TCREUR_Public/150722.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 22, 2015, Vol. 16, No. 143



HETA ASSET: Creditors Demand Oversight Body, Strategy Paper Says


LSF9 BALTA: Moody's Gives B2 Corp. Family Rating, Outlook Stable
LSF9 BALTA: S&P Assigns Prelim. 'B' LT Corp. Credit Rating


HRVATSKA BANKA: S&P Affirms 'BB/B' Issuer Credit Ratings
ZAGREB CITY: S&P Revises Outlook to Negative & Affirms 'BB' ICR


FORCE TWO: S&P Affirms Then Withdraws 'D' Ratings on 2 Notes
NOTTORF SMOKED: Friesenkrone Delicatessen Buys Firm


GREECE: Repays EUR6.8-Bil. Debt to International Creditors
NAT'L BANK OF GREECE: Senior Creditors Mull Recapitalization


ALLIED IRISH: S&P Raises Counterparty Credit Rating to 'BB+'
* IRELAND: Cork Insolvency Rate Drops to More than 50% in June


ISLAND REFINANCING: Fitch Cuts Rating on Class D Notes to 'Csf'


EURASIAN BANK: S&P Affirms 'B+/B' Ratings, Outlook Negative
EURASIAN RESOURCES: S&P Affirms 'B-/B' CCRs, Outlook Negative


CAIRN CLO V: Moody's Assigns B2 Rating to EUR7.7MM Class F Notes
CAIRN CLO V: Fitch Assigns 'Bsf' Rating to Class F Notes


LUSITANO MORTGAGES 6: S&P Hikes Rating on Class B Notes to 'BB'


OLTCHIM SA: Chinese Company Eyes Chemical Producer


KAZAN CITY: Fitch Affirms 'BB-' Long-term Issuer Default Rating
PETROPAVLOVSK PLC: Russian Ruble Decline to Aid Cost Reduction
UNITED BANK: Under Provisional Administration, License Revoked


ELCHE: Fails With Appeal Against Relegation


OTP BANK: Moody's Withdraws Ca LT Foreign Currency Deposit Rating
RADICAL BANK: NBU Declares Bank Insolvent

U N I T E D   K I N G D O M

CENTROL RECYCLING: Owes GBP2.5 Million to Unsecured Creditors
CPUK FINANCE: Fitch Assigns 'B(EXP)' Rating to Class B2 Notes
CPUK FINANCE: S&P Assigns Prelim. B Rating on Class B2 Notes
GREAT HALL 2006-1: Fitch Affirms 'BBsf' Rating on Class Ea Debt
INFINIS ENERGY: Moody's Puts 'Ba3' CFR on Review for Downgrade

LADBROKES PLC: Fitch Affirms 'BB' Long-term Issuer Default Rating
MEIF RENEWABLE: Moody's Affirms Ba2 CFR & Changes Outlook to Neg.
MYSTIA BRIDAL: Brides-To-Be Express Fears as Shop Suddenly Shut
RELAY CARPETS: Director Gets 7-Year Directorship Ban
SKELWITH LEISURE: Goes Into Liquidation on Cost of Legal Disputes

* UK: Number of Food Suppliers in Financial Distress Up 54%



HETA ASSET: Creditors Demand Oversight Body, Strategy Paper Says
Boris Groendahl and Alexander Weber at Bloomberg News report that
creditors of Austrian "bad bank" Heta Asset Resolution AG are
demanding an oversight body to ensure the government doesn't
further harm their interests.

The Austrian government as Heta's sole shareholder has nothing to
gain from winding it down and is planning a fire sale of assets
that won't maximize the value for creditors, Bloomberg says,
citing a strategy paper drafted by law firms Kirkland & Ellis
International LLP and Vienna-based Binder Groesswang.

Austria "has mismanaged the Heta supervision via the bank's
supervisory board, the FMA, the Finance Ministry and the Austrian
central bank for years and is now trying to escape responsibility
by disposing of the assets in a disorderly, hasty and non-
transparent manner," according to the document obtained by

The paper hints at where discussions between creditors and
Austria on more than EUR10 billion of Heta's state-guaranteed
debt are headed, Bloomberg notes.  Almost five months after the
FMA regulator imposed the moratorium, both sides are accelerating
efforts to come to an agreement and avoid what could be years of
legal action, Bloomberg relays.

Andrea Kohlweis, a spokeswoman for the Carinthian government,
said that Carinthia's Finance Secretary Gaby Schaunig and Hans
Schoenegger, head of the region's asset agency which also
guarantees Heta's debt, met on July 20 with creditors in
Klagenfurt, Austria, Bloomberg relates.

According to Bloomberg, Austrian Finance Minister Hans Joerg
Schelling has said he supports Carinthia's negotiations with
creditors and that he's ready to lend the province money if it
manages to reach a deal that reduces Heta's debt.  Mr. Schelling,
as cited by Bloomberg, said the goal is to avoid legal action and
convince creditors to waive Carinthia's guarantees.

While the creditor group expects Heta's Carinthia-guaranteed
bonds to be repaid at par, according to the paper, Mr. Schelling
has said that he aims for a debt cut below the market value of
the debt, Bloomberg notes.

According to Bloomberg, in the strategy paper, creditors said
that Heta shouldn't be forced to conclude a "fire sale" and that
Heta's management "owes their duties" to them, and not to the
Austrian government.  The group said it will pursue legal action
if mismanagement becomes evident, as well as in the case of
failure to reach a deal with Carinthia, Bloomberg relays, citing
the paper.

Heta Assset Resolution AG is a wind-down company owned by the
Republic of Austria.  Its statutory task is to dispose of the
non-performing portion of Hypo Alpe Adria, nationalized in 2009,
as effectively as possible while preserving value.


LSF9 BALTA: Moody's Gives B2 Corp. Family Rating, Outlook Stable
Moody's Investors Service has assigned a first-time B2 corporate
family rating (CFR) and a B2-PD probability of default rating
(PDR) to LSF9 Balta Issuer S.A., the parent holding company of
the Balta group.  Concurrently, Moody's assigned a (P)B2 rating
to the proposed EUR290 million senior secured notes issued by
LSF9 Balta Issuer S.A.  The outlook on all the ratings is stable.

Moody's issues provisional ratings for debt instruments in
advance of the final sale of securities or conclusion of credit
agreements.  Upon the successful closing of the bond issuance and
a conclusive review of the final documentation, Moody's will
endeavor to assign a definitive rating to the different capital
instruments.  A definitive rating may differ from a provisional



Balta's B2 corporate family rating (CFR) is primarily constrained
by its: (1) small scale, and limited product and end-market
diversification; (2) exposure to the cyclical construction
market, with generally low revenues visibility; (3) some
geographic and customer concentration, with its top three
customers representing almost 25% of group revenues; (4) limited
prospects for free cash flow generation in the next 12-18 months
due to elevated level of expansionary capex; (5) limited track
record of good profitability (Moody's adjusted EBIT margin of
7.7% for the 12 months to March 2015 period), primarily achieved
through strategic investments during 2012-2014; and (6) initially
high leverage (5.8x pro-forma for 12 months to March 2015 period,
as adjusted by Moody's).

These constraints are partially offset by Balta's (1) market
leader positions in most of its products, particularly in its key
markets in Germany, UK and France; (2) high share of renovation
and redecoration business (some 80% of group sales) which tends
to be less cyclical compared to new construction, currently
enjoying positive market momentum that supports EBITDA expansion
and deleveraging in the next 12-18 months; (3) long-standing
relationships with its key customers; (4) solid manufacturing and
distribution footprint, enabling customer proximity and limiting
transportation costs; and (5) good track record of product

Moody's views Balta's liquidity as adequate.  Starting cash
balance of some EUR20 million and revolving facility of EUR40
million should cover seasonality of cash flows driven by intra
year working capital swings, even in absence of material free
cash flow generation in next 12 to 18 months.


The envisaged EUR290 million secured notes to be issued by LSF9
Balta Issuer S.A. are rated (P)B2, in line with CFR, despite the
fact that they rank behind the EUR40 million super senior secured
RCF that benefits from the same guarantor and collateral package.
The guarantors represent at least 80% of group sales, EBITDA and
assets.  However the size of RCF is small enough to prevent a
notching down of the notes below the CFR.  In a default scenario
the RCF ranks at the top of the loss given default waterfall,
followed by the notes and trade payables at second rank and
limited amount of lease rejection claims and pensions at the
bottom of the waterfall.


The stable outlook reflects the rating agency's expectation that
in the next 12 to 18 months Balta will maintain a healthy
profitability of around 8% Moody's adjusted EBIT margin (7.7% for
12 month to March 2015 period) and Moody's adjusted debt/EBITDA
trending towards below 5.0x (5.8x pro-forma for 12 months to
March 2015 period, as adjusted by Moody's), which are levels
commensurate with a B2 rating.


Upward pressure on the ratings could arise if Balta were to
demonstrate its ability to (1) sustain its Moody's adjusted EBIT
margin at high single digit in percentage terms, even in an
adverse economic environment; (2) build a track record of
meaningful positive free cash flow generation, supporting a more
robust liquidity profile; and (3) sustainably improve its
Moody's-adjusted debt/EBITDA below 4.5x.

Moody's could downgrade Balta if its (1) Moody's adjusted EBIT
margin were to fall well below current levels (7.7% for 12 month
to March 2015 period), indicating that it is unable to withstand
competitive pressure in the market; (2) free cash flow turned
negative for a pro-longed period; (3) Moody's-adjusted
debt/EBITDA remained sustainably above 5.5x; or (4) liquidity
profile deteriorated.

The principal methodology used in these ratings was Consumer
Durables Industry published in September 2014.  Other
methodologies used include Loss Given Default for Speculative-
Grade Non-Financial Companies in the U.S., Canada and EMEA
published in June 2009.

Headquartered in Sint-Baafs-Vijve, Belgium, LSF9 Balta Issuer
S.A. is one of the leading manufacturer of soft-flooring
products, including rugs, broadloom and carpet tiles for both
residential and commercial construction markets.  In 2014, Balta
reported around EUR520 million revenues, employing more than
3,000 workforce. Balta is currently being acquired by funds
controlled by private equity firm Lone Star (unrated) for a total
consideration of around EUR465 million.

LSF9 BALTA: S&P Assigns Prelim. 'B' LT Corp. Credit Rating
Standard & Poor's Ratings Services assigned preliminary 'B' long-
term corporate credit rating to LSF9 Balta Investments S.a.r.l.,
a holding company of Belgium-based rugs and carpet manufacturer
Balta.  The outlook is stable.

At the same time, S&P assigned its preliminary 'B' long-term
issue rating to LSF9 Balta Issuer S.A.'s proposed EUR290 million
senior secured notes and S&P's preliminary 'BB-' long-term issue
ratings to the proposed EUR40 million super senior revolving
credit facility (RCF).  S&P has assigned a preliminary recovery
rating of '4' to the notes indicating its expectation of average
(30%-50%) recovery prospects in the event of a payment default.
S&P assigned a preliminary recovery rating of '1' to the RCF,
indicating S&P's expectation of very high (90%-100%) recovery in
the event of a payment default.

The final ratings will be subject to the successful closing of
the transaction under terms similar to those currently indicated,
and will depend on S&P's receipt and satisfactory review of all
final transaction documentation.  Accordingly, the preliminary
ratings should not be construed as evidence of the final ratings.
If the terms and conditions of the final transaction depart from
the material S&P has already reviewed, of if the transaction does
not close within what it considers to be a reasonable time frame,
S&P reserves the right to withdraw or revise its ratings.

The preliminary rating on LSF9 Balta Investments (Balta) reflects
S&P's assessments of the group's "weak" business risk profile and
"highly leveraged" financial risk profile.  The combination of
these assessments leads to an anchor of 'b' or 'b-' under S&P's
corporate criteria.  S&P selected an anchor of 'b' based on its
view that Balta's Standard & Poor's-adjusted debt-to-EBITDA and
EBITDA interest coverage ratios are relatively strong compared
with "highly leveraged" peers.

Balta benefits from strong market positions in the niche markets
for residential rugs and carpets, particularly in the U.K.,
Germany, and France.  It has long-term customer relationships
with large international retailers and furniture chains; and its
ongoing investments in production and innovation will continue to
bolster profitability, in S&P's view.  However, Balta's product
range is relatively narrow, and brand differentiation and
manufacturer pricing power are relatively low in the mature and
competitive home furnishings industry.  The business risk profile
is also constrained by the relatively small size of the business
and the large proportion of revenues generated in the fragmented
European market.  S&P considers customer concentration to be a
potential risk given that the group's largest customer accounts
for more than 10% of total revenues.

S&P's financial risk profile assessment is underpinned by Balta's
ownership by financial sponsor Lone Star Funds under the proposed
capital structure.  The transaction would be financed with the
issue of EUR290 million of senior secured notes and an equity
contribution of EUR140 million.  S&P understands that the
financing structure will also include a EUR40 million super
senior revolving credit facility.  The main part of the equity
injection takes the form of preference equity certificates (PECs)
that S&P has assessed as equity-like under its criteria.

S&P believes that Balta's adjusted debt-to-EBITDA ratio will be
slightly above 5x at the end of this year.  S&P includes in its
calculation of debt the EUR290 million senior secured notes,
financial lease liabilities of about EUR20 million, a smaller
amount of operating lease commitments and pension obligations,
and close to EUR50 million relating to a factoring line.  Under
S&P's operating base-case scenario, it anticipates that leverage
will gradually decrease over the next 12-18 months, due to
steadily growing EBITDA.  S&P estimates that Balta should achieve
adjusted EBITDA of about EUR75 million in 2015 and close to EUR80
million in 2016.

