/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/150708.mbx T R O U B L E D C O M P A N Y R E P O R T E R E U R O P E Wednesday, July 8, 2015, Vol. 16, No. 133 Headlines G E R M A N Y HYPO ALPE-ADRIA: Austria Settles Legal Disputes with Bavaria G R E E C E GREECE: Fails to Present New Rescue Proposal; ELA Remains Frozen GREECE: Referendum Tips Balance Further Towards Euro Exit I R E L A N D IRISH BANK: Liquidators & A1 Agree to Delay Quinn Asset Sale I T A L Y BANCO POPOLARE: Fitch Maintains Mortgage Covered Bonds on RWN L U X E M B O U R G THESEUS EUROPEAN: S&P Raises Rating on Class E Notes to 'BB' N E T H E R L A N D S CID FINANCE: S&P Affirms 'BB+' Rating on Series 43 Notes GROSVENOR PLACE II: S&P Raises Rating on Class E Notes to B+ P O R T U G A L ATLANTES SME 5: Moody's Assigns B1 Rating to EUR35.6MM Notes R U S S I A PETROCOMMERCE BANK: Moody's Raises Senior Debt Rating to 'Ba3' S L O V E N I A SLOVENIA: NKBM Bank Sale Hints at Sector Stabilization S P A I N SANTANDER TOTTA: Fitch Affirms 'bb+' Viability Rating TDA EMPRESAS 1: Fitch Cuts Ratings on 2 Note Classes to 'BBsf' T U R K E Y ALLER PETFOOD: Turkish Unit Declares Bankruptcy U K R A I N E FERREXPO PLC: S&P Lowers LT Corporate Credit Rating to 'SD' U N I T E D K I N G D O M LOTUS F1: Creditors' Winding-Up Petition Adjourned SANDWELL 1: Fitch Affirms 'Csf' Rating on GBP5MM Class E Notes SCOP SEAFRANCE: Administrators Reject DFDS Offer to Keep Staff ********* ============= G E R M A N Y ============= HYPO ALPE-ADRIA: Austria Settles Legal Disputes with Bavaria ------------------------------------------------------------ James Shotter at The Financial Times reports that Austria and Bavaria have agreed a provisional deal that would finally settle their array of legal disputes stemming from the collapse of the Carinthian regional bank, Hypo Alpe Adria. According to the FT, under the memorandum of understanding hammered out by Hans Joerg Schelling, Austrian finance minister, and his counterpart in the German state of Bavaria, Markus Soeder, Austria would pay EUR1.23 billion to Bavaria. All legal cases relating to the dispute would also be dropped, the FT notes. BayernLB, the publicly owned Bavarian regional bank, bought a majority stake in Hypo in 2007, before ceding control to Austria when the bank had to be nationalized in 2009, the FT recounts. Austria has since pumped more than EUR5.5 billion into the stricken lender, whose remaining assets are being wound down by the so-called "bad bank" Heta Asset Resolution, the FT relays. "With this deal, we can avoid years of expensive legal proceedings with extremely uncertain outcomes, and at the same time, bring about a normalization of relations with our neighbor," the FT quotes Mr. Schelling as saying. "Heta is a rucksack full of unsolved political problems. The key thing for me . . . is to minimize the damage in what has been a dark chapter for Austrian taxpayers." About Hypo Alpe-Adria Hypo Alpe-Adria International AG is a subsidiary of BayernLB. It is active in banking and leasing. In banking, HGAA serves both corporate and retail customers and offers services ranging from traditional lending through savings and deposits to complex investment products and asset management services. Hypo Alpe received EUR1.75 billion in aid in emergency capital from the Austrian government. European Union Competition Commissioner Joaquin Almunia said in March 2013 that Hypo Alpe faced possible closure for failing to adequately restructure. The European Commission approved Hypo's recapitalization in December 2013, but made it conditional on the management presenting a thorough plan to overhaul the group. The Austrian finance ministry, which effectively runs Hypo Alpe, submitted a restructuring plan to the Commission on Feb. 5, 2013. On Sept. 3, 2013, the Commission cleared Hypo Alpe's restructuring plan, which includes the sale of the bank's Austrian unit and Balkans banking network and the winding-down of non-viable parts. It also approved additional aid to wind down the bank. As reported in the Troubled Company Reporter-Europe on Nov. 3, 2014, The Wall Street Journal said Austria's nationalized lender Hypo Alpe-Adria-Bank International AG said on Oct. 30 it has split itself between a wind-down unit, called Heta Asset Resolution GmbH, and its southeastern European network of banks. The split is part of the lender's restructuring plan approved by the European Commission, the Journal disclosed. According to the Journal, under the plan, the Austrian government -- Hypo Alpe- Adria's current owner -- must sell off all of the bank's assets or transfer them into a wind-down unit by mid-2015. =========== G R E E C E =========== GREECE: Fails to Present New Rescue Proposal; ELA Remains Frozen ---------------------------------------------------------------- Peter Spiegel at The Financial Times reports that Greece's attempt to salvage its place in the eurozone got off a rocky start when its finance minister arrived at a meeting of counterparts without a fresh rescue proposal. Athens has been given a final chance to present a new reform plan to its eurozone partners -- even though their willingness to accommodate it has all but evaporated following Greece's emphatic rejection of previous bailout terms in the July 5 referendum, the FT discloses. But Greece's new finance minister Euclid Tsakalotos turned up with no written proposal, the FT relays. Instead, he outlined verbally what a Greek official said was the same plan Athens submitted to its creditors on June 30, the FT notes. Greece's June 30 letter accepted many of the creditors' demands, but watered down some of the value added tax and pension reforms to the tune of "hundreds of millions of euros", the FT states. According to the FT, officials said the lack of a new plan shocked the assembled finance ministers and angered several. Their meeting was supposed to set the parameters of a make-or- break summit of eurozone leaders on July 7. Euro Exit The European Commission and the French government struck a more emollient note, saying they would work hard to prevent Greece's exit from the single currency, the FT relates. According to the FT, Pierre Moscovici, EU economy commissioner, said Brussels had "some technical solutions" to solve the stand- off between Greece and its creditors but that "trust is to be rebuilt". However, several officials said it was unlikely that ministers would be able to commit to any deal and only the bloc's leaders had the authority to broker the difficult political compromises required to prevent Greece's exit, the FT notes. Much will hinge on how far Angela Merkel, German chancellor, is prepared to bend to keep Greece in the euro and whether Greek Prime Minister Alexis Tsipras can persuade his counterparts he can be trusted to implement any deal, the FT says. Many officials involved in the talks said there was little willingness to concede on any front, and warned there was not a clear path towards a deal that could avoid a messy default when a EUR3.5 billion bond owed to the European Central Bank comes due in two weeks, the FT discloses. ECB Tightens Noose Meanwhile, The Telegraph's Ambrose Evans-Pritchard and Mehreen Khan report that The European Central Bank has tightened liquidity conditions for the Greek banking system following the landslide victory for the Leftist