TCREUR_Public/150625.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

                           E U R O P E

           Thursday, June 25, 2015, Vol. 16, No. 124



VTB BANK: S&P Affirms 'BB-/B' Counterparty Rating; Outlook Stable


KOLIBRI POWER: To Continue Operating Under Colibri Energy Name
ORION ENGINEERED: Moody's Raises CFR to Ba3, Outlook Stable


GREECE: ECB Raises Liquidity Limit; Creditors Refuse Proposals


HYPO ALPE-ADRIA: Heta Injects Capital Into Italian Subsidiary


CB TEST: Under Provisional Administration, License Revoked
MAST-BANK: Under Provisional Administration, License Revoked


BANCO BPI: Fitch Affirms 'BB' Long-Term Issuer Default Rating

U N I T E D   K I N G D O M

BRITISH AIRWAYS: S&P Revises Outlook to Pos. & Affirms 'BB' CCR
CRITERION: Rent Hike Prompts Administration; Buyer Sought
DOBSON & CROWTHER: In Administration; Trading Continues
FAB UK 2004-1: Fitch Affirms 'CCsf' Rating on Class A-3E Notes
FAB UK 2004-1: S&P Affirms CCC- Ratings on Three Note Classes

KJK INVESTMENTS: High Court Winds Up Investment Firm
LONGCROSS CONSTRUCTION: Files Administration Notice
PRECISE MORTGAGE 2015-2B: Fitch Rates Class E Notes 'BB(EXP)sf'
* UK: Pos. Outlook For South East Hotels/Restaurants, R3 Says



VTB BANK: S&P Affirms 'BB-/B' Counterparty Rating; Outlook Stable
Standard & Poor's Ratings Services affirmed its 'BB-/B' long- and
short-term counterparty credit ratings on Georgia-based VTB Bank
(Georgia).  The outlook is stable.

The affirmation reflects S&P's view that VTB Georgia remains a
"strategically important" subsidiary for its parent, VTB Bank, a
diversified financial services group headquartered in Russia.  At
the same time, S&P thinks that VTB Georgia is showing steady
progress in working out its problem loans, while curbing its
growth appetite.  S&P has therefore revised its assessment of VTB
Georgia's risk position to "moderate" from "adequate" and raised
its assessment of the bank's stand-alone credit profile (SACP)to
'b' from 'b-'.

S&P bases its ratings on VTB Georgia on our 'bb-' anchor for a
commercial bank operating only in Georgia, the bank's "moderate"
business position, "moderate" capital and earnings, "moderate"
risk position, "average" funding, and "adequate" liquidity.

In 2014, the share of VTB Georgia's nonperforming assets (by
which S&P means problem loans and repossessed investment
property) reduced to 5.3% from 6.7% of the total loan book and
repossessed real estate owned, after the bank recovered about
Georgian lari (GEL)2 million (EUR800,000) on some large problem
assets.  S&P considers that the bank has a track record of
successful workouts of problem loans for at least four straight
years.  S&P expects provision recovery to continue in 2015,
although the pace of such recovery will likely slow.  S&P also
thinks that the bank's growth appetite has lessened, which should
prevent rapid risk accumulation in the future.

Among the key weaknesses of VTB Georgia's risk position, S&P
still sees high single-name loan and industry concentrations.
S&P regards the loan book as concentrated.  The 20 largest
borrowers represented about 30% of total loans and 1.5x of equity
as of Dec. 31, 2014.  S&P still considers that high foreign
currency lending, at about 60% of total lending at end-2014,
creates substantial financial risk for the bank, not only in
terms of credit risk if the lari depreciates, but also in terms
of the management of foreign currency mismatch risk.

The bank's 96% owner, VTB group, acquired its stake in 2005,
maintaining its presence through the 2008 conflict in Georgia and
despite the current sanctions imposed on major Russian entities.
S&P considers that VTB group is interested in expanding its
geographic footprint in Georgia, given the strong upside
potential of the local economy.  S&P observes a strong track
record of capital and liquidity support to VTB Georgia from its
parent, including a US$6.5 million capital injection in 2014 and
a planned capital injection this year.  Therefore, S&P
incorporates two notches in its rating on VTB Georgia to reflect
support from VTB Bank.  At the same time, S&P caps the long-term
rating on VTB Georgia at the level of our long-term sovereign
rating on Georgia (BB-/Stable/--).

S&P's assessment of VTB Georgia's business position as "moderate"
reflects S&P's view of the bank's still-limited domestic market
share.  With total assets of approximately GEL1 billion (about
US$531 million) the bank ranks No. 6 in terms of assets among
Georgia-based financial institutions, with a market share of
about 5%.  The bank focuses on commercial banking for mid-tier
domestic corporate clients (40% of the loan book), and small and
midsize enterprises (22%), as well retail clients (36%).  S&P
believes VTB Georgia's relatively small capital base limits the
bank's pricing power and constrains its ability to compete with
Georgia's two largest banks for high-quality borrowers.  At the
same time, S&P notes that in the future the bank will likely
continue to leverage its parent's financial resources to win
bigger clients.

S&P views VTB Georgia's capital and earnings as "moderate,"
reflecting S&P's expectation that the bank's risk-adjusted
capital ratio, which stood at 7.4% as of Dec. 31, 2014, will
gradually decline to 6.8%-6.9% in 2015-2016.  In S&P's forecast,
it factors in a Tier-1 capital injection of GEL10 million in
2015, and do not expect any dividends to be paid this year.  S&P
thinks that net interest margins will contract to about 6%, which
would put some pressure on earnings in 2015.  S&P regards the
bank's revenue mix as supportive of stable and predictable
earnings generation: 65%-70% has historically come from interest
income and 8%-10% from fees and commissions.  S&P expects this
composition will be sustained in the future, although it could be
affected by one-time effects, such as large disposals of
repossessed collateral.  S&P expects net profit in 2015 at about
GEL10 million, equivalent to a return on assets of about 1%.

"We assess VTB Georgia's funding as "average" and its liquidity
as "adequate."  Customer deposits remain the major funding source
for the bank and the 20 largest depositors represented about 45%
of the bank's liabilities as of Dec. 31, 2014, a moderately high
level of concentration, in our view.  The bank's loan-to-deposit
ratio was 86% on the same date, which is better than that of its
domestic peers.  In our view, the maturity structure of VTB
Georgia's funding is well balanced, with short-term wholesale
funding comprising 13% of total funding and broad liquid assets
covering short-term wholesale liabilities by almost 2.7x," S&P

Funding attracted from the parent amounted to GEL133 million on
Dec. 31, 2014 (approximately 14% of total liabilities),
supporting the stability of bank's funding profile and enabling
it to sustain a net interest margin at a generally satisfactory
level.  VTB Georgia also has an outstanding liquidity facility
from its parent, VTB Bank, which it could use if necessary.  S&P
thinks that the sanctions imposed on the parent bank have an only
limited impact on VTB Georgia and the amount of liquidity support
available to the subsidiary.

The stable outlook reflects S&P's expectation that VTB Georgia
will maintain at least moderate capitalization, with
nonperforming loans generally in line with the system average,
and its funding and liquidity position will not worsen.