"Under our base case, we project that Balta's adjusted debt-to-
EBITDA ratio will be in the 4.5x-5.0x range over the next 12-18
months, and that its adjusted EBITDA interest coverage will
exceed 2.5x.  We view these ratios as borderline between the
"aggressive" and "highly leveraged" financial risk profile
assessments. However, we expect Balta's free operating cash flow
(FOCF) to be relatively low in absolute terms at less than EUR15
million, owing to capital expenditures over 2015 and 2016.  This
places our assessment of the financial risk profile within the
"highly leveraged" category," S&P said.

S&P's base case assumptions:

   -- It forecasts real GDP growth of 2% in Germany and 2.5% in
      the U.K. in 2015, and 2.8% in Germany and 2.9% in the U.K.
      in 2016.  S&P forecasts real GDP growth in North America of
      2.5% in 2015 and 2.9% in 2016.  S&P projects that Balta's
      annual revenue growth will exceed 3%-4% over the next two
      years, broadly in line with consumer spending growth and
      supported by the company's investment in product
      development and marketing.

   -- S&P believes that Balta's EBITDA margins will exceed 13%
      over the next two years, primarily driven by the positive
      impact of recent years' restructuring and cost efficiency
      measures, as well as ongoing investments in the group's
      manufacturing facilities.  S&P believes that investments
      over the next two years will result in capital expenditures
      of about 5%-6% of sales, split between new and enhanced
      manufacturing capacity and in-store consumer displays.

Based on these assumptions, S&P arrives at these adjusted credit
measures over the next 12-18 months:

   -- Debt to EBITDA of 4.5x-5.0x.
   -- EBITDA interest coverage of 2.5x-3.0x.

The stable outlook reflects S&P's view that Balta's strong market
positions in its niche markets, combined with benefits drawn from
past years' efficiency gains and cost savings, will enable it to
generate growing revenues and EBITDA over the next 12-18 months.
The stable outlook also reflects S&P's view that Balta's adjusted
debt-to-EBITDA ratio will be around 4.5x-5x over the next 12-18
months and that its adjusted EBITDA interest coverage will exceed
2.5x, which are relatively strong levels for the 'B' rating, but
that its FOCF will be relatively low in absolute terms at less
than EUR15 million owing to large capex in 2015 and 2016.

A positive rating action would depend on Balta's financial risk
profile strengthening as a result of continuous profitable growth
and a consistently improving operating cash flow base.  S&P
considers that an upgrade would be contingent on Balta's adjusted
debt-to-EBITDA ratio being less than 4.5x on a sustainable basis
and FOCF steadily increasing on the back of more moderate capex,
all else equal.

S&P could take a negative rating action if Balta's credit ratios
weaken such that the EBITDA interest coverage falls below 2x, or
if internally generated liquidity weakens through lower
profitability or a greater-than-expected increase in capex or
working capital.  In S&P's view, the most likely cause of
pressure on the operating performance of the group would be a
loss of customers or due to a prolonged economic slowdown across
Europe, constraining revenues.


HRVATSKA BANKA: S&P Affirms 'BB/B' Issuer Credit Ratings
Standard & Poor's Ratings Services revised its outlook on
Croatian 100%-state-owned development bank, Hrvatska banka za
obnovu i razvitak (HBOR) to negative.  At the same time, S&P
affirmed its long- and short-term issuer credit ratings on HBOR
at 'BB/B'.

The outlook revision follows S&P's outlook revision on the
Republic of Croatia on July 17, 2015.  S&P's outlook revision on
HBOR does not reflect any change in S&P's view on HBOR's
likelihood of extraordinary support from the sovereign or on its
stand-alone creditworthiness.

S&P equalizes the ratings on HBOR with those on Croatia.  S&P
assess as almost certain the likelihood that the sovereign would
provide timely and sufficient extraordinary support to HBOR in
the event of financial distress.  S&P bases its assessment of
HBOR on S&P's view of the bank's:

   -- Critical public policy role as the main operator of the
      government's economic, social, and political policy --
      namely, the sustainable development of the Croatian economy
      and the promotion of exports.  The bank's role has widened
      since its formation and has evolved alongside the
      government's strategic goals for the social and economic
      development of the country.  In view of the government's
      economic agenda, S&P believes that HBOR will continue to
      play a vital role.

   -- Integral link with Croatia, demonstrated by the state's
      100% ownership, regular oversight, and injections of
      capital. HBOR benefits from a public policy mandate and
      strong government support.  Croatia guarantees all of
      HBOR's obligations unconditionally, irrevocably, and at
      first demand, without issuing a separate guarantee
      instrument. The government is closely involved in defining
      HBOR's strategy; the supervisory board includes the
      ministers of finance and economy, who serve as president
      and vice president of the board, as well as the ministers
      of regional development and EU funds, agriculture, tourism,
      and entrepreneurship and trade.

HBOR was established in June 1992, tasked with financing the
reconstruction and development of the Croatian economy.  HBOR
lends to both the public and the private sectors, either directly
or through commercial banks.  These banks lend HBOR funds on to
the ultimate borrowers, who benefit from HBOR's lower funding
cost, while still providing subsidized loans to Croatian

The negative outlook on HBOR reflects that on Croatia.  As S&P
equalizes the ratings on HBOR with those on Croatia, S&P would
lower the ratings on HBOR if it lowered its sovereign ratings on

In addition, S&P could lower the ratings on HBOR if S&P revised
its view of the likelihood of sufficient and timely extraordinary
support from the Republic of Croatia, for example if S&P
considered that the bank's role for or link to the Croatian
government had weakened.

A revision of our outlook on Croatia to stable would trigger the
same action on HBOR.

ZAGREB CITY: S&P Revises Outlook to Negative & Affirms 'BB' ICR
Standard & Poor's Ratings Services revised its outlook on the
Croatian City of Zagreb to negative from stable and affirmed its
'BB' long-term issuer credit rating.

As defined in EU CRA Regulation 1060/2009 (EU CRA Regulation),
the ratings on Zagreb are subject to certain publication
restrictions set out in Article 8a of the EU CRA Regulation,
including publication in accordance with a pre-established
calendar.  Under the EU CRA Regulation, deviations from the
announced calendar are allowed only in limited circumstances and
must be accompanied by a detailed explanation of the reasons for
the deviation.  In the case of Zagreb, the deviation has been
caused by the outlook revision to negative from stable on the
long-term rating on Croatia on July 17, 2015.


The outlook revision follows a similar action on Croatia on
July 17, 2015.

In accordance with S&P's criteria for rating non-U.S. local and
regional governments (LRGs) and their related sovereigns, S&P
generally caps the long-term rating on an LRG at the same level
as its respective sovereign.  S&P do not believe that the
institutional and financial framework for Croatian LRGs allows
any of them to be rated above the sovereign.  In particular, S&P
views Croatian LRGs' autonomy as limited by their revenues'
dependence on transfers or shared taxes from the sovereign.  In
addition, Croatian LRGs' revenue-expenditure balance has been
undermined several times over the past few years by the central
government's changes to the tax system, most recently the
realignment of income tax brackets.  As a result, S&P considers
that the long-term rating on Zagreb cannot be higher than that on
the sovereign, leading S&P to revise its outlook on the rating to
negative in line with that on Croatia.

The rating on Zagreb reflects S&P's view of the city's weak
budgetary flexibility, financial management, and liquidity
position, as S&P's criteria define these terms.  It also reflects
S&P's view of the volatile and unbalanced institutional framework
for Croatian cities and Zagreb's average economy.  These factors
are somewhat offset by the city's very strong budgetary
performance, low debt, and moderate contingent liabilities.

The long-term rating on Zagreb is equivalent to S&P's assessment
of its stand-alone credit profile, which S&P assess at 'bb'.  In
S&P's base case, it believes that tight control over operating
spending should allow Zagreb to maintain strong budgetary
performance and gradually reduce its debt burden amid economic
stagnation in Croatia.


S&P views Zagreb's liquidity position as weak, owing to the
city's limited access to external liquidity.  S&P also believes
that the dwindling operating surplus indicates that the city's
internal cash-generating capacity has weakened somewhat.


The negative outlook on Zagreb reflects that on Croatia.

If S&P lowered the long-term rating on Croatia, S&P would lower
the long-term rating on Zagreb because it considers that Croatian
cities cannot be rated above the sovereign, according to S&P's

Moreover, S&P might consider a negative rating action on Zagreb,
if S&P sees weakening budgetary performance and debt increases
that exceed its forecast.  S&P could also lower the ratings if it
saw the city's liquidity position deteriorate further due to
dwindling cash reserves, or if S&P changed its assessment of the
city's financial management due to uncertainties regarding the
political leadership.

S&P could revise the outlook on Zagreb to stable if S&P revised
the outlook on the long-term sovereign credit rating on Croatia
to stable and, at the same time, Zagreb continued to perform in
line with S&P's base-case scenario.

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

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

The committee's assessment of the key rating factors is reflected
in the Ratings Score Snapshot above.

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


                               To               From
Zagreb (City of)
Issuer credit rating
  Foreign and Local Currency   BB/Neg./--       BB/Stable/--


FORCE TWO: S&P Affirms Then Withdraws 'D' Ratings on 2 Notes
Standard & Poor's Ratings Services affirmed and subsequently
withdrew its credit ratings on FORCE Two Limited Partnership's
class D and E notes.

The rating actions follow S&P's receipt of a request from the
issuer to withdraw the ratings.  In S&P's opinion, the current
ratings appropriately reflect its opinion of the creditworthiness
of the class E and D notes.  S&P has therefore affirmed and
subsequently withdrawn its 'D (sf)' ratings on the class D and E

FORCE Two Limited Partnership is a German small and midsize
enterprise (SME) collateralized loan obligation (CLO) transaction
that securitizes a static portfolio of profit participation
agreements.  The transaction closed in May 2007 and has a legal
final maturity date of Jan. 1, 2018.


FORCE Two Limited Partnership
EUR214.5 Million Fixed- And Floating-Rate Notes

Class             Rating
             To            From

Ratings Affirmed and Withdrawn

D            D (sf)        D (sf)
             NR            D (sf)

E            D (sf)        D (sf)
             NR            D (sf)

NR--Not rated.

NOTTORF SMOKED: Friesenkrone Delicatessen Buys Firm
Undercurrent News reports that creditors of bankrupt German fish
smoker Nottorf Smoked Specialties have agreed to sell the company
to herring processor Friesenkrone Delicatessen Heinrich Schwarz &
Sohn, Friesenkrone and bankruptcy firm Munzel & Bohm said.

"We can use the value chain with the modern expanded smokehouse
in Kuehlungsborn and the highly trained staff," the report quotes
Friesenkrone Delicatessen CEO Hendrik Schwarz as saying.

Nottorf Smoked Specialties was a 111-year old family business
that processed a wide range of fish species, the report
discloses. Friesenkrone specializes in young herring specialties.

"With the Friesenkrone delicatessen, we have found an ideal
buyer," Undercurrent News quotes liquidator Reinhold Horn -- -- of Munzel & Bohm as saying.


GREECE: Repays EUR6.8-Bil. Debt to International Creditors
Mehreen Khan at The Telegraph reports that the Greek government
cleared its monthly debts with its international creditors on
July 20, as the country's creaking banks were able to open for
the first time in three weeks.

Athens was able to make a EUR6.8 billion payment to the European
Central Bank, International Monetary Fund, and the Bank of Greece
on July 20, avoiding a debt default and ensuring the country will
stay afloat until at least the end of the month, The Telegraph

According to The Telegraph, the payment was made after a EUR7.18
billion bridging loan was released by the Europe's rescue fund,
the EFSM, following an agreement to use the facility was struck
last week.

Greece, The Telegraph says, is now no longer in arrears with the
IMF -- 20 days after it became the first ever developed world
debtor to default on the Washington-based fund.  The payment
paves the way for the IMF to disburse up to EUR16 billion to the
cash-strapped country as part of a third bail-out program, The
Telegraph notes.

"The fund stands ready to continue assisting Greece in its
efforts to return to financial stability and growth," The
Telegraph quotes IMF spokesman Gerry Rice as saying.

However, analysts warned the prospect of a debt default and
possible Greek exit from the eurozone has not faded, according to
The Telegraph.  Greece still needs to find another EUR5 billion
for its creditors in August, The Telegraph states.

Negotiations over a third bail-out worth EUR86 billion are due to
formally begin once the Greek parliament crosses another
legislative hurdle later this week, The Telegraph discloses.

MPs need to pass laws reforming the country's public
administration and begin implementation of an EU directive on
bank failures today, July 22, The Telegraph says.

                     Banking Sector Recovery

According to The New York Times' Jack Ewing, restoring trust in
the banks, so that customers will be willing to deposit their
money again, is one of the most important tasks that Greek and
eurozone officials will face as they try to get the economy
moving again.

But undoing the damage wrought in recent months will take money
and time, as well as agreement among quarreling eurozone nations,
The Times notes.  Analysts said even if Greece and its creditors
can reach a new bailout deal, it might not be until next year
that Greek banks are stable enough that the government can lift
restrictions on movements of money abroad, The Times relates.

Greeks' nervousness about keeping their money in the banks is
understandable as long as it is only emergency loans from the
European Central Bank that are keeping those lenders from
collapsing, The Times states.

