TCREUR_Public/150703.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

                           E U R O P E

            Friday, July 3, 2015, Vol. 16, No. 130



CSKA SOFIA: Faces Demotion Following Financial Woes
MUNICIPAL BANK: Moody's Assigns 'B1' Currency Deposit Ratings


NESCHEN AG: Bueckeburg Court Opens Insolvency Proceedings
PFLEIDERER GMBH: Moody's Raises Corporate Family Rating to 'B2'
PFLEIDERER GMBH: S&P Revises Outlook to Pos. & Affirms 'B-' CCR
PROKON REGENERATIVE: Creditors Reject EUR550MM Cash Offer
TAURUS CMBS 2007-1: Fitch Cuts Rating on 3 Note Classes to 'Dsf'


ELLAKTOR SA: S&P Lowers CCR to 'CCC-/C', Outlook Negative
GREECE: Faces Cash Crunch, "No Vote" Won't Lead to Better Deal
GREECE: Moody's Cuts Government Bond Rating to 'Caa3'


LANDSVIRKJUN: Moody's Raises Rating on EMTN Program to (P)Ba1


ALITALIA-LINEE: Real Estate Binding Offers Deadline October 15


KAZMUNAYGAS: S&P Affirms 'BB+' Corp. Credit Rating, Outlook Neg.


LOCK LOWER: S&P Affirms 'B+' Counterparty Rating, Outlook Stable


LUSITANO MORTGAGES NO. 2: S&P Cuts Rating on Class B Notes to BB


MECHEL OAO: Redeems Overdue Debt, Deal Expected This Month
MY INSURANCE: Put Under Provisional Administration
NORDGOLD NV: Fitch Affirms 'BB-' Issuer Default Rating
PROFILE RE: Put Under Provisional Administration
X5 RETAIL: Moody's Raises Corporate Family Rating to 'Ba3'


CASER SA: Moody's Raises IFS Rating to 'Ba2', Outlook Positive

U N I T E D   K I N G D O M

BORDER PRECISION: MSP Reveals Hopes that Firm Can Still be Saved
COOPER GAY: Moody's Puts 'B3' CFR Under Review for Downgrade
FAIRHURST WARD: In Administration, Cuts 200 Jobs
KONEK-T: Acquired by ITS Tech Out of Administration
MAN COED: 40 Jobs Saved Following Management Buyout

TURNEY WYLDE: Staff Say Firm is Poised to Enter Administration
WORLDSPREADS LTD: July 15 Claims Submission Deadline Set


* BOOK REVIEW: Transnational Mergers and Acquisitions



CSKA SOFIA: Faces Demotion Following Financial Woes
Standart News reports that the domestic football union (BFU) said
CSKA Sofia will relaunch from the third division following their
financial crisis.

The decision marks a spectacular fall from grace for CSKA, who
have won 31 league titles and reached three European semi-finals
in happier times between 1967 and 1989, Standart notes.

Last month, cash-strapped CSKA and three other teams were denied
licenses to compete in next season's Bulgarian professional
championship and European competitions, Standart recounts.

There were speculations Bulgarian soccer could be restructured
and the domestic second division will accommodate CSKA but local
authorities said the licensing procedure is complete and changes
in professional divisions cannot be made, Standart relays.

"CSKA can only play in the amateur championship," Standart quotes
the BFU as saying in a statement.

According to Standart, CSKA accepted their fate and their new
bosses said the club will waste no time to return to the Balkan
country's top divisions.

"We don't even think for a moment that we'll not return to
professional football," former Bulgaria coach Plamen Markov, who
was appointed as CSKA's sporting director, as cited by Standart,

"It'll be the end for CSKA if we don't win a promotion."

It will take CSKA at least two years to return to Bulgarian top
flight, which the club or Levski have won 57 times since 1948
when the Reds were founded, Standart says.

CSKA Sofia is a Bulgarian football team.

MUNICIPAL BANK: Moody's Assigns 'B1' Currency Deposit Ratings
Moody's Investors Service assigned first-time B1/Not-Prime local
and foreign-currency deposit ratings to Municipal Bank AD and a
baseline credit assessment (BCA) of b2. The B1 long-term deposit
ratings carry a stable outlook. Moody's has also assigned a
Ba2(cr)/Not-Prime(cr) Counterparty Risk Assessment (CR

Municipal Bank's ratings reflect the bank's municipal financing
niche that represents a stable and relatively low-risk business,
its adequate loss absorption capacity and high liquidity buffers,
balanced against a still challenging operating environment and
weak asset quality metrics and earnings-generating capacity.

A list of the assigned ratings is provided at the end of this
press release.



Municipal Bank's ratings capture Moody's expectation that the
bank's non-performing loans (NPLs)-to-gross loans ratio will
remain at elevated levels in 2015 owing to subdued economic
growth in Bulgaria and challenging economic conditions. These
conditions include: (1) low economic growth (Moody's forecasts
real GDP growth at 1.3% in 2015) and a weak labor market
affecting most sectors; (2) strain in the construction and real
estate sector, which Moody's expects will affect repayment
capacity and recoveries in this portfolio (at 14% of loans as of
end-2014); and (3) the ongoing limitations to foreclose on
collateral due to lengthy judicial proceedings. Based on audited
financials, as of December 2014, the latest available, the bank's
NPLs (defined as individually impaired loans plus past due by
more than 90 days non impaired) stood at an elevated 32% of gross


Moody's also expects that, given the challenging environment,
lending opportunities will remain limited and continue to
suppress the bank's earnings, with pre-provision income to
average assets estimated at a low 0.7% in 2014 (compared to 1.5%
in 2013). Margin pressure has also hurt the bank's profitability
as a low interest rate environment leads to lower yields on its
loan portfolio and newly issued Bulgarian government securities
have record low coupon rates. Furthermore, Moody's expects that
the bank will be facing elevated provisioning requirements in the
context of asset quality pressure and reduced possibilities for
recoveries on NPLs that will further dampen bottom-line


Despite the aforementioned challenges, the bank benefits from its
niche focus in municipal financing and budget servicing. While
the bank has a 2% market share in terms of total domestic banking
assets, it commands a leading 26% market share in municipal
budget servicing and 19% share in loans to the municipal sector.
Municipal Bank works with 30 municipalities, providing 24 of them
with complete bank servicing. According to the bank, as of end-
2014, around 12% of its gross loan portfolio was extended to
budget entities. Loans to budget entities have performed well in
the past and current impairments on these loans are zero, so
these loans reduce the overall asset risk in the bank's


The continuing capitalization of net earnings has supported
Muncipal Bank's capital ratios, improving its loss absorption
capacity against the high level of NPLs in the context of
Bulgaria's challenging operating environment. Furthermore, in
recent years, Municipal Bank has benefited from capital
injections from shareholders, primarily those from its 68%
majority shareholder, the Sofia Municipality, which have further
strengthened the bank's loss absorption capacity. As at year-end
2014, the bank's reported Basel III Tier 1 ratio was 15.8%.


The bank benefits from a solid and historically stable deposit
base (bank is almost exclusively funded by customer deposits) in
Bulgaria and comfortable liquidity levels, with the ratio of
liquid banking assets to total banking assets at 41% as at year-
end 2014. Meanwhile, cash equivalents alone made up a high 42% of
total assets.


Moody's believes that Municipal Bank's deposits are likely to
face low loss-given failure due to the loss absorption provided
by the substantial volume of deposits themselves and also a small
amount of outstanding subordinated debt. Therefore Moody's has
assigned a Preliminary Rating Assessment (PRA) to Municipal
Bank's deposits of b1 (one notch above the bank's Adjusted BCA).

Municipal Bank's B1 deposit ratings do not currently incorporate
any rating uplift from the PRA reflecting Moody's assessment of
the low likelihood of support from the Bulgarian government.
Although the bank is majority owned by the Sofia municipality,
any capital support provided to Municipal Bank must occur in
circumstances that would be acceptable to a private investor
under normal market conditions (i.e., well in advance of any
potential failure of the institution) to comply with EU state aid
rules and the EU Bank Resolution and Recovery Directive (BRRD)
once this applies in Bulgaria.


Moody's has also assigned a CR Assessment of Ba2(cr)/ Not-
Prime(cr) to Municipal Bank, which is two notches higher than its
B1 deposit ratings, reflecting the level of subordination in the
bank's liability structure and Moody's view that authorities are
likely to honor the operating obligations the CR Assessment
refers to in order to preserve a bank's critical functions and
reduce potential for contagion.


Upwards pressure on Municipal Bank's ratings is limited because
of the weak operating environment. A combination of significant
improvements in the bank's provisioning coverage, reduction of
NPL balances and improvement in profitability metrics as well as
an enhancement of the bank's market position would exert upward
pressure on the bank's rating.

Downwards pressure on the ratings would develop if the operating
environment weakens further and affects the bank's asset quality,
earnings generating capacity and capital levels beyond Moody's
current expectations.


-- Deposit ratings: B1 outlook stable / Not-Prime

-- Baseline credit assessment: b2

-- Adjusted Baseline credit assessment: b2

-- Counterparty Risk Assessment: Ba2(cr)/Not-Prime(cr)

At the end-March 2015, Municipal Bank, headquartered in Sofia,
Bulgaria, had total assets of BGN1.3 billion ($0.9 billion).


NESCHEN AG: Bueckeburg Court Opens Insolvency Proceedings
The District Court of Bueckeburg on July 1 resolved to open
Neschen AG's insolvency proceedings and confirmed the
self-administration of the company as well as Arndt Geiwitz as

"The insolvency proceedings will enable the company to relieve
itself from its debt burden of the past," explained Dr. Bettina
Breitenbuecher, Chief Restructuring Officer of Neschen.

Under the insolvency, outstanding loans could be settled, so that
Neschen could once again completely focus on its future and

At the same time, Henrik Felbier, Board spokesman, stressed "that
Neschen has so far developed well from an operative viewpoint and
that we are continuing to expand our product portfolio".

The positive trend has enabled the company to prevent job losses.
Immediately before the insolvency proceedings were opened, it was
also possible to conclude a long-term collective agreement
solution for Neschen, which will replace the short-term
restructuring agreements in place since 2009 and should provide
investors with long-term security.

"Neschen has proven itself as a reliable partner for its
customers, suppliers and employees after the successful operative
restructuring of the last three years and will emerge
strengthened from the insolvency", says Mr. Felbier.

The Executive Board of Neschen filed for insolvency with an
application for self-administration on April 17, 2015.  The
reason for the insolvency application was the existing liability
from an old credit agreement that the company cannot settle.  As
a result, it was thus not possible to issue a positive prognosis
for the company.  In this regard, Neschen agreed on a mediation
procedure with the hedge fund for the legal disputes, which will
start in mid-August.

"It is important to note that the company nevertheless has
remained solvent at all times.  Of course, we have ensured that
it will be possible to pay each new supplier order after the
insolvency proceedings have been opened", emphasizes
Ms. Breitenbuecher.

Headquartered in Bueckerburg, Germany, Neschen AG -- develops, produces and markets
innovative coated self-adhesive and digital print media
worldwide, together with their processing machines and
presentation systems.

PFLEIDERER GMBH: Moody's Raises Corporate Family Rating to 'B2'
Moody's Investors Service, upgraded the Corporate Family Rating
of Pfleiderer GmbH (Pfleiderer) to B2 from B3 and the Probability
of Default rating to B2-PD from B3-PD. The rating of the
company's EUR322 million senior secured notes due 2019 has been
upgraded to B3 from (P)Caa1. At the same time all ratings of
Pfleiderer have been placed on review for upgrade.

The rating upgrade to B2 acknowledges the profitability
improvements Pfleiderer has shown since the rating assignment in
June 2014, which was at the upper end of Moody's expectations and
has resulted in a financial profile well in line with the
requirements for the B2 rating.

The decision to place the ratings under review for a further
upgrade follows an announcement made by Pfleiderer on June 30,
2015, regarding an increase of the free float of Pfleiderer
Grajewo S.A. and the plan for a reverse takeover of Pfleiderer


According to Moody's current understanding of the plan presented
on June 30 regarding a reverse takeover of Pfleiderer by its
subsidiary Pfleiderer Grajewo, holders of Pfleiderer's
outstanding bonds will benefit from a materially strengthened
position reflecting (1) repayment of debt outstanding at Grajewo
(approximately EUR20 million as of March 31, 2015), (2) issuance
of a guarantee by Grajewo securing the outstanding notes and (3)
fall-away of the ring-fencing within the group which resulted in
a leverage imbalance between Core East and Core West.