A positive rating action is currently remote, given that S&P's
long-term rating on VTB Georgia is at the level of S&P's long-
term rating on Georgia and S&P's view that the bank is unlikely
to survive sovereign credit stress, if any occurs.  Consequently,
an upgrade of the sovereign is a prerequisite for S&P to consider
an upgrade of the bank.  S&P might consider revising its
assessment of the bank's SACP upward if its business position
improved significantly, and S&P considered such improvement as

S&P might consider a downgrade if it saw that the bank's relative
importance for its parent had declined, in particular, if VTB
Bank's interest or capacity to provide continuing financial
support for VTB Georgia diminished and is not sufficient to
maintain capital or liquidity ratios at current levels.  A
deterioration of the sovereign's creditworthiness, resulting, for
example, from weaker economic growth than S&P expects, a
worsening financial position, or rising imbalances, could also
lead to a negative rating action on the bank.


KOLIBRI POWER: To Continue Operating Under Colibri Energy Name
Sandra Enkhardt at pv-magazine reports that Kolibri Power Systems
AG will continue operating under the name Colibri Energy GmbH.
Despite ongoing insolvency proceedings, the energy storage
company has been processing orders and developing new products,
the report says.

At the start of June, Kolibri Power began operating under the
name Colibri Energy, pv-magazine relates. Via a management
buyout -- effectively a company reorganization -- former board
members, Helmuth von Grolman and James Astorian took the energy
storage manufacturer over. They are now acting as managing
partners, with the majority of the previous company investors
remaining involved, according to the report. The workforce has
also been kept on.

pv-magazine notes that Kolibri was forced to file for insolvency
after considerable due diligence breaches by then management
member, Mirko Hannemann, which led to massive financial damages.
The company filed a criminal complaint against Mr. Hannemann, the
report says. According to reports, the financial loss was between
EUR2 million and EUR5 million, pv-magazine relays.

Colibri reports that despite the ongoing insolvency proceedings,
new products are being marketed and existing orders processed,
including a 200 kWh battery system for a transport vehicle in
Hamburg, the report says.

Germany-based Colibri Energy is not only involved in large energy
storage solutions, but also in stationery and small mobile

ORION ENGINEERED: Moody's Raises CFR to Ba3, Outlook Stable
Moody's Investors Service has upgraded the corporate family
rating (CFR) of Orion Engineered Carbons S.A. ("OEC SA", and
together with its subsidiaries, "Orion") to Ba3, from B1, and has
concurrently upgraded its probability of default rating (PDR) to
B1-PD, from B2-PD. At the same time, Moody's has upgraded to Ba3
(from B1) the rating of the EUR665 million equivalent term loan
facility ('TL facility') and of the EUR115 million multicurrency
revolving credit facility ('RCF') borrowed by Orion Engineered
Carbons GmbH and OEC Finance US LLC, two indirect subsidiaries of
OEC SA. All ratings have a stable outlook.


The rating action reflects Orion's positive operating and
financial track record so far since its listing in July 2014, and
the rating agency's expectation that the company will be able to
display further positive momentum in its operating and financial
performance over the coming quarters, which will then translate
into (i) an adjusted EBITDA margin materially higher than the
recent historical peak of 16% achieved in 2014, (ii) a gross
leverage ratio, as adjusted by Moody's, sustainably below 3.5x,
and (iii) positive free cash flows supporting the adequate
liquidity profile of the company. The rating action therefore
anticipates the progressive migration of Orion's key metrics
towards levels which are more commensurate with the 'Ba' rating
category. At the same time, Moody's expects the business profile
of the company to continue to be supported by Orion's (i) strong
market position as the global leader in specialty carbon black
segment and as the third largest global producer of rubber carbon
blacks; (ii) long-standing relationships with established and
reputable blue-chip customers; (iii) large, well maintained and
flexible manufacturing asset base spread across the key regions
for the company, North and Latin America, Europe and Asia; and
(iv) continued progress with regard to the percentage of customer
contracts containing cost-pass through mechanisms (i.e. indexed
pricing formulas) allowing to mitigate the impact of raw material
price fluctuations (mostly linked to oil) on operating profits.

The status of Orion as a publicly listed company, along with
management publicly stated commitment towards a deleveraging
target of 2.5x net debt/EBITDA ratio over the medium term, based
on company's reported figures, mitigates the consideration that
financial policy still remains shareholder-friendly, given the
dividend policy publicly targeted. Indeed, Orion, after paying a
dividend of EUR40 million in the last quarter of 2014, has
confirmed its plan to pay, in 2015 and subsequent years, a
dividend of EUR40 million per annum, which would approximate to a
dividend payout ratio close to 70% based on the agency's
forecasted net income for Orion in 2015. As a mitigating
consideration, the company's projected liquidity position, which
is supported by Moody's expectations of continuous robust
operational cash flow being generated going forward, would
accommodate such a dividend policy, as well as rising capex
requirements which Moody's expects the company will likely face
over the coming years, in order to upgrade its US plants to
comply with regulations the Environmental Protection Agency
('EPA') is enforcing across the US carbon black industry. Orion
should also be legally entitled to receive an indemnification
from former owner Evonik Industries AG ('Evonik', Baa2 positive)
for a large portion of the future regulatory-driven capex
requirements in the US. Such indemnification would represent a
supportive consideration for the company's liquidity, as an
important mitigating factor if and when the company will start to
incur more capex in the US. Such indemnification from a third
party (Evonik) is also a positive differentiation of Orion's case
compared to the case of other peers facing capex requirements
already settled with EPA in the US in the recent past.


The stable outlook reflects Moody's expectation that Orion will
display credit metrics appropriate with its rating category and
keep an adequate liquidity position at all times, and will
continue to be able to maintain its high operating profitability
by effectively managing the volatility of its feedstock and the
cyclicality of its end-user markets. The outlook also assumes
that the outcome of the current negotiations with the US EPA can
be comfortably managed by the company, and that Orion's financial
policy, albeit shareholder friendly, will not become more
aggressive, while management will stick to its public commitment
to focus on further deleveraging the company.

What Could Change the Rating UP

An upgrade is currently considered as unlikely, however positive
rating pressure could build over time in case of a material
improvement in liquidity and credit metrics, including (1)
Moody's-adjusted debt/EBITDA ratio falling below 3.0x on a
sustained basis; (2) retained cash flow (RCF)/debt ratio above
20% on a sustained basis; and (3) the company maintaining a
sustained positive free cash flow. An upgrade will also require a
more balanced financial policy.

What Could Change the Rating DOWN

Moody's would consider downgrading the rating if credit metrics
deteriorate substantially, including Moody's adjusted debt/EBITDA
ratio above 4.0x on a sustained basis and RCF/debt ratio below
10%. Furthermore, free cash flows turning negative and any
deterioration in the company's liquidity position could
contribute towards a rating downgrade.


The principal methodology used in these ratings was Global
Chemical Industry Rating Methodology published in December 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.