And, unlike in the United States, where federal deposit insurance
protects individual bank accounts up to US$250,000, there is no
adequately financed system to insure eurozone depositors against
losses if a bank fails, The Times says.

Some elements of a rescue plan for Greek banks are beginning to
take shape, The Times discloses.  The European Central Bank, in
its role as overseer of eurozone banks, will conduct a review of
the financial condition of the four largest Greeks banks around
the end of the summer, The Times relays.  That is the first step
in determining what kind of help they need to survive, The Times

NAT'L BANK OF GREECE: Senior Creditors Mull Recapitalization
Tom Beardsworth at Bloomberg News reports that a group of senior
creditors to National Bank of Greece SA said they'll consider
recapitalizing the troubled lender to avoid incurring losses on
their bonds.

"As sophisticated investors in financial institutions, our
clients would consider increasing their financial commitments to
NBG under appropriate circumstances," Shearman & Sterling LLP,
the law firm representing the group, wrote in a July 17 letter to
international creditors including the European Central Bank and
obtained by Bloomberg.  "Our clients intend to ensure that their
rights under all applicable laws are fully respected.

Greece's tentative bailout deal puts senior bank bondholders
explicitly in line for losses because it requires the country to
adopt the European Union's Bank Resolution and Recovery Directive
as a condition for aid, Bloomberg notes.  Fitch Ratings said
Greece's existing insolvency law excludes a bail-in of the debt,
Bloomberg relays.

The bondholders are seeking to ensure that Greece explores
private-sector solutions before resorting to a bank resolution
and that senior creditors are protected should it come to that,
Bloomberg says, citing the letter, which was also addressed to
the European Stability Mechanism, the vehicle set up to finance
loans to distressed euro area countries, the president of the
Eurogroup and the governor of the Bank of Greece.

According to Bloomberg, a person familiar with the matter said
the group holds about 25% of NBG's EUR750 million (US$812.5
million) of senior bonds due April 2019.

The National Bank of Greece S.A. is a commercial bank and was
incorporated in the Hellenic Republic in 1841.  The National Bank
of Greece S.A. and its subsidiaries (the "Group" or "NBG Group")
provide a wide range of financial services activities including
retail and commercial banking, global investment management,
investment banking, insurance, investment activities and
securities trading.  The Group's non-financial service activities
include hotels, warehouse management and real estate investments.
The Group operates in Greece, Turkey, UK, South Eastern Europe
which includes Bulgaria, Romania, Albania, Serbia and FYROM,
Cyprus, Malta, Egypt and South Africa.


ALLIED IRISH: S&P Raises Counterparty Credit Rating to 'BB+'
Standard & Poor's Ratings Services took various rating actions on
Irish banks.  Specifically S&P:

   -- Raised the ratings on Bank of Ireland (BOI) to 'BBB-/A-3'.
      The outlook is positive.

   -- Raised the long-term ratings on Allied Irish Banks PLC
      (AIB) and Permanent TSB PLC (PTSB) to 'BB+' and 'BB-',
      respectively.  The outlooks on both banks are stable.

   -- Revised the outlook to stable from negative on KBC Bank
      Ireland PLC (KBCI) and affirmed the 'BBB-/A-3' ratings.

   -- Affirmed the 'BBB/A-2' ratings on Ulster Bank Ireland Ltd.
      (UBIL) and its U.K.-based parent Ulster Bank Ltd. (UBL).
      The outlook remains stable.

The rating actions reflect S&P's view that industry risks have
decreased for Irish banks, as S&P believes that improvements in
banking system profitability and lower risk appetite will prove
enduring.  In addition, S&P believes that the structure of the
industry will remain broadly stable with relatively few players
and a primary focus on domestic retail and business banking.  As
a result, S&P expects the industry's existing competitive
landscape to remain supportive of a more rational risk-return
profile than before the crisis.

S&P has observed a significant improvement in preprovision
profitability and earnings capacity of most Irish banks over the
past few reporting periods.  This has primarily been the result
of improving net interest margins (NIM) on the back of deposit
repricing, a decline in other funding costs, and better margins
on new lending.  In addition, structural factors such as the
eligible liabilities guarantee (ELG) fees no longer pose a
material drag on profitability.  Notwithstanding these
improvements, however, S&P now expects any further improvements
in systemwide preprovision profitability to be gradual over the
next two years.  This is in part because deposit re-pricing has
largely run its course for now with the possible exception of a
few banks.  The large portfolios of tracker mortgages will
continue to weigh on margins as long as low interest rates
persist.  In addition, banks are coming under some pressure to
reduce rates on standard variable rate (SVR) mortgages.  Finally,
S&P expects net loan growth to remain muted over the next few

Although wholly or partially government-owned institutions
continue to dominate the Irish banking system, S&P expects this
ownership to be temporary (although complete divestment will
likely take a few years).  The government reduced its stake in
PTSB to 75% earlier this year following its successful capital
raise.  S&P expects the sale of a first tranche of AIB's shares
over the next few months pending a final decision on its go-
forward capital structure.

"We see a positive trend in our assessment of economic risk for
Ireland.  The Irish macroeconomic recovery has provided an
increasingly supportive backdrop for the banking system.  We
expect real GDP growth of 4.2% in 2015 and 3.8% in 2016 -- levels
that are likely to be ahead of Continental European peers.  We
expect the unemployment rate to also gradually trend down to 8.0%
by end-2016 from 11.4% at end-2014.  Nationally, house prices
have increased by 13.8% over the past 12 months as of May 2015.
Although house price increases have moderated in the past few
months, we expect the gap between demand and supply of new
housing to persist.  Against this favorable backdrop, we expect
credit losses to remain exceptionally low.  This will be due to a
combination of provision releases (both due to progress on
restructuring nonperforming loans and changes in peak-to-trough
house price assumptions in provisioning models) and declining
inflows into new defaults.  We now expect domestic systemwide
credit losses to average around 40 basis points (bps) over 2015
and 2016 (compared to a net provision release of around 40 bps in
2014)," S&P said.

"Private sector deleveraging is increasingly supportive to our
assessment of credit risk in the economy.  We estimate that
private sector credit (we define this as household debt plus
domestic corporate debt) at end-2014 was around 15% lower than at
end-2013, representing a continuation of the deleveraging trend
over the past few years.  That said, the banking system's large
stock of nonperforming loans (NPLs; we define these as impaired
loans plus loans that are 90 days past due but not impaired) and
still-high level of mortgage arrears (including very long term
720 days plus arrears) are some of the most significant
challenges facing the industry, in our view.  We estimate that
NPLs were a very high 28% of systemwide loans at end-2014 (down
from 31% at end-2013) and will only reduce gradually to
approximately 25% by 2016, although provision coverage of NPLs at
around 56% remains adequate, in our view," S&P added.


The positive outlook indicates that S&P may raise the ratings on
BOI over the next one to two years if S&P expects that
capitalization, as indicated by the risk-adjusted capital (RAC)
ratio, will be comfortably and sustainably above 7%.  This could,
for example, result from an improvement in S&P's view of
macroeconomic risks that BOI faces, which in turn would lower the
Standard & Poor's risk weights it applies to its exposures.

An upgrade might also follow if S&P includes a notch of support
for additional loss-absorbing capacity (ALAC) if it deems the
resolution regime in Ireland to be effective, and if S&P expects
BOI's subordinated buffers to meet a required threshold over a
two-year horizon, or potentially longer.  Although less likely,
an upgrade could also follow if S&P considers that potential
extraordinary government support for BOI's senior unsecured
creditors is unchanged in practice, despite the introduction of
bail-in powers and international efforts to increase banks'

S&P could revise the outlook back to stable if it perceives that
BOI's dividend policy, longer-term growth in Standard & Poor's
risk-weighted assets, and risk appetite do not warrant an upward
revision of the bank's stand-alone credit profile (SACP).

The stable outlook reflects S&P's view that the improving
macroeconomic environment and possible capital strengthening
offset the risk that S&P may remove the uplift for potential
extraordinary government support that it currently incorporates
in its long-term counterparty credit rating.

"More specifically, we believe that our assessment of the
economic risks that Irish banks face could improve within the
next year or two.  This could lead to a higher anchor--our
starting point for assigning an issuer credit rating to a bank--
for Irish banks.  In addition, ahead of AIB's privatization, we
believe that part of the government preferred shares could be
converted into equity, which could materially enhance our
assessment of the bank's capitalization.  We expect a conversion
into equity of EUR1 billion of the EUR3.5 billion would be
sufficient to push our projected RAC ratio beyond 5%, and lead to
an increase in the SACP.  Therefore, we consider it likely that
an improvement in our stand-alone assessment on the bank would
offset any potential removal of the one notch of uplift in the
issuer credit rating above the SACP," S&P said.

S&P could lower its long-term rating on AIB if S&P removes the
uplift that it factors into the rating for government support,
and if this removal was not offset by an improved view of the
economic risks that Irish banks face, or an improvement in S&P's
assessment of the bank's capitalization.

Even if S&P decides to remove any uplift for government support,
S&P could raise the long- and short-term ratings in the next two
years if its assessment of economic risk improves--leading to a
higher anchor for Irish banks--and if S&P also expects the bank's
RAC ratio to durably exceed 7%.  The latter could be triggered by
a conversion of at least two-thirds of the government preference
shares.  It could also occur if only one of the above possible
improvements in the bank's SACP materializes, and if S&P includes
a notch of uplift in the ratings for ALAC--provided that S&P
deems the Irish resolution regime as effective at that point and
that the bank's ALAC buffer increases substantially to exceed the
required thresholds.

The upgrade of PTSB reflects an improvement in its SACP to 'bb-'
from 'b+' to reflect the improvement in the anchor or starting
point for rating banks in Ireland.  It also incorporates a
negative notch of adjustment to reflect S&P's view that PTSB has
yet to deliver steady-state, sustainable earnings.  This
adjustment has the impact of offsetting the notch of uplift
factored into the rating for extraordinary government support,
which we expect will diminish by end-2015.

The stable outlook on PTSB reflects Standard & Poor's view that
PTSB's capitalization and earnings capacity will remain
commensurate with S&P's expectations at this rating level.  The
stable outlook also reflects S&P's view that an improvement in
its view of Irish economic risk is unlikely in itself to result
in an upgrade of PTSB.  This is because S&P continues to believe
that PTSB lags its peers in the path to recovery and sustainable

S&P would lower the ratings if PTSB's path to earnings recovery
falters or if S&P observes setbacks in the execution of its
restructuring plan.

S&P would raise the ratings if it perceives that PTSB's earnings
capacity and profitability will materially outperform S&P's
expectations, resulting in an improvement in capitalization as
measured by S&P's RAC ratio sustainably above the 10% level.
This would have to result in an improvement in S&P's combined
assessment of capitalization and risk profile.

S&P has raised UBL's stand-alone credit profile (SACP) to 'bb'
from 'b+', reflecting improvements in S&P's views of its
capitalization and funding and liquidity profile.

The stable outlook on UBL and its Ireland-based subsidiary UBIL
reflects S&P's stable view of the supported group credit profile
(GCP) of the Royal Bank of Scotland PLC (RBS), UBL's ultimate
parent.  An upgrade or downgrade of RBS would have the same
impact on UBL and UBIL.

S&P could also consider an upgrade if it revised UBL's group
status to "core" from "highly strategic", which would enable S&P
to equalize the ratings on both UBL and UBIL with RBS.  Such an
assessment would primarily require both UBL and UBIL to
demonstrate operating performance in line with that of the
parent, in particular its U.K. Personal & Business Banking

S&P could consider a downgrade if it perceived a weakening in the
links between the entities and RBS.

Over the coming 12 months, S&P believes that UBL's intrinsic
creditworthiness may improve, though this would not affect the
ratings given that its group status caps them at one notch below
those on RBS.  This improvement may occur if S&P revised upward
its economic risk assessment for either the U.K. or Ireland (both
currently on a positive trend).  In this situation, S&P would
revise up UBL's anchor to 'bbb' from 'bbb-', which in turn would
also likely lead S&P to revise upward the SACP by one notch.
However, S&P don't expect either scenario would lead to an
improvement in its assessment of UBL's capitalization.

S&P has raised its SACP on KBC Bank Ireland PLC (KBCI) to 'bb'
from 'bb-' to reflect the improvement in the anchor or starting
point for rating banks in Ireland.  However, S&P has offset this
improvement by incorporating a negative notch of adjustment in
the rating.  This reflects S&P's view that the bank is yet to
demonstrate its ability to return to sustained profitability and
the large stock of non-performing assets it has to work through
compared to peers with a similar rating.

The stable outlook reflects S&P's view that the improving
macroeconomic environment and reducing impairments will support
KBCI's capital position, which S&P considers will likely remain
sustainably above 5% as measured by its projected RAC ratio.

"However, while we view KBCI's strategy as logical, we consider
management's attempt to reposition the KBCI franchise as still
work in progress.  We could lower the ratings if we consider that
management is unlikely to develop KBCI into a retail-focused bank
that is able to generate solid and sustainable earnings or if we
believe that the bank is lagging behind peers in working through
its stock of nonperforming assets.  We could take a similar
action if we observe that the links between KBCI and KBC are
weakening, which could lead us to revise the uplift for potential
group support factored in our ratings on KBCI," S&P said.

S&P could raise the ratings by removing the negative transitional
notch if it sees strong indications that (a) the bank has
returned to sustained profitability, (b) the strategic
repositioning is working successfully, and (c) KBCI maintains a
RAC ratio comfortably in excess of 5.0%.