government in the July 5 referendum. The central bank continued its freeze on emergency liquidity assistance (ELA) after Germany issued a humiliating ultimatum to Greece, warning that the country would be cast adrift and left to go bankrupt unless it agreed to much deeper concessions than anything offered so far. Sigmar Gabriel, the German vice-chancellor, said the landslide rejection of EU austerity demands in the Greek referendum changed nothing, demanding that the Left-wing Syriza government must accept further belt-tightening without any prospect of debt relief if it wishes to remain in the eurozone, The Telegraph relays. Late on July, the ECB decided to maintain its liquidity freeze on the banking system, The Telegraph relates. But in a highly contentious move, opted to tighten the collateral rules it imposes on lenders to access the lifeline, intensifying the squeeze on the cash-starved banks, which are set to remain closed for another two days, The Telegraph discloses. The ECB, as cited by The Telegraph, said the move was based on the deteriorating quality of the bank collateral, most of which is made up of Greek government bonds. The ECB did not specify the level of haircut it had now imposed, The Telegraph notes. According to The Telegraph, Greece's four big banks are effectively out of cash, though some ATMs are still allowing Greek savers to extract the maximum EUR60 (GBP42) a day. . GREECE: Referendum Tips Balance Further Towards Euro Exit --------------------------------------------------------- The "No" vote in Greece's referendum on July 5 dramatically increases the risk of a slide towards a disorderly Greek exit from the eurozone, Fitch Ratings says. An agreement between Greece and its official creditors remains possible, but time is short and the risk of policy missteps, or that the two sides simply cannot agree a deal, is high. The resignation of Finance Minister Yannis Varoufakis signals the Greek government's desire to re-engage with its official creditors, from whom stronger commitments on debt relief may be forthcoming following the expiry of the EFSF program last week. But assuming they return to the negotiating table, the creditors are unlikely to make large concessions on policy conditionality up front. Their proposals may still be unacceptable to a Greek government emboldened by the referendum outcome. The lack of progress and loss of trust so far this year mean we think it will be a difficult to strike even a limited deal before July 20, when EUR3.5 billion of bonds held by the Eurosystem fall due. Solvency at Greek banks is very weak, with estimated combined group non-performing exposures for the four banks rated by Fitch above 40% at end-1Q15. These are likely to have deteriorated further since, making recapitalization a more pressing priority. Solvency concerns may also make it difficult for the ECB to justify an increase in Emergency Liquidity Assistance (ELA), which has not been increased since 28 June, although it may identify an interim way of providing Greek banks with additional liquidity while negotiations continue. Without new funding, Greek banks may have to reduce the minimum daily deposit withdrawals below the EUR60 permitted under current capital controls. A missed payment to the ECB would therefore be a major event, primarily due to the possible reaction of the ECB's Governing Council, which may conclude that it cannot provide further ELA funding for Greek banks. Further tightening of bank liquidity by the ECB would be likely to push the banks into resolution and would make salvaging any potential deal extremely difficult. Missing the July 20 payment would not of itself trigger an 'RD' rating, as our 'CC' sovereign rating reflects the risk that Greece will not honor private debt obligations. Upcoming repayments to the private sector include Treasury Bills maturing this week and next, and a JPY11.67 billion (EUR85 million) bond maturing on July 14. There are no formal provisions for leaving the eurozone, so a Greek exit would consist of a series of ad hoc measures. For example, the Greek government may have to issue IOUs rather than paying pensions and wages, effectively creating a parallel currency ('scrip'). An unplanned, reactive process could not be 'orderly' and would inflict severe damage on Greece's economy. But the risk that a Greek exit would trigger a systemic crisis in the eurozone has fallen in the last three years. The fiscal and current account positions, growth performance, and banking systems of other peripheral member states have improved, and the bloc has developed support mechanisms. Eurozone banks have reduced their Greek exposures, and bond market contagion has so far been limited. Nevertheless, a Greek exit would cause financial market volatility and dent economic confidence. It would increase the risk of future economic and financial crises, creating fears of another euro exit, with the attendant risks of higher sovereign borrowing costs and bank deposit withdrawals. This consideration may prompt a further acceleration in the eurozone authorities' continuing policy response to the eurozone sovereign debt crisis, as happened in 2012, if Greece does leave. ============= I R E L A N D ============= IRISH BANK: Liquidators & A1 Agree to Delay Quinn Asset Sale ------------------------------------------------------------ Colm Kelpie at Irish Independent reports that IBRC special liquidators and Russian asset recovery firm A1 have agreed to delay the sale of key former Quinn family assets in Russia and Ukraine until the economic situation there improves. The special liquidators said assets secured by the Irish State include a skyscraper in Moscow, a shopping centre and a logistics park, Irish Independent relates. But their value has fallen by an estimated US$80 million over the last two years as a result of the political crisis that has engulfed both Russia and the Ukraine, according to IBRC's special liquidators, Irish Independent notes. A revised deal has been drawn up between A1 and the special liquidators which involves holding on to the assets for longer, Irish Independent relays. IBRC formed the joint venture with A1 in February 2013 to recoup key property assets in Russia and the Ukraine linked to Sean Quinn, Irish Independent recounts. Mr. Quinn, once the country's richest man, was one of biggest foreign investors in Russian commercial property during the Celtic Tiger years before he went bankrupt in January 2012, Irish Independent states. IBRC special liquidator Kieran Wallace, as cited by Irish Independent, said the joint venture approach has worked well. "The revision of the joint venture agreement with A1 makes commercial sense at this juncture as it is in the best interests of the State that these assets are not sold now at seriously depressed prices," Irish Independent quotes Mr. Wallace as saying. "We will continue to benefit from the income generated from the secured assets and to work hard to recover more assets which are the legitimate property of the Irish State." About Irish Bank Resolution Irish Bank Resolution Corp., the liquidation vehicle for what was once one of Ireland's largest banks, filed a Chapter 15 petition (Bankr. D. Del. Case No. 13-12159) on Aug. 26, 2013, to protect U.S. assets of the former Anglo Irish Bank Corp. from being seized by creditors. Irish