual
sites and overall size are small.

The company operates five biomass-fired power stations and 25
landfill sites, with a total net installed capacity of 174MW at
end-September 2014. The assets are only located in the UK. The
company is a large biomass-fuelled independent power generator in
the UK, with its biomass plants accounting for almost two-thirds
of its total net installed capacity.

MEIF Renewable's EBITDA is fairly well balanced across two main
divisions and their assets. The biomass business accounts for
about 60% of the company's EBITDA, while the landfill gas
division contributes about 40%. The largest biomass power
station -- Thetford -- represents about 20% of the company's net
installed capacity, demonstrating some concentration.

Landfill Gas Output to Decline
The output of landfill gas and, as a result, electricity
generation by power gas engines can be less predictable and
challenging to forecast compared to conventional gas. It is
generally declining, especially in closed landfills and the
company seeks to manage its opex and capex accordingly. We expect
the larger biomass business to offset electricity output
fluctuations from the landfill gas division resulting in fairly
predictable total power generation.

Contracted Fuel Supplies
Fuel costs are one of the key determinants of MEIF Renewable's
profitability as they comprised almost half of the company's
operating expenses (including biomass fuel costs and royalties
payments for the use of landfill sites) in FY14.

Fitch said "We believe that MEIF Renewable's exposure to the fuel
supply and price risks is mitigated by its medium-to-long term
contracts for fuel supplies (including landfill gas), reasonably
diversified supplier base and by the close proximity of its
biomass stations to abundant fuel supplies. Prices in most of the
biomass contracts are fixed for their duration and linked to the
RPI. It is further offset by the fact that 95% and 81% of
projected biomass fuel requirements for FY15 and FY16 have
already been contracted (and over half of biomass fuel needs are
contracted for FY17 and FY18), while 89% of expected gas volumes
from landfill sites are contracted through to March 31, 2020."

MEIF Renewable's long-term relationships with its suppliers, in
particular in the biomass division, are supported by fuel being
sourced from waste products that have limited alternative use.

Wholesale Electricity Price Volatility
Although supported by the UK regulatory framework for renewable
energy, MEIF Renewable's revenue and, as a result, cash flow
generation is also dependent on the development of the wholesale
power market. A substantial portion of the company's revenue
(41.5% in the year to September 30, 2014) is driven by payments
for electricity based on the wholesale electricity market price.

The company's power purchase agreements (PPA) offer limited
protection against wholesale electricity price fluctuations as
the electricity price for its biomass division is fixed every 12
months in advance and the electricity price for its landfill gas
division is fixed every six months in advance based on the
average market rates prevailing in a certain period prior to the
fixing date.

Fitch assumes largely flat wholesale power prices over the
forecast period of 2015-2019, based on forward market prices. Any
significant drop in power prices is likely to weaken the
company's financial profile, as electricity output produced from
its landfill gas division is in long-term decline.

Financials Comparable to Peers
MEIF Renewable's credit metrics are comparable with those of the
'BB' category-rated utility peers, while we assess its business
profile as fairly strong for this rating level.

Following the planned GBP190m secured bonds issue, we expect
funds from operations (FFO) adjusted gross leverage to increase
to 4.4x in FY15 from 3.75x in FY14 and FFO adjusted net leverage
to rise to 3.7x from 3.3x, respectively. These forecasts take
into account a new shareholder loan which lacks both provisions
for events of default and acceleration rights, enabling its
exclusion it from the Restricted Group's IDR perimeter in our

The company's ability to pay dividends will be limited by the
consolidated net leverage ratio stipulated in the bond
documentation (eg net debt/EBITDA below 3.25x prior to the date
that is three years from the bond issue and 2.5x thereafter). We
expect that the decrease of the net leverage threshold to 2.5x
from 3.25x will prompt the company to commit to medium-term de-


Expected Senior Secured Bond

"While there is no immediate liquidity risk, the company will
face large bullet maturities in 2020 and 2021 but we expect
adequate landfill gas and biomass power production to facilitate
refinancing. We also anticipate that the company will pursue a
proactive refinancing policy. Following the planned bond issue,
MEIF Renewable's debt will comprise only senior secured notes for
GBP190 million due in 2020 and a remaining portion of a
subordinated shareholder loan of GBP112.9 million due in 2021,"
Fitch said.

The proceeds of the planned senior secured bond issue are
expected to be primarily used for the repayment of all the
current external debt and additional shareholder distribution, ie
partial repayment (GBP78.3 million) of the new shareholder loan
(GBP191.2 million) received by the company as part of its
structural reorganization.

MEIF Renewable's estimated cash position was GBP22.8 million at
end-December 2014 (excluding restricted cash of GBP5.3 million
which will be released after repayment of the existing
facilities). The company is also expected to have access to a
GBP20 million revolving credit facility (RCF) due 4.5 years after
the notes' issue date.

Dividends Limit FCF
"Given low capex and working capital requirements, we expect the
company to be free cash flow (FCF)-positive although a large
portion is likely to be distributed as dividends, subject to the
net leverage covenant stipulated in the bond documentation,"
Fitch said.

Shareholder Loan

"We excluded the new shareholder loan from the Restricted Group's
IDR perimeter in our analysis as it is subordinated to all
current and future indebtedness of the company (including senior
secured notes), matures one year after the maturity of the senior
secured notes, and its interest should only be paid in cash if
permitted by the restricted payment tests specified in the inter-
creditor agreement and the senior secured notes documentation. In
our financial forecast we treated potential cash interest
payments under the shareholder loan as part of dividends."


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

-- Increased wholesale prices or electricity output above
    Fitch's expectations leading to expected FFO adjusted gross
    leverage below 2.5x and FFO gross interest cover above 4x
    (FY14: 3.2) on a sustained basis

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

-- Recoverable landfill gas depletion faster than Fitch assumes
    or wholesale prices substantially lower than forward prices
    such that expected FFO adjusted net leverage is around 4x and
    FFO gross interest cover below 2.5x on a sustained basis

-- Changes to the regulatory framework resulting in a less
    supportive mechanism for the company's operations

SHOON: Appoints BDO to Find Buyer for Business Again
---------------------------------------------------- reports that the owners of footwear chain Shoon
have appointed advisors BDO to find a buyer for the business,
just a year after it was sold by turnaround firm GA Europe.

Ken Bartle and Peter Phillips, industry veterans who have backed
footwear chains including Jones the Bootmaker, Stead & Simpson,
Oliver Shoes and Gordon Scott, agreed a takeover of Shoon in
January last year, according to  But they have
hired advisors to sell the 10-store chain because Philips is
suffering from ill health, according to The Telegraph, the report
relates. notes that GA Retail supported a management
buyout of Shoon in May 2012 after it fell into administration, as
well as taking a direct stake in the business.

The report relays that on its acquisition in January last year,
Mr. Bartle said: "Peter and I have been admirers of the Shoon
concept since its inception and have watched its recent progress
with interest. We are confident that the business has enormous
potential and this deal represents a very good outcome for the
Shoon brand, our customers and staff."

Shoon, which first launched in 1985, has stores across the South
in locations including Bath, Guildford, Reading and Tunbridge
Wells, and also trades online.


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

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

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


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

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

Copyright 2015.  All rights reserved.  ISSN 1529-2754.

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

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

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

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