Ireland                  To                 From
BICRA Group              6                  7
Economic risk            6                  6
Economic resilience      Low risk           Low risk
Economic imbalances      High risk          High risk
Credit risk in the economy
                         Very high risk     Very high risk

Industry risk            6                  7
Institutional framework  High risk          High risk
Competitive dynamics     Intermediate risk  High risk
Systemwide funding       High risk          High risk

Economic risk trend      Positive           Stable
Industry risk trend      Stable             Stable

* Banking Industry Country Risk Assessment (BICRA) economic risk
  and industry risk scores are on a scale from 1 (lowest risk) to
  10 (highest risk).


Upgraded; CreditWatch/Outlook Action; Ratings Affirmed
                                   To                 From
Allied Irish Banks PLC
AIB Group (U.K.) PLC
Counterparty Credit Rating        BB+/Stable/B       BB/Neg./B

                                   To                 From
Allied Irish Banks PLC
Senior Unsecured                  BB+                BB

Allied Irish Banks N.A. Inc.
Commercial Paper (1)              BB+/B              BB/B

Ratings Affirmed

Allied Irish Banks PLC
Commercial Paper                  B
Subordinated                      D

                                   To                 From
Bank of Ireland
Counterparty Credit Rating    BBB-/Positive/A-3  BB+/Positive/B
Certificate Of Deposit            BBB-               BB+

Bank of Ireland
Senior Unsecured                  BBB-               BB+
Subordinated                      BB                 B+
Junior Subordinated               B+                 B-
Preference Stock                  B+                 B-
Commercial Paper                  A-3                B

Bank of Ireland U.K. Holdings PLC
Junior Subordinated (2)           B+                 B-

Ratings Affirmed; CreditWatch/Outlook Action
                                   To                From
KBC Bank Ireland PLC
Counterparty Credit Rating        BBB-/Stable/A-3  BBB-/Neg./A-3

Ratings Affirmed

KBC Bank Ireland PLC
Senior Unsecured                  BBB-

Upgraded; CreditWatch/Outlook Action; Ratings Affirmed
                                   To                 From
Permanent TSB PLC
Counterparty Credit Rating        BB-/Stable/B
Certificate Of Deposit            BB-                B+
Senior Unsecured                  BB-                B+

Ratings Affirmed

Ulster Bank Ireland Ltd.
Ulster Bank Ltd.
Counterparty Credit Rating        BBB/Stable/A-2

Ulster Bank Ireland Ltd.
Certificate Of Deposit            BBB/A-2

Ulster Bank Finance PLC
Commercial Paper (3)              A-2

(1) Guaranteed by Allied Irish Banks PLC.
(2) Guaranteed by Bank of Ireland.
(3) Guaranteed by Ulster Bank Ireland Ltd.

* IRELAND: Cork Insolvency Rate Drops to More than 50% in June
Peter O'Dwyer at Irish Examiner reports that insolvencies in some
parts of Ireland have nosedived by more than 50% in the past
month despite a quarterly nationwide increase, two reports

Irish Examiner, citing data compiled by, discloses
that Cork saw a 55% drop-off in insolvencies this month compared
to the same period last year, while counties Dublin and Meath
accounted for the highest proportions of insolvencies.

The decrease in Cork is more than twice that of the country as a
whole, which had a reduction of 26%, the report notes.

Irish Examiner relates that despite the large decrease, Cork
remained near the top of the insolvency ladder as the third most
insolvent county.

Overall, 83 companies were declared insolvent in June compared to
112 in the same month last year, the report discloses.

Counties Carlow, Clare, Kerry, Kilkenny, Monaghan, Offaly,
Roscommon, and Waterford experienced no insolvent businesses this
month, adds Irish Examiner.

Meanwhile, Irish Examiner says a report by Deloitte painted a
less favourable picture of the insolvency landscape, however,
with a 10% increase in the second quarter of the year.

The report showed 275 corporate insolvencies over the past three
months, of which close to 70% were voluntary liquidations, Irish
Examiner relates.

Irish Examiner discloses that receiverships accounted for 75
(27%) of the total corporate insolvencies in the second quarter
of this year, up by 20 from the first quarter.

Additionally, there were 13 court liquidator appointments --
almost half of which were initiated by the Revenue Commissioners,
adds Irish Examiner.

Just 1% of the insolvencies recorded were accounted for by
examinerships -- a tiny proportion in light of new legislation
that was introduced in early 2014 and which appears to have had
little effect, Irish Examiner relays.

The retail sector is also identified as the industry most dogged
by insolvencies following a 52% increase on the previous quarter
which indicates that difficult trading conditions persist despite
signs of a pick-up in the domestic economy, Irish Examiner


ISLAND REFINANCING: Fitch Cuts Rating on Class D Notes to 'Csf'
Fitch Ratings has downgraded the ratings of Island Refinancing
S.r.l.'s floating rates due 2015 as follows:

  EUR62 million Class B (IT0004293574) downgraded to 'BBsf' from
  'BBBsf'; Outlook Negative

  EUR60 million Class C (IT0004293582) downgraded to 'CCsf' from
  'CCCsf' from 'Bsf'; Recovery Estimate 30%

  EUR32 million Class D (IT0004293590 downgraded to 'Csf' to
  'CCCsf'; Recovery Estimate 0%

Island Refinancing is a refinancing of Island Finance (ICR4)
S.p.A. and Island Finance 2 (ICR7) S.r.l. ICR4 and ICR7 were
securitizations of NPLs originated in Italy by Banco di Sicilia
S.p.A. (BdS, part of the UniCredit banking group, BBB+/Stable/


The downgrades reflect a worsened rate of collections since the
last rating action in July 2014. The Negative Outlook reflects
the possibility of this trend continuing, as well as uncertainty
around the timing of release of the substantial funds tied up in
courts (EUR65.6 million as of January 2015, up from EUR44 million
in July 2014). With most of these funds tied up in courts in
Sicily, Fitch expects a trickle of funds to be released over
time, but cannot assume the full amount will be available by bond
maturity in 2025.

Fitch expects the class B notes to be repaid in full. Once this
occurs (projected to be around July 2021) the class C notes may
face technical default given the accumulated unpaid interest
(Fitch projects over EUR20 million) will become due and payable.
Eventual default and loss on this class is considered probable,
and in the case of the class D notes a full write-off at maturity
(including substantial rolled-up interest in excess of EUR50
million) is all but inevitable. In its projections Fitch assumes
a gradual increase of Euribor to 4% over the term of the

As the transaction is in breach of various performance triggers,
net proceeds are used to pay interest and principal on the most
senior tranche only. Upon the redemption of the class A notes in
January 2015, all deferred interest on the class B notes became
immediately due and payable, prompting a draw of EUR1.8 million
from the liquidity facility given lower-than-average collections.
The drawing is expected to be repaid from recovery proceeds this


The ratings are sensitive to the pace of collections. Further
deterioration in collections will result in downgrades.


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.


EURASIAN BANK: S&P Affirms 'B+/B' Ratings, Outlook Negative
Standard & Poor's Ratings Services revised its outlook on
Kazakhstan-based JSC Eurasian Bank to negative from stable.

S&P has affirmed its long- and short-term counterparty credit
ratings at 'B+/B' and lowered the Kazakhstan national scale
rating to 'kzBBB-' from 'kzBBB'.

The outlook revision reflects S&P's view that Eurasian Bank's
capitalization may come under increasing pressure in the next 12
to 18 months in the currently tight macroeconomic environment in
Kazakhstan.  Although the bank is undertaking extensive cost-
cutting programs to support profitability, and its shareholders
are committed to fully capitalizing earnings in 2015-2017, unlike
in previous years, S&P sees a risk that our risk-adjusted capital
(RAC) ratio before adjustments for diversification and
concentration may stay below 5% because of either elevated
funding costs or increased provision expenses.

At the same time, S&P believes that the bank's asset quality will
remain better than the average level for peer banks in Kazakhstan
and countries with similar economic risks.  S&P expects that the
bank will be able to reduce the level of nonperforming loans
overdue more than 90 days to below 10% by the end of 2015, from
11.5% on July 1, 2015.  In S&P's view, this will result from the
significant enhancement of risk management procedures implemented
by the bank since the end of 2014, including strengthened
collection and loan recovery processes.

S&P considers Eurasian bank's business position will remain
"moderate," balancing its medium size in the context of
Kazakhstan with better-than-system-average business model
diversification, a balanced product mix in both corporate and
retail segments, and an experienced management team.

S&P assesses Eurasian bank's funding as "average" and liquidity
as "adequate" because S&P expects the bank's funding profile to
remain stable in the next 12-18 months, based on a loyal client
base.  S&P also anticipates that the bank will maintain adequate
liquidity buffers.  Liquid assets made up 14.8% of the bank's
balance sheet on April 1, 2015, which exceeded the internal
minimum level of 10%.

The negative outlook on Eurasian Bank reflects S&P's expectation
that the bank's capital ratios may come under increasing pressure
in the next 12-18 months.  This might result from the worsening
operating environment for banks in Kazakhstan owing to the
economic growth slowdown and deteriorating creditworthiness of
the bank's borrowers, both in the retail and corporate segments.
In addition, systemwide pressure on funding in the Kazakh banking
sector might result in elevated funding costs.

S&P would likely take a negative rating action in the next 12
months if the bank's capitalization, as measured by S&P's RAC
ratio, stayed below 5%.  This may result from low profitability
due to increased funding costs, or because of a rise in the
bank's new provision expenses significantly exceeding S&P's
expectation of 2.4%-2.5% of total loans in 2015.  The need to
improve the loan loss reserve coverage, which is currently very
low at 56% of total loans overdue more than 90 days, is one of
the factors that could lead to elevated provision expenses in
2015, in S&P's view.

S&P could revise the outlook to stable if the bank's capital
ratio was restored sustainably to comfortably above 5% and the
bank maintained better asset quality than average for banks in
Kazakhstan.  For a positive rating action, S&P would also need to
see industry risks for Kazakh banks becoming less intense.

EURASIAN RESOURCES: S&P Affirms 'B-/B' CCRs, Outlook Negative
Standard & Poor's Ratings Services affirmed its long- and short-
term corporate credit ratings on Kazakh miner Eurasian Resources
Group (ERG) S.a.r.l. at 'B-/B'.  S&P removed the ratings from
CreditWatch, where it had placed them with negative implications
on April 13, 2015.  The outlook is negative.

The affirmation reflects S&P's view of ERG's "weak" liquidity and
the elevated risk of a debt restructuring over the coming months,
balanced by S&P's higher assessment of potential extraordinary
support for ERG from the Kazakh government.

ERG's liquidity position has deteriorated over the past few
quarters.  The cash generation of its operations has reduced, and
it has insufficient liquidity from either cash or committed
facilities to meet its maturities of more than US$2.8 billion
over the coming 12 months.  That said, under S&P's base-case
scenario, it still anticipates that the company will be able to
refinance the maturities, thanks to the supportive track record
of ERG's banks and their willingness to avoid a write-down if the
company defaults.  However, even if the company successfully
refinances, S&P believes that, given the current commodity
environment, the capital structure of ERG will remain
unsustainable.  S&P has revised downward ERG's stand-alone credit
profile (SACP) to 'ccc+' from 'b-'.

As of December 2014, ERG's adjusted debt was US$7.9 billion, of
which US$1.7 billion is associated with the leveraged buyout of
Eurasian Natural Resources Corporation Ltd. (ENRC).  This is
compares to US$0.8 billion of cash on the balance sheet.  Most of
the debt is owed to two Russian banks: VTB and Sbersbank.  Up to
now, the banks have supported ERG by extending the facilities, in
return for expensive fees and higher interest rates (the total
cash payment from ERG to the banks in 2014 was over US$0.5
billion). However, the weaker position of the Russian banks at
the moment compared with previous years may lead to them to adopt
a less supportive stance; for example, they could cap their
exposure to ERG.  In S&P's view, the company has non-core assets
that could be sold to support deleveraging.  However, given the
uncertain nature of such transactions, S&P don't factor them into
its base-case scenario.

Under S&P's criteria, the rescheduling of a bank loan such that
the lender receives less than the original value of the loan
could be considered to be a distressed exchange offer, which
would be tantamount to a selective default.  According to ERG,
such a plan to haircut the debt was not considered.

Since the beginning of 2015, iron ore and aluminum, which have
contributed substantially to ERG's EBITDA in recent years, saw
their prices drop materially.  They are now expected to make only
a limited contribution to earnings.  The fall in prices, coupled
with competitive new volumes entering the market, weakened the
company's competitive position.  These trends increase ERG's
dependency on the relatively stable ferroalloys division.  As a
result, S&P has revised its assessment of the business risk
profile downward to "weak" from "fair."  Under S&P's base-case
scenario, it projects adjusted EBITDA of US$1.2 billion to
US$1.3 billion in 2015, compared with US$1.9 billion in 2014.

S&P's change in the assessment of potential government support
reflects the Kazakh government being the largest shareholder in
ERG (it has a 40% stake, up from 11% in the past); its extensive
involvement in the running of ERG (two of five board members are
from the government); and ERG's role as the main mining company
in Kazakhstan, with a large workforce in remote regions.  Over
the past year, the government has provided some indirect support
in the form of a US$350 million loan from Kazakhstan Development
Bank, the lowering of some taxes, and a reduction in railway
network charges.  The current assessment reflects S&P's view that
the government has increased its commitment to support ERG, if
needed. But it also reflects some uncertainty in regards to the
timeliness and extent of such support.