Bank Resolution sought assistance from the U.S. court in liquidating Anglo Irish Bank Corp. and Irish Nationwide Building Society. The two banks failed and were merged into IBRC in July 2011. IBRC is tasked with winding them down and liquidating their assets. In February, when Irish lawmakers adopted the Irish Bank Resolution Corp., IBRC was placed into a special liquidation in the Irish High Court to complete liquidation and distribution of the two banks' assets. IBRC's principal asset as of June 2012 was a loan portfolio valued at some EUR25 billion (US$33.5 billion). About 70 percent of the loans were to Irish borrowers. Some 5 percent of the portfolio was under U.S. law, according to a court filing. Total liabilities in June 2012 were about EUR50 billion, according to a court filing. Most assets in the U.S. have been sold already. IBRC is involved in lawsuits in the U.S. IBRC was granted protection under Chapter 15 of the U.S. Bankruptcy Code in December 2013. Kieran Wallace and Eamonn Richardson of KPMG have been named the special liquidators. About Anglo Irish Anglo Irish Bank was an Irish bank headquartered in Dublin from 1964 to 2011. It went into wind-down mode after nationalization in 2009. In July 2011, Anglo Irish merged with the Irish Nationwide Building Society, with the new company being named the Irish Bank Resolution Corporation (IBRC). Standard & Poor's Ratings Services said that it lowered its long- and short-term counterparty credit ratings on Irish Bank Resolution Corp. Ltd. (IBRC) to 'D/D' from 'B-/C'. S&P also lowered the senior unsecured ratings to 'D' from 'B-'. S&P then withdrew the counterparty credit ratings, the senior unsecured ratings, and the preferred stock ratings on IBRC. At the same time, S&P affirmed its 'BBB+' issue rating on three government- guaranteed debt issues. The rating actions follow the Feb. 6, 2013, announcement that the Irish government has liquidated IBRC. The former Irish bank sought protection from creditors under Chapter 15 of the U.S. Bankruptcy Code on Aug. 26, 2013 (Bankr. D. Del., Case No. 13-12159). The former bank's Foreign Representatives are Kieran Wallace and Eamonn Richardson. Its U.S. bankruptcy counsel are Mark D. Collins, Esq., and Jason M. Madron, Esq., at Richards, Layton & Finger, P.A., in Wilmington, Delaware. ========= I T A L Y ========= BANCO POPOLARE: Fitch Maintains Mortgage Covered Bonds on RWN ------------------------------------------------------------- Fitch Ratings is maintaining Banco Popolare's (BP, BB/Stable/B) EUR8.45 billion mortgage covered bonds (Obbligazioni Bancarie Garantite, OBG) -- rated 'BBB+' -- on Rating Watch Negative (RWN). The rating action reflects proposed amendments, among others, to the definition of eligible institution contained in the program documentation. The rating action follows the Representative of Bondholders' (RoB) decision to convene an extraordinary meeting of bondholders to give consent to such amendments, which will allow BP to continue to act as account bank for the program, or to discuss the actions to be undertaken by the RoB. The 'BBB+' covered bonds rating was originally placed on RWN on May 22, 2015, following the downgrade of BP's Issuer Default Rating (IDR) to 'BB' from 'BBB', to reflect the downgrade risk in the absence of actions to remedy the ineligibility of the account bank (Banco Popolare, London branch). Fitch understands from BP that the proposed changes are contingent on investors' approval. Based on the RoB notice, the initial meeting will be held on July 29, 2015 and adjourned, if necessary, to a new date no earlier than 14 days and no later than 42 days after the original date of the meeting. Fitch will resolve the RWN upon conclusion of the process and, in any case, no later than six months after it was first placed on RWN. KEY RATING DRIVERS The RWN now takes into account the request of consent submitted to covered bonds holders. If the amendment to the definition of eligible institution is approved, the rating of BP as account bank would limit the covered bonds rating at the 'BB' rating category. The covered bonds rating would be floored at 'BB+', which is equivalent to BP's IDR of 'BB' as adjusted by the IDR uplift of one. If the covered bonds holders choose not to give consent to this proposed amendment, Fitch understands from the notice that the RoB will act in accordance with bondholders' instructions to put in place remedies. The other proposed amendments, if passed, would lead Fitch to re- assess the alternative management and the asset segregation components of the Discontinuity Cap (D-Cap) assigned to the program. However, they are unlikely to affect the covered bonds' rating, which is constrained by the enhancement provided through the program's asset percentage (AP). The further proposed amendments include a change of trigger for the back-up servicer appointment, for the repayment of the subordinated loan, together with the trigger for delivering certain solvency certificates. The current 'BBB+' rating of the OBG is based on BP's IDR of 'BB', an unchanged IDR uplift of 1, an unchanged D-Cap of 2 and the 80.7% AP the issuer undertakes to apply in the quarterly test performance report, which provides more protection than the unchanged 93% 'BBB+' breakeven AP. RATING SENSITIVITIES The rating of the covered bonds is subject to the outcome of bondholders meeting: if Banco Popolare continues to act as account bank, the rating of the covered bonds is likely to be downgraded to 'BB+', in line with Fitch's counterparty criteria. The 'BBB+' rating is likely to be affirmed if the account bank is replaced by a bank rated at least 'BBB-'. The Fitch breakeven asset percentage for the covered bond rating will be affected, amongst others, by the profile of the cover assets relative to outstanding covered bonds, which can change over time, even in the absence of new issuance. Therefore the breakeven asset percentage to maintain the covered bond rating cannot be assumed to remain stable over time. =================== L U X E M B O U R G =================== THESEUS EUROPEAN: S&P Raises Rating on Class E Notes to 'BB' ------------------------------------------------------------ Standard & Poor's Ratings Services raised its credit ratings on Theseus European CLO S.A.'s class B, C, D, and E notes. At the same time, S&P has affirmed its ratings on the class A1, A2A, and A2B notes. The rating actions follow S&P's review of the transaction's performance. S&P performed a credit and cash flow analysis and assessed the support that each participant provides to the transaction by applying S&P's current counterparty criteria. In S&P's analysis, it used data from the latest available trustee report dated April 27, 2015. S&P subjected the capital structure to a cash flow analysis to determine the break-even default rate for each rated class of notes at each rating level. In S&P's analysis, it used the reported portfolio balance that it considered to be performing (EUR115.4 million), the weighted-average spread (3.79%), and the weighted-average recovery rates for the performing portfolio. S&P applied various cash flow stress scenarios, using its standard default patterns in conjunction with different interest stress scenarios for each liability rating category. The exposure to obligors based in countries rated below 'A-' is