The review will primarily focus on getting confirmation of the
points above. In addition it will look into

(1) Actual consummation of the transaction as planned

(2) Receipt of necessary approvals from Grajewo's shareholders

(3) Receipt of the necessary consent from Pfleiderer's

(4) The Group's financial policy going forward

(5) Receipt of necessary regulatory approvals

The rating could be upgraded if the reverse takeover transaction
will be completed as planned and bondholders will thus indirectly
get access to the cash flow generated by current Core East
entities. Beyond that, an upgrade would require Pfleiderer to
sustain its EBITDA margin around 12% through the cycle (2014:
13.6%). The consideration of a positive move of the rating would
also require the company to generate stable positive free cash
flow leading to FCF/Debt coverage at mid-single digits (2014:
6.0%) and supporting a stabilization of leverage below 4.0x
Debt / EBITDA (2014: 3.8x. - All figures in this paragraph are as
adjusted by Moody's). Based on the information available any
upgrade is likely to be limited to one notch.

The B2 Corporate Family Rating is supported by (1) the company's
solid market position in a concentrated market with a portfolio
that largely comprises products with a higher technological
content, such as laminated board or high pressure laminates, in
an elsewhere rather commoditized industry, (2) a well-diversified
customer base with long-standing customer relationships, (3)
material profit improvements as a result of restructuring
measures taken since 2010, (4) majority of revenues (more than
60%) generated by the so-called value added products with greater
pricing power and (5) favorable industry fundamentals.

At the same time, the ratings are constrained by (1) the
company's exposure to a cyclical industry with a customer base
that consists predominantly of producers in the furniture
industry, (2) history of high pricing pressure resulting from
overcapacity in the market, especially at times of cyclical
downturns, also taking into account relatively high capital
intensity, (3) somewhat limited geographic diversification with
dependency on markets in Germany and Poland and (4) high minority
interest and limited access to cash flow generated by the 65%
owned business unit Core East given the ring-fenced nature of
financing arrangements in Core East.

In response to the difficult situation Pfleiderer faced in 2010,
when a sudden market decline required the group to end its
strategy of largely debt financed international expansion which
resulted in a unsustainable debt level, Pfleiderer refocused on
its core activities and took a series of restructuring
activities. In total, all the restructuring actions undertaken
since 2010 add up to cost savings in excess of EUR100 million
(2010-2013) against one-off cost of approximately EUR60 million.

In fiscal year 2014, the group's revenues increased by 3.9% year-
on-year to over EUR960 million. Despite unfavorable effects from
value adjustments on receivables from former Group companies we
acknowledge the steady improvement in the group's profitability
with Moody's EBITA margin approaching 8.2% in 2014 from 5.3% in
2013. However, Moody's highlights improvement in Group's
profitability on Moody's adj. basis was also caused by foreign
currency gains, which might reverse in the future and against an
overall fairly benign environment in Pfleiderer's core markets as
evidenced by moderately growing volumes, positive price movements
as well as fairly low raw material prices.

Should against Moody's current expectations the transaction fail
to materialize, downward pressure could be exerted on the rating
if Pfleiderer's operating performance weakens indicated by EBITDA
Margin approaching 10%, interest cover falling below 1.5x EBITA /
Interest expense (2014:1.9x), if Free Cash Flow turns negative or
if the company increases debt as a result of acquisitions or
shareholder distributions, such that its Debt/EBITDA exceeds
4.5x. A weakening in the company's liquidity could also exert
downward pressure on the rating (all figures in this paragraph
are as adjusted by Moody's).

The principal methodology used in these ratings was Global Paper
and Forest Products Industry published in October 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.

Pfleiderer GmbH, headquartered in Neumarkt, Germany, is one of
the leading manufactures in the European ecological wood-based
products and solutions, with origins dating back to 1894. The
company, which serves customers in the construction and furniture
industry, employs more approximately 3,261 people and operates 9
production facilities across Germany and Poland.

PFLEIDERER GMBH: S&P Revises Outlook to Pos. & Affirms 'B-' CCR
Standard & Poor's Ratings Services revised its outlook on
Germany-based wood panels producer Pfleiderer GmbH to positive
from stable.  At the same time, S&P affirmed the 'B-' long-term
corporate credit rating.

In addition, S&P is affirming its 'CCC+' issue rating on the
company's EUR322 million senior secured notes.  The recovery
rating on the notes is '5', indicating S&P's expectation of
modest recovery, in the lower half of the 10%-30% range, in the
event of a payment default.

S&P is also affirming its 'B+' issue rating on the company's
EUR60 million super senior revolving credit facility (RCF) due
2019.  The recovery rating on the super senior RCF is '1',
indicating very high (90%-100%) recovery in the event of a
payment default.

The outlook revision follows the announcement on June 30, 2015,
that Pfleiderer will pursue a reverse takeover with its 65%-owned
Polish subsidiary Pfleiderer Grajewo SA (Grajewo).  As part of
the transaction, Grajewo will raise equity (amount still unknown)
in a secondary offering on the Polish stock exchange and use the
proceeds to acquire Pfleiderer from its current shareholders
Atlantik S.A., a Luxembourg-based holding company created to own
shares in Pfleiderer.  This would result in Pfleiderer Grajewo
being listed on the Polish stock exchange as the top holding
company, with Pfleiderer GmbH as a subsidiary in Germany.

If the group pursues this transaction, S&P thinks that
Pfleiderer's financial risk profile could be permanently
strengthened because S&P would no longer include the debt at
Atlantik in S&P's calculation of Pfleiderer's credit metrics.
The inclusion of Atlantiks's debt is principally why S&P's
current assessment of Pfleiderer's financial risk profile is
"highly leveraged."  As of Dec. 31, 2014, Pfleiderer's adjusted
debt was EUR1.2 billion, consisting of the company's EUR322
million high yield bond in 2014, some EUR25 million of debt at
Grajewo, financing relating to the sale of accounts receivables
(EUR71.6 million), pension obligations (about EUR57 million), and
operating leases (about EUR35 million).  In addition, S&P
understands that Pfleiderer's parent company Atlantik still has
about EUR609 million of nominal debt (unchanged from year-end
2013) excluding accrued interest, which S&P includes in
consolidated credit metrics as Atlantik has no other operations
than owning shares in Pfleiderer.  That resulted in adjusted
funds from operations (FFO) to debt of about 2% and debt to
EBITDA of 8.9x for 2014 (about 19% and 3.8x, respectively without
the Atlantik debt).  S&P expects these ratios to remain stable as
operational improvements will offset increasing debt at Atlantik,
and S&P therefore anticipates that credit metrics will remain
commensurate with S&P's "highly leveraged" financial risk profile
if the company doesn't complete the transaction.  However, if the
reverse takeover is finalized as planned, S&P understands that
Atlantik could fully or partly pay down its debt, which would
lead to a clear upside for credit metrics.  Another benefit of
the transaction is the elimination of cash leakage to minority
shareholders that is present, given that Pfleiderer only holds
65% of the shares in Grajewo, while the rest are listed on the
Polish stock exchange.

"Our assessment of Pfleiderer's "weak" business risk profile
reflects the company's exposure to the highly cyclical and
commoditized wood-based panels industry, characterized by price-
based competition, volatile demand, high sensitivity to raw
material costs, and relatively high market fragmentation.  Our
assessment also reflects Pfleiderer's relatively limited size and
scope, with production in eight sites in Germany and Poland, a
high degree of sales geared toward mature Western European
markets, and historical underinvestment in core assets.  We
believe that Pfleiderer's profitability will remain highly
dependent on the general economic environment and that a decline
in consumer confidence can lead to sharp declines in sales and
earnings for the company.  That said, the company has performed
well since the bond transaction in 2014, outperforming its
targets, supported by an improving market environment and
internal efficiency measures.  We think that Pfleiderer will
continue to benefit from strong market positions in Germany and
Poland, as well as a continued strong internal focus on cost
savings and greater integration of the German and Polish business
units," S&P said.

The positive outlook indicates a one-in-three likelihood that S&P
could raise the ratings on Pfleiderer within the next 12 months.

S&P could raise the rating if Pfleiderer were to succeed with its
plans to pursue the reverse takeover and thereby emerge as a
consolidated entity with lower leverage than previously.  For an
upgrade to materialize, S&P would have to be certain that debt
within Pfleiderer's parent Atlantik has decreased and that
Atlantik will no longer have significant influence over
Pfleiderer.  The magnitude of an upgrade would primarily be
decided by the amount raised by Grajewo and subsequently by the
lowering of debt at Atlantik.  For a two-notch upgrade S&P would
expect Pfleiderer to maintain a ratio of FFO to debt of at least
20%, i.e. in line with S&P's threshold for a "significant"
financial risk profile.

A downgrade is unlikely in the coming 12 months unless Pfleiderer
were to enter into liquidity problems.  S&P could revise the
outlook to stable if the proposed transaction did not
materialize, because S&P considers Pfleiderer's long-term capital
structure to face uncertainties as long as the highly leveraged
holding company Atlantik has significant influence.

PROKON REGENERATIVE: Creditors Reject EUR550MM Cash Offer
Tino Andresen at Bloomberg News reports that creditors of Prokon
Regenerative Energien GmbH rejected Energie Baden-Wuerttemberg
AG's EUR550 million (US$611 million) cash offer for the insolvent
wind-farm developer.

According to Bloomberg, EnBW said in an e-mailed statement the
lenders voted against EnBW's bid at a meeting in Hamburg on
July 2.  That would have allowed the creditors to recoup EUR52.20
of every EUR100 invested, Bloomberg says.  Under an alternative
cooperative model that puts a higher valuation on Itzehoe,
Germany-based Prokon, they may have to wait until 2030 to receive
full payment of about EUR57.80, Bloomberg notes.

Prokon filed for bankruptcy in 2014 after investors withdrew
funding, Bloomberg recounts.  EnBW failed to persuade those
investors, who forced Prokon to repay money after liquidating
profit-participation certificates, to back its bid, Bloomberg

Prokon Regenerative Energien GmbH operates 529 megawatts of wind
farms, with 461 megawatts in Germany, according to Capital Stage.

TAURUS CMBS 2007-1: Fitch Cuts Rating on 3 Note Classes to 'Dsf'
Fitch Ratings has downgraded Taurus CMBS (Pan-Europe) 2007-1
Limited's Class A1, A2, B, C, E and F notes due 2020 and affirmed
the class D notes as follows:

  EUR98.5 mil. class A1 (XS0305732181) downgraded to 'Dsf' from
   'BBB-sf'; Recovery Estimate (RE) 100%;

  EUR10.9 mil. class A2 (XS0309194248) downgraded to 'CCsf' from
   'BBsf'; RE100%;

  EUR16 mil. class B (XS0305744608) downgraded to 'CCsf' from
   'Bsf'; RE100%;

  EUR23.3 mil. class C (XS0305745597) downgraded to 'CCsf' from
   'CCCsf'; RE 90%;

  EUR18.4 mil. class D (XS0305746215) affirmed at 'Csf'; RE0%;

  EUR2.5 mil. class E (XS0309195567) downgraded to 'Dsf' from
   'Csf'; RE0%; and

  EUR0 mil. class F (XS0309195997) downgraded to 'Dsf' from
   'Csf'; RE0%

Taurus CMBS (Pan-Europe) 2007-1 was originally the securitization
of 13 loans originated by Merrill Lynch.  The loans comprised
both tranched and whole facilities which were secured on
collateral located in Switzerland, France and Germany.  In July
2015, three loans remained.


The downgrade of the class A1 notes reflects a senior interest
shortfall at the May 2015 interest payment date, which
constitutes an event of default.  The class A2, B and C notes
have been downgraded to reflect an increased likelihood of
default, although full ultimate repayment (or in the case of the
class C notes, 90%) is expected.  The class E and F notes have
been downgraded as a result of a loss allocation from the workout
of the defaulted Leipzig loan.

Since the last rating action in July 2014, two smaller loans have
been repaid.  The redemption of EUR23.7 mil. Saturn (which repaid
in full) and EUR14.8 mil. Leipzig (with a EUR2 mil. loss)
exceeded Fitch's 'Bsf' projections by approximately EUR3.7 mil.
The loss from the Leipzig workout reduced the class F note
balance to zero and caused a EUR75,000 principal shortfall on the
class E notes.