Based in Frankfurt, Germany, Orion group is the third-largest
global producer of rubber blacks by capacity and the largest
global producer of specialty pigment blacks by both volumes and
revenue. The company has 14 plants (including joint ventures)
across Europe, North and South America, Asia and South Africa.
Orion was formed on July 29, 2011, following the leveraged buyout
of the carbon black operations from Evonik. Post IPO, the two
reference shareholders, Rhone Capital L.L.C. and Triton Managers
Limited, each own 27.4% of the company. In 2014, Orion reported
revenues of EUR1.32 billion.


GREECE: ECB Raises Liquidity Limit; Creditors Refuse Proposals
Claire Jones, John Aglionby and Kadhim Shubber at The Financial
Times report that the European Central Bank on June 23 raised the
limit on the emergency liquidity assistance available to Greek
banks to about EUR89 billion as depositors continued to withdraw

The move has become a daily operation as tension mounts amid
negotiations to secure an eleventh-hour deal to unlock EUR7.2
billion in bailout funds and prevent Greece defaulting on its
debts at the end of the month, the FT relays.

The extension of a little under EUR1 billion in ELA funding,
according to people with knowledge of the decision, is less than
half EUR2 billion figure on June 22, the FT notes.  The reduction
follows rising optimism for a deal after eurozone leaders,
meeting in Brussels on June 22, welcomed reform proposals by the
Greek government that included its first substantial concessions
in months, the FT relates.

                    Depositors Pull Out Money

Separately, the FT's Claire Jones, Kerin Hope and Henry Foy
report that another EUR1.6 billion-worth of deposits left the
Greek banking system on June 22, following withdrawals of EUR2
billion on June 19 and over the weekend according to two senior

Greek banks need central bank loans to pay back depositors who
have been pulling out their money for fear that Athens and its
creditors will prove unable to strike a deal, the FT says.

Capital controls would help stem the run on deposits by forcing
Greeks to limit withdrawals from their accounts and by preventing
funds from leaving the country, according to the FT.

                     Creditors Refuse Proposals

Lana Clements at Express reports that EU creditors refused to
accept half-hearted austerity reforms put forward by the Greek
Prime Minister, and on June 24 summoned Alexis Tsipras back to
Brussels to push for further concessions.

In response, Mr. Tsipras has accused creditors of double
standards and not wanting to find an agreement, Express relates.

"The repeated rejection of equivalent measures by certain
institutions never occurred before -- neither in Ireland nor
Portugal," Express quotes Mr. Tsipras as saying.

"This odd stance seems to indicate that either there is no
interest in an agreement or that special interests are being

The offer on the table already contains measures that the Greek
leader has repeatedly promised he would never agree to, and which
look set to tear the Greek government apart, Express discloses.

Politicians in Athens have blasted the proposals, which include
cuts to pension spending and increased taxes, in return for a
bailout loan worth EUR7.2billion (GBP5.6 billion), Express

At the same time, one of Greece's main creditors, the
International Monetary Fund (IMF) is thought to be highly
skeptical about a number of assumptions and figures made in the
proposal as it stands, Express relays.


HYPO ALPE-ADRIA: Heta Injects Capital Into Italian Subsidiary
Boris Groendahl at Bloomberg News reports that Heta Asset
Resolution AG and Austria agreed to inject capital and liquidity
into Hypo Alpe-Adria-Bank SpA to avoid Italian authorities
winding down the Italian operations of failed Hypo Alpe-Adria-
Bank International AG.

According to Bloomberg, Heta said in a statement on June 23 it
agreed to supply aid for the business, whose main activity is
leasing in northern Italy, because it may otherwise lose a larger
sum of money it's owed by the former subsidiary.  It said the
Italian unit's parent, Austrian state-owned HBI-Bundesholding AG,
will also provide aid, Bloomberg relates. The terms weren't
disclosed, Bloomberg notes.

"The goal of the agreement is to avoid a regulatory procedure in
Italy and to achieve a bigger repayment of the outstanding
funds," Bloomberg quotes Heta as saying in the statement.  "The
economic and financial consequences of the agreement will be
reflected in Heta's first-half results."

Heta, Hypo Alpe's "bad bank," sold the Italian business to HBI
when it was set up in October, Bloomberg recounts.  It has EUR1.6
billion in outstanding loans to the Italian business, and set
aside EUR1.2 billion for potential losses last year, Bloomberg
says, citing Heta's annual report published last week.  An
additional EUR300 million "emergency liquidity facility" to
replace deposits withdrawn from the bank was frozen when Austrian
regulators imposed a debt moratorium on Heta in March, Bloomberg

Heta warned in the annual report that this led to a continuous
deterioration of the liquidity situation of HBI, whereby it can't
compensate the continuous deposit outflow without external
support, Bloomberg relays.

                     About Hypo Alpe-Adria

Hypo Alpe-Adria International AG is a subsidiary of BayernLB.  It
is active in banking and leasing.  In banking, HGAA serves both
corporate and retail customers and offers services ranging from
traditional lending through savings and deposits to complex
investment products and asset management services.

Hypo Alpe received EUR1.75 billion in aid in emergency
capital from the Austrian government.  European Union Competition
Commissioner Joaquin Almunia said in March 2013 that Hypo Alpe
faced possible closure for failing to adequately restructure.
The European Commission approved Hypo's recapitalization in
December 2013, but made it conditional on the management
presenting a thorough plan to overhaul the group.  The Austrian
finance ministry, which effectively runs Hypo Alpe, submitted a
restructuring plan to the Commission on Feb. 5, 2013.  On Sept.
3, 2013, the Commission cleared Hypo Alpe's restructuring plan,
which includes the sale of the bank's Austrian unit and Balkans
banking network and the winding-down of non-viable parts.  It
also approved additional aid to wind down the bank.

As reported in the Troubled Company Reporter-Europe on Nov. 3,
2014, The Wall Street Journal said Austria's nationalized lender
Hypo Alpe-Adria-Bank International AG said on Oct. 30 it has
split itself between a wind-down unit, called Heta Asset
Resolution GmbH, and its southeastern European network of banks.

The split is part of the lender's restructuring plan approved by
the European Commission, the Journal disclosed.  According to the
Journal, under the plan, the Austrian government -- Hypo Alpe-
Adria's current owner -- must sell off all of the bank's assets
or transfer them into a wind-down unit by mid-2015.


CB TEST: Under Provisional Administration, License Revoked
The Bank of Russia, by its Order No. OD-1438 dated June 24, 2015,
revoked the banking license from the Moscow-based credit
institution Open Joint-stock Company Commercial Bank TEST or OJSC
CB TEST from June 24, 2015.

The Bank of Russia took such an extreme measure -- revocation of
the banking license -- due to the credit institution's failure to
comply with federal banking laws and Bank of Russia regulations,
due to repeated violations within one year of the requirements
stipulated by Article 7 (excluding Clause 3 of Article 7) of the
Federal Law "On Countering the Legalisation (Laundering) of
Criminally Obtained Incomes and the Financing of Terrorism", and
due to the applications within one year of measures envisaged by
the Federal Law "On the Central Bank of the Russian Federation
(Bank of Russia)".