S&P views ERG's management and governance as "weak" because of
the risks related to an ongoing investigation of ENRC by the
U.K.'s Serious Fraud Office.  S&P also factors into its
assessment the fact that the reporting of financial accounts is
often delayed, which could lead to periods where S&P lacks timely

S&P assesses ERG's liquidity as "weak."  This is because S&P
foresees a liquidity shortfall in the coming 12 months, which is
related to significant short-term debt (mostly bank loans) of
US$2.8 billion.  In S&P's view, the company's ability to cover
financing needs in the coming 12 months relies to a great extent
on its banks' willingness to refinance the facilities.  As of
now, the company has about US$800 million of cash on the balance
sheet. S&P's assessment doesn't take into account potential
divestments, which are uncertain by nature.

S&P anticipates a breach of maintenance covenants for the key
credit facilities later on this year, leading to another round of
negotiations between ERG and the main banks.

S&P's analysis of liquidity sources does not factor in the
recently extended US$1 billion backstop facility from VTB, under
which the company has US$500 million available.  This is because
it is due in less than 12 months.

S&P calculates that the ratio of sources of liquidity to uses of
liquidity for the 12 months from June 30, 2015, is now
significantly below 1x.  Liquidity sources at this date include:

   -- About US$600 million of cash and equivalents, excluding
      US$200 million that may not be available for debt

   -- Roughly US$600 million-US$700 million of funds from
      operations, as per S&P's base case; and

   -- Relatively small proceeds from divestments the company made
      earlier this year.

Liquidity uses include:

   -- About US$800 million-US$900 million of capital expenditure
      per year; and

   -- Roughly US$2.8 billion of short-term maturities, including
      US$1.7 billion at the ERG level and US$0.4 billion of
      promissory notes to First Quantum Minerals.

Moreover, S&P understands that international mining company Zamin
has taken ENRC to court, claiming that ENRC failed to fully pay
for the purchase of a Brazilian iron ore project.  ERG disputes
this claim.  S&P understands that the parties are currently
negotiating a settlement.

The negative outlook reflects the possibility that S&P could
lower the rating in the coming 12 months if ERG's liquidity
position further deteriorated.

S&P may lower the rating if ERG's liquidity position
deteriorates. This could happen if:

   -- S&P expects ERG's free operating cash flow to be materially
      negative, leading to a potential increase in debt, without
      disposals to offset it; or

   -- ERG's banks become less supportive, making it harder for
      ERG to refinance its facilities.

Such a scenario would lead S&P to lower the rating by at least
two notches, pointing to a potential default or debt

In addition, S&P would consider lowering the rating if it revised
down its assessment of the likelihood of extraordinary government

S&P could revise the outlook to stable if ERG presents a
refinancing plan that S&P considers to be achievable, potentially
including an injection from shareholders or large-scale
divestments.  However, S&P believes that the success of such a
plan is uncertain, particularly in the context of challenging
industry conditions.


CAIRN CLO V: Moody's Assigns B2 Rating to EUR7.7MM Class F Notes
Moody's Investors Service announced that it has assigned the
following definitive ratings to notes issued by Cairn CLO V B.V.:

  EUR181,800,000 Class A Senior Secured Floating Rate Notes due
   2028, Definitive Rating Assigned Aaa (sf)

  EUR25,200,000 Class B-1 Senior Secured Floating Rate Notes due
   2028, Definitive Rating Assigned Aa2 (sf)

  EUR7,000,000 Class B-2 Senior Secured Fixed Rate Notes due
   2028, Definitive Rating Assigned Aa2 (sf)

  EUR18,750,000 Class C Senior Secured Deferrable Floating Rate
   Notes due 2028, Definitive Rating Assigned A2 (sf)

  EUR15,750,000 Class D Senior Secured Deferrable Floating Rate
   Notes due 2028, Definitive Rating Assigned Baa3 (sf)

  EUR20,200,000 Class E Senior Secured Deferrable Floating Rate
   Notes due 2028, Definitive Rating Assigned Ba2 (sf)

  EUR7,700,000 Class F Senior Secured Deferrable Floating Rate
   Notes due 2028, Definitive Rating Assigned B2 (sf)


Moody's definitive rating of the rated notes addresses the
expected loss posed to noteholders by the legal final maturity of
the notes in 2028.  The definitive ratings reflect the risks due
to defaults on the underlying portfolio of loans given the
characteristics and eligibility criteria of the constituent
assets, the relevant portfolio tests and covenants as well as the
transaction's capital and legal structure.  Furthermore, Moody's
is of the opinion that the collateral manager, Cairn Loan
Investments LLP ("CLI"), has sufficient experience and
operational capacity and is capable of managing this CLO.

Cairn V CLO is a managed cash flow CLO.  At least 90% of the
portfolio must consist of senior secured loans and senior secured
bonds and up to 10% of the portfolio may consist of unsecured
senior loans, second-lien loans, mezzanine obligations and high
yield bonds.  The portfolio is expected to be at least 65% ramped
up as of the closing date and to be comprised predominantly of
corporate loans to obligors domiciled in Western Europe.

CLI will manage the CLO.  It will direct the selection,
acquisition and disposition of collateral on behalf of the Issuer
and may engage in trading activity, including discretionary
trading, during the transaction's four-year reinvestment period.
Thereafter, purchases are permitted using principal proceeds from
unscheduled principal payments and proceeds from sales of credit
risk and credit improved obligations, and are subject to certain

In addition to the seven classes of notes rated by Moody's, the
Issuer issued EUR32.15 million of subordinated notes which are
not rated.

The transaction incorporates interest and par coverage tests
which, if triggered, divert interest and principal proceeds to
pay down the notes in order of seniority.

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

The rated notes' performance is subject to uncertainty.  The
notes' performance is sensitive to the performance of the
underlying portfolio, which in turn depends on economic and
credit conditions that may change.  CLI's investment decisions
and management of the transaction will also affect the notes'

Loss and Cash Flow Analysis:

Moody's modelled the transaction using CDOEdge, a cash flow model
based on the Binomial Expansion Technique, as described in
Section 2.3 of the "Moody's Global Approach to Rating
Collateralized Loan Obligations" rating methodology published in
February 2014. The cash flow model evaluates all default
scenarios that are then weighted considering the probabilities of
the binomial distribution assumed for the portfolio default rate.
In each default scenario, the corresponding loss for each class
of notes is calculated given the incoming cash flows from the
assets and the outgoing payments to third parties and
noteholders.  Therefore, the expected loss or EL for each tranche
is the sum product of (i) the probability of occurrence of each
default scenario and (ii) the loss derived from the cash flow
model in each default scenario for each tranche.  As such,
Moody's encompasses the assessment of stressed scenarios.

Moody's used these base-case modeling assumptions:
Par amount: EUR 300,000,000
Diversity Score: 36
Weighted Average Rating Factor (WARF): 2850
Weighted Average Spread (WAS): 3.95%
Weighted Average Coupon (WAC): 5.25%
Weighted Average Recovery Rate (WARR): 43.00%
Weighted Average Life (WAL): 8 years

Stress Scenarios:

Together with the set of modelling assumptions above, Moody's
conducted additional sensitivity analysis, which was an important
component in determining the definitive rating assigned to the
rated notes.  This sensitivity analysis includes increased
default probability relative to the base case.  Below is a
summary of the impact of an increase in default probability
(expressed in terms of WARF level) on each of the rated notes
(shown in terms of the number of notch difference versus the
current model output, whereby a negative difference corresponds
to higher expected losses), holding all other factors equal:

Percentage Change in WARF: WARF + 15% (to 3278 from 2850)
Ratings Impact in Rating Notches:
Class A Senior Secured Floating Rate Notes: 0
Class B-1 Senior Secured Floating Rate Notes: -2
Class B-2 Senior Secured Fixed Rate Notes: -2
Class C Senior Secured Deferrable Floating Rate Notes: -2
Class D Senior Secured Deferrable Floating Rate Notes: -1
Class E Senior Secured Deferrable Floating Rate Notes: -1
Class F Senior Secured Deferrable Floating Rate Notes: 0
Percentage Change in WARF: WARF +30% (to 3705 from 2850)
Class A Senior Secured Floating Rate Notes: -1
Class B-1 Senior Secured Floating Rate Notes: -3
Class B-2 Senior Secured Fixed Rate Notes: -3
Class C Senior Secured Deferrable Floating Rate Notes: -4
Class D Senior Secured Deferrable Floating Rate Notes: -1
Class E Senior Secured Deferrable Floating Rate Notes: -2
Class F Senior Secured Deferrable Floating Rate Notes: -1

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

CAIRN CLO V: Fitch Assigns 'Bsf' Rating to Class F Notes
Fitch Ratings has assigned Cairn CLO V B.V. final ratings, as

Class A: 'AAAsf'; Outlook Stable
Class B-1: 'AAsf'; Outlook Stable
Class B-2: 'AAsf'; Outlook Stable
Class C: 'Asf'; Outlook Stable
Class D: 'BBBsf'; Outlook Stable
Class E: 'BBsf'; Outlook Stable
Class F: 'Bsf'; Outlook Stable
Subordinated notes: not rated

Cairn CLO V B.V. is an arbitrage cash flow collateralized loan
obligation (CLO).


'B'/'B-' Portfolio Credit Quality

Fitch places the average credit quality of obligors in the
'B'/'B-' range. The agency has public ratings or credit opinions
on 65 of the 67 assets in the identified portfolio. The Fitch
weighted average rating factor (WARF) of the identified portfolio
is 32.6, below the covenanted maximum for assigning the final
ratings of 34.5.

High Recovery Expectations

The portfolio will comprise a minimum 90% of senior secured
obligations. Fitch has assigned Recovery Ratings to 65 of the 67
assets in the identified portfolio. The weighted average recovery
rate (WARR) of the identified portfolio is 68.6%, above the
covenanted minimum for assigning the final ratings of 68%.

Partial Interest Rate Hedge

Between 0% and 5% of the portfolio can be invested in fixed-rate
assets, while fixed-rate liabilities account for 2.3% of the
target par amount. At closing the issuer entered into interest
rate caps to hedge the transaction against rising interest rate.
The notional of the caps is EUR10 million, representing 3.3% of
the target par amount, and the strike rate is fixed at 4%. The
caps will expire five years after the closing date.

Diversified Asset Portfolio

The transaction documents provide the investment manager with the
flexibility to choose different obligor concentration covenants
within the portfolio. The covenanted maximum exposure to the top
10 obligor for assigning the final ratings is 20% of the
portfolio balance. This covenant ensures that the asset portfolio
will not be exposed to excessive obligor concentration. The
manager will then have the flexibility to trade obligor
concentration in the portfolio against credit quality (WARF and
WARR covenants) and excess spread (weighted average spread and
weighted average coupon covenants).


Net proceeds from the notes issue were used to purchase a EUR300m
portfolio of mostly European leveraged loans and bonds. The
portfolio is managed by Cairn Loan Investments LLP. The
reinvestment period is scheduled to end in 2019.

The transaction documents may be amended subject to rating agency
confirmation or noteholder approval. Where rating agency
confirmation relates to risk factors, Fitch will analyze the
proposed change and may provide a rating action commentary if the
change has a negative impact on the ratings. Such amendments may
delay the repayment of the notes as long as Fitch's analysis
confirms the expected repayment of principal at the legal final

If in the agency's opinion the amendment is risk-neutral from a
rating perspective Fitch may decline to comment. Noteholders
should be aware that confirmation is considered to be given if
Fitch declines to comment.


A 25% increase in the obligor default probability would lead to a
downgrade of up to two notches for the rated notes. A 25%
reduction in expected recovery rates would lead to a downgrade of
up to four notches for the rated notes.


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


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

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


LUSITANO MORTGAGES 6: S&P Hikes Rating on Class B Notes to 'BB'
Standard & Poor's Ratings Services raised to 'BB (sf)' from
'B+ (sf)' its credit rating on Lusitano Mortgages No. 6 Ltd.'s
class B notes.  At the same time, S&P has affirmed its ratings on
the class A, C, D, and E notes.

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 June 2015.  S&P's analysis reflects the application of its
RMBS criteria.

Credit enhancement has remained stable since S&P's previous

  Class             Available credit
                     enhancement (%)
   A                      21.12
   B                      10.39
   C                       3.53
   D                       0.65

This transaction features an amortizing reserve fund, which
currently represents 0% of the outstanding balance of the notes.
Because the reserve fund is fully depleted, the transaction is
highly exposed to rises in arrears.

Severe delinquencies of more than 90 days at 1.57% are on average
higher for this transaction than our Portuguese RMBS index.
Although total arrears have remained stable over the last year,
defaults in transactions originated by Novo Banco have
historically underperformed S&P's index.  Defaults are defined as
mortgage loans in arrears for more than 360 days in this
transaction.  Cumulative defaults, at 8.71%, are also higher than
in other Portuguese RMBS transactions that S&P rates.  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                 46.17      39.74
AA                  34.68      35.64
A                   28.47      27.39
BBB                 20.77      22.79
BB                  13.18      19.50
B                   11.01      16.42

The increase in the WAFF is mainly due to the geographic
concentration and the use of the weighted-average original loan-
to-value (OLTV) ratio in the WAFF calculation.  A penalty of
1.25x is applied on 58.53% of the pool as province concentration
in Grande Lisboa, Setubal, and Grande Porto exceeds the limit set
by the RMBS criteria.  The weighted-average OLTV ratio of
Lusitano Mortgages No. 6 is very high, with 98% of the
outstanding pool balance having an OLTV ratio of above 80%, with
about 40% having an OLTV ratio above 90%.  This means that, in
line with S&P's RMBS criteria, most of the pool is penalized, as
its OLTV ratio is above the 73% threshold.  At the same time,
seasoning partially offsets the negative effect of geographic
concentration and the weighted-average OLTV ratio.  This is
because S&P's updated criteria give greater credit to well-
seasoned pools.  Lusitano Mortgages No. 6 has a weighted-average
seasoning of 9.8 years, which means that most of the loans will
have a 0.5x adjustment.