The EUR134.2 million Fishman JEC loan entered safeguard
proceedings in July 2014, two months after becoming a specially
serviced and accelerated loan.  Subsequent non-payment of
interest resulted in liquidity facility drawings, which covered
material and higher senior expenses (due to legal expenses and
fees related to the Fishman workout/ safeguard) and partial note
interest.  In May 2015, only partial interest payment was made on
the senior notes. This constitutes an event of default and
triggered the downgrade of the class A1 notes.

The loan remains in safeguard while the French courts address the
special servicer's claim that protection should not have been
granted to an already accelerated defaulted loan.  Meanwhile the
Fishman borrowers have made two proposals to the senior
noteholders.  Both envisage resolution of the loan after bond

In both proposals, the borrowers aim to repay the loan over time
via asset sales and (under one proposal) partial cash sweeps.
Proceeds would be paid into borrower accounts no longer pledged
to the issuer.  Total interest and principal amounts repaid over
time may vary between the proposals but in both cases the loan
agreement will no longer apply, as interest and principal
payments are defined in the proposals.  This may have unforeseen
effects on the securitization.

Even if the borrowers meet the proposed annual repayment targets,
only the class A1 notes would have a realistic chance of being
repaid by bond maturity.  This assumes a 49% redemption of
Fishman JEC by February 2020, the full repayment of the
performing EUR29.7 million Hutley loan and the resolution of the
defaulted EUR5.3 million WPC G&S loan (the latter two are secured
on collateral located in Germany).


All notes rated above 'Dsf' would be downgraded if the issuer
security becomes enforced or if the notes remain outstanding
beyond bond maturity.


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

Fitch did not undertake a review of the information provided
about the underlying asset pool ahead of the transaction's
initial closing.  The subsequent performance of the transaction
over the years is consistent with the agency's expectations given
the operating environment and Fitch is therefore satisfied that
the asset pool information relied upon for its initial rating
analysis was adequately reliable.

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.


ELLAKTOR SA: S&P Lowers CCR to 'CCC-/C', Outlook Negative
Standard & Poor's Ratings Services said that it has lowered its
long-term corporate credit ratings on three Greece-based
corporations: concessions and construction group Ellaktor S.A.,
utility Public Power Corp. S.A. (PPC), and telecommunications
operator Hellenic Telecommunications Organization S.A. (OTE).

   -- S&P lowered the long- and short-term corporate credit
      ratings on Ellaktor to 'CCC-/C' from 'B-/B'.  The outlook
      is negative.  S&P lowered the long-term corporate credit
      rating on PPC to 'CCC-' from 'CCC'.  The outlook is

   -- S&P lowered the long-term corporate credit rating on OTE to
      'B' from 'B+' and placed it on CreditWatch with negative

The rating actions follow the downgrade of Greece to 'CCC-' from


The downgrade reflects S&P's view that the probability of
"Grexit" -- Greece exiting the eurozone -- has increased to about
50% following the Greek government's decision to hold a
referendum on official creditors' loan proposals this Sunday
July 5.  S&P now factors in the risk of a deposit freeze,
particularly following recently imposed capital controls in
Greece, into S&P's liquidity stress test assumptions on
corporates with material exposure to Greece.  As Ellaktor
currently holds around 50% of its total cash balances in Greek
banks, S&P believes that this heightened risk of a Grexit could
put significant pressure on the group's liquidity position.  As a
result, S&P now caps the rating on Ellaktor at the level of the
rating on Greece.

The negative outlook on Ellaktor reflects that on Greece.


The rating action follows the similar action on Greece.  S&P
believes that PPC faces liquidity risks stemming from the
continuously deteriorating macroeconomic conditions in Greece and
the shrinking funding sources available to PPC.  In light of the
group's increasing working capital needs, heavy investment
commitments, and reliance on the depressed Greek banking system
(especially for the refinancing of the power network IPTO), S&P
believes its liquidity could weaken materially in the coming
months.  The financial market shutdown leaves PPC heavily reliant
on the weak Greek banking system, which S&P believes has
deteriorated since its previous rating action, in light of the
imposition of emergency capital controls.

The negative outlook on PPC reflects that on Greece.


The rating actions result from S&P's downgrade of Greece and its
view that the likelihood of Grexit has now increased to about
50%. In S&P's view, the present risk of Greece leaving the
currency union and the potential consequences for domestic
nonsovereign entities with foreign currency debt constrain the
rating on OTE at 'B'.  OTE generates about 75% of its revenues
and about 80% of its EBITDA in Greece.

OTE is also subject to pricing restrictions imposed by Greek
regulators and generates moderate revenues from government
entities.  In addition, there is a lack of clarity regarding
Greek companies' future access to capital markets and the risk
that the company's credit metrics, liquidity, and free cash flow
generation could materially weaken from currently strong levels
if Greece leaves the eurozone.

At this stage, S&P continues to assess OTE's stand-alone credit
profile (SACP) at 'bb-' assuming that Greece will remain in the

S&P continues to expect that OTE is unlikely to default in the
hypothetical stress scenarios that S&P anticipates would likely
accompany a sovereign default of Greece or an exit of Greece from
the eurozone in 2015.  S&P believes that OTE's solid balance
sheet, strong track record of cost-cutting, and resilient free
cash flow generation will protect the company in a stress
scenario, as will its policy of holding almost all of its cash
balances (EUR1 billion as of March 31, 2015) at large
international banks outside Greece.

The CreditWatch placement indicates that S&P could lower the
long-term rating on OTE by one or several notches if Greece were
to leave the eurozone, if materially weaker economic conditions
in Greece have a significant adverse effect on OTE's operating
prospects or liquidity, or if S&P believes that OTE's free
operation cash flow generation would weaken.

S&P could affirm the long-term rating if the currently "very
high" country risk lessened, the risk of a Grexit decreased, or
S&P observed that the commitment to OTE of Deutsche Telecom (DT),
the company's 40% owner, had strengthened.  Stronger support from
DT could take the form of a substantial increase in DT's stake in
OTE or other explicit forms of financial support.


                               To                 From
Ellaktor S.A.
Corporate Credit Rating       CCC-/Negative/C    B-/Negative/B

Public Power Corp. S.A.
Corporate Credit Rating       CCC-/Negative/--   CCC/Negative/--
Senior Unsecured              CCC-               CCC

PPC Finance PLC
Senior Unsecured (1)          CCC-               CCC

Downgraded; CreditWatch/Outlook Action; Ratings Affirmed
                               To                 From
Hellenic Telecommunications Organization S.A.
Corporate Credit Rating       B/Watch Neg/B      B+/Negative/B

Senior Unsecured (2)          B/Watch Neg        B+

Ratings Affirmed

Commercial Paper (2)          B

(1) Guaranteed by Public Power Corp. S.A.
(2) Guaranteed by Hellenic Telecommunications Organization S.A.

GREECE: Faces Cash Crunch, "No Vote" Won't Lead to Better Deal
Nektaria Stamouli at The Wall Street Journal report that
officials were battling it out for the minds of Greek voters on
July 2 ahead of a crucial vote on its creditors' demands that
could decide whether the country leaves the euro or buckles down
for further difficult negotiations.

The referendum called for Sunday, July 5, is splitting voters and
spreading dissent inside the Greek government as the country
faces a potentially devastating bankruptcy, The Journal
discloses.  According to The Journal, eurozone finance ministers
say there will be no further talks until after the vote -- and
even if Greeks vote "yes," that could be long and painful.

Greek Prime Minister Alexis Tsipras has insisted that voter
rejection of creditor demands would give him more leverage in
negotiations for desperately needed funded and that the standoff
could be quickly resolved, a claim European leaders have denied,
The Journal relates.

"The day after the referendum we will be united in the country's
efforts to overcome this economic crisis," Mr. Tsipras, as cited
by The Journal, said on July 2 during a visit to the defense

But a German government official warned Greece would face long
and hard negotiations over a fresh bailout even if voters
rejected their government's tough line, The Journal notes.

The comments raise doubt about the ability of negotiators to put
Greece under a new financial safety net by July 20, when it must
repay more than EUR3 billion in bonds held by the European
Central Bank or face a second multi-billion default on its debt
within 20 days, The Journal states.  Greece became the first
developed country to default on the International Monetary Fund
after it missed a US$1.73 billion rescue-program payment the same
day, The Journal discloses.

According to The Journal, Berlin argues that Greece's default to
the IMF and the rapid deterioration of the its economy and its
public finances have shifted the basis for negotiations, making
an agreement unlikely until well into the summer, if it can be
reached at all.

One complication is the economic and fiscal impact on Greece of
the five-month standoff, built-up domestic arrears and its
closure of banks this week in the face of a surge of withdrawals,
The Journal says.

These would require a thorough review of Greece's financing
needs, The Journal notes. If these exceed the amount Greece
requested this week, possibly by a wide margin, creditors might
have to impose tougher budget cuts than under the previous
bailout in order to stabilize Greece's debt -- which Athens is
unlikely to accept, according to The Journal.

The collapse of trust between Greek negotiators and its creditors
-- mainly other eurozone members, the International Monetary
Fund, and the European Central Bank -- in the past weeks will
complicate matters further, The Journal states.

                          Cash Crunch

Separately, The Journal's Matina Stevis and Charles Forelle
report that Greece's ruling party continued to say it was
offering new compromises to its creditors and urged a "no" vote
in the July 5 referendum.

European leaders dismissed the overtures as insufficient and said
they would hold off on further negotiations until the vote, The
Journal relates.

The first opinion surveys in Greece since Mr. Tsipras called for
the referendum show conflicting results but suggest the outcome
could be close, The Journal discloses.

The freezing of Greece's banking system is the most dramatic
moment of the country's five-year debt crisis -- and perhaps its
most pivotal, The Journal notes.  Since June 29, Greeks can get
only EUR60 a day at cash machines and can't transfer money
abroad, The Journal relays.

How long the remaining cash lasts and how unsettled Greeks become
will be big factors in the July 5 referendum on creditors'
demands for more austerity in exchange for more bailout funds,
The Journal notes.  According to The Journal, analysts say the
tighter the squeeze, the more Greeks might vote "yes" to
reconcile with creditors.

As of July 1, Greece's banking system had about EUR1 billion in
cash left, The Journal relays, citing a person familiar with the
situation.  The person said even with the EUR60-a-day limit on
ATM withdrawals from Greek's closed banks, "it's a matter of a
few days" until the money runs out, The Journal notes.

By July 1, many ATMs in central Athens had constant lines of
people waiting to withdraw their daily limit, The Journal
discloses.  The crunch has suffused the economy, The Journal


According to BBC News, Jeroen Dijsselbloem, head of the grouping
of eurozone finance ministers, has said a "No" vote in the Greek
referendum on bailout terms would not provide Greece with an easy
way out of its economic crisis.

Mr. Dijsselbloem's comments came after Mr. Tsipras told Greeks a
"No" vote would lead to a "better agreement", BBC relays.

But Mr. Dijsselbloem insisted that suggestion was "simply wrong",
BBC notes.

Mr. Dijsselbloem, who is also the Dutch finance minister, told a
parliamentary committee in the Netherlands that a rejection of
the current bailout terms by Greek voters in the July 5 hastily
arranged referendum would make it hard for the two sides to
bridge "fundamental differences", BBC relates.

According to BBC, he said it would place both Greece and Europe
in a "very difficult position".

"The Greek government is rejecting everything with the suggestion
that if you vote 'No' you will get a better or less tough, or
more friendly package. That suggestion is simply wrong," BBC
quotes Mr. Dijsselbloem as saying.

GREECE: Moody's Cuts Government Bond Rating to 'Caa3'
Moody's Investors Service downgraded Greece's government bond
rating to Caa3 from Caa2 and placed the rating on review for
further downgrade. The short-term rating is unaffected by this
rating action and remains Not Prime (NP). Moody's government bond
rating applies to privately-held debt only.

The key driver for the July 1 rating action is Moody's view that
the probability of support continuing to be provided over the
medium-term has fallen since the assignment of the Caa2 rating in
April, regardless of the outcome of Sunday's referendum. Moody's
believes that without ongoing support from official creditors,
Greece will default on its privately-held debt. Events of recent
months have illustrated the distance between what Greece's
official creditors will demand as a condition of continued
support over the coming years, and what Greece's institutions are
able to do to meet those demands with further meaningful economic
and fiscal reforms. This creates significant difficulties for the
achievement of a long-lasting support agreement.

The announcement of the referendum adds a further, more acute,
risk to private creditors. The review for further downgrade will
assess the implications of the outcome of the referendum for
Greece's willingness and ability to reach agreement with its
official sector creditors. A "No" vote would likely increase the
risk of exit from the euro area which would impose significant
losses on private sector creditors.