CB TEST did not observe the requirements of the legislation on
anti-money laundering and combating the financing of terrorism,
including with regard to the identification of customers, their
representatives and beneficiary owners.  The internal control
rules on anti-money laundering and combating the financing of
terrorism of CB MAST-Bank did not comply with the Bank of
Russia's requirements.

The credit institution was involved in dubious large-value cash
withdrawals outside the Russian Federation.  Besides, CB TEST was
focused on servicing customers who conducted dubious passthrough
payments in their accounts.  The management and owners of the
bank did take measures required to normalize its activities.

The Bank of Russia, by its Order No. OD-1439, dated June 24,
2015, appointed a provisional administration to CB TEST for the
period until the appointment of a receiver pursuant to the
Federal Law "On the Insolvency (Bankruptcy)" or a liquidator
under Article 23.1 of the Federal Law "On Banks and Banking
Activities".  In accordance with federal laws, the powers of the
credit institution's executive bodies are suspended.

According to its financial statements, as of June 1, 2015, OJSC
CB TEST ranked 741st by assets in the Russian banking system.

MAST-BANK: Under Provisional Administration, License Revoked
The Bank of Russia, by its Order No. OD-1436 dated June 24, 2015,
revoked the banking license from the Moscow-based credit
institution Commercial Bank MAST-Bank (Joint-stock Company) or CB
MAST-Bank (Registration No. 3267) from June 24, 2015.

The Bank of Russia took such an extreme measure -- revocation of
the banking license -- due to the credit institution's failure to
comply with federal banking laws and Bank of Russia regulations,
due to the identification of instances of material unreliability
of financial statements, due to repeated violations within one
year of the requirements stipulated by Article 7.2 of the Federal
Law "On Countering the Legalisation (Laundering) of Criminally
Obtained Incomes and the Financing of Terrorism", due to the fact
that the values of all capital adequacy ratios of the bank are
below two percent, due to the bank's inability to meet monetary
obligations to creditors, and also taking into account repeated
applications within one year of measures envisaged by the Federal
Law "On the Central Bank of the Russian Federation (Bank of

Because of the bank's highly risky lending policy and extremely
poor quality of assets which did not generate sufficient cash
flow, CB MAST-Bank did not execute its obligations to depositors.
At the same time, the credit institution submitted to the Bank of
Russia grossly unreliable financial statements which concealed
grounds for initiating measures to prevent insolvency
(bankruptcy) and to revoke the banking license.  Besides, after
CB MAST-Bank complied with the supervisor's requirement to create
loss provisions commensurate with risks assumed, the bank's
capital was reduced to a critical level.  In these circumstances,
guided by Article 20 of the Federal Law "On Banks and Banking
Activities", the Bank of Russia performed its obligation and
revoked the banking license from the credit institution.

The bank's activities contain established facts of repeated
violation of requirements of the legislation on anti-money
laundering and combating the financing of terrorism with regard
to customer identification procedure on cashless settlements
conduced at customers' instructions.  Besides, the credit
institution was involved in dubious large-value cash withdrawals
abroad, and also dubious payable-through.

The Bank of Russia, by its Order No. OD-1437 dated June 24, 2015,
the Bank of Russia appointed a provisional administration to CB
MAST-Bank for the period until the appointment of a receiver
pursuant to the Federal Law "On the Insolvency (Bankruptcy)" or a
liquidator under Article 23.1 of the Federal Law "On Banks and
Banking Activities".  In accordance with federal laws, the powers
of the credit institution's executive bodies are suspended.

CB MAST-Bank is a member of the deposit insurance system.  The
revocation of the banking license is an insured event as
stipulated by Federal Law No. 177-FZ "On the Insurance of
Household Deposits with Russian Banks" in respect of the bank's
retail deposit obligations, as defined by law.

According to its financial statements, as of June 1, 2015, CB
MAST-Bank ranked 189th by assets in the Russian banking system.


BANCO BPI: Fitch Affirms 'BB' Long-Term Issuer Default Rating
Fitch Ratings has affirmed Banco BPI, S.A.'s Long-term Issuer
Default Rating (IDR) at 'BB', Short-term IDR at 'B' and Viability
Rating at 'bb'.

The IDRs have been removed from Rating Watch Positive following
Spain's CaixaBank S.A.'s (BBB/Positive) decision to withdraw its
tender offer for Banco BPI's shares on June 18, 2015. The Outlook
on the Long-term IDR is Stable.



The bank's IDRs, VR and senior debt ratings reflect weak domestic
earnings, but also take into account Banco BPI's stronger asset
quality indicators and funding and liquidity profile than
domestic peers and reasonable capitalization, after the repayment
of EUR920 million cocos in 2014.

International activity, mainly Angola, made up the bulk of Banco
BPI's net income in 1Q15, while it represented only around 20% of
the group's assets. In 1Q15 the bank just broke even in Portugal,
reflecting lower business volumes, interest rates and spreads,
which were partially offset by lower funding costs following the
repayment of state cocos in 2014 and re-pricing of deposits.

Fitch expects Banco BPI to be fairly well placed to cope with the
slowdown in the Angolan economy, supported by the subsidiary's
wide margins, strong cost efficiency, deposit-driven activity and
absence of private sector loan growth in 2010-2014, reflecting
the group's prudent approach towards risk-taking.

The group's Fitch Core Capital (FCC) ratio was 10.4% at end-2014
and unreserved credit-at-risk loans/FCC remained a manageable
18%. Banco BPI's capital ratios have been affected in 2015 by
Angola not being recognized as having supervisory and regulatory
equivalence to the EU. At end-1Q15, Banco BPI's common equity
tier 1 fully loaded ratio was still acceptable at 9.1%, compared
with 9.6% at end-2014.

Banco BPI has weathered the domestic recession better than peers.
Its credit-at-risk remained fairly stable at 5.4% of gross loans
at end-1Q15, with ample reserve coverage of above 70%. This
reflects the bank's loan mix, lower exposures to troubled
economic sectors and more moderate risk appetite.

The bank's main funding source is deposits. Loan de-leveraging
enabled it to improve the regulatory net loans/deposits ratio to
83% at end-1Q15 from 94% at end-1Q14. Wholesale and European
Central Bank funding has declined. Liquidity is supported by a
large portfolio of liquid assets.

The Stable Outlook reflects the stabilization of the bank's risk
profile. Fitch expects Banco BPI's profitability to improve, but
at a slow pace given low interest rates and still declining loan


The bank's Support Rating (SR) of '5' and Support Rating Floor
(SRF) of 'No Floor' reflect Fitch's view that senior creditors
can no longer rely on receiving full extraordinary support from
the sovereign in the event that any of these banks becomes non-
viable. In Fitch's view, the EU's BRRD and the SRM are now
sufficiently progressed to provide a framework for resolving
banks that is likely to require senior creditors participating in
losses, if necessary, instead of or ahead of a bank receiving
sovereign support.