less than 10% of the aggregate collateral balance. S&P has therefore not applied any additional stresses in accordance with its non- sovereign ratings criteria. From S&P's analysis, it has observed that the available credit enhancement has increased for all of the rated classes of notes, due to the deleveraging of the senior notes after the end of the reinvestment period in August 2012. The class A notes have paid down by EUR61.2 million since our previous review. S&P's analysis indicates that the available credit enhancement for the class A1, A2A, and A2B notes is commensurate with their currently assigned ratings. S&P has therefore affirmed its ratings on the class A1, A2A, and A2B notes. At the same time, S&P's credit and cash flow results show that the available credit enhancement for the class B, C, D, and E notes is now commensurate with higher ratings than those currently assigned. Therefore, S&P has raised its ratings on the class B, C, D, and E notes. Theseus European CLO is a cash flow collateralized loan obligation (CLO) transaction that securitizes loans granted to primarily European speculative-grade corporate firms. INVESCO Senior Secured Management Inc. manages the transaction. The transaction closed in August 2006 and entered its amortization period in August 2012. RATINGS LIST Class Rating To From Theseus European CLO S.A. EUR331 Million Senior Secured and Deferrable Floating-Rate Notes Ratings Raised B AAA (sf) AA+ (sf) C AA+ (sf) A+ (sf) D A- (sf) BBB (sf) E BB (sf) B+ (sf) Ratings Affirmed A1 AAA (sf) A2A AAA (sf) A2B AAA (sf) ===================== N E T H E R L A N D S ===================== CID FINANCE: S&P Affirms 'BB+' Rating on Series 43 Notes -------------------------------------------------------- Standard & Poor's Ratings Services affirmed and removed from CreditWatch negative its 'BB+' credit rating on CID Finance B.V.'s series 43 credit-linked secured limited recourse notes. This transaction is a credit-linked note, linked to the performance of CaixaBank S.A.'s subordinated debt rated 'BB+'. On the issue date, CID Finance entered into a credit default swap and an interest rate swap agreement with Banco Bilbao Vizcaya Argentaria, S.A. (BBVA; BBB/Stable/A-2). Under the credit default swap, CID Finance agreed to sell protection on CaixaBank's subordinated debt. Under the interest rate swap, BBVA pays to CID Finance the quarterly coupon due on the notes. BBVA will repay the principal amount due on the notes on Sept. 20, 2015. As such, S&P's rating on the credit-linked notes reflects the credit risk associated with: -- BBVA as the swap counterparty; and -- CaixaBank's subordinated debt rating as reference obligation under the credit default swap. The affirmation and removal from CreditWatch negative follows S&P's recent rating actions on the reference obligation Under S&P's repack criteria, it would generally reflect changes to the rating on the collateral or reference obligation in S&P's rating on the tranche. S&P has therefore affirmed and removed from CreditWatch negative its 'BB+' rating on CID Finance's series 43 notes. RATINGS LIST Class Rating To From CID Finance B.V. EUR9 Million Credit-Linked Secured Limited Recourse Notes\ Series 43 Rating Affirmed and Removed From CreditWatch Negative BB+ BB+/Watch Neg GROSVENOR PLACE II: S&P Raises Rating on Class E Notes to B+ ------------------------------------------------------------ Standard & Poor's Ratings Services raised its credit ratings on Grosvenor Place CLO II B.V.'s class B, C, D, and E notes. The upgrades follow S&P's review of the transaction's performance. S&P performed a credit and cash flow analysis and assessed the support that each participant provides to the transaction by applying its current counterparty criteria. In S&P's analysis, it used data from the latest available trustee report dated April 30, 2015. S&P subjected the capital structure to a cash flow analysis to determine the break-even default rate for each rated class of notes at each rating level. In S&P's analysis, it used the reported portfolio balance that it considered to be performing (EUR94.1 million), the weighted-average spread (4.41%), and the weighted-average recovery rates for the performing portfolio. S&P applied various cash flow stress scenarios, using its standard default patterns in conjunction with different interest stress scenarios for each liability rating category. The exposure to obligors based in countries rated below 'A-' is greater than 10% of the aggregate collateral balance (18.9%). Therefore, S&P has also applied additional stresses in accordance with its nonsovereign ratings criteria. S&P's review of the transaction highlights that the class A and B notes have been paid down by EUR159.6 million since S&P's previous review. This has increased the available credit enhancement for all of the rated classes of notes. S&P's analysis indicates that the available credit enhancement for the class B, C, D, and E notes is now commensurate with higher ratings than those currently assigned. Therefore, S&P has raised its ratings on all of these classes of notes. S&P's largest obligor test constrains our ratings on the class C, D, and E notes. Grosvenor Place CLO II is a cash flow collateralized loan obligation (CLO) transaction that securitizes loans granted to primarily European speculative-grade corporate firms. CQS Investment Management manages the transaction. The transaction closed in January 2007 and entered its amortization period in March 2013. RATINGS LIST Class Rating To From Grosvenor Place CLO II B.V. EUR412.875 Million, GBP24.3 Million Floating And Fixed-Rate Notes Ratings Raised B AAA (sf) A+ (sf) C A+ (sf) BBB+ (sf) D BB+ (sf) B+ (sf) E B+ (sf) CCC+ (sf) =============== P O R T U G A L =============== ATLANTES SME 5: Moody's Assigns B1 Rating to EUR35.6MM Notes ------------------------------------------------------------ Moody's Investors Service has assigned these definitive ratings to the Atlantes SME No. 5 asset-backed notes issued by GAMMA - Sociedade de Titularizacao de Creditos, S.A./ Atlantes SME No. 5: EUR440 mil. Class A Asset Backed Floating Rate Notes due 2044, Definitive Rating Assigned A3 (sf) EUR35.6 mil. Class B Asset Backed Floating Rate Notes due 2044, Definitive Rating Assigned B1 (sf) EUR164.4 mil. Class C Asset Backed Floating Rate Notes due 2044; EUR172.8 mil. Class D Securitisation Notes due 2044; and EUR33.2 mil. Class S Securitisation Notes due 2044 were not rated by Moody's. Atlantes SME No.5 is a cash securitization of secured and unsecured loans, as well as short term credit facilities to micro, small and medium-sized enterprises (SME) domiciled in Portugal extended by BANIF -- Banco Internacional do Funchal, S.A. ("BANIF", Caa2/NP). BANIF will service the securitized portfolio, and a back up servicer (Whitestar Asset Solutions, S.A., NR) will be appointed at closing ready to step in as needed upon a servicer termination event. The EUR800 million portfolio is made up of terms loans as well as credit facilities, whereas some credit facilities have not been drawn to their limit. At closing the notes proceeds will only finance the drawn amount, but over the first year of the transaction BANIF will be able to sell further advances on the credit facilities, with the issuer funding such purchases either with portfolio collections or subordinated