Concurrently, Moody's has lowered the country's local- and
foreign-currency bond ceilings to Caa2 from B3, which reflects
the increased probability that the outcome of the referendum
leads not just to Greece defaulting on its official and privately
held debt, but also exiting the euro area.

The local- and foreign-currency bank deposit ceilings remain at
Caa3. In Moody's view, that level appropriately reflects losses
expected on bank deposits given both the immediate pressures
implied by the bank holiday, deposit withdrawal limitations and
capital controls recently put in place, alongside the risks of a
broad insolvency of the banking system or an exit from the euro
area. The short-term foreign-currency bond and deposit ceilings
remain Not Prime (NP).



In Moody's view, without support from official creditors, and the
economic and fiscal reforms needed to retain that support and to
place its own finances on a more sustainable footing, Greece will
default on its privately held obligations at some point. If
Greece is to continue to service its official and private sector
obligations over the coming years, it needs to reach a lasting
agreement with its official creditors.

However, even if such an agreement can be reached, it will face
high, ongoing implementation risks given political and social
discontent in Greece and its weak institutions, which have
hampered implementation of agreed measures to date. The July 1
rating action reflects Moody's view that, regardless of the
outcome of the July 5 referendum, the probability of a supportive
program being agreed and remaining in place has fallen since the
assignment of the Caa2 rating in April, and that the risks to
private creditors have risen to levels commensurate with a Caa3

While much has been done in recent years to reduce the Greek
government's budget deficit, Greece has had limited success in
implementing longer-term structural reform. Recent events have
cast doubt over the current government's willingness to try, but
even were it or a future government to adopt a more co-operative
stance with official creditors, its capacity to achieve agreed
objectives would remain in doubt. Developments over the past few
months reflect the distance between what Greece's official
creditors are likely to demand as a condition for further support
and the government's capacity to meet those demands with further
economic and fiscal reform.

As a result, the likelihood of an irrevocable breakdown in
relations with external creditors and the withdrawal of support
over the medium term has risen in recent months in Moody's view,
and will remain high for some time to come. That has significant
implications for Greece's creditworthiness and for the risks to
private creditors.

While Greece's debt is currently affordable due to soft financing
terms, it is unsustainable over the long term. In order to bring
its debt load down to more manageable levels, the Greek
government would need to run large primary surpluses for a number
of years. It is increasingly clear that this will be politically
and socially untenable. It also seems increasingly likely that
progress on the economic reforms needed to boost growth will be
gradual. In short, it is unlikely that either growth or fiscal
austerity will be successful, even over multiple generations, in
reducing Greece's debt from its current level of over 177% of GDP
to a manageable level.

It follows that official sector debt, which forms the dominant
share of Greece's debt burden, will very likely need to be
restructured at some point in the coming years. The implications
of this for private sector creditors will depend on the
circumstances in which that happens. A restructuring undertaken
with the agreement of official creditors once Greece has regained
market access could be undertaken without imposing losses on
private sector creditors: as both sides would have an incentive
to avoid a further shock to creditor confidence.

However, a write-down which resulted from a period of acrimonious
disagreement of the sort seen in recent months would be unlikely
to reflect shared longer-term objectives, and more likely to
result in losses being imposed on private sector creditors,
either as a quid pro quo for losses experienced by official
creditors or as a by-product of a shock event such as Greece's
exit from the euro area.

In Moody's view, events in recent months suggest that the
likelihood of a consensual restructuring of debt has reduced. An
extended period of time has been spent attempting, so far without
success, to reach an agreement to tide Greece over for a short
period. Even if agreement is reached, a further program will be
needed containing more far-reaching reforms in exchange for a
longer-term financing program. Recent experience suggests that
even if this program is put in place, implementation risks will
remain high for some time to come, as will the risks of a further
breakdown in relations between Greece and its creditors.

These dynamics imply a greater risk to private sector creditors
over the medium term than previously assumed. They imply a high
risk of further default, and of loss. That risk is, in Moody's
view, no longer consistent with a Caa2 rating.

More immediately, the pressures on Greece's liquidity and its
economy remain high. These pressures will not dissipate quickly,
whatever the outcome of Sunday's referendum.

Greece's failure to make the EUR1.5 billion payment due to the
IMF on June 30, resulting in Greece joining the small group of
nations that have built up arrears to the IMF, illustrates both
the precarious nature of its finances and the difficult relations
with its official creditors. Moody's ratings reflect our views on
losses expected on privately held, not official creditor debt.
However, the missed payment reflects the extreme credit distress
that Greece is facing. Greece will, at a minimum, lose access to
further IMF resources until the arrears were cleared.

Greece's banking system, already impaired, has been further
damaged by recent events, with adverse consequences for financial
intermediation in the economy in the coming months and years. The
calling of the referendum prompted the official creditors not to
extend the European Financial Stability Facility (EFSF (P)Aa1,
stable) facility, which expired on June 30 as scheduled.
Furthermore, the European Central Bank's (ECB) decision not to
allow the Bank of Greece to increase Emergency Liquidity
Assistance (ELA) prevents Greek banks from financing further
deposit withdrawals. Consequently, the Greek banks have closed
and will not reopen until at least July 7, and the government has
imposed capital controls, which essentially restrict cash
withdrawals and external payments (subject to approval by the
Committee on Banking Transactions Approval) in order to contain
deposit outflows.

In response to the referendum announcement, Greek households have
withdrawn deposits at an accelerating pace over the past weekend.
Moody's estimates that private-sector deposits have declined by
around EUR44 billion since the end of last November to
approximately EUR120 billion on July 1. Outflows over the past
two weeks alone exceeded EUR8 billion. Elevated uncertainty over
the past six months has adversely affected consumer and investor
confidence, and economic growth. Growth will be further
undermined by the imposition of limits on deposit withdrawals and
capital controls, which Moody's believes will have a long-lasting
impact on domestic demand, the more so the longer they remain in


While it is not the principal driver of the July 1 downgrade, the
announcement of a referendum adds a further, more acute, risk
which poses additional risks to private creditors. The review for
further downgrade will assess the implications of the outcome of
the referendum for Greece's willingness and ability to reach
agreement with its official sector creditors. The negative bias
of the review reflects Moody's view that the balance of economic,
financial and political risks remains slanted to the downside.

The significance of last weekend's events lies not simply in the
calling of a referendum, but in the manner in which it was
called. It was not called in order to allow the Greek electorate
to approve a package agreed with Greece's official lenders and
endorsed by the Greek government. Instead, it was the
government's response to the failure to agree to proposals from
the official lenders which the Greek government felt were
unacceptable, despite recent signs of a rapprochement between the
two sides. Accordingly, regardless of the precise question the
Greek authorities will put to the electorate, Moody's views this
as a referendum on whether or not Greece should accede to the
demands of the official creditors. Since a hardline stance on
negotiations would make the likelihood of agreement with
creditors remote, the question the government is essentially
putting to voters is whether Greece should remain within the euro

The Greek government indicated that it will advise voters to vote
'No'. Since then it has requested a new program from the European
Stability Mechanism (ESM, Aa1, stable) and an extension to the
EFSF program, which was subsequently denied by the Eurogroup.
Most recently, the Prime Minister indicated that the government
would be willing to compromise on a number creditor demands. The
implications of these developments for the government's preferred
outcome of the referendum, and perhaps even for whether it
happens at all, remain unclear. The review will assess all of
these uncertainties.

Assuming the referendum happens, Moody's believes that a 'Yes'
vote would increase the likelihood of an agreement being reached
between Greece and its creditors in time to avoid further
defaults on official sector and privately-held debt over the near
term. Even in that event, reaching agreement would not be
straightforward and at the minimum would herald a period of
political uncertainty, especially in the context of a very tight
timeframe of payments to private-sector bond holders (around
EUR90 million in July) and a payment to the official creditor ECB
of EUR3.5 billion on July 20.

However, a 'No' vote would further increase the probability of
default on official and private sector debt and, ultimately, exit
from the euro area. Should that be the outcome, some form of
negotiations might well resume, but the probability of an
agreement being reached would be low, and the probability of the
two sides reaching a complete impasse commensurately high. In
that event, further default on Greece's official sector
obligations would be inevitable, and the probability of a default
on privately-held securities much higher than at present. And
while default need not necessarily imply exit, the risk of exit
would inevitably be high in the event of a complete impasse. In a
'No' scenario, Moody's would expect that Greek banks would remain
closed for a longer period with capital controls becoming
tighter, and economic and financial conditions would worsen
rapidly and significantly.

Even in the event of a 'No' vote, the situation would likely be
fluid and uncertain. While Moody's would expect to resolve the
review in the period following the referendum, some time is
likely to be needed once the result is known to assess the
implications for the composition of the Greek government, and for
its willingness and ability to reengage with its official sector


Moody's has also lowered Greece's local- and foreign-currency
bond ceilings to Caa2 from B3. The bond ceilings essentially
reflect the risk of Greece leaving the euro area and the impact
of the resulting currency redenomination on holders of Greek
debt. While default need not necessarily entail exit, recent
developments suggest it is increasingly likely that a default in
privately held debt would follow on from a disorderly default on
official creditors, increasing the probability of exit-given-

The local- and foreign-currency bank deposit ceilings remains at
Caa3. In Moody's view, that rating level appropriately reflects
losses expected on bank deposits given both the immediate
pressures implied by the bank holiday, deposit withdrawal
limitations, and capital controls recently put in place,
alongside the risks of a broad insolvency of the banking system
or an exit from the euro area. The short-term foreign-currency
bond and deposit ceilings remain at Not Prime (NP).


Moody's would further downgrade Greece's government bond rating
if the probability of a default and/or severity of loss to
investors in the event of default were to rise to levels that are
no longer commensurate with a Caa3 rating. That would most likely
occur in the near-term should the referendum yield a 'No' result.
Even in the event of a 'Yes' vote, further deterioration in the
Greek government's relations with its creditors in the ensuing
negotiations, or evidence that the Greek electorate is becoming
supportive of a more confrontational stance, would raise the
probability of default and exit from the euro area, and place
downward pressure on the rating.

Although not likely over the near term given the prevailing
downside risks, Moody's would consider upgrading Greece's
government bond rating in the event of (1) an increase in the
pace of fiscal consolidation and structural reforms; (2)
sustained economic growth and primary surpluses, which would
support a continued decline in debt levels; and (3) more
certainty and visibility on future external financial support and
the political environment.

Prompted by the factors described above, the publication of this
credit rating action occurs on a date that deviates from the
previously scheduled release date in the sovereign release
calendar, published on

GDP per capita (PPP basis, US$): 25,859 (2014 Actual) (also known
as Per Capita Income)

Real GDP growth (% change): 0.8% (2014 Actual) (also known as GDP

Inflation Rate (CPI, % change Dec/Dec): -2.6% (2014 Actual)

Gen. Gov. Financial Balance/GDP: -3.5% (2014 Actual) (also known
as Fiscal Balance)

Current Account Balance/GDP: 0.9% (2014 Actual) (also known as
External Balance)

External debt/GDP: [not available]

Level of economic development: Low level of economic resilience

Default history: At least one default event (on bonds and/or
loans) has been recorded since 1983.

On 29 June 2015, a rating committee was called to discuss the
rating of the Greece, Government of. The main points raised
during the discussion were: The issuer's institutional
strength/framework, have materially decreased. The issuer's
governance and/or management, have materially decreased. The
issuer has become increasingly susceptible to event risks.

The principal methodology used in these ratings was Sovereign
Bond Ratings published in September 2013.

The weighting of all rating factors is described in the
methodology used in this rating action, if applicable.


LANDSVIRKJUN: Moody's Raises Rating on EMTN Program to (P)Ba1
Moody's Investors Service upgraded the guaranteed debt ratings of
Landsvirkjun, including the backed senior unsecured rating of the
US$2.5 billion EMTN program to (P)Baa2/(P)P-2 from (P)Baa3/(P)P-3
and the ratings of the debt issued thereunder to Baa2 from Baa3,
all benefitting from a guarantee of collection from the
Government of Iceland (Baa2 stable). Concurrently, Moody's has
upgraded the company's long-term unguaranteed ratings, including
the ratings of the US$1 billion EMTN program to (P)Ba1 from
(P)Ba2 and the company's senior unsecured debt ratings to Ba1
from Ba2. Landsvirkjun's (P)NP short-term rating of the
unguaranteed US$1 billion EMTN program was affirmed. All ratings
have a stable outlook.