In the EU, BRRD has been effective in member states since 1
January 2015, including minimum loss absorption requirements
before resolution financing or alternative financing (eg,
government stabilization funds) can be used. Portugal transposed
BRRD into the national regulatory framework on 26 March 2015,
including the bail-in tool.


The subordinated debt and preference shares issued by Banco BPI
are all notched down from the bank's VR in accordance with
Fitch's assessment of each instrument's respective non-
performance and relative loss severity risk profiles, which vary


The ratings of Banco Portugues de Investimento (BPI) are
equalized with those of its 100% parent, Banco BPI. The
equalization is driven by BPI's integration within its parent
bank and the benefits derived from parent support. Fitch does not
assign VR to the institution as the agency does not view it as an
independent entity.



The bank's IDRs and senior debt ratings are sensitive to a change
in its VR. They could be upgraded if Banco BPI enhances its
recurrent profitability in its domestic operations, particularly
at pre-impairment operating level. A continued improvement of the
operating environment should support business volumes, benefit
asset quality and result in a reduction in impairment charges.
This will ultimately benefit profitability and enhance the bank's

Downward rating pressure would primarily come from a substantial
deterioration in asset quality and a material deterioration of
its Angolan subsidiary. The bank's ratings are also sensitive to
the conclusion of the sale process of NovoBanco and potential
related costs and capital impact, if any.

The ratings do not currently incorporate Banco BPI's potential
role in further sector consolidation. Fitch would therefore treat
any corporate transactions involving Banco BPI as event risk.


The SR is potentially sensitive to a change in assumptions around
the propensity of Portugal to provide timely support to the bank.
While not impossible, this is highly unlikely in Fitch's view.
The SR may also change in the event of a successful alternative
offer for Banco BPI's shares but Fitch does not currently factor
that into the ratings.


The ratings of Banco BPI's subordinated debt and preference
shares are primarily sensitive to change in the bank's VR.


The ratings of BPI are sensitive to rating actions on Banco BPI's

The rating actions are as follows:

Banco BPI

  Long-term IDR affirmed at 'BB'; removed from RWP, Outlook
  Short-term IDR affirmed at 'B'; removed from RWP
  Viability Rating: affirmed at 'bb'
  Support Rating: affirmed at '5'; removed from RWP
  Support Rating Floor: affirmed at 'No Floor'
  Senior unsecured debt: affirmed at 'BB'; removed from RWP
  Commercial paper programme: affirmed at 'B'; removed from RWP
  Lower Tier 2 subordinated debt: affirmed at 'BB-'; removed
   from RWP
  Preference shares: affirmed at 'B'; removed from RWP


  Long-term IDR affirmed at 'BB'; removed from RWP, Outlook
  Short-term IDR affirmed at 'B'; removed from RWP
  Support Rating: affirmed at '3'; removed from RWP

U N I T E D   K I N G D O M

BRITISH AIRWAYS: S&P Revises Outlook to Pos. & Affirms 'BB' CCR
Standard & Poor's Ratings Services revised its outlook on U.K.-
based airline British Airways PLC (BA) to positive from stable.
At the same time, S&P affirmed the 'BB' long-term corporate
credit rating on the company.  S&P also affirmed its long-term
issue rating on BA's enhanced equipment trust certificates (EETC)
class A and B at 'A' and 'BBB', respectively, and the 'BB' rating
on its GBP250 million unsecured bonds due 2016.  S&P also
affirmed the 'B' issue ratings on the EUR300 million notes of
BA's subsidiary British Airways Finance (Jersey) L.P.

The outlook revision reflects S&P's view that the stand-alone
credit profile (SACP) of BA is 'bb+' and hence could support a
higher rating.  However, the rating is constrained by S&P's view
of the credit metrics of BA's parent, IAG.  S&P believes there is
uncertainty around IAG's credit metrics at this stage due to the
potential acquisition of Aer Lingus and the subsequent impact on
its credit ratios.  S&P could raise the ratings on BA if IAG
acquires Aer Lingus and is able to maintain credit metrics that
would support a higher rating on BA.

S&P has assigned an SACP of 'bb+' for BA, reflecting its
expectation that the company's solid operating performance in
2014 will continue into 2015, demonstrated by good revenue growth
and improving profitability.  While BA currently benefits from
lower fuel prices, S&P believes that the company will be able to
maintain funds from operations (FFO) to debt above 30% even if
they started to increase somewhat faster than S&P's current
projections.  The company's good performance in 2014 resulted in
stronger financial ratios; FFO to debt improved to about 36%.
S&P expects BA to be able to maintain FFO to debt at this level,
supporting S&P's assessment of its financial risk profile as

S&P continues to view BA's business risk profile as "fair".  It
is constrained by S&P's view of the cyclicality of the airline
industry and volatile fuel costs, although the latter are
currently favorable for BA.  Combined with BA's exposure to the
transatlantic premium market, this has led to significant
volatility in BA's profitability over the last economic cycle.
However, these factors are partially offset by BA's ability to
use its strong market position at Heathrow and in the
transatlantic premium market to generate higher profitability
than its peers operating under similar business models, as was
the case in 2014. S&P considers BA's position at Heathrow
Airport, with its access to the wealthy and sizable London
market, is a key support in S&P's assessment of the company's
competitive position.  S&P also believes that BA's position at
Heathrow Airport provides the company some protection from
significant capacity increases by competitors in key long-haul
destinations that could lead to lower average ticket prices.  S&P
also consider that BA has a good track record of managing its
cost base and extensive route network, which further supports
S&P's analysis.

The rating on BA is currently constrained by the group credit
profile of its parent, IAG (not rated).  S&P believes that the
acquisition of Aer Lingus, based on the current parameters, is
likely to weaken IAG's credit ratios.  However, at this stage S&P
considers that IAG could maintain credit metrics that is
supportive of a higher rating depending on the operating
performance of its airline portfolio in 2015 and 2016, which S&P
reflects in the positive outlook on BA.

Under S&P's base case for BA, it assumes:

   -- Available seat kilometers (ASK; measure of capacity) to
      grow by 2%-3% in 2015.

   -- BA to be able to sell the new capacity and hence revenue
      passenger kilometers (RPK) to grow at the same pace or
      slightly ahead of ASKs in 2015.

   -- Average ticket prices to be 2%-3% lower in 2015 as part of
      the lower fuel prices are passed on to consumers.

   -- Oil prices (Brent) at around $55 per barrel in 2015 and $65
      per barrel in 2016, in line with S&P's assumptions outlined
      in "Standard & Poor's Revises Its Crude Oil And Natural Gas
      Price Assumptions," published March 26, 2015.

   -- Unit costs excluding fuel to grow by between 2%-4%.

   -- Capex of about GBP1.3 billion-GBP1.5 billion in 2015,
      leading to neutral to slightly negative free operating cash
      flow for the year.

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

   -- Return on capital ranging between 13%-15% in 2015-2016.
   -- Weighted-average FFO to debt of 31%-32% in 2015-2016.
   -- EBITDA interest cover of about 12x.

The positive outlook on BA reflects S&P's view that it could
raise the ratings if the company maintains FFO to debt above 30%
through to 2016 and its parent can maintain its credit metrics at
a level that supports a higher rating on BA despite the potential
acquisition of Aer Lingus.