notes issuance. In case there are no additional advances on the current accounts, the issuer will apply the portfolio collections to amortize down the notes. RATINGS RATIONALE According to Moody's the ratings take into account, among other factors, (i) a loan-by-loan evaluation of the underlying portfolio, also complemented by the historical performance information as provided by the originator; (ii) the structural features of the transaction, including an amortizing cash reserve (1.6% of the initial portfolio amount) designed to provide liquidity and credit support over the life of the transaction first to the Class A notes and, upon redemption of these senior notes, to the Class B notes; and (iii) the sound legal structure of the transaction. Moody's notes that the transaction benefits from a series of credit strengths, such as (i) the appointment of a back up servicer at closing which has conducted a review of BANIF's operations in order to be ready to step in as and when needed; (ii) the presence of a third party highly rated account bank where the issuer accounts sit. Moody's notes that the transaction also features a number of credit weaknesses, such as: (i) the originator will be able to sell additional advances drawn under the credit facilities and to renew securitized credit facilities. Furthermore BANIF has retained the option to replace loans whose terms and conditions it wants to renegotiate with the customer or loans for which there has been a breach of a representation. Such substitutions may affect 30% of the pool; (ii) exposure to set-off risk; (iii) the lack of a hedging mechanism to mitigate the base rate mismatch risk on the floating portion of the portfolio and the fixed-floating mismatch on the fixed portion of the portfolio. These characteristics, amongst others, were considered in Moody's analysis and ratings. As of the cut off date (April 30, 2015), the portfolio principal balance amounted to EUR800 million. The portfolio is composed of 8,523 contracts granted to 8,085 borrowers, mainly micro, small and medium-sized companies. The portfolio presents some borrower concentration, with the top borrower being 2.4% of the pool (top borrower group 2.7%) and the top ten borrowers being 18.4% (top ten borrower groups 19%). The portfolios' weighted average seasoning is 5 years and the weighted average remaining term equals approximately 4 years. The interest rate is floating for 86% of the pool, the balance being made up of fixed rate loans. In its quantitative assessment, in view of the number of assets and the size of the largest exposures in the portfolio, Moody's derived the portfolio default distribution through a two-factor Monte-Carlo approach using CDOROM tool. The rating agency derived the default distribution, namely the mean default probability and its related standard deviation, via the analysis of: (i) the characteristics of the loan-by-loan portfolio information and the historical vintage data; (ii) the potential fluctuations in the macroeconomic environment during the lifetime of this transaction; (iii) the portfolio concentrations in terms of industry sectors and single obligors. Moody's assumed the cumulative default probability of the portfolio to be 31.7% (equivalent to a Moody's Caa1 proxy rating for an average life of approximately 3.3 years) with a coefficient of variation (i.e. the ratio of standard deviation over mean default rate) of around 23.6%. The rating agency has assumed stochastic recoveries with a mean recovery rate of 30%, a standard deviation of 20%. In addition, Moody's has assumed prepayments to be around 7.5% per year. Furthermore, Moody's has considered: (i) the amortization vector based on the assumptions that the majority of the credit facilities were renewed; and (ii) a stressed yield vector of the portfolio, accounting for 100% of the portfolio being un-hedged. The main sources of uncertainty in the analysis relates to the concentration of borrowers in the more vulnerable construction & buildings sector and the potential deterioration in the portfolio credit quality due to the addition of substituted loans, additional advances under the credit facilities as well as renewal of securitized credit facility. Moody's also tested other sets of assumptions under its Parameter Sensitivities analysis. The results show that the model output for the Class A notes would have been Baa2 if the recovery rate assumption were to decrease to 20% and the prepayment assumption were to increase to 9.5%, all other parameters being kept unchanged. For rating this transaction, Moody's used the following models: (i) ABSROM to model the cash flows and determine the loss for each tranche and (ii) CDOROM to derive the default definition applicable to this transaction. More specifically, Moody's ABSROM cash flow model evaluates all default scenarios that are then weighted considering the probabilities of such default scenarios as defined by the transaction-specific default distribution. On the recovery side Moody's assumes a stochastic (normal) recovery distribution which is correlated to the default distribution. In each default scenario, the corresponding loss for each class of notes is calculated given the incoming cash flows from the assets and the outgoing payments to third parties and noteholders. Therefore, the expected loss for each tranche is the sum product of (i) the probability of occurrence of each default scenario; and (ii) the loss derived from the cash flow model in each default scenario for each tranche. As such, Moody's analysis encompasses the assessment of stressed scenarios. Moody's used CDOROM to derive the default distribution for this transaction. The Moody's CDOROM model is a Monte Carlo simulation which takes borrower specific Moody's default probabilities as input. Each borrower reference entity is modeled individually with a standard multi-factor model incorporating intra- and inter-industry correlation. The correlation structure is based on a Gaussian copula. In each Monte Carlo scenario, defaults are simulated. The ratings address the expected loss posed to investors by the legal final maturity of the notes. In Moody's opinion, the structure allows for timely payment of interest and ultimate payment of principal with respect to the Notes by the legal final maturity. Moody's ratings address only the credit risk associated with the transaction, Other non-credit risks have not been addressed but may have a significant effect on yield to investors. Factors that would lead to an upgrade or downgrade of the rating: Factors or circumstances that could lead to a downgrade of the rating affected by the action would be (1) the worse-than- expected performance of the underlying collateral; (2) deterioration in the credit quality of the counterparties; and (3) an increase in Portugal's sovereign risk. Factors or circumstances that could lead to an upgrade of the ratings affected by the action would be a marked improvement in BANIF credit profile. =========== R U S S I A =========== PETROCOMMERCE BANK: Moody's Raises Senior Debt Rating to 'Ba3' -------------------------------------------------------------- Moody's Investors Service has withdrawn the B2/Not- Prime deposit ratings, b2 baseline credit assessment, b2 adjusted baseline credit assessment and B1(cr)/Not- Prime(cr) Counterparty Risk