There is no action on the ratings of Orkuveita Reykjavikur. An
overview of this entity is provided later on in this press



The rating action follows Moody's upgrade of Iceland's government
bond rating to Baa2 with a stable outlook from Baa3 with a stable

Given its 100%-ownership by the Government of Iceland,
Landsvirkjun is considered a government-related issuer (GRI)
under Moody's methodology. Moody's believe that extraordinary
financial support to Landsvirkjun from the Icelandic government
would be forthcoming if needed. The upgrade of both the
guaranteed and unguaranteed debt ratings reflects Moody's view
that the government's ability to support Landsvirkjun has

The "very high" support assumption incorporated in Landsvirkjun's
ratings reflects the high level of commitment that the government
has shown in the past by the provision of guarantees of
collection to support the company's debt and the strategic
importance of Landsvirkjun to Iceland, given the company's
position as the country's dominant power producer and the role it
plays in the provision of electricity to the aluminium smelting
industry, which directly contributes to about 40% of Icelandic

Moody's notes that guarantees of collection do not offer
bondholders the same degree of protection as a timely payment
guarantee. There is a potential risk of non-timely repayment
should the company fail to meet its obligations, as exhaustive
administrative and legal procedures must be followed before the
shareholders are obliged to pay. However, given Landsvirkjun's
strategic role for Iceland and other incentives for the
shareholders (such us its liability for penalty interest),
Moody's expects that the state would intervene in a timely
fashion and provide financial or other assistance to ensure
timely payments under the guaranteed bonds.

The company's ratings incorporate an uplift for potential
government support to its standalone credit quality (BCA), which
Moody's continues to assess at b1. Landsvirkjun's BCA factors in
positively (1) the company's dominant position in the Icelandic
energy market; (2) its low-cost renewable generation asset base
and minimal levels of capital expenditure; and (3) its ability to
generate relatively stable cash flows. However, the company's
assessment is constrained by (1) Landsvirkjun's still high
financial leverage; (2) its concentrated exposure to a
comparatively small number of counterparties, mainly in the
aluminium industry; (3) its degree of exposure to aluminium
prices in a weak commodity market; (4) its foreign exchange risk;
and (5) a considerable proportion of outstanding debt linked to
floating interest rates.

Landsvirkjun's (P)Ba1/(P)NP unguaranteed ratings incorporate
three notches of uplift from the company's BCA of b1 to reflect
the high level of commitment that the Government of Iceland has
shown in the past to support Landsvirkjun's debt and the
strategic importance of the company to the Icelandic economy.

The (P)Baa2/(P)P-2 guaranteed ratings reflect the additional
credit support provided by the guarantee of collection from its
owner and the expectation that the state is highly likely to
intervene in a timely fashion and provide financial or other
assistance to support notes issued thereunder if needed to ensure
timely payments.


The stable outlook on Landsvirkjun reflects the stable outlook on
Iceland. It also reflects Moody's view that a likely improvement
of the BCA by one notch will not by itself lead to an upgrade of
the final ratings.


An improvement in the Government of Iceland's rating would be
required before Moody's would consider an upgrade of
Landsvirkjun's backed senior unsecured ratings that benefit from
a guarantee of collection from the state. Additionally, Moody's
would consider an upgrade of the unguaranteed debt ratings if (1)
Landsvirkjun continues to demonstrate the ability to withstand
significant volatility in commodity and financial markets and
maintain its strong operational performance; and (2) the company
makes substantial progress in reducing its leverage.

The guaranteed ratings would be downgraded if the rating of the
Government of Iceland is downgraded. Equally, the unguaranteed
ratings would come under downward pressure if Moody's were to
revise the current assumption of a very high probability of
timely support from the government. Downward rating pressure
could also arise as a result of (1) a substantial deterioration
in Landsvirkjun's operating performance, which would cause
financial metrics to materially deviate from Moody's expectations
or considerably increase funding requirements; and/or (2) if it
appears likely that the company's available liquidity were not
sufficient to insulate it from market risks, particularly in
relation to sudden movements in exchange rates, aluminium prices
or interest rates.


Landsvirkjun is Iceland's dominant power producer, responsible
for around 72% of Iceland's total electricity production of 18.1
TWh in 2014. The company currently operates 14 hydropower plants,
2 geothermal plants and 2 wind turbines with total installed
capacity of 1,960 MW. It provides 100% renewable energy for
domestic users via electricity sales to public utilities,
although the majority of sales are to power intensive industries,
mostly for aluminium smelting, under long-term take-or-pay
contracts. Additionally, Landsvirkjun is the majority owner
(64.7%) of Landsnet, which owns and operates the country's
electricity transmission system and is a fully regulated company.


ALITALIA-LINEE: Real Estate Binding Offers Deadline October 15
Prof. Avv. Stefano Ambrosini, Proff. Avvv. Gianluca Brancadoro
and Proff. Dott. Giovanni Fiori, the Extraordinary Commissioners
of Alitalia-Linee Aeree Italiane S.p.A. and Alitalia Servizi
S.p.A., on June 26 disclosed that in compliance with the sale
program prepared in accordance with article 27, paragraph 2,
letter b-bis) of Legislative Decree No. 270/1999 and authorized
by the Ministry of Economic Development on November 19, 2008,
Alitalia-Linee Aeree Italiane S.p.A. under extraordinary
administration and Alitalia Servizi S.p.A. under extraordinary
administration, in accordance with the authorization of the
Ministry of Economic Development dated June 10, 2015, considering
the favorable opinion of the Supervisory Committee (Comitato di
Sorveglianza) dated March 27, 2015, intends to start the
procedure for selling the following Lots of real estate, which
will be sold in Lots to the part offering the highest price,
provided that such price cannot be lower than the  current market
value, as indicated below

Real Estate                            Owner     Market Value

Portion of the building located in     Alitalia  EUR2.870.000,00
Sesto San Giovanni (Milan - Italy),
via XXIV Maggio no. 8/10

Portion of the building located in     Alitalia    EUR418.000,00
Barcellona (Spain), Avenida Diagonal
no. 403.

Land with the entire bulding           Alitalia EUR16.130.000,00
("fabbricato cielo terra") located
in Servizi Rome (Italy),
viale Alessandro Marchetti no. 12.

Entire bulding ("fabbricato            Alitalia  EUR5.600.000,00
cielo terra"), located in
Sesto San Giovanni (Milan- Italy),
Via Maggio no.6

Land, located in Magliana Vecchia      Alitalia  EUR4.525.000,00

The Binding Offers, secured by a guarantee, must be received by
and no later than 12:00 p.m. (noon Italian time) on October 9,
2015 and the examination of the offers will start from 3:00 p.m.
(Italian time) on October 15, 2015, at the presence of the
Extraordinary Commissioners (or a person delegated by them) and
of an Italian Public Notary.  During the public meeting, the
offerors will be invited to submit increased offers (rilanci)
starting from the highest price offered.  Upon request of the
interested parties, to be received by and no later than 12:00
p.m. (noon Italian time) on August 7, 2015 and subject to the
execution of a Confidentiality agreement, in the discretion of
the Extraordinary Commissioners, it will be possible to carry out
a due diligence on the information available on the Real Estate.
The Real Estate will be awarded to the aprt offering the highest
price, provided that such price is no lower than the market value
indicated above.

The full text of this notice is published in Italian and English
language, on the websites: and together with all
documents necessary to participate to this sale procedure.


KAZMUNAYGAS: S&P Affirms 'BB+' Corp. Credit Rating, Outlook Neg.
Standard & Poor's Ratings Services affirmed its 'BB+' long-term
corporate credit rating on Kazakhstan-government-controlled
vertically integrated oil company KazMunayGas NC JSC (KMG) and
its core subsidiary KazMunaiGas Exploration Production JSC (KMG
EP). The outlook is negative.

S&P also affirmed its 'kzAA-' Kazakhstan national scale rating on

The affirmation reflects S&P's view that KMG's various efforts to
reduce debt should be sufficient to avoid weakening in its credit
metrics and liquidity.

KMG's majority shareholder, state-owned Samruk-Kazyna, has
reportedly agreed to buy KMG's 50% stake in Kazakhstan's largest
offshore oilfield, Kashagan, for US$4.7 billion.  S&P understands
that KMG plans to use the proceeds from the asset sale to repay
debt, which should enable the company to preserve its credit
metrics, improve liquidity, and avoid covenant breaches on its
bonds.  S&P understands that the company is working on a few
other transactions that should also support credit metrics and
liquidity in the current low oil price environment.  These
efforts could further strengthen liquidity, which S&P currently
assess as "less than adequate."

In S&P's current base-case scenario, it expects KMG's adjusted
ratios of debt to EBITDA at 3-3.5x and funds from operations
(FFO) to debt in the 15%-20% range in 2015-2016, which should
remain commensurate with the rating and S&P's 'b' assessment of
the group's stand-alone credit profile.

KMG is a 100% government-owned national oil company, with stakes
in essentially all of Kazakhstan's oil-related assets and
priority access to new assets that also benefit from vertical
integration into pipelines.  It is one of the country's largest
exporters and taxpayers and has some social mandates, such as
supplying the local market with fuel at fairly low prices and
investing in socially important projects.  Still, KMG is
responsible for only about 28% of the country's oil production
(12% when including only majority-owned operations).

In the current environment of lower oil prices, during which most
oil companies strongly cut their capital expenditures (capex),
KMG is increasing its capex compared with 2014's because many of
its assets require investments.  Most of KMG's majority-owned oil
production assets are mature and lack growth prospects, its
refineries are relatively old, and the company only has minority
stakes in the country's most profitable and young oil projects
(such as 20% in Tengiz Chevroil and 10% in Karachaganak).

In S&P's base case, it assumes:

   -- A Brent crude oil price of US$55 per barrel (/bbl) in 2015,
      US$65/bbl in 2016, and US$75/bbl from 2017.

   -- High capex, including refinery modernization, pipeline
      construction, and KMG's portion of additional spending to
      put Kashagan on stream in first-half 2015.

   -- Stable dividends from the company's affiliate Tengiz
      Chevroil, which S&P expects to be about US$500
      million-US$700 million per year in 2015-2016.

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

   -- Funds from operations to debt of 15%-20% in 2015-2016.
   -- Negative free operating cash flow generation.

The rating on KMG reflects S&P's expectation of a "very high"
likelihood of government support, based on the company's "very
important" role and "very strong" link with the government.

The negative outlook on KMG mirrors the outlook on Kazakhstan.

If S&P lowers its ratings on Kazakhstan, S&P would likely lower
the ratings on KMG.  This is because of the uplift S&P includes
in the long-term rating on KMG to reflect S&P's expectation of
the "very high" likelihood of government support for the company,
if needed.

S&P could also lower the rating if KMG's SACP weakens to 'b-'
from 'b'.  However, this would likely follow deteriorating
liquidity, which S&P do not expect in its base-case scenario.

S&P would likely revise its outlook on KMG to stable following a
similar outlook revision the sovereign rating.

S&P could consider upgrading KMG if we revised up the SACP to
'bb-'.  However, S&P regards this scenario as remote, because it
would follow improvement of FFO to debt to at least 30%, which it
views as tough to achieve given the current oil price.


LOCK LOWER: S&P Affirms 'B+' Counterparty Rating, Outlook Stable
Norway-Based Credit Management Service Provider Lock Lower
Holding (Lindorff) Affirmed At 'B+'; Outlook Stable
STOCKHOLM (Standard & Poor's) July 1, 2015

Standard & Poor's Ratings Services said that it had affirmed its
'B+' long-term counterparty credit rating on Norway-based credit
management service provider Lock Lower Holding AS (Lindorff) and
its fully owned subsidiary Lock AS.  The outlook is stable.

At the same time, S&P affirmed its 'BB' rating on Lindorff's
super senior revolving credit facility (RCF) with a recovery
rating of '1', indicating S&P's expectation of very high recovery
(90%-100%) in the event of a payment default.

S&P also affirmed its 'BB-' rating on the company's senior
secured notes.  The recovery rating remains at '2', reflecting
S&P's expectation of substantial recovery (70%-90%; lower half of
the range) in the event of a default.

Similarly, S&P has affirmed its 'B-' rating on the senior
unsecured notes, with the recovery rating remaining at '6' to
indicate S&P's estimate of negligible recovery (0%-10%) in the
event of a default.