The increase in the WALS is mainly due to the application of
S&P's revised market value decline assumptions and the indexing
of its valuations under its RMBS criteria.  The overall effect is
an increase in the required credit coverage for each rating

Lusitano Mortgages No. 6 features interest deferral triggers
based on cumulative collateral defaults as a proportion of the
original collateral balance.  This protects the more senior
classes of notes in stressful scenarios.  Cumulative defaults
currently represent 8.71% of the initial pool balance, compared
with trigger levels of 25.02%, 19.00%, 13.00%, and 8.00% for the
class B, C, D, and E notes, respectively.  Therefore, the class E
notes' trigger has been breached.  Consequently, and as outlined
in the transaction documents, the interest due on this class of
notes is now subordinate to the principal deficiency ledger
(PDL).  Because the PDL is not cured, the reserve fund is fully
depleted and the class E notes have defaulted.

Following the application of S&P's RMBS criteria, its current
counterparty 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,
(ii) the rating that the class of notes can attain under S&P's
RMBS criteria, and (iii) the rating as capped by S&P's current
counterparty criteria.

In this transaction, S&P's unsolicited 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 not all of the conditions in paragraph 44 of the RAS
criteria are met, S&P cannot assign any additional notches of
uplift to the ratings in this transaction.

S&P does not consider the replacement language in the
transaction's liquidity facility and swap agreements to be in
line with S&P's current counterparty criteria.  Therefore, S&P's
ratings in the transaction are capped at 'BBB+' by S&P's long-
term issuer credit rating (ICR) on The Royal Bank of Scotland as
the liquidity facility provider.  At the same time, S&P's ratings
on the notes are capped by its ICR plus notch on Credit Agricole
Corporate and Investment Bank as swap counterparty at 'A+'.
These caps are effective unless higher ratings are possible
without giving benefit to the liquidity facility or swap

The class A notes can withstand the severe stress under S&P's RAS
criteria, and are consequently eligible for up to a four-notch
rating uplift above S&P's rating on the sovereign, which is
'BBB+'.  However, the available credit enhancement for the class
A notes is only able to withstand the stresses that are
commensurate with a 'BBB' rating level under S&P's RMBS criteria.
S&P has therefore affirmed its 'BBB (sf)' rating on the class A

The class B notes fail S&P's RAS stress, and are therefore
ineligible for a rating uplift above S&P's rating on the
sovereign. They have sufficient available credit enhancement to
withstand the stresses that are commensurate with a 'BB' rating
level under S&P's RMBS criteria.  S&P has therefore raised to
'BB (sf)' from 'B+ (sf)' its rating on the class B notes.

Taking into account the results of S&P's credit and cash flow
analysis, S&P considers the available credit enhancement for the
class C notes to be commensurate with our currently assigned
rating.  S&P has therefore affirmed its 'B (sf)' rating on the
class C notes.

The class D notes will be paid after the PDL in the interest
priority of payments if gross cumulative defaults are greater
than 13% of the initial collateral balance.  Because there is a
balance registered on the PDL, a rise in defaults may result in
the class D notes experiencing an interest shortfall.  However,
based on the evolution of cumulative defaults over the last few
years, S&P do not expect this interest shortfall to occur over
the next year.  S&P has therefore affirmed its 'CCC (sf)' rating
on the class D notes.

The gross default cumulative ratio is above the 8% trigger for
the class E notes.  Consequently, and as outlined in the
transaction documents, the interest due on these notes is now
subordinate to the PDL.  Because the PDL is not cured and the
reserve fund is fully depleted, the class E notes have defaulted.
S&P has therefore affirmed its 'D (sf)' rating on the class 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- 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 our 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. 6 is a Portuguese RMBS transaction, which
closed in July 2007.  The transaction securitizes a pool of
first-ranking residential mortgage loans that Novo Banco
(formerly BES) originated.


Lusitano Mortgages No. 6 Ltd.
EUR1.122 Billion Mortgage-Backed Floating-Rate And Subordinated

Class       Rating             Rating
            To                 From

Rating Raised

B           BB (sf)            B+ (sf)

Ratings Affirmed

A           BBB (sf)
C           B (sf)
D           CCC (sf)
E           D (sf)


OLTCHIM SA: Chinese Company Eyes Chemical Producer
-------------------------------------------------- reports that a Chinese petrochemical company
is interested in buying Romania's insolvent state-owned chemical
producer Oltchim, and exploiting oil in Romania. The company's
representatives met Oltchim's judicial administrators last week.

Mediafax reported that Gheorghe Piperea, Oltchim's judicial
administrator, said the state-owned company, which has been under
insolvency for two years, but plans to close this year with
profit, could be sold at the beginning of next year, Romania- relates.

According to, the Chinese company also plans
to take on oil exploitations in Romania, as the main raw
materials which Oltchim needs, namely ethylene and propylene, are
derived from oil. With these raw materials, the Romanian chemical
producer could function at 65% of its capacity, compared to 30%

The judicial administrator hasn't mentioned the company's name,
but this could be the Chinese company Junlun Petroleum CO LTD,
which made several visits in Romania, including for meeting
Romania's Economy Minister Mihai Tudose,

The state, which has a 54.8% stake in Oltchim, has failed several
times in its attempts to privatize the company, adds Romania-

Oltchim SA is a Romanian chemical producer.

As reported in Troubled Company Reporter-Europe on Feb. 1, 2013,
SeeNews said a court in the southwestern Romanian county of
Valcea declared Oltchim insolvent. According to SeeNews, Oltchim
said in a statement the court appointed a consortium made up of
Rominsolv SPRL and BDO Business Restructuring SPRL as its
temporary administrator. The state controlled company filed for
insolvency on Jan. 24, 2013.


KAZAN CITY: Fitch Affirms 'BB-' Long-term Issuer Default Rating
Fitch Ratings affirmed the long-term Issuer Default Rating
("IDR") of the city of Kazan, Russia, foreign and local currency
at the level "BB-" from "stable" outlook and short-term foreign
currency IDR at "B". The agency has also affirmed its National
Long-term rating at "A + (rus)" from "stable" outlook. The
ratings are in circulation in the domestic market of senior
unsecured bonds of the city affirmed at "BB-" and "A + (rus)".

The ratings reflect a high direct risk (direct debt plus other
liabilities classification agency) in Kazan, which includes
budgetary credits from the Republic of Tatarstan. The ratings
also take into account the acceptable operating performance of
the city and a strong diversified local economy. Key Rating
Factors direct risk Kazan made 157% of current revenue in 2014
(2013: 160%). The main share of direct risk -- is loans to
RUR25.4 billion from the state budget, which were aimed at the
development of infrastructure in preparation for the Universiade-
2013. The rest of the market is represented by debt in the amount
of RUR4.8 billion and consists mainly of bank loans.

In February 2013, repayment terms of budget credits Kazan were
substantially mitigated with the introduction of a grace period
up to 2023, and the amortization of the principal amount of ten
annual installments from 2023 to 2032, simultaneously with the
extension of the budget Credit has been a moratorium on the
increase in the debt market, which means that the city can now
attract a new market debt to refinance and not to finance the
deficit. Fitch expects direct debt of the city (bank loans and
bonds) will remain stable in absolute terms but will continue to
be gradually reduced as a proportion of operating revenues: up to
22% by the end of 2017 (2014 .: 25%).

On January 1, 2015, the city's direct debt amounted to RUR4.8
billion and unchanged from a year earlier. The city has improved
the profile of debt maturities during 2014, replacing almost all
short-term bank loans to revolving credit facilities with a final
maturity in 2017. This has helped to ease the pressure in terms
of refinancing and reducing debt servicing costs. In 2015 to
2016, the city should pay off only 1% of direct debt. Fitch
expects the operating balance in Kazan will reach 6%-7% of
operating revenue in 2015-2017 against the backdrop of
containment of operating costs and increase tax revenues.

Operating margin in 2014 was equal to 4.3% and remained almost
unchanged compared with 2013. In 2014, on tax revenues, Kazan
negatively affected lower revenues from tax on personal income
("PIT"), which contributes most significant tax contribution to
the city budget. This was due to the redistribution of revenue
sources and expenditure obligations between the Republic of
Tatarstan and the city of Kazan. From 2014, the total health care
was transferred from the city of the republic. In this regard,
the republic has reduced the share of personal income tax
transmitted to the budget of Kazan, to 15% in 2014 compared to
23.4% in 2013, Kazan - the capital of the Republic of Tatarstan
("BBB-"/outlook "Negative"/"F3"), one of the most developed
regions of the Russian Federation.

The city receives a large amount of capital transfers from the
republic for the last nine years to finance its capital
expenditures. Fitch expects that the country will support the
city in the future if necessary. Kazan has a well diversified
economy with a strong industrial sector, where the main place is
occupied by petrochemicals, machinery and food industries. In
2012-2014, economic growth in the city has exceeded the growth
rate in the whole country. In 2014, the growth of the urban
economy was 2.5%, and the administration expects average growth
of 2% -3% per year in 2015-2017. Factors that may affect the
rating in the future gradual reduction of direct risk in relative
terms combined with stable operating balance at about 7% of
operating income may lead to an upgrade. The increase in direct
debt to over 50% of current income and/or future deterioration in
the operating balance to a level close to zero, may lead to a

PETROPAVLOVSK PLC: Russian Ruble Decline to Aid Cost Reduction
James Wilson at The Financial Times reports that Petropavlovsk,
the gold miner rescued by a rights issue this year, said the fall
in the Russian rouble would help it cut operating costs as the
sector battles the latest drop in the price of the precious

Petropavlovsk was one of the groups hit hardest by the problems
in the sector, the FT notes.  It was forced to scale back plans
for Russian growth -- including an expensive gold processing
plant -- and struggled to refinance the debt accumulated to fund
its growth, the FT recounts.  It did so with a deeply discounted
rights issue concluded in February, the FT relays.

According to the FT, on July 21, the UK-listed miner, chaired by
Peter Hambro, said it would be able to cut its production costs
this year to about US$600 per troy ounce, from a previous target
of US$700 per ounce, helped by Russian currency weakness and its
cost-cutting efforts.  All of Petropavlovsk's gold is produced in
the far east of Russia, the FT states.

The miner suggested it was ready to cut out some less profitable
production in the rest of the year, the FT discloses.  "[A]
tactical decision on absolute levels of production will be taken
during the next six months to achieve the optimal cash flow
generation and net debt repayment," the FT quotes the company as

The company's net debt, which was US$930 million at the end of
2014 before the restructuring, fell to US$696 million at the end
of June, the FT relates.  The company expects to cut net debt to
US$600 million by the end of June, the FT says.

Petropavlovsk PLC is a London-listed mining and exploration
company with its principal assets located in Russia.

UNITED BANK: Under Provisional Administration, License Revoked
The Bank of Russia, by its Order No. OD-1721 dated July 21, 2015,
revoked the banking license from the Moscow-based credit
institution Joint-Stock Commercial Bank United Bank of Industrial
Investments, public joint-stock company, or JSCB UBII PJSC
(Registration No. 2626) from July 21, 2015.

The Bank of Russia took such an extreme measure -- revocation of
the banking license -- because of the failure of the credit
institution to comply with federal banking laws and Bank of
Russia regulations, and established facts of material financial
misstatements, and failure to meet pecuniary obligations to
creditors, considering repeated application within a year of
measures envisaged by the Federal Law "On the Central Bank of the
Russian Federation (Bank of Russia)".

JSCB UBII PJSC deposited funds in low-quality assets and did not
create loan loss provisions adequate to the risks assumed.  Due
to unsatisfactory asset quality to generate sufficient cash flow,
the credit institution failed to meet obligations to creditors on
a timely basis.  The bank materially mispresented its financial
statements to the supervisor to hide available grounds for the
revocation of the banking license.  The management and owners of
the bank did not take required measures to normalize its
activities.  Under such circumstances, the Bank of Russia
discharged its duty to revoke the banking license of JSCB UBII
PJSC as stipulated by Article 20 of the Federal Law "On Banks and
Banking Activities".

The Bank of Russia, by its Order No. OD-1722 dated July 21, 2015,
appointed a provisional administration to JSCB UBII PJSC for the
period until the appointment of a receiver pursuant to the
Federal Law "On the Insolvency (Bankruptcy)" or a liquidator
under Article 23.1 of the Federal Law "On Banks and Banking
Activities".  In accordance with federal laws, the powers of the
credit institution's executive bodies are suspended.

JSCB UBII PJSC is a member of the deposit insurance system.  The
revocation of banking license is an insured event envisaged by
Federal Law No. 177-FZ "On Insurance of Household Deposits with
Russian Banks" regarding the bank's obligations on household
deposits determined in accordance with the legislation.

According to the financial statements, as of July 1, 2015, JSCB
UBII PJSC ranked 378th by assets in the Russian banking system.