Assessments of Petrocommerce Bank (OJSC), based in Russia (Ba1 negative). Concurrently, the local-currency senior unsecured debt rating was upgraded to Ba3, negative. RATINGS RATIONALE This action follows Petrocommerce Bank's reorganization and merger with Bank Otkritie Financial Corporation PJSC (deposits/senior unsecured Ba3 negative, BCA b1). Following the merger, all the liabilities of Petrocommerce Bank have been transferred to Bank Otkritie Financial Corporation, including the ruble bonds due 2015 that are now rated Ba3 by Moody's in line with the senior unsecured debt rating of Bank Otkritie Financial Corporation. Petrocommerce Bank reported -- as at year-end 2014 -- total IFRS (audited) assets of US$4.8 billion and total equity of US$539 million. The bank's net loss amounted to US$104 million for 2014 (latest available audited figures). =============== S L O V E N I A =============== SLOVENIA: NKBM Bank Sale Hints at Sector Stabilization ------------------------------------------------------ The agreement to sell Nova Kreditna Banka Maribor (NKBM), reached last week, provides a small indication that stability is gradually returning to Slovenia's troubled banking sector, says Fitch Ratings. But the low sale price, reported in the press to be 40% of book value, highlights the bank's weak profile, weighed down by a very high level of impaired loans, many of which could still require additional provisioning. NKBM, the country's second largest bank, is the first of three banks bailed out by the state in December 2013 to be sold to the private sector. Appetite for investing in Slovenian banks is low. To date, the only bidders to have emerged are private equity funds, which generally adopt higher-risk investment strategies. Apollo Global Asset Management, a US-based private equity fund, will acquire 80% of NKBM; the EBRD will take up the remaining 20%. NKBM has an 11.5% market share in Slovenia. Apollo stated that its objective is to complete restructuring of the bank. Fitch said, "In our opinion, this is likely to take several years because NKBM still has substantial exposure to highly indebted companies. Impaired loans represented 42% of total loans at end- March 2015, around 60% reserved." NKBM's privatization is unlikely to have an immediate impact on the bank's ratings as, in Fitch's view, external support from an investment fund usually cannot be relied on. But accelerated progress in problem loan recoveries, improved performance and maintenance of solid capital ratios could result in positive rating actions. Slovenia's economy returned to growth in 2013. Fitch forecasts GDP growth of around 2% for each of 2015 and 2016 and expects bank credit to the private sector to stabilize gradually from 2015. Efforts to restructure and clean up bank balance sheets continue; these are all the more important if the state is to reduce its stake in the banking sector (60% at end-2014). The state is planning the sale of another Slovenian bank, Abanka Vipa, following its merger with Banka Celje, set for Q415. The state also made a commitment to the European Commission to sell 75% of the largest bank, Nova Ljubljanska Banka. ========= S P A I N ========= SANTANDER TOTTA: Fitch Affirms 'bb+' Viability Rating ----------------------------------------------------- Fitch Ratings has affirmed Santander Totta, SGPS, S.A.'s and Banco Santander Totta, S.A.'s (BST) Long-term Issuer Default Ratings (IDRs) at 'BBB', Short-term IDR at 'F2' Viability Rating at 'bb+' and Support Rating at '2'. The Outlook is Positive. KEY RATING DRIVERS IDRs, SENIOR DEBT AND SUPPORT RATING The IDRs of Santander Totta and its fully owned bank subsidiary, BST, reflect a high probability of support from its Spanish parent bank, Banco Santander, S.A. (Santander; A-/Stable), in case of need. Fitch believes that Santander Totta's activities in Portugal are strategically important to the Spanish banking group. Santander Totta's and BST's Long-term IDRs are capped at two notches above that of the Portuguese sovereign (BB+/Positive), in accordance with Fitch's criteria. In a higher sovereign rating environment, these would be notched down once from the parent's IDR, reflecting common branding, strong synergies and integration with the parent, and a wide range of shared risk management and operational policies and procedures. Santander Totta is a Portuguese holding company, wholly owned by Santander. BST is it main operating subsidiary in Portugal. The ratings of Santander Totta and BST are equalized because the two are regulated as a consolidated entity in Portugal, the bank is wholly owned by the holding company and the holding company has no outstanding debt. The Positive Outlook reflects that of the sovereign and that their ratings are currently capped. Available support from the parent is reflected in the higher of the two possible Short-term IDRs for banks with a Long-term IDR of 'BBB'. VR Santander Totta's VR reflects the company's robust capital and asset quality indicators, which are better than peers'. It also takes into account the improving domestic economy, which is supporting profitability. Santander Totta's capital ratios have been supported by internal capital generation, declining risk-weighted assets and higher revaluation reserves. At end-2014, Fitch core capital (FCC)/weighted risks ratio was robust at 16.8%. Capital has a high influence on and is supportive of Santander Totta's VR. At end-1Q15, Santander Totta reported a CET1 ratio of 15.2% (1Q14: 14.5%) and its CET1 fully loaded was 15.4%. Also unreserved credit at risk (CaR) loans-to-FCC was less than 15%, which is considered low. Santander Totta's CaR ratio was 5.7% at end-1Q15, which was lower than system average and loan loss reserves were ample at 78% of CaR loans. Moreover, foreclosed assets are comparatively modest. Asset quality is supported by a large share of residential mortgages and lower exposure to troubled sectors, benefiting from the sound risk management and risk-taking approach of the Santander group. Sustained economic recovery should further support asset quality indicators. Santander Totta reported positive net income throughout the crisis, due to sound fee income generation, strong cost efficiency, a higher proportion of ECB funding and, as with many peers, capital gains from the sale of sovereign debt securities. Fitch believes the bank's profitability has scope to improve, though only just moderately, as the improving economy supports business volumes and eases pressure on loan impairment charges. Continued reduction of deposit costs should also be beneficial. The bank continued to improve its funding and liquidity profile, supported by a slight reduction of its loan book and higher deposits. Its regulatory net loans/deposits ratio improved to 117% at end-1Q15 from 130% at end-1Q14. Santander Totta has a higher proportion of funding from the ECB's liquidity facility, representing EUR3.8 billion at end-1Q15 or almost 9% of assets, but it also maintains a large portfolio of discountable assets (EUR5 billion, net of haircut at end-1Q15). SUBORDINATED DEBT AND OTHER HYBRID SECURITIES BST's preference shares are capped at the level assigned to equivalent securities issued by the parent. In Fitch's view support from the parent mitigates the non-performance risk of the instruments. Therefore, the agency