The affirmation follows S&P's reassessment of Lindorff's
regulatory risks.  In S&P's view, the company's exposure to
regulatory changes is mitigated by its geographic diversity.  In
addition, S&P do not currently see any significant near-term
regulatory pressure in any of Lindorff's main markets.  However,
S&P recognizes that there are regulatory and legislative risks
associated with debt-purchasing and debt-collection operations.
S&P believes such risks could hamper Lindorff's business
strategy, which S&P reflects in its assessment of the business
risk profile as "fair."

The relative importance of the domestic market is decreasing as
the company gains third-party agreements on debt servicing in
other countries.  Recently, Lindorff entered into a 10-year
collection agreement with a leading bank in Spain.  This
transaction made Lindorff the largest provider of debt-collecting
services in Spain.  In addition, Lindorff--in partnership with a
large financial institution--has entered the Italian market,
where there is a considerable stock of nonperforming receivables.
In S&P's view, geographic expansion can boost revenues, improving
the group's financial position, and the added diversification can
reduce regulatory risk.  Nevertheless, if the expansion is
financed with debt, this could slow the pace of deleveraging and
might increase financial risks, in our view, if not managed well
over time.

Compared with primarily U.K.-based peers that S&P assess as
having a weak regulatory risk position, Lindorff has considerably
more diversified operations, with Norway and Spain dominating the
revenue base (each contributing 25%) and operations in 10 other
countries.  S&P expects further diversification in the coming
year as Lindorff enters new markets, and S&P believes the
company's scale puts it in a better position to meet any future
regulatory initiatives that could hurt profitability.
Furthermore, S&P considers the potential impact of any regulatory
changes in the EU to be limited because they will likely take
several years to implement, allowing Lindorff to adjust its
pricing and purchasing on new portfolios.

At the same time, S&P believes expansion could mean that debt
reduction will be slower than it previously anticipated, since
Lindorff's acquisition by the private equity firm Nordic Capital
in 2014 and subsequent debt-financed portfolio acquisitions.  S&P
estimates that Lindorff's key ratios in 2015 will be in its
"highly leveraged" category, with debt to EBITDA (adjusted for
portfolio amortization) at 5.5x and funds from operations (FFO)
to debt at about 10%.  Although S&P believes the current owners
favor a strategic long-term debt profile, S&P expects Lindorff to
gradually reduce the leverage ratio toward what S&P would regard
as "aggressive."  This as S&P anticipates that the acquired
portfolios will provide incremental positive cash flows over the
medium term, and S&P assumes modest new issuance of debt.
However, S&P views the longer transition phase as an additional
risk factor, and therefore make a negative adjustment of one

The stable outlook on Lock Lower Holding reflects S&P's
expectation that the group will continue expanding its business
franchise with a relatively even split between collections and
debt purchasing.  S&P expects sustained growth in revenues from
both the purchased-debt and collections businesses without a
proportional increase in issued debt, which will gradually
improve debt cash-flow coverage and leverage metrics.  Moreover,
S&P anticipates that there will continue to be no material
barriers to cash flow within the group, and that the "restricted
group" as defined in the financing structure will remain

"We could lower the ratings if the debt-to-adjusted-EBITDA and
FFO-to-debt ratios do not improve over the next two years and
remain above 5x and below 12% respectively.  This is because we
would then likely view the company as having a structurally more
leveraged profile imposed by its financial sponsor.  We also note
the low ratio of tangible equity to debt, as the company carries
a fair amount of goodwill on its balance sheet due to its recent
takeover by Nordic Capital.  As such, if there were significant
goodwill impairments, we would also consider a negative rating
action.  Additionally, we could lower the ratings if we saw
evidence of failure in the company's control framework, adverse
changes in the regulatory environment, or lower collections
compared with our forecasts," S&P said.

While S&P views an upgrade as remote over the next two years, it
could consider raising the rating if it observed a material
reduction in leverage, aided by sustained growth in adjusted
EBITDA and cash flow that placed Lindorff's financial metrics
firmly in line with an "aggressive" financial risk profile (debt
to EBITDA in the 4x-5x range and FFO to debt of 12%-20%).  This
could lead S&P to remove the negative one-notch adjustment under
S&P's comparable ratings analysis.


LUSITANO MORTGAGES NO. 2: S&P Cuts Rating on Class B Notes to BB
Standard & Poor's Ratings Services lowered its credit ratings on
the class A and B notes in Lusitano Mortgages No. 2 PLC.  At the
same time, S&P has affirmed its ratings on the class C, D, and E

Upon publishing S&P's updated criteria for Portuguese residential
mortgage-backed securities (RMBS criteria), it placed those
ratings that could potentially be affected "under criteria

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

The rating actions follow S&P's credit and cash flow analysis of
the most recent transaction information that it has received as
of the March 2015 payment date.  S&P's analysis reflects the
application of its RMBS criteria.

Credit enhancement has increased since S&P's previous review.

Class         Available credit
               enhancement (%)
A                        31.72
B                        21.03
C                        11.05
D                         5.35
E                         3.21

This transaction features a non-amortizing reserve fund, which
currently represents 3.21% of the outstanding balance of the
notes and is at its required level.  It has never been drawn.

Severe delinquencies of more than 90 days at 3.05% are on average
higher for this transaction than S&P's Portuguese RMBS index.
The transaction's performance has been stabilizing since Q2 2012.
Prepayment levels remain low and the transaction is unlikely to
pay down significantly in the near term, in S&P's opinion.

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

Rating level    WAFF (%)    WALS (%)
AAA                42.29       14.78
AA                 32.25       10.82
A                  26.76        4.98
BBB                19.63        2.93
BB                 12.90        2.00
B                  10.95         2.0

The increase in the WAFF is mainly due to the consideration of
the original loan-to-value ratio in the default calculations.
The increase in the WALS is mainly due to the application of
S&P's revised market value decline assumptions.  The overall
effect is an increase in the required credit coverage for each
rating level.

Following the application of S&P's RMBS criteria and considering
its criteria for rating single-jurisdiction securitizations above
the sovereign foreign currency rating (RAS criteria), S&P has
determined that its assigned rating on each class of notes in
this transaction should be the lower of (i) the rating as capped
by S&P's RAS criteria and (ii) the rating that the class of notes
can attain under S&P's RMBS criteria.

In this transaction, S&P's long-term rating on the Republic of
Portugal (BB/Positive/B) constrains S&P's ratings on the class A
and B notes.

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

S&P's RAS criteria designate the country risk sensitivity for
RMBS as "moderate".  Under S&P's RAS criteria, this transaction's
notes can therefore be rated four notches above the sovereign
rating, if they have sufficient credit enhancement to pass a
minimum of a "severe" stress.  However, as all six of the
conditions in paragraph 48 of the RAS criteria are met, S&P can
assign ratings in this transaction up to a maximum of six notches
(two additional notches of uplift) above the sovereign rating,
subject to credit enhancement being sufficient to pass an
"extreme" stress.

The class A notes have sufficient available credit enhancement to
withstand the stresses that are commensurate with a 'A' rating
level under S&P's RMBS criteria.  However, this class of notes
can withstand the severe stresses, but not the extreme ones,
under S&P's RAS criteria, and is consequently only eligible for a
four-notch rating uplift above the sovereign.  S&P has therefore
lowered to 'BBB+ (sf)' from 'A (sf)' its rating on the class A

The class B notes cannot support the stresses that S&P applies at
a rating level higher than that on the sovereign.  Consequently,
S&P can assign a rating to the class B notes up to the sovereign
rating.  S&P has therefore lowered to 'BB (sf)' from 'BBB+ (sf)'
its rating on the class B notes.

S&P's analysis indicates that the available credit enhancement
for the class C, D, and E notes is commensurate with its
currently assigned ratings and it do not expect these classes of
notes to experience interest shortfalls in the next 12 months.
S&P has therefore affirmed its ratings on the class C, D, and E

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

In S&P's opinion, the outlook for the Portuguese residential
mortgage and real estate market is not benign and S&P has
therefore increased its expected 'B' foreclosure frequency
assumption to 3.33% from 2.00%, when S&P applies its RMBS
criteria, to reflect this view.  S&P bases these assumptions on
its expectation of modest economic growth, continuing high
unemployment, and sluggish house price appreciation for the
remainder of 2015 and 2016.

On the back of the weak macroeconomic conditions, S&P don't
expect the performance of the transactions in its Portuguese RMBS
index to significantly improve in 2015.

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

Lusitano Mortgages No. 2 is a Portuguese RMBS transaction, which
closed in November 2003.  It securitizes a pool of first-ranking
mortgage loans Novo Banco originated.  The mortgage loans are
mainly located in the Norte region and the transaction comprises
loans granted to prime borrowers.


Class              Rating
            To                From

Lusitano Mortgages No. 2 PLC
EUR1 Billion Residential Mortgage-Backed Floating-Rate Notes

Ratings Lowered

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

Ratings Affirmed

C           BB (sf)
D           B (sf)
E           B- (sf)


MECHEL OAO: Redeems Overdue Debt, Deal Expected This Month
PRIME reports that Mechel redeemed all its overdue debt to VTB
Bank, Russia's second largest bank, while final debt
restructuring deals will be signed within a month.

"The company redeemed all overdue liabilities that existed at the
moment of signing preliminary agreements on debt restructuring,"
PRIME quotes a bank representative as saying.  "The signing of
final contracts on suspensive conditions and final settlements
with the company are expected to be done within a month."

Previously, the company managed to reach agreements on
restructuring of debts to two of its three main creditors -- VTB
and Gazprombank, but it could not reach a compromise with
Sberbank, PRIME notes.  Earlier on July 1, Sberbank said it plans
to initiate bankruptcy of three Mechel subsidiaries, while
Sberbank CEO German Gref said there were no real buyers of
Mechel's debt to the bank, PRIME relays.

As of June 15, Mechel's debt stood at US$6.772 billion, PRIME
discloses.  The company said earlier it owed around US$2.3
billion to Gazprombank, US$1.8 billion to VTB Bank, and US$1.3
billion to Sberbank, PRIME relates.

Mechel is a Russian steel and coal producer.

MY INSURANCE: Put Under Provisional Administration
The Bank of Russia, by its Order No. OD-1486 dated June 29, 2015,
took a decision to appoint a provisional administration to
My Insurance Company, LLC.

The decision to appoint the provisional administration was taken
due to the suspension of the Company's insurance license (Bank of
Russia Order No. 1232, dated June 3, 2015).

The powers of the executive bodies of the Company are suspended.

Alexander Ye. Kublikov, member of the non-profit partnership
Association of Receivers Vozrozhdenie, has been appointed as a
head of the provisional administration.

NORDGOLD NV: Fitch Affirms 'BB-' Issuer Default Rating
Fitch Ratings has affirmed gold producer Nordgold N.V.'s Long-
term Issuer Default Rating at 'BB-'.  The Outlook is Stable.

The ratings reflect Nordgold's smaller-than-average reserve base
and a limited operating track record, as well 2014 operational
results moderately exceeding our expectations and progress in
cost reduction.

Over the period to 2017, Nordgold will commission two new
projects (Bouly and Gross), which will enhance the company's
operational diversification and cost profile.  The Outlook may be
revised to Positive closer to the commissioning of these


Below-Average Reserve Base
The company has increased its proved and probable reserves
marginally (3%) since 2012 to 13moz.  With annual production of
985koz in 2014 this implies close to a 13-year lifespan of its
operations.  This is somewhat below the average for Fitch-rated
peers, which suggests that its reserve base would benefit from
more active exploration work.  The average ore grade of
Nordgold's reserves is 1g/t, which is in line with the average
for Fitch-rated gold mining companies.  It should be noted that
most of Nordgold's reserves are easy to process with fairly high
recovery rates compared with the large refractory ore reserves of
Polyus Gold (BBB-/Negative) or Polymetal.

Progress in Production Costs Decline

Nordgold reported total cash costs (TCC) of USD675/oz in 2014, a
20% yoy decline due to higher processing volumes and better
recovery.  To a great extent the cash cost reduction was also
driven by local currency devaluation in Russia and in Burkina
Faso.  First quarter 2015 results show TCC declining further by
25% YoY to USD539/oz.  All-in sustaining costs declined 23% YoY
to USD680/oz.  Fitch acknowledges the company's efforts at cost
optimization, but at the same time would like to see further
confirmation that such cost reduction is sustainable and not
driven by macro-economic factors.