ELCHE: Fails With Appeal Against Relegation
------------------------------------------- reports that Elche Club de Futbol, S.A.D. hoped to be
reinstated to Spain's top flight but have been informed they will
start the campaign in the Segunda Division

Elche Club has failed with a High Court appeal against their
relegation from La Liga for tax debts and will play in the
Segunda Division in 2015-16, according to

It was announced last month that the club would be demoted
despite finishing 13th in the top flight last season after
failing to settle tax debts, the report notes.

The report discloses that decision gave a reprieve to Eibar, who
finished in the bottom three but were informed that they would
avoid the drop due to Elche's plight.

The report relays that the Court of Arbitration for Sport (CAS)
rejected Elche's appeal against their expulsion earlier this
month, so the club opted to take the case to a regular court.

However, despite announcing they have cleared their tax debts
last month, they were unable to get their punishment overturned
and will start the upcoming campaign in the second tier, the
report notes.

The report says that Elche responded to the ruling by stating
that they will not give up their attempt to preserve their Liga
status, saying they will take "any necessary actions inside the
law" to defend their interests.


OTP BANK: Moody's Withdraws Ca LT Foreign Currency Deposit Rating
Moody's Investors Service withdrew OTP Bank (Ukraine)'s ratings:

   -- Long-term local-currency deposit rating of Caa2
   -- Long-term foreign-currency deposit rating of Ca
   -- Short-term local and foreign-currency deposit ratings of
      Not Prime
   -- Long-term Counterparty Risk Assessment of Caa2(cr)
   -- Short-term Counterparty Risk Assessment of Not Prime(cr)
   -- National Scale Rating long-term Bank Deposits of
   -- Baseline credit assessment (BCA) of ca.
   -- Adjusted Baseline Credit Assessment of caa2.

At the time of the withdrawal, all the bank's long-term ratings
carried a negative outlook.


Moody's has withdrawn the rating for its own business reasons.

Domiciled in Ukraine, OTP Bank (Ukraine) reported total assets of
US$1.47 billion and shareholders' equity US$85.9 million as at
year-end 2014 under audited IFRS.

RADICAL BANK: NBU Declares Bank Insolvent
The National Bank of Ukraine on July 9, 2015, declared Radical
Bank PJSC and JSB Stolychnyy PJSC insolvent.

The inspection of Radical Bank PJSC's operational cashier desks
and its branches revealed gross breaches of the applicable laws
governing cash circulation, which posed a threat to the interests
of depositors and other creditors of the bank.

Radical Bank PJSC failed to ensure a proper level of security
during the transportation of currency valuables and their safe
storage at the bank's branches and exercise internal control over
cash transactions.

The National Bank of Ukraine takes a tough line on banks that
perform risky transactions that might put at stake the funds
stored at the bank.

In view of the above, and in order to protect the interests of
depositors and other creditors, the Board of the National Bank of
Ukraine adopted a decision to declare Radical Bank PJSC insolvent
(NBU Board resolution No452/BT of July 9, 2015).

In view of risky activities performed by JSB Stolychnyy PJSC,
leading to the deterioration of its financials, which posed
threats to the interests of depositors and other creditors of
this bank, the National Bank of Ukraine held talks with the
bank's shareholders and managers urging them to take measures to
bring the bank's activities into conformity with the applicable
laws, including the NBU regulations.

However, JSB Stolychnyy PJSC failed to take the necessary
measures, its performance indicators deteriorated markedly,
leading to the bank's non-compliance with the regulatory
requirements set by the National Bank of Ukraine.

In addition, this bank failed to meet its obligations to the
depositors and other creditors.

In violation of Article 58 of the Law of Ukraine On Banks and
Banking, the qualifying shareholders of JSB Stolychnyy PJSC
failed to take timely measures to prevent the bank from slipping
into insolvency.

Pursuant to the first part of Article 76 of the Law of Ukraine On
Banks and Banking, the National Bank of Ukraine is obliged, not
later than 180 days from the date the bank was adjudicated a
problem bank, to adopt a decision on declaring the bank insolvent
if a bank that has been declared a problem bank fails to bring
its activities into conformity with the applicable laws,
including the NBU regulations.

In view of JSB Stolychnyy PJSC' failure to take the appropriate
measures to remedy breaches of the NBU regulations and the bank's
inability to meet creditors' claims on the repayment of deposits
and execute payment transactions, given the bank's financial
standing and the fact that the bank was in breach of the
applicable banking laws, the Board of the National Bank of
Ukraine adopted a decision on declaring JSB Stolychnyy PJSC
insolvent (NBU Board resolution No. 453, dated July 9, 2015).

As a side note, according to the applicable Ukrainian laws,
Radical Bank PJSC and JSB Stolychnyy PJSC that have been declared
insolvent shall be placed under jurisdiction of the Deposit
Guarantee Fund (hereinafter -- the Fund), which shall appoint the
provisional administration and authorized officials to these
financial institutions.   The Fund guarantees the reimbursement
of deposits to all depositors who will receive compensation for
the amount of their deposit, including the interest accrued
thereon on the date when the National Bank of Ukraine adopts a
decision to declare the bank insolvent and the Fund initiates a
winding-up procedure against this bank, but up to the
compensation limit established on the date of the respective
decision, regardless of the number of deposits held in one bank.

U N I T E D   K I N G D O M

CENTROL RECYCLING: Owes GBP2.5 Million to Unsecured Creditors
Richard Frost at Insider Media reports that Centrol Recycling
Group Ltd., which was at the center of a public health scare
after accumulating more than 600 tons of waste, entered
administration owing GBP2.5 million to unsecured creditors.

According to Insider Media, newly published documents also reveal
that the firm was bought by Fresco Environmental for almost
GBP300,000 after an initial bid of GBP80,000 was rejected by

The company entered administration on May 11, 2015, with
Simon Plant and Daniel Plant of SFP appointed joint
administrators, following a breach of its company voluntary
arrangement (CVA) and the presentation of a winding-up petition
by the firm's former CVA supervisor, Insider Media recounts.

The company entered into a CVA in October 2013 following a period
of loss-making incurred due to overstaffing, inaccurate pricing
for a large contract and the loss of clients, Insider Media says,
citing a newly published statement of administrator's proposals.

The statement, as cited by Insider Media, said: "Following the
implementation of the CVA, the company found trading very
difficult.  This was due to suppliers seeking pro-forma payments.
The monthly CVA contribution also caused a serious cash-flow
strain and is also understood to have impacted the credit rating
of the company, which contributed to the loss of certain clients
and created difficulty in winning new work.

"In 2014, the company was fined by the Environment Agency for
breaches of the environmental regulations, putting yet further
strain on finances.  Further, the Environment Agency withdrew the
license to hold waste and despite an appeal by the company, the
decision was upheld in March 2015 and the license was revoked.

"At the time of the revocation of the license, the company was
holding a significant amount of municipal waste.  This led the
Environment Agency to issue a remedial notice to remove the
waste.  The terms of the notice also required a site condition
report to be submitted following removal.  Further, during
April 2015, the company's operator license was revoked."

The statement shows that following the company's administration,
12 interested parties requested non-disclosure agreements and two
submitted offers for certain assets but neither deal involved
buying on a going-concern basis, Insider Media relates.

Fresco also submitted an offer on a going-concern basis, Insider
Media recounts.  The deal completed on May 21 and, in accordance
with the terms of the sale and purchase agreement, 17 employees
were transferred to Fresco, Insider Media notes.

An accompanying estimated statement of affairs, as of the date of
the administration, shows that employees in their role as
preferential creditors are claiming GBP11,049 while unsecured
employee claims amount to GBP115,001, Insider Media discloses.
Meanwhile, unsecured trade and expense creditors are owed
GBP437,221 while HM Revenue & Customs is due GBP2.05 million,
Insider Media states.

Centrol Recycling Group is a Widnes recycling firm.

CPUK FINANCE: Fitch Assigns 'B(EXP)' Rating to Class B2 Notes
Fitch Ratings has assigned CPUK Finance Ltd.'s (CPUK) upcoming
tap issue of class B2 notes expected ratings of 'B(EXP)'. The
ratings of the existing class A2, A3 and A4 notes are unaffected.
The Outlook is Stable.

The transaction is a partial refinancing of the CPUK Finance Ltd
whole business securitization (WBS) of five purpose-built holiday
villages in the UK. The GBP560 million class B2 notes will fully
refinance the existing GBP280 million class B notes, and
partially fund the acquisition of Center Parcs by Brookfield. The
issue will increase CPUK Finance's outstanding principal by
GBP280 million to GBP1,490 million.

Fitch calculates that for financial year ended April 2015, EBITDA
pro forma leverage, adjusted for the tap issue, is 8.0x versus
6.5x prior to the proposed partial refinancing, and 7.6x at
transaction close in 2012.

The Stable Outlook reflects Fitch's expectation that the
relatively good quality estate and proactive, experienced
management will continue to deliver steady performance over the
medium term.


The holiday villages are Sherwood Forest in Nottinghamshire;
Longleat Forest in Wiltshire; Elveden Forest in Suffolk, Whinfell
Forest in Cumbria and Woburn Forest in Bedfordshire.


The proposed class B refinancing has been compared to the status
quo and original (closed in 2012) transaction structures
primarily through synthetic (due to the lack of scheduled
amortization) debt service coverage ratio (DSCR) metrics,
deleveraging profile and ultimate forecast repayment date in
addition to stress testing via breakeven analysis.

As per its original analysis in 2012, Fitch assumes under its
base case that the class A and B notes are not refinanced at
expected maturity. Fitch assumes cash sweep amortization after
that. Notably, the class A2, A3 and A4 notes also benefit from a
full cash lock-up one year prior to their expected maturity.
However, this feature falls away from the class A3 and A4 notes
if there is an IPO and Fitch has therefore only given credit to
the class A2 lock-up in its base case.

The increase in debt results in the synthetic DSCR metrics being
weaker than under the status quo scenario (1.55x vs. 1.77x),
however, they are only marginally weaker than under the original
structure. In terms of deleveraging, the class B notes also
demonstrate a weaker profile than under the status quo -- being
ultimately repaid four years later by 2034. However, repayment
under the Fitch base case is only two years later than under the
original transaction. As the repayment dates are far in the
future, the difference in years is viewed as a significant credit
negative for the class B notes due to the greater uncertainty. At
this level, the rating is also inherently more sensitive and
hence more volatile. Under the breakeven analysis, the class B2
notes are fully repaid by 2042 with a decline in cumulative Fitch
base case free cash flow (FCF) of 19.8% vs. 31.4% under the
status quo and 24% under the original structure. Additionally,
the limited trading data (44 weeks) available for Woburn
introduces greater uncertainty to the cash flow projections, and
the slightly weaker structural features (eg, class B restricted
payment condition (RPC) reduced to 1.75x from 1.90x) also weigh
down the rating.


Woburn Cannibalization Adjustment

To estimate how the opening of the Woburn site might affect the
performance of the other four sites, Fitch extrapolated the
average daily rate (ADR) for the four existing sites based on the
first 44 weeks of Woburn trading data provided by management. The
resulting growth rates for each site were then used to adjust the
Fitch base case ADR projections for the first few years of the
projected period.

Woburn Adjustment

Based on the first 44 weeks of Woburn weekly trading data for
occupancy and ADR, Fitch adjusted the occupancy assumption to 95%
from 96%. Analysis showed that ADR had started off at a high
level but has subsequently fallen, which coincided with an
increase in occupancy. However, it is likely that seasonality has
some impact and it is also possible that the absence of the
'Winter Wonderland' attraction at Woburn this year (which will be
present next year) may also have contributed to this. The
management case set Woburn's ADR at GBP189.8. After adjusting for
recent trends, Fitch set Woburn's ADR at a lower level, but at a
10% premium over the average of the other sites (around GBP170).
This premium remains justified by the site's proximity to London
where the median gross annual earnings are 37.4% higher than the
average for the rest of the UK. Part of this premium in wages is
absorbed by higher living costs but a 10% premium is expected to
be sustainable.

Combined EBITDA Projection

EBITDA (after head office costs) is assumed to grow at a CAGR of
negative 0.1% but the actual EBITDA generated is higher than the
CAGR would suggest (with EBITDA growing until 2028). This
reflects the nature of the industry risk for Center Parcs Limited
(CPL; the operating and borrower group company), whereby recent
historical performance has been strong, leading to stronger
growth in the early years. However, beyond 10 years, revenue
visibility reduces, resulting in a subsequent forecast decline
over the longer term.

Combined FCF Projection

FCF is forecast to grow at a long-term CAGR of negative 0.7% but
the actual projected FCF is slightly uneven due to variable tax
expenses. Growing tax and capex amounts contribute to the lower
projected growth rate of FCF in comparison with revenues and
EBITDA. As sales growth slows over the life of the transaction,
the positive working capital cash contribution also falls.


Industry Profile: Weaker

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

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

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

Company Profile: Stronger

Fitch views financial performance as 'stronger'. CPL has
demonstrated strong revenue growth despite past difficult
economic environments, having generated seven-year revenue and
EBITDA CAGRs to 2015 of 3% and 5.5% (not including Woburn),
respectively. Growth has been driven by villa price increases,
bolstered by committed development funding upgrading villa
amenities and increasing capacity. An aspect of revenue stability
is the high repeating customer base with around 60% of guests
returning over a five-year period and 35% within 14 months.