S&P could revise the outlook to stable should adjusted FFO to
debt drop below 30%.  In S&P's view, this could happen if
revenues were to decline by more than 2%, for example due to
higher-than-expected pressure on average ticket prices not being
offset by similar cost reductions.

CRITERION: Rent Hike Prompts Administration; Buyer Sought
Naomi Rovnick at The Financial Times reports that The Criterion,
a historic London restaurant in the heart of Piccadilly Circus,
has gone into administration after its landlord increased the
annual rent by 60%.

According to the FT, the owner of the restaurant has had its rent
increased to GBP850,000 a year.

The restaurant, which is run by young Georgian entrepreneur
Irakli Sopromadze and owned by his father, also owes landlord
Criterion Capital, an unrelated company, GBP517,000 in rental
arrears, the FT discloses.

Administrator Peter Kubik, of UHY Hacker Young, said the
restaurant, which was previously run by celebrity chef Marco
Pierre White until the Sopromadzes purchased it in 2009, will be
put back on the market, the FT relates.

Mr. Kubik said the family, who could not immediately be reached
for comment, originally paid GBP1.25 million for the Criterion,
the FT notes.

The Georgian owners are also the restaurant's largest creditors,
however, so they will have a big say in who buys it, the FT

Mr. Kubik, as cited by the FT, said that his job was simply to
"get a good price" for the company.

The Criterion, which serves modern European food and is also
known for its opulent interior and golden mosaic ceiling, has
long been a favorite with London's pre-theatre crowd.

DOBSON & CROWTHER: In Administration; Trading Continues
On June 16, 2015, it was announced that Chris Ratten and Lindsey
Cooper of Baker Tilly Restructuring and Recovery LLP had been
appointed Joint Administrators to Dobson & Crowther Limited.

Following a review of the financial position of the company, the
Administrators have decided that it can continue to trade for a
short period in order to complete existing orders and explore
whether there are any parties willing to buy it as a going
concern.  Any parties with an interest in the business should
make contact with Baker Tilly Restructuring and Recovery LLP as
soon as possible on 0161 830 4000.

The company has recently incurred losses and to address these it
has been necessary for the Administrators to take the difficult
decision make 55 redundancies.  Baker Tilly will now work with
the former employees and relevant government departments to
ensure that the former staff receive their entitlements from the
National Insurance Fund.

FAB UK 2004-1: Fitch Affirms 'CCsf' Rating on Class A-3E Notes
Fitch Ratings has affirmed FAB UK 2004-1 Limited's notes.

The transaction is a securitization of European structured
finance assets, concentrated in the UK. At closing the SPV issued
GBP204.5 million of fixed and floating rate notes, using the
proceeds to buy a GBP200 million portfolio managed by Gulf
International Bank (UK) Ltd.


The affirmations reflect the notes' credit enhancement relative
to the portfolio's credit quality. The portfolio is heavily
concentrated in UK RMBS, for which Fitch maintains a stable

Since the last review in July 2014, current defaults have
increased to GBP26.28 million from GBP18 million, due to 'CCCsf'
or below rated assets migrating to default. In addition, two
assets have been written off, leading to a loss of GBP5 million
for the transaction. As a result the credit quality of the
performing pool, excluding defaulted assets but including 'CCC'
rated or below assets, has slightly improved.

The transaction continue to deleverage slowly with the class A-1E
and A-1F notes (ranked pari passu) having a note factor of 45.6%
compared with 49% one year ago and 59% two years ago. All the
over-collateralization tests are out of compliance, and
consequently the class A2 and A3 are deferring interest and
excess spread is used to paydown the senior notes. Since the last
review in July 2014, GBP760,000 of interest has been used to pay
down the senior notes. Over the past year, the deleveraging of
the senior notes was insufficient to compensate for the
additional defaults and write off, and credit enhancement has
decreased for all the rated notes.

The class S1 and S2 combination notes' rating reflect the ratings
of their respective component classes i.e. the class A-1F notes
and class C notes for the class S1 combination note and the class
A-3F and class C notes for the class S2 combination notes.


Applying a 1.25x default rate multiplier to all assets in the
portfolio would likely result in a downgrade of one notch for the
class A1 and A2 notes. Applying a 0.75x recovery rate multiplier
to all assets in the portfolio would have no impact on the notes'


No third party due diligence was provided or reviewed in relation
to this rating action.


Fitch has checked the consistency and plausibility of the
information it has received about the performance of the asset
pool and the transaction. There were no findings that were
material to this analysis. Fitch has not reviewed the results of
any third party assessment of the asset portfolio information or
conducted a review of origination files as part of its ongoing

The majority of the underlying assets have ratings or credit
opinions from Fitch and/or other Nationally Recognised
Statistical Rating Organisations and/or European Securities and
Markets Authority registered rating agencies. Fitch has relied on
the practices of the relevant Fitch groups and/or other rating
agencies to assess the asset portfolio information.

Overall, Fitch's assessment of the information relied upon for
the agency's rating analysis according to its applicable rating
methodologies indicates that it is adequately reliable.


The information below was used in the analysis.

-- Loan-by-loan data provided by Bank of New York as of 27 May
-- Transaction reporting provided by Bank of New York as of 27
    May 2015.

Fitch has affirmed the following ratings:

  Class A-1E Notes (ISIN: XS0187962104): affirmed at 'BBsf';
  Outlook Stable

  Class A-1F Notes (ISIN: XS0187962369): affirmed at 'BBsf';
  Outlook Stable

  Class A-2E Notes (ISIN: XS0187962799): affirmed at 'Bsf';
  Outlook Stable

  Class A-3E Notes (ISIN: XS0187962872): affirmed at 'CCsf'

  Class A-3F Notes (ISIN: XS0187963094): affirmed at 'CCsf'

  Class S1 Combination Notes (ISIN: XS0187963334): affirmed at
  'BBsf'; Outlook Stable

  Class S2 Combination Notes (ISIN: XS0187963508): affirmed at

FAB UK 2004-1: S&P Affirms CCC- Ratings on Three Note Classes
Standard & Poor's Ratings Services affirmed its credit ratings on
FAB UK 2004-1 Ltd.'s class A-1E, A-1F, A-2E, A-3E, A-3F, and BE
notes.  At the same time, S&P has raised to 'BBB- (sf)' from
'BB+ (sf)' its rating on the class S1 combination notes.

The rating actions follow S&P's updated credit and cash flow
analysis of the transaction using data from the trustee note
valuation report dated May 15, 2015, and the application of S&P's
relevant criteria.

Similar to S&P's previous review of the transaction, the class A-
1E and A-1F notes have continued to amortize as the transaction
continues to deleverage.