Operating Environment

The company has operations in Burkina Faso (37% of total
production in 2014), Guinea (21%), Russia (35%) and Kazakhstan
(8%).  Fitch considers these countries as jurisdictions where the
law is not supportive of creditor rights and where there is
significant volatility in the application of law and legal
enforceability, resulting in uncertain recovery prospects.

Recent social unrest in Burkina Faso has brought some uncertainty
to business activity in the country in that mining companies may
face delays with license approvals and mining permit grants from

Further Track Record Needed

The company successfully commissioned the Bissa project in 2013.
It was on time and on budget.  Fitch would like to see further
evidence of Nordgold bringing new projects into operation to
confirm its ability to grow organically.  Therefore successful
realisation of the company's two new development projects, Bouly
in Burkina Faso and Gross in Russia may be positive for the

Manageable Capex Programme

Over 2015-2018, Nordgold expects to increase capital spending,
driven by Bouly in Burkina Faso and Gross in Russia.  Nordgold
will have some flexibility in delaying the realisation of Gross
project should the company need to protect its financial profile
in a lower gold price environment.  Fitch expects the company to
have sufficient operating cash flow to finance the bulk of its
investment program.

Average Corporate Governance

Fitch assesses Nordgold's corporate governance as average
compared with other Russian corporates in this industry and
applies a two-notch rating discount.  The company announced its
intention to seek a premium listing on the LSE, which would
require Nordgold to be compliant with UK corporate governance


Fitch's key assumptions within our rating case for the issuer

   -- Fitch gold price deck assumes USD1,200/oz during the
      forecast period (2015-2018);
   -- Improvement in EBITDA in 2015 will be partly driven by a
      currency devaluation at Russian operations.  This effect
      will be offset by higher inflation in 2015-2018.
   -- Fitch expects commissioning of the Bouly project in 2016,
      with ramp-up in 2017.
   -- Commissioning of the Gross project is expected in 2017,
      with ramp-up in 2018.


Positive: Future developments that could, individually or
collectively, lead to positive rating actions include:

   -- Strengthening of the company's operational profile through
      successful commissioning of the Bouly and Gross projects or
      through funds from operations (FFO)-adjusted gross leverage
      being sustained below 1.5x (2014: 2.14x) and FFO fixed
      charge cover above 8x (2014: 8.18x)
   -- Positive free cash flow (FCF) on a sustained basis
   -- EBITDA margin above 30% on a sustained basis (2014: 41.9%)

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

   -- EBITDA margin below 20% on a sustained basis
   -- Failure to deleverage in line with Fitch's expectations,
      resulting in FFO leverage above 3.0x on a sustained basis


Nordgold's liquidity position is strong with USD423 million of
cash and short-term deposits compared with only USD12 million of
short-term borrowings at end-1Q15.  The company's repayment
schedule is comfortable with its first repayment of USD42 million
starting in summer 2016 and amounting to USD125m until end of

Despite a challenging market environment Nordgold's profitability
remained robust in 2014, with a 41.9% EBITDA margin (Fitch-
calculated), versus 29.3% in 2013.  More conservative capital
spending in 2014 versus previous years resulted in positive FCF
of USD140.5 mil. (Fitch- calculated), compared with negative
USD4.3 mil. in 2013.  FCF should remain positive in 2015 at an
expected USD42m, before returning to negative territory in 2016-
2018 when investment projects are realized.

FFO adjusted gross leverage decreased to 2.14x in 2014 from 2.5x
in 2013.  Fitch expects leverage to further decrease to 2.05x in
2015 and remain at this level during 2016-2017.


Long-term foreign currency IDR: affirmed at 'BB-'; Outlook
Short-term foreign currency IDR: affirmed at 'B';
Foreign currency senior unsecured rating: affirmed at 'BB-'
Long-term local currency IDR: affirmed at 'BB-'; Outlook Stable

PROFILE RE: Put Under Provisional Administration
The Bank of Russia, by its Order No. OD-1487 dated June 29, 2015,
took a decision to appoint a provisional administration to
OJSC Profile Re Reinsurance Company.

The decision to appoint the provisional administration was taken
due to the suspension of the Company's reinsurance license (Bank
of Russia Order No. OD-1157, dated May 26, 2015).

The powers of the executive bodies of the Company are suspended.

Mikhail V. Storozhuk, member of the non-profit partnership Self-
Regulatory Organisation of Receivers of Natural Monopoly Entities
of the Fuel and Energy Complex, has been appointed as a head of
the provisional administration.

X5 RETAIL: Moody's Raises Corporate Family Rating to 'Ba3'
Moody's Investors Service upgraded to Ba3 from B1 the corporate
family rating (CFR) and to Ba3-PD from B1-PD the probability of
default rating (PDR) of X5 Retail Group N.V. (X5), Russia's
second largest food retail company. The outlook on the ratings is

This concludes the review for upgrade initiated by Moody's on
June 16, 2015 following the publication of its announcement
"Moody's updates its global methodology for financial statement
adjustments", published on June 15, 2015.


The upgrade of X5's ratings to Ba3 reflects the company's
improved financial ratios as a result of the reduction in
adjusted debt following changes in Moody's approach to
capitalizing operating leases. Thus, X5's adjusted debt/EBITDA
went down materially to 3.8x and 3.4x from 5.0x and 4.6x in 2014
and Q1 2015 respectively. Going forward, Moody's expects that the
company will continue to maintain sound financial profile with
adjusted debt/EBITDA not exceeding 4x, supported by a solid track
record of healthy operating performance, prudent financial policy
committed to organic growth, highly flexible capex, and limited
foreign exchange risk.

The ratings continue to factor in (1) X5's large size, strong
format diversity and leading market position in the Russian food
retail market; (2) improved operating performance under ongoing
efforts to turnaround the business model; (3) the company's
resilience to economic cycles and low exposure to changes in
consumer demand; (4) the still attractive fundamentals of the
Russian food retail market for large players focused on the
defensive economy segment, such as X5, despite the challenging
economic environment leading to contracting consumption; and (5)
X5's adequate liquidity and historically proven access to local
and international banks funding as well as to the local capital

At the same time, X5's ratings are constrained by the company's
somewhat weak adjusted interest coverage metrics, (adjusted
EBITA/interest at around 2x in 2014 and Q1 2015), which is driven
mainly by the reliance of X5's business model on operating
leasing. However, a substantial share of ruble-denominated and
easy cancellable leasing contracts, X5's ability to preserve
adequate level of interest rates, and a gradual reduction of key
interest rate by the Central Bank of Russia provide a degree of

The ratings also factor in the company's exposure to Russia and
its political, economic and legal risks, further exacerbated by
the currently challenging economic and geopolitical situation. In
particular, Moody's would still like to see a longer track record
of the company sustaining its historical level of profitability
amid ongoing deterioration of consumer environment. A potential
tightening of retail regulation in Russia is another risk, but it
is impossible to estimate the exact impact on the company's
operations at this point.


The stable outlook on the CFR reflects Moody's expectation that
the company will continue to exhibit a stable business profile
with healthy operating results and that its financial metrics
will remain within our guidelines for a Ba3 rating.


Upward pressure on the ratings could build up if X5 improves its
financial profile, so that (1) adjusted total debt/EBITDA goes
down to below 3.5x and adjusted EBITA/interest coverage trends
towards 2.5x, all on a sustained basis; and (2) the company
maintains a solid liquidity profile.

Downward pressure on the ratings could develop if X5's leverage
measured as adjusted debt/EBITDA trends towards 4.5x and adjusted
EBITA/interest decreases below 1.7x, all on a sustained basis.
Any deterioration in the company's liquidity, including access to
its bank facilities and covenants compliance, could put negative
pressure on the rating.


Domiciled in the Netherlands, X5 Retail Group N.V. is one of the
leading multi-format Russian retailers, operating a chain of food
retail stores under the brand names "Pyaterochka", "Perekrestok",
"Karusel", and Express convenience stores under various brands in
more than 62 major Russian cities. In 12 months ended
March 31, 2015, X5 generated around RUB672 billion (US$15.7
billion) of revenues and RUB80 billion (US$1.9 billion) of
adjusted EBITDA.


CASER SA: Moody's Raises IFS Rating to 'Ba2', Outlook Positive
Moody's Investors Service has upgraded the insurance financial
strength rating (IFSR) of Caser S.A. to Ba2 from B1. The outlook
remains positive.


The upgrade reflects the significant improvement in Caser's
credit fundamentals as a result of the de-risk of its investment
portfolio, which shows a material reduction in the exposure
towards Spanish saving banks' investments (currently mainly
consisting of deposits) and a greater investment allocation
towards higher-quality Spanish government debt (Baa2 positive).
The rating action follows the conclusion of the review with
stable outlook of Caser's main banking shareholders (on average
based on each bank's ownership stake).

The positive outlook for the rating reflects our expectation of
(1) a stronger balance sheet with the continuous reduction of the
investment concentration in Caser's bank shareholders and (2) a
stabilization of Caser's premiums, with growth rates aligned to
those of the overall Spanish insurance market.

Caser's Ba2 IFSR continues to be partially constrained by its
linkages with its main long-term shareholders -- Liberbank
(deposit B1 stable, BCA b1), Unicaja Banco (deposit Ba3 stable,
BCA b1), Ibercaja Banco SA (deposit B1 negative, BCA b1), and BMN
(unrated) -- in terms of ownership, distribution and investments

Caser's investment quality has improved significantly as a result
of the drastic reduction in its investment exposure to its bank
shareholders (currently mainly consisting of deposits) over the
last few years. The company's fixed income quality has also
improved significantly with a weighted average of Baa2 at year-
end 2014, driven by a reorientation to Spanish sovereign debt
(45% of investments at YE2014).

On June 17, 2015, the deposit and BCA ratings of Caser's main
long-term bank shareholders' and distributing partners have being
confirmed at an average rating of Ba3 and B1 respectively,
following the conclusion of the review for possible downgrade
that was put in place following the publication of Moody's new
bank rating methodology and revisions to its government support
assumptions for these banks. Furthermore, the outlook on most of
Caser's bank shareholders have been stabilized for the first time
in many years partially driven by improving macroeconomic
conditions in Spain.

Caser's profitability has improved in 2014 given the absence of
investment losses and other negative one-offs that had
characterized the previous years. The company's net income (after
minority interests) more than doubled in 2014 to EUR52 million
from EUR19 million in 2013. However operational earnings have
been under pressure due to sustained declines in premiums and the
impact of the low-interest rate environment, which more than
offset the benefits from the cost savings program and
improvements in non-life underwriting profitability (combined
ratio down to 92% in 2014 from 94% in 2013).

Caser reported a large decline in premiums of 16% to around
EUR1.5 billion in 2014, driven by a significant reduction in life
savings premiums (down by nearly a third from 2013), as a
consequence of the impact of low-interest rates on savings sales
and the loss of bancassurance agreements. Non-life premiums --
which contributes for around 80% of Caser's operational insurance
profits - were down by 3% to EUR829 million mainly driven by the
loss of bancassurance agreements. Excluding the loss of
bancassurance agreements, non-life premiums were modestly up.

Moody's believes Caser's premiums will likely begin to stabilize
in 2015, particularly in the non-life segment, benefitting from
the generally more favorable macroeconomic conditions in Spain
over the next 12 months absent a major external shock.


Upward pressure on the IFSR could occur as a result of:

-- Stabilization in top-line premiums, with growth rates aligned
    to those of the overall Spanish insurance market

-- Continuous reduction of the investment concentration in
    Caser's banking shareholders

Downward pressure is unlikely given the positive outlook.
However, the IFSR rating may stabilize if:

-- Meaningful increases in the concentration to investments in
    Caser's bank shareholders in relation to its shareholders'

-- Substantial deterioration in Caser's market position with
    significant declines in premiums

-- Sustained deterioration in Caser's economic capitalization
    driven by dislocation in investment markets or by a
    significant deterioration in investments either in terms of
    credit quality or concentration to weaker rated entities

-- A credit deterioration on Caser's main bank shareholders'
    debt and BCA


The following rating has been upgraded with positive outlook:

Caser S.A. - IFSR upgraded to Ba2 from B1

U N I T E D   K I N G D O M

BORDER PRECISION: MSP Reveals Hopes that Firm Can Still be Saved
Border Telegraph reports that redundancy support is being offered
to 79 workers following the collapse of Border Precision
Engineering, a specialized engineering firm, in the Borders.