would only notch down the rating of the preference shares twice for loss severity from the subsidiary's IDR if the cap was not applied. RATING SENSITIVITIES IDRS, SENIOR DEBT and SUPPORT RATING At the current levels, the IDRs of Santander Totta and BST are sensitive to a change of the sovereign rating. The IDRs and the SR are also sensitive to a change in Fitch's assumptions around Santander's propensity or ability to support its Portuguese subsidiary. VR Santander's VR would benefit from an improving operating environment. This in turn will support higher business volumes, benefiting asset quality and profitability. Santander Totta's VR would also benefit from a continued improving funding profile, with a reduced reliance on central bank borrowing. A downgrade would primarily come from a marked deterioration of asset quality. The bank's VR is also sensitive to the conclusion of the sale process of NovoBanco and potential impact on its risk profile and capitalization, if any. SUBORDINATED DEBT AND OTHER HYBRID SECURITIES BST's preference shares are sensitive to a change in Santander's IDR. The rating actions are as follows: Santander Totta: Long-term IDR affirmed at 'BBB', Outlook Positive Short-term IDR affirmed at 'F2' Viability Rating affirmed at 'bb+' Support Rating affirmed at '2' BST: Long-term IDR affirmed at 'BBB', Outlook Positive Short-term IDR affirmed at 'F2' Viability Rating affirmed at 'bb+' Support Rating affirmed at '2' Senior unsecured debt affirmed at 'BBB' Commercial paper affirmed at 'F2' Preference shares affirmed at 'BB' TDA EMPRESAS 1: Fitch Cuts Ratings on 2 Note Classes to 'BBsf' -------------------------------------------------------------- Fitch Ratings has downgraded TDA Nostra Empresas 1 and 2 FTA's junior and mezzanine notes and affirmed the remaining notes as follows: TDA SA Nostra Empresas 1 (TDA Empresas 1) EUR6.2 million Series A (ISIN: ES0377969003): affirmed at 'Asf', Outlook Stable EUR12.0 million Series B (ISIN: ES0377969011): affirmed at 'Asf'; Outlook Negative EUR6.7 million Series C (ISIN:ES0377969029): downgraded to 'BBsf' from 'BB+sf'; Outlook Stable EUR6.6 million Series D (ISIN: ES0377969037): downgraded to 'BBsf' from 'BB+sf'; Outlook Stable EUR3.0 million Series E (ISIN: ES0377969045): downgraded to 'BBsf' from 'BB+sf'; Outlook Stable TDA SA Nostra Empresas 2 (TDA Empresas 2) EUR12.0 million Series A (ISIN: ES0377957008): affirmed at 'Asf'; Outlook Stable EUR33.7 million Series B (ISIN: ES0377957016): affirmed at 'Asf'; Outlook Stable EUR31.9 million Series C (ISIN: ES0377957032): downgraded to 'BBsf' from 'BB+sf'; Outlook Stable EUR9.7 million Series D (ISIN: ES0377957024): downgraded to 'BBsf' from 'BB+sf'; Outlook Stable KEY RATING DRIVERS The downgrade of TDA Empresas 1's class C, D and E notes and TDA Empresas 2's class C and D notes reflect the downgrade of Banco Mare Nostrum (BMN; BB/Stable/B) in May 2015. BMN is servicer and the reserve fund account bank for both transactions and is an ineligible counterparty in accordance with Fitch's criteria. The notes' credit enhancement is partially or fully provided by the reserve fund held at BMN. This material exposure has been addressed by capping the notes' ratings at BMN's rating. The affirmation of the class A and B notes in both transactions reflect the overall stable performance of the transaction over the past year. Credit enhancement has increased as a result of amortization over the past year and the notes' ratings could be maintained even if the reserve fund is not being considered. TDA Empresas 1 and 2's class A notes have amortized by EUR7.7 million and EUR14.4 million, respectively, since the last review. Both transactions are currently amortizing sequentially but could switch to pro rata amortization should the reserve funds be replenished. Both reserve funds are currently marginally underfunded. The rating of the class A and B notes are capped at 'Asf' to address liquidity risks caused by potential servicer disruption events. Delinquencies and defaults remain at overall low levels. Current defaults represent 0.03% and 2.5% of the outstanding balance of TDA Empresas 1 and 2, respectively. Delinquencies over 90 days are 1.05% and 0.91%, respectively. The Negative Outlook on TDA Empresas 1's class B notes has been maintained to reflect the transaction's increased risks due to obligor concentration. The top obligor currently makes up 6.9% of the outstanding balance and the top 10 obligors 49%. Concentration is significantly lower for TDA Empresas 2 with the largest obligor accounting for 3.2% and the 10 largest obligors for 12.8%. RATING SENSITIVITIES The analysis included a stress test to analyze the ratings' sensitivity to a change in the underlying assumptions. The first stress simulated a 25% increase of the default probability and did not imply any impact on the ratings. The second stress test addressed a 25% reduction of recovery rates on the collateral and did not indicate any impact on the ratings. TDA Empresas 1's class C, D and E notes and TDA Empresas 2's class C and D notes would be subject to rating action should BMN's rating change. DUE DILIGENCE USAGE No third party due diligence was provided or reviewed in relation to this rating action. DATA ADEQUACY 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 monitoring. 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. =========== T U R K E Y =========== ALLER PETFOOD: Turkish Unit Declares Bankruptcy ----------------------------------------------- PetfoodIndustry.com reports that Aller Petfood will leave the Turkish market as a producer after the bankruptcy of its Turkish division. Aller Petfood entered the Turkish market in 2014 and became the first international pet food producer in the market, PetfoodIndustry.com recounts. According to PetfoodIndustry.com, Amazon began to hold back all payment to Aller Petfood from its client, putting severe strain on Aller Petfood's Turkish division and draining the division's cash flow. The division was forced to stop deliveries to Amazon, and ultimately declare the Turkish division bankrupt, PetfoodIndustry.com relates. Aller Petfood says it will take any necessary legal actions related to the situation, PetfoodIndustry.com discloses. Denmark-based Aller Petfood develops and produces pet food. ============= U K R A I N E ============= FERREXPO PLC: S&P Lowers LT Corporate Credit Rating to 'SD' ----------------------------------------------------------- Standard & Poor's Ratings Services lowered its long-term corporate credit rating on Ukraine-based iron ore producer Ferrexpo PLC to 'SD' (selective default) from 'CCC', and its short-term rating to 'SD' from 'C'. S&P also lowered the issue rating on the US$286 million senior unsecured notes to 'D' (default) from 'CCC'. S&P placed the 'CCC' rating on the rest of Ferrexpo's outstanding senior unsecured notes on CreditWatch with positive implications. The downgrade follows Ferrexpo's recent announcement that about 90% of the noteholders voted in favor of exchanging the outstanding US$286 million senior unsecured notes due 2016 for new senior unsecured notes. The company expects to complete the exchange offer in the coming days. According to S&P's criteria, it views this as a distressed exchange and tantamount to a default, given its assessment of the liquidity as "weak," the company's credit standing in the market, and the fact that minority noteholders are being forced to exchange their notes. S&P expects to raise its long-term rating on Ferrexpo to 'CCC' or 'CCC+' over the coming days. In S&P's view, the higher rating should be supported by Ferrexpo's ability to maintain at least a "less than adequate" liquidity under S&P's iron ore working assumptions. S&P placed the outstanding $161 million senior unsecured notes on CreditWatch to reflect the likelihood that it would raise the rating on these notes to 'CCC+' if S&P raised the corporate credit rating to 'CCC+'. =========================== U N I T E D K I N G D O M =========================== LOTUS F1: Creditors' Winding-Up Petition Adjourned -------------------------------------------------- Alan Baldwin at Reuters reports that a winding-up petition brought by creditors against the Lotus Formula One team has been adjourned for two weeks. A spokeswoman for the Companies Court in London said on July 6 that the claim against the Enstone-based team, title winners in a previous existence as Benetton and Renault, would be heard on July 20, Reuters relates. Lotus, who now race with Mercedes engines, have had financial problems although the signing of Venzuelan Pastor Maldonado has brought considerable backing from state oil company PDVSA, Reuters discloses. According to Reuters, the team's chief executive Matthew Carter says Lotus are not for sale despite persistent paddock speculation linking them to Renault. Lotus F1 Team is a British Formula One racing team. SANDWELL 1: Fitch Affirms 'Csf' Rating on GBP5MM Class E Notes -------------------------------------------------------------- Fitch Ratings has affirmed Sandwell Commercial Finance No. 1 plc (Sandwell 1) and Sandwell Commercial Finance No. 2 plc (Sandwell 2) as follows: Sandwell 1 FRNs due 2039: GBP15.5 million class B (XS0191371391) affirmed at 'Asf'; Outlook Stable GBP12.5 million class C (XS0191372522) affirmed at 'BBsf'; Outlook Stable GBP10 million class D (XS0191373686) affirmed at 'CCsf'; Recovery Estimate (RE) 65% GBP5 million class E (XS0191373926) affirmed at 'Csf'; RE0% Sandwell 2 FRNs due 2037: GBP33.6 million class A (XS0229030126) affirmed at 'BBsf'; Outlook Stable GBP12.6 million class B (XS0229030472) affirmed at 'Bsf'; Outlook Stable GBP11.5 million class C (XS0229030712) affirmed at 'CCCsf'; RE80% GBP14.5 million class D (XS0229031017) affirmed at 'CCsf'; RE0% GBP9. 4 million class E (XS0229031280) affirmed at 'Csf'; RE0% The transactions are securitizations of commercial mortgage loans originated in the UK by West Bromwich Building Society. KEY RATING DRIVERS The affirmations for Sandwell 1 & 2 reflect improvements seen in the number of watch-listed loans, the falling loan-to-value (LTV) ratios and the sequential paydown of the senior classes. Most properties have been re-valued since closing (between 2010 and 2014). Following a market-wide correction in UK secondary quality property values since origination, which saw the LTV for the portfolios increase substantially, ongoing amortization and completed loan workouts have over the last 12 months reduced the weighted average (WA) LTV in Sandwell 1 to 89.4%, from 91.6%, and in Sandwell 2 to 91.8%, from 98.5%. Low interest rates continue to allow the servicer some time in working out distressed floating-rate loans that are unhedged, although this is only sustainable until interest rates start to rise. The WA interest coverage ratios (ICR) for the loans are 4.15x and 2.77x, for Sandwell 1 and Sandwell 2, respectively. This compares with 4.83x and 2.85x a year earlier. As of the May/June 2015 reporting cycle, Sandwell 1 had nine of its 30 remaining loans in various stages of enforcement, compared with 11 out of 49 in Sandwell 2. While proportionally similar, the performance of Sandwell 2 is overall weaker (highlighted by the principal deficiency ledger (PDL) on the class Es), as are its prospects. Losses in Sandwell 1 total GBP5.3 million and have so far been absorbed by the reserve account. While below its target, the reserve fund is being replenished with excess spread before step- up margins will be paid on the notes (Fitch's ratings do not address the likelihood of these step-up payments being met). Sandwell 2's reserve fund has been exhausted, with a total of GBP18.2 million loan losses having been realised, leaving a GBP7.2 million debit balance on the PDL for the class E notes. While excess spread can be used to replenish principal deficiencies, Fitch expects the class D and E notes from both issuers ultimately to be written off as more loan losses are realised. Fitch expects sequential payments to continue for the foreseeable future, given that arrears in both transactions are at levels in breach of the sequential payment test. Sequential payments, along with scheduled amortization, mitigate adverse selection risk facing senior investors in Sandwell 1 and 2. RATING SENSITIVITIES Evidence of recoveries or revaluations below Fitch's expectations could result in downgrades. DUE DILIGENCE USAGE No third party due diligence was provided or reviewed in relation to this rating action. DATA ADEQUACY 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 monitoring. 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. SCOP SEAFRANCE: Administrators Reject DFDS Offer to Keep Staff -------------------------------------------------------------- Jamie Weir at Kentnews.co.uk reports that SCOP Seafrance has rejected an offer from cross-Channel ferry operator DFDS which could have kept 202 of its staff members in their current jobs. Danish ferry operator, DFDS made the offer after it became apparent that MyFerryLink owners Eurotunnel would be unable to continue its cross-Channel ferry service, Kentnews.co.uk relates. DFDS promptly picked up leases to two of the MyFerryLink boats before making the offer to take on board some of the SCOP's staff on June 25, Kentnews.co.uk discloses. DFDS says that it didn't receive a response to its offer until June 30, when administrators for SCOP Seafrance contacted it to reject the offer, Kentnews.co.uk notes. The Danish operator, as cited by Kentnews.co.uk, said that its offer would have allowed the company -- which has taken on two of the former MyFerryLink boats -- to run a third vessel between Dover and Calais. According to Kentnews.co.uk, the company said in a statement it "regrets the position taken by the administrators, but remains at the disposal of the Commercial Court of Boulogne to discuss a transfer of parts of the SCOP Seafrance business in order to minimize the social impact of the potential liquidation of SCOP Seafrance." SeaFrance is the operator of the undersea rail link between Britain and continental Europe. ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers' public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than US$3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/booksto order any title today. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter-Europe is a daily newsletter co- published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA. Valerie U. Pascual, Marites O. Claro, Rousel Elaine T. Fernandez, Joy A. Agravante, Ivy B. Magdadaro, and Peter A. Chapman, Editors. Copyright 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 202-362-8552. * * * End of Transmission * * *