At closing, the class S1 notes represented GBP10 million of
combination notes, which comprise GBP7.5 million of class A-1F
notes and GBP2.5 million of class C subordinated notes.  S&P's
rating on the class S1 combination notes addresses the payment of
GBP7.5 million of principal.  S&P's analysis shows that the
distribution of payments that have been made by the underlying
components has resulted in a reduced principal amount outstanding
of the class S1 combination notes.  Based on these observations,
S&P's credit and cash flow analysis indicates that the class S1
notes are able to achieve a higher rating.  S&P has therefore
raised to 'BBB- (sf)' from 'BB+ (sf)' its rating on this class of

Since S&P's previous review, the class A-1E and A1-F notes have
amortized by approximately GBP19.6 million, representing a 22%
reduction in the principal amount outstanding of the notes.

Overall, S&P's analysis indicates a slight deterioration in the
underlying portfolio's general credit quality.  S&P has observed
a decrease in the percentage of assets rated in the 'AA' rated
category (to 4.72% from 5.76%) and the 'BB' rating category (to
6.91% from 9.61%).  By contrast, assets rated in the 'B' rating
category have increased by 6.16% since S&P's previous review.
With this, S&P's credit analysis indicates that its scenario
default rates (SDRs) -- the level of defaults that S&P expects
the transaction to incur at the respective rating levels -- have
increased since S&P's previous review.

Both the class A and BE notes' overcollateralization tests
continue to breach their required triggers, similar to what S&P
observed in its previous review.

"We conducted our cash flow analysis to determine the break-even
default rate (BDR) for each rated class of notes.  The BDR
represents our estimate of the maximum level of gross defaults,
based on our stress assumptions, that a tranche can withstand and
still fully repay the noteholders.  We used the portfolio balance
that we consider to be performing, the reported weighted-average
spread, and the weighted-average recovery rates that we
considered to be appropriate.  We incorporated various cash flow
stress scenarios using our shortened and additional default
patterns and levels for each rating category assumed for each
class of notes, combined with different interest stress scenarios
as outlined in our criteria," S&P said.

Overall, S&P's credit and cash flow results indicate that the
available credit enhancement for the class A and BE notes is
commensurate with the currently assigned ratings.  S&P has
therefore affirmed its ratings on these classes of notes.

FAB UK 2004-1 is a cash flow mezzanine structured finance
collateralized debt obligation (CDO) transaction that closed in
April 2004.


FAB UK 2004-1 Ltd.
GBP214.5 mil fixed-, floating-, and zero-coupon notes

                            Rating              Rating
Class     Identifier        To                  From
A-1E      XS0187962104      BB+ (sf)            BB+ (sf)
A-1F      XS0187962369      BB+ (sf)            BB+ (sf)
A-2E      XS0187962799      B+ (sf)             B+ (sf)
A-3E      XS0187962872      CCC- (sf)           CCC- (sf)
A-3F      XS0187963094      CCC- (sf)           CCC- (sf)
BE        XS0187963177      CCC- (sf)           CCC- (sf)
S1        XS0187963334      BBB- (sf)           BB+ (sf)

KJK INVESTMENTS: High Court Winds Up Investment Firm
KJK Investments Ltd and G Loans Ltd, two North West-based
companies, were wound up by the High Court for operating a
misleading pension-backed loan and investment scheme in which
clients invested GBP11.9 million.

The liquidation was ordered following an investigation by the
Insolvency Service.

The investigation found that the companies operated what is
commonly known as a 'pension liberation' scheme. Clients were
encouraged to obtain a loan from Windermere-based G Loans Ltd, on
the condition that they used their existing pension funds to
purchase shares in the Liverpool-based KJK Investments Ltd.

Clients were led to believe that their investment in KJK
Investments Ltd would increase in value by 6% each year and that
these returns would be sufficient to enable the client to repay
their loan from the proceeds of their pension upon retirement.
Over a 2-1/2 year period, KJK Investments Ltd received GBP11.9
million worth of investments from 209 clients.

The loans made to clients by G Loans Ltd were typically in the
region of 50% of the amount invested by the client in KJK
Investment Ltd shares. G Loans Ltd provided GBP6.3 million of
loans to the same 209 clients.

The investigation found that KJK Investments Ltd was not a
commercial lender (as it claimed to be), but that a significant
portion of the funds invested by the clients were, in fact, lent
by KJK Investments Ltd on uncommercial terms to G Loans Ltd. This
was the only means by which G Loans Ltd was able to provide loans
to the clients -- meaning that the loans which clients received
from G Loans Ltd were funded from their own pension funds
invested in KJK Investments Ltd. This was not made clear to

The loans provided by both KJK Investments Ltd and G Loans Ltd
were on terms that allowed interest to be accrued rather than
paid, such that G Loans Ltd was not in a position to repay its
liability to KJK Investments Ltd, and that KJK Investments Ltd,
in turn, could not pay a dividend to the clients that had
invested in it. The remaining funds invested in KJK Investments
Ltd were used to make loans to other associated companies on
uncommercial terms and to pay substantial commissions, fees and
salaries to those involved in the operation of the companies.
Sales commissions totalled in excess of GBP900,000 while the
directors received payments totalling GBP490,000.

The court was satisfied that the companies acted with a lack of
commercial probity in the way in which they marketed the scheme
to clients and that the scheme itself was lacking in any proper
commercial basis -- with the result that there was no realistic
prospect of clients getting back the funds which they had
originally invested in KJK Investments Ltd.

Colin Cronin, Investigation Supervisor, said:

"Pension liberation is being widely promoted as an easy way of
gaining early access to pension savings, particularly given the
recent changes in pension legislation. Any schemes offering such
benefits should be viewed with caution and independent financial
advice should always be sought before entering into such a

"In this case clients were not told that they were obtaining
loans funded directly from their own pension pots. The Insolvency
Service will investigate and bring to a halt the activities of
companies that mislead clients in this way and that are found to
be operating against the public interest."

KJK Investments Ltd was incorporated on April 22, 2009. The
company's registered office is at 16 Crosby Road North,
Liverpool, in Merseyside.

G Loans Ltd was incorporated on Jan. 7, 2009. The company's
registered office is at St Catherine's Cottage, Patterdale Road,
in Windermere, Cumbria.

The petitions to wind-up KJK Investments Ltd and G Loans Ltd were
presented under s124A of the Insolvency Act 1986 on Aug. 8, 2013.
The companies were wound up on April 15, 2015 and the Official
Receiver has been appointed as liquidator.

LONGCROSS CONSTRUCTION: Files Administration Notice
ABI on June 23 disclosed that Longcross Construction filed a
notice to appoint administrators.

The notice follows on from several construction company
administrations this year, including Anglo Holt, GB Group
Holdings and GB Building Solutions Limited.  This announcement
highlights the need for firms to protect themselves against the
financial problems of a trading partner.

Mark Shepherd, Manager of General Insurance, ABI, said:

"The announcement that Longcross Construction has appointed
administrators is the latest in a number of high-profile
announcements that large construction firms have stopped trading
or been placed in administration this year.

"This latest administration puts a number of major construction
projects in jeopardy and provides a stark reminder about the
vital role trade credit insurers play in protecting businesses
from the knock on effects that can be caused by the unexpected
insolvency of a trading partner.