Border Precision Engineering collapsed after losing a major
contract, its liquidator has confirmed, according to Border

The report notes that staff were turned away from the factory in
Kelso on Monday and later learned that the company was in

Workers are being offered PACE support with an event being held
for them in the town's Tait Hall in Kelso on Tuesday, July 7,
between 1:00 p.m. and 4:00 p.m, the report notes.

The report discloses that the company previously went into
administration in 2013 -- but was saved by a management buyout,
backed by investors syndicate Tri Cap.

South of Scotland MSP Paul Wheelhouse on July 1 contacted Deputy
First Minister and Cabinet Secretary for Finance and Sustainable
Growth, John Swinney MSP, to establish what support is to be made
available to employees of Border Precision Engineering who are
now facing redundancy, the report relays.

The report notes that Mr. Wheelhouse said: "My thoughts are with
those employees and their families currently facing uncertainty
at this most stressful of times.  It is always difficult to
witness any company face potential insolvency, but it is
especially upsetting to see a company that is so important a
local employer face such a savage change of its fortunes and to
see it happen so unexpectedly.

"I have contacted the Deputy First Minister, John Swinney, who is
very much aware of the situation, and expressed his own great
concern for the company's employees.  Mr. Swinney has informed me
that the 79 employees facing redundancy are being offered PACE
support with an event being held for them in the Tait Hall in
Kelso on July 1 between 1:00 p.m.-400 p.m., where they can find
out more about their options and support available to them.
Further information will, I understand, have been sent to
employees on this today," the report quoted Mr. Wheelhouse as

"I also understand a meeting between the company and liquidators
was also due to take place today and I hope that it may not be
beyond the possibility that something may yet be salvaged from
what is undoubtedly a very worrying situation," Mr. Wheelhouse
said, the report notes.

"If I can be of assistance to any of my constituents in dealing
with the knock-on consequences of this news for them, I will of
course do whatever I can to support them.  The Deputy First
Minister has offered to keep me up-to-date with any developments
and my staff and I stand ready to provide any support we can
through my office in Hawick, supporting the efforts of the PACE
team and other national and local agencies," Mr. Wheelhouse

COOPER GAY: Moody's Puts 'B3' CFR Under Review for Downgrade
Moody's Investors Service has placed the ratings of Cooper Gay
Swett & Crawford Ltd. (CGSC corporate family rating B3,
probability of default rating B3-PD) on review for downgrade
given deterioration in EBITDA, financial leverage and interest
coverage metrics. Moody's also placed the B2 rating on CGSC's
revolving credit facility and first-lien term loan and Caa2
rating on its second-lien term loan on review for downgrade.


According to Moody's, the review will focus on the timing and
magnitude of the company's strategic initiatives to restore
revenue and EBITDA growth, the impact of expense reduction and
other restructuring initiatives, as well as prospective interest
coverage and free cash flow generation to service debt. For the
12 months ended March 31, 2015, the company reported a decline in
the EBITDA margin to about 13% as a result of weak organic growth
in the group's international operations, particularly in London
and Europe, which was mitigated by good performance in its North
America segment.

The company's debt-to-EBITDA ratio has risen to over 10x on a
Moody's adjusted basis with a weakening of EBITDA interest
coverage to about 1x for the 12 months ended March 2015. The
rating agency added the company has $36 million of unrestricted
cash on its balance sheet as of March 31, 2015.

CGSC has a good market presence as a wholesale and reinsurance
broker and is well diversified across geographic regions and
business lines. Declines in revenue and earnings in part reflect
negative pricing and volume trends related to its January 1
reinsurance renewals, where changes in buying trends and
significant competition from alternative capital has pressured
the traditional reinsurance market.

The rating agency said that the following factors could lead to a
downgrade: (i) debt-to-EBITDA ratio remaining above 8x on a
sustained basis, (ii) (EBITDA-capex) coverage of interest
remaining below 1.2x, and/or (iii) free-cash-flow to debt ratio
consistently less than 2%.

Conversely, the ratings could be confirmed in the event of: (i)
successful execution of management actions to restore revenue and
EBITDA, (ii) debt-to-EBITDA ratio trending towards 8x or below,
(iii) (EBITDA-capex) coverage of interest of exceeding 1.2x,
and/or (iv)) free-cash-flow to debt ratio consistently exceeding

Moody's has placed the following ratings on review for downgrade
(and revised the loss given default (LGD) assessments as of March
31, 2015):

  CGSC corporate family rating B3;

  CGSC probability of default rating B3-PD;

  CGSC of Delaware Holdings Corporation $75 million revolving
  credit facility expiring April 2018, rated B2 (to LGD3,
  33% from LGD3, 35%);

  CGSC of Delaware Holdings Corporation $305 million first-lien
  term loan due April 2020, rated B2 (to LGD3, 33% from
  LGD3, 35%);

  CGSC of Delaware Holdings Corporation $120 million second-lien
  term loan due October 2020, rated Caa2 (to LGD5, 84% from
  LGD5, 86%).

Based in London, England, CGSC is a leading independent
wholesale, underwriting management and reinsurance broker,
placing about US$5 billion of premiums annually in the London,
US, and international insurance markets. For the 12 months ending
March 2015, the company generated revenue of US$375 million.

FAIRHURST WARD: In Administration, Cuts 200 Jobs
Construction Enquirer reports that long-established historic
building restoration specialist Fairhurst Ward Abbotts has gone
into administration.

More than 200 staff with the Dartford-based firm are understood
to have received letters informing them they have been made
redundant, according to Construction Enquirer.

The report notes that the news comes as two other contractors --
Nottingham M&E specialist D H Fathers and Tyneside builder Turney
Wylde Construction -- also entered administration bringing total
job losses to over 400.

FWA was established back in 1941 and holds the royal warrant for
building and decorating services to the Queen.  The firm built up
a countrywide reputation for delivering renovation and
refurbishment of historic properties, plus luxury new build

Begbies Traynor (Central) took over as the administrators.

KONEK-T: Acquired by ITS Tech Out of Administration
Prolific North reports that Runcorn-based ITS Technology Group
has bought the assets of Konek-T, another Welsh broadband firm.

The move means that ITS Technology expands its operations into
South Wales, according to Prolific North.

Konek-T, which provides broadband to rural communities across the
region, appointed administrators, DDJ Insolvency last month, the
report notes.

"ITS delivers connectivity to digitally deprived areas across the
UK, and the addition of this network certainly adds value to this
proposition.  ITS already has a footprint in Llancarfan, so these
assets will extend our reach in this area," the report quoted Roy
Shelton, group CEO at ITS, as saying.

"As a result, ITS will be able to offer access to more business
and residential customers that have been struggling with
inadequate broadband speeds, as well as allowing us to focus on
wholesale access to our partners," Mr. Shelton said.

It's the fourth acquisition in the last 12 months for ITS, the
report notes.  In December, it bought North Wales wireless
broadband provider, Xwavia, which had also gone into
administration, the report relays.

MAN COED: 40 Jobs Saved Following Management Buyout
BBC News reports that half the job which were expected to go
after Man Coed went into administration have been saved.

According to BBC, about 40 posts have been secured at the company
in Mold following a management buy-out.

Martin Boardman, Andrew Rossiter and Tony Jones made the deal
after the creditors were called in April, Man Coed relates.

Man Coed is a tree-cutting firm.

TURNEY WYLDE: Staff Say Firm is Poised to Enter Administration
Chronicle Live reports that Wallsend-based Turney Wylde, a major
building contractors on Tyneside, is poised to enter
administration, though there is hope that jobs can be saved.

Staff at Turney Wylde have been told to continue work despite the
threat of administration at the firm, according to Chronicle

The report notes that members of construction trade union UCATT
say they have been told the company is preparing to enter
administration and to continue going to work as normal.

The last published accounts for the firm in 2013 show it made
pre-tax profit of GBP132,807 from turnover of GBP5.7 million, the
report relates.

The Journal has unsuccessfully attempted to contact Turney Wylde
and it remains unclear what may have triggered the reported
administration, the report says.

"Our members have been in contact to say that the company is
preparing to go into administration but no administrators have
yet been appointed.  The workforce have been told to continue to
work normally.

"UCATT is attempting to contact the company to find out what is
happening and if administrators are appointed we will try to meet
with them to find out their proposals for the company," the
report quoted Denis Doody, regional secretary for UCATT Northern,
as saying.

The report notes that Mr. Doody: "If our members are eventually
made redundant UCATT will ensure that they receive every penny
they are entitled to as the company will have failed to inform
and consult them before laying them off."

In early 2014, Turney Wylde said it was on track to almost double
turnover to GBP15 million and create eight new jobs on the back
of several contract wins, the report relays.

At that time, managing director Ken Parkin said: "These new
contracts are great wins for the company, cementing our position
as a key player in the construction sector in the region and
providing an ongoing pipeline of work for the next five years,"
the report discloses.

Established in 1967 as a family company, Turney Wylde has since
focused on specialist contracting work.

WORLDSPREADS LTD: July 15 Claims Submission Deadline Set
The English High Court, on June 10, 2015, entered an order
prescribing a procedure by which client money held by
WorldSpreads Limited (in special administration) should be
distributed to clients.

Jane Bronwen Moriarty and Samantha Rae Bewick of KPMG LLP, the
Joint Special Administrators of WorldSpreads, intend to make a
final distribution of client money to clients of WorldSpreads, in
accordance with the Order.

Clients who have not yet submitted a client money claim, but wish
to do so, must provide their claim to the Special Administrators.

Clients may submit their claims at any point up to and including
July 15, 2015, being the last date for proving.

WorldSpreads intends to distribute all remaining client money.
Clients who have not submitted a client money claim to the
Special Administrators by the last date for proving will not be
entitled to share in the proposed distribution of client monies.

Clients who intend to submit a client money claim should do so
within 21 days from the date of this notice, i.e. on or before
July 15, 2015.

Once the remaining client money has been distributed, clients who
have not submitted a client money claim will no longer be
entitled to any distribution from the client money pool.

Provision is being made in WorldSpreads' general estate for
creditor claims connected with those clients who have not
submitted a claim in respect of their client money entitlements.

WorldSpreads will assist clients who have not claimed
compensation to contact the FSCS in order for those clients to
try to make a claim for compensation for their client money
entitlement from the FSCS.

The Special Administrators intend to make a final distribution to
clients by October 31, 2015.


Jane Bronwen Moriarty and Samantha Rae Bewick were appointed as
Special Administrators of WorldSpreads on March 18, 2012.  The
Special Administrators' insolvency practitioner numbers are 9095
and 8872 respectively.

The affairs, business and property of WorldSpreads are being
managed by the Special Administrators who contract as agents of
WorldSpreads without personal liability.

Worldspreads Limited is authorized and regulated by the Financial
Conduct Authority. FCA reference number 230730. Registered in
England No. 04898762

The Special Administrators can be contacted:

(a) by emailing

(b) by writing to WorldSpreads Limited (in special
administration), 15 Canada Square, London, United Kingdom E14
5GL, or

(c) by telephoning +44 (0)20 7311 4878.


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

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

At the same time, he provides a comprehensive and large-scale
look at the industrial sector of the U.S. economy that proves
very useful for policy makers even today. With its nearly 100
tables of data and numerous examples, Khoury provides a wealth of
information for business historians and researchers as well.

Until the late 1960s, we Americans were confident (some might say
smug) in our belief that U.S. direct investment abroad would
continue to grow as it had in the 1950s and 1960s, and that we
would dominate the other large world economies in foreign
investment for some time to come. And then came the 1970s, U.S.
investment abroad stood at $78 billion, in contrast to only $13
billion in foreign investment in the U.S. In 1978, however, only
eight years later, foreign investment in the U.S. had skyrocketed
to nearly #41 billion, about half of it in acquisition of U.S.
firms. Foreign acquisitions of U.S. companies grew from 20 in
1970 to 188 in 1978. The tables had turned an Americans were
worried. Acquisitions in the banking and insurance sectors were
increasing sharply, which in particular alarmed many analysts.

Thus, when it was first published in 1980, this book met a
growing need for analytical and empirical data on this rapidly
increasing flow of foreign investment money into the U.S., much
of it in acquisitions. Khoury answers many of the questions
arising from the situation as it stood in 1980, many of which are
applicable today: What are the motives for transnational
acquisitions? How do foreign firms plans, evaluate, and negotiate
mergers in the U.S.? What are the effects of these acquisitions
on competition, money and capital markets; relative technological
position; balance of payments and economic policy in the U.S.?

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

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

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


Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par.  Prices are
obtained by TCR editors from a variety of outside sources during
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

                 * * * End of Transmission * * *