The company's operations are viewed as 'stronger'. CPL is the
UK's leading family-orientated short break holiday village
operator, offering around 850 villas per site set in a forest
environment with significant central leisure facilities. There
are no direct competitors and the uniqueness of its offer
differentiates the company from more basic camping and caravan
offerings or overseas weekend breaks. Management has been stable,
with the current CEO having been in place since 2000 and there
are no known corporate governance issues.

CPL benefits from a high level of advance bookings, which helps
operations. Operating leverage is moderate with fixed costs
estimated at around 50%. Fitch views CPL as a medium-sized
operator with FY15 EBITDA of GBP180.2 million, but it benefits
from some economies of scale. The Center Parcs brand is also
fairly strong and the company benefits from other brands operated
on a concession basis at its sites.

Fitch considers transparency as 'stronger'. As the business is
largely self-operated, insight into underlying profitability is
good. Despite an increasing portion of food and beverage revenues
that are derived from concession agreements, these are mainly
fully turnover-linked, thereby still giving some visibility on
underlying performance.

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

Asset quality is viewed as 'stronger'. Within the UK holiday
parks sector, Fitch considers the quality of the assets as
stronger. CPL is heavily reliant on fairly high capex to keep its
offer current. Fitch views it as a well-invested business with
around GBP380 million of capex since 2007 (around GBP225 million
of investment/refurbishment capex). As of end-4QFY15
refurbishments are on track with 84% of accommodation units
having been upgraded since 2008. The upgrade of a further 106
lodges at Sherwood and Whinfell is expected to be completed in
early August 2015.

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

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

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

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

The class B noteholders benefit from a topco share pledge
(structurally subordinate to the borrower group), and as such
would be able to sell the shares upon a class B event of default
(e.g. failure to refinance in 2020). However, as long as the
class A notes are outstanding, only the class A noteholders are
entitled to direct the relevant trustee with regard to the
enforcement of any borrower security (e.g. if the class A notes
cannot be refinanced one year after their expected maturity).

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

In addition, the class A2, A3 and A4 notes benefit from a full
cash lock-up one year prior to their expected maturity (however,
this falls away for the class A3 and A4 notes if there is an
IPO). However, the class B notes also benefit from a performance-
dependent RPC. As expected, as of end-April 2015, the class B
notes' cumulative ICR at 1.86x was still below its RPC at 1.9x,
so no dividends are being paid (except management fees) and cash
is being locked up. Notably, following the class B refinancing,
this covenant will be reduced to 1.75x. At GBP80m, the liquidity
facility is appropriately sized covering 18 months of the class A
notes' peak debt service. The class B notes do not benefit from
any liquidity enhancement.

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

Peer Group

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


Class A notes

Negative: Deterioration in performance could result in negative
rating action, particularly if Fitch-estimated synthetic FCF DSCR
metrics fall below around 2.0x, in combination with deterioration
in the expected leverage profile.

Positive: Any significant improvement in performance above
Fitch's base case, with a resulting improvement in the Fitch-
estimated synthetic FCF DSCR to above 2.6x, in addition to
further deleveraging could result in positive rating action. The
class A notes are unlikely to be rated above 'BBB+'. This is
mainly due to the sector's substantial exposure to consumer
discretionary spending and uncertainty as to whether the CPL
concept will remain in favor over the long term.

Class B

Negative: Under Fitch's base case, the class B notes are expected
to be repaid by around 2034, with a median synthetic FCF DSCR of
around 1.6x. Any significant deterioration in these metrics could
result in negative rating action.

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

CPUK FINANCE: S&P Assigns Prelim. B Rating on Class B2 Notes
Standard & Poor's Ratings Services assigned its 'B (sf)'
preliminary credit rating to CPUK Finance Ltd.'s class B2 notes.

The transaction is contemplated as a part of the acquisition of
the Center Parcs group by an affiliate of Brookfield Asset
Management.  This is considered a change of control under the
class B notes' issuer/borrower loan agreement.  Following the
acquisition, the borrowing group would be required to offer to
repurchase all or any part of the class B notes at a price of
101% of the aggregate principal amount of the notes' repurchase,
plus accrued interest.

In order to comply with the terms of the class B notes' financing
document, S&P understands that a tender offer was made to the
class B noteholders on July 20.  On the acquisition date, which
S&P expects to be Aug. 3, 2015, the tendered class B notes will
be purchased by the borrowing group.  S&P understands that this
purchase will be funded as part of the multi-stage process that
includes CPUK Finance's expected issuance of its class B2 notes.

Pending the acquisition of the Center Parcs group by an affiliate
of Brookfield Asset Management, S&P understands that exchangeable
notes will be issued by an issuer, an entity separate from CPUK
Finance, and the proceeds from the issuance of exchangeable notes
will be retained in an escrow account.  The exchangeable
noteholders will only have security granted, under an
exchangeable note issuer deed, over the escrow account and will
not have security over any assets of the borrowing group.

On the closing date (acquisition date; expected Aug. 3, 2015),
there will be a mandatory exchange of the exchangeable notes for
the class B2 notes, which will be issued by CPUK Finance (the
issuer).  After this, the class B2 notes' security package
changes from the escrow cash to the operating assets of the
borrowing group, granted under the issuer deed of charge.  In
addition, the class B2 notes have indirect benefit over all of
the shares in CP Cayman Midco 2 Ltd. (Topco) (the topmost entity
in the securitization group outside of the corporate

On the class B2 notes' closing date, a portion of the funds in
the escrow account will be disbursed to the issuer and will be
drawn down to the borrowers via a class B2 loan.  In addition,
the borrowers will use the borrowed funds both to purchase the
class B notes that were tendered (with a commensurate portion of
the class B loan being discharged by the issuer), and to redeem
the remaining portion of the class B loan.  The issuer will
deliver the tendered notes purchased by the borrowers to the
principal paying agent for cancellation.  The issuer will place
the funds from the redemption of the class B loan (in an amount
to cover the prepayment price, accrued interest, and additional
amounts) into a prefunding account to repay the class B notes
that were not tendered after the expiration of the redemption
notification period.  This will be 30 days after the third
closing date (expected Sept. 2, 2015).  The funds in the
prefunding account will only be for the benefit of the class B
noteholders, with security granted under a third supplemental
issuer deed of charge. The operation of the prefunding account is
controlled by an amended (second) and restated issuer cash
management agreement.

If the acquisition does not proceed by Nov. 30, 2015 (longstop
date), the cash held in the escrow account will instead be
applied to fully redeem the exchangeable notes together with
accrued interest, and the existing class B notes will remain

The mechanics for the exchange are spelled out in the terms and
conditions for the exchangeable notes, and the cash movement is
controlled by the exchangeable note escrow agreement.  Both
agreements are currently being finalized and S&P expects them,
along with the conditions precedent to the issuance of the class
B2 notes, to address the movement of cash such that any risks are

From the closing date, the class B2 notes will rank pari passu
with any further class B notes issued and will be subordinated to
the class A notes.

The class B2 notes do not benefit from a liquidity facility.  In
corporate securitization transactions, one of S&P's primary
assumptions is that the issuer is able to survive the insolvency
of the borrowing group without defaulting.  In order to make that
assumption, an appropriately sized liquidity facility is
necessary in order for the issuer to make timely payments to the
noteholders, as well as any other obligations that are senior in
the waterfall to the notes.  The class B notes do not have the
benefit of the liquidity facility (it only covers interest on the
class A notes).

The class B2 notes are structured as a bullet note due in Feb.
2042, but with interest and principal due and payable to the
extent received under the B2 loan.  Therefore, if the B2 loan is
repaid at the expected maturity date (Aug. 2020), the class B2
notes will be redeemed three days later.  However, S&P's analysis
focuses on scenarios in which the loans underlying the
transaction are not refinanced at their maturities.  Under the
terms and conditions of the class B2 loan, if the loan is not
repaid on its expected maturity date (August 2020), interest will
no longer be due and will be deferred.  The deferred interest,
and the interest accrued thereafter, becomes due and payable on
the maturity of the class B2 loan in 2042.  S&P therefore
considers the class B2 notes as deferring accruing interest after
their expected maturity date and receiving no further payments
until all of the class A debt is fully repaid.

It is possible that the deferability of interest would mitigate
the risk that the issuer will not, in the absence of a liquidity
facility, survive the insolvency of the borrowing group without
defaulting on the class B2 notes.  However, in the transaction's
tail period, an insolvency of the borrowing group would affect
the ability of the issuer to repay the class B2 notes.  Given
that S&P typically looks for a liquidity facility to cover debt
service over a period of 18 to 24 months (depending on certain
factors), S&P's view is that, in the absence of a liquidity
facility, the issuer is still at risk of default if the class B2
notes are outstanding in the final few years leading up to the
legal final maturity on the notes at rating categories above that
of the borrowing group.  Furthermore, a liquidity facility in a
transaction that relies upon a cash sweep typically does not
cover principal payments.  Therefore, when S&P assess the
likelihood of repayment for deferrable notes, it may look for
both the deferred interest and the full principal to be repaid
prior to the final few years leading up to the legal final
maturity on the notes.  As a result, S&P's rating on the class B2
notes is limited by the borrowing group's creditworthiness.  S&P
has therefore assigned its 'B (sf)' preliminary rating to the
class B2 notes.

The class B2 notes have several features that improve credit
quality compared with the notes they are refinancing:

   -- Issuer requirement to pay the class B2 notes' interest and
      principal only to the extent received under the B2 loan.
      This removes potential note events of default on redemption
      of the senior debt, providing a longer tail period to fully
      repay accrued interest and principal.  The borrowing
      group's general covenants, which are related to the control
      of assets and liabilities, can survive the redemption of
      the class A debt.  This extends the covenants that are in
      place while the class A debt is outstanding to the
      transaction's full life.  Improved pricing, which reduces
      the amount of interest up to the expected maturity date.

However, the class B2 notes have these key weaknesses compared
with the class A notes and other corporate securitizations that
S&P rates through the borrowing group's insolvency:

   -- The class B2 notes do not have the benefit of a liquidity
      facility.  Despite the pass-through nature of the notes and
      the deferability of the interest payments, the ability to
      rate through insolvency of the borrowing group is limited,
      particularly in the transaction's tail period when S&P
      anticipates that the class B2 notes will be outstanding
      under its rating category stresses.

CPUK Finance's primary sources of funds for principal and
interest payments on the notes are the loan interest and
principal payments from the borrowing group, amounts available
from the liquidity facility (for the class A notes only), and
payments from Topco under the Topco payment undertaking (for the
class B2 notes only).

The transaction will likely qualify for the appointment of an
administrative receiver under the U.K. insolvency regime.  An
obligor default would allow the noteholders to gain substantial
control over the charged assets prior to an administrative
receiver's appointment, without necessarily accelerating the
secured debt, both at the issuer and the borrowing group levels.

S&P's preliminary rating on the class B2 notes reflects the
borrowing group's "satisfactory" business risk profile, the
assets' strong performance and cash flow generating potential,
and any structural protections available to the noteholders.

The transaction blends a corporate securitization of the
operating business of the Center Parcs group with a subordinated
high-yield issuance.


Preliminary Rating Assigned

CPUK Finance Ltd.
GBP560 Million Fixed-Rate Secured Notes

Class                Prelim.          Prelim.
                     rating            amount
                                     (mil. GBP)

B2                   B (sf)             560.0

GREAT HALL 2006-1: Fitch Affirms 'BBsf' Rating on Class Ea Debt
Fitch Ratings has upgraded eight tranches of three Great Hall
Mortgages (GHM) transactions and affirmed 20 others.


Stable Asset Performance

The portion of loans in arrears in all three transactions is
among the lowest across Fitch-rated UK non-conforming deals.
Three months plus arrears have come down from their peaks of
13.1%, 11.6% and 12.7% of the current loan balance for GHM 2006-
1, GHM 2007-1 and GHM 2007-2, respectively, in June 2009 (GHM
2006-1 and GHM 2007-1) and March 2010 (GHM 2007-2), and currently
stand at 2.8%, 3% and 4.1%. The improvement is reflected in
today's upgrades.

Loss severities on properties sold in GHM 2006-1 are at 25.2%,
much lower than 29.5% and 30% for the less seasoned GHM 2007-1
and GHM 2007-2 transactions. This is explained by the
transaction's lower loan-to-value (LTV) levels than in the 2007
vintage deals from the series.

Steady Structure

Following breaches in cumulative possessions and cumulative loss
triggers, the reserve funds (RF) cannot amortize further and a
switch to pro rata amortization of the notes is not permitted. As
a result, Fitch expects a steady increase in credit enhancement
for all tranches.

Commingling Risk

National Westminster Bank (Natwest) acts as collection account
bank in all three deals. Following Natwest's downgrade to
'BBB+'/'F2' in May 2015, the bank does not comply with the
minimum Short-term rating of 'F1' stipulated in the transactions'

A daily sweep from the collection to the issuer account (held
with BNY Mellon, rated AA-/Stable/F1+), in line with the agency's
structured finance counterparty criteria, together with Natwest's
current rating, is still sufficient to support a 'AAAsf' rating.
However, the respective issuers have indicated that they will not
be implementing remedial actions to comply with their transaction
documentation. Therefore, in its analysis of the transactions,
Fitch tested for commingling risk and found that current credit
enhancement is sufficient to withstand such stresses.

Interest Only Loan Concentration
The transactions all have a large portion of interest-only (IO)
loans (85.1% for GHM 2006-1, 85.3% for GHM 2007-1 and 82.7% for
GHM 2007-2) and a concentration of more than 20% of IO loans
maturing within a three-year period. As per criteria, Fitch
carried