"Trade credit insurers provided more than GBP16 million of cover
for goods and services supplied on credit to Longcross
Construction Ltd.  This means their suppliers will have the
protection of credit insurers to replenish the loss incurred.
Without this insurance in place, many more companies would be at
risk of large financial losses, and potentially further job

"Trade credit insurance gives businesses security to extend
credit to companies they are trading with and improves access to
bank funding, which encourages businesses to expand and supports
sustainable growth.  Credit insurers also work with their
customers to help them understand and manage their risk when
trading with other firms."

PRECISE MORTGAGE 2015-2B: Fitch Rates Class E Notes 'BB(EXP)sf'
Fitch Ratings has assigned Precise Mortgage Funding 2015-2B plc's
notes expected ratings, as follows:

  Class A: 'AAA(EXP)sf', Outlook Stable
  Class B: 'AA(EXP)sf', Outlook Stable
  Class C: 'A(EXP)sf', Outlook Stable
  Class D: 'BBB(EXP)sf', Outlook Stable
  Class E: 'BB(EXP)sf', Outlook Stable
  Class Z: not rated

The transaction is a securitization of buy-to-let (BTL) mortgages
that were originated by Charter Court Financial Services (CCFS),
trading as Precise Mortgages (Precise or the originator) in the
UK (excluding Northern Ireland). The loans are serviced by the
servicing arm of Charter Court Financial Services Limited,
operating under the name Exact. The majority of the mortgages
(Tier 1 & Tier 2 products) have been originated in line with
market-typical prime BTL underwriting guidelines. This is the
fifth transaction from Precise and Fitch has assigned ratings to
the previous four transactions.


Prime Underwriting, Limited History

Fitch deemed the Tier 1 & 2 BTL loans to be consistent with other
prime BTL in the UK market. These loans have been granted to
borrowers with no adverse credit; full and detailed rental income
verification; full property valuations with robust audit checks;
and with a clear lending policy in place. Data, although limited,
shows robust performance which would be expected of prime loans.
Fitch treated these loans as prime but with an increased
underwriting adjustment to account for the limited data history.

Flexible Underwriting

The portfolio also includes 14% of Tier 3 products, for which the
underwriting criteria permits prior adverse credit behavior and
pricing is higher. Since the Tier 3 originations represent the
smallest sample of originated loans among the different product
categories, the performance data available is very limited.
However, none of the Tier 3 loans selected for this pool have any
adverse credit history. Fitch used the non-conforming matrix for
these loans but with a reduced underwriting adjustment.

Unrated Originator and Seller

The originator and seller are not rated entities and as such may
have limited resources available to repurchase any mortgages in
the event of a breach of the representations and warranties (RW)
given to the issuer. While this is a weakness, there are a number
of mitigating factors that make the likelihood of a RW breach

High London Concentration

49% of the loans are located in Greater London. Although this is
typical for BTL pools, it is much higher than the proportion of
the UK population in this region. Fitch views properties in
London as overvalued and applies a sustainable discount of 31.1%
in its stressed scenarios. In addition, Fitch has increased the
default probability for these loans to account for the
geographical concentration.


Material increases in the frequency of defaults and loss severity
on defaulted receivables could produce loss levels greater than
Fitch's base case expectations, which in turn may result in
negative rating actions on the notes. Fitch's analysis revealed
that a 30% increase in the weighted average (WA) foreclosure
frequency, along with a 30% decrease in the WA recovery rate,
would imply a downgrade of the class A notes to 'A+sf' from
'AAAsf' and the class B notes to 'Asf' from 'AAsf'.


No third party due diligence was provided or reviewed in relation
to this rating action.


Precise provided Fitch with a loan-by-loan data template. All
relevant fields were provided in the data tape, with the
exception of prior mortgage arrears, where Precise was unable to
differentiate between loans having had one to six months of prior
arrears and those having had seven to 12 months prior arrears.
Performance data on historical static arrears was provided for
all loans originated by Precise, but the scope of the data was
limited by the relatively small origination volumes to date and
the length of available history (the first Precise origination
was in 2010).

Precise has experienced only two sold repossessions to date, due
to its limited origination history. As a proxy, Precise provided
a data tape in Fitch template format for 242 sold repossessions
that have been serviced by Exact, which included the Precise-
originated loans. Although the majority of the sample was not for
loans originated by Precise, the agency considers the performance
of the servicer to be one of the key components in determining
sold possession performance. The majority of the loans in the
repossession file were from non-prime originations that were
originated at the peak of the market during 2006-2008, when in
many cases property valuations were optimistic. Despite this, the
observed quick sale adjustments (QSA) were fairly well aligned to
Fitch's base criteria assumptions.

Given this and that in Fitch's opinion Precise's approach to
obtaining property valuations is robust -- as it obtains both
full valuations and conducts subsequent desktop audit
valuations -- the agency has applied QSA assumptions as per its
standard criteria and not applied any upward adjustments.

Fitch requested to receive a third party assessment conducted on
the asset portfolio information and expects to receive and review
the results before the transaction's close.

Fitch conducted a review of a small targeted sample of Precise's
origination files and found the information contained in the
reviewed files to be adequately consistent with the originator's
policies and practices and the other information provided to the
agency about the asset portfolio.

Overall and together with the assumptions referred to above,
Fitch's assessment of the asset pool information relied upon for
the agency's rating analysis according to its applicable rating
methodologies indicates that it is adequately reliable.


The information below was used in the analysis.

-- Loan-by-loan data provided by Precise as at June 12, 2015
-- Transaction reporting provided by U.S. Bank Global Corporate
    Trust Services for Precise 2014-2 plc as at March 12, 2015
-- Loan enforcement details provided by Precise as at May 1,
-- Loan performance data provided by Precise as at May 1, 2015

* UK: Pos. Outlook For South East Hotels/Restaurants, R3 Says
Insider Media reports that there has been a drop in the number of
South East hotel businesses which have a higher than normal risk
of insolvency, according to research from insolvency trade body

The report relates that the research has revealed that while
there are currently more active hotel businesses than ever in the
South East, the sector has the lowest number considered at risk
of insolvency since January.

Compared to five months ago when the local hotel industry had 888
active businesses, with 80 at high risk of insolvency and 135 at
a caution level, there are currently 924 operating hotels, with
only 72 at high risk and 130 at a caution level, Insider Media

According to the report, R3 said the figures paint a positive
picture for the sector ahead of the busy summer season when many
holidaymakers will be heading to the South Coast.

Restaurants also appear to be on more secure footing, with
figures of businesses at high risk of insolvency dropping since
April while the number of active companies continues to rise, the
report says.

"It's certainly positive to see this trend in the figures for
local hotels and restaurants, especially before the South becomes
a hive of activity once more over the summer," Insider Media
quotes Andrew Watling, chairman of the Southern Committee of R3
and a partner at Quantuma in Southampton, as saying.  "Hotels are
sure to do well with guests staying to visit local attractions
and before and after cruises, so it's important they do what they
can to continue the good work into the autumn."

The research, compiled using Bureau van Dijk's 'Fame' database of
company information, tracks the proportion of businesses across
key sectors that have a heightened risk of entering insolvency,
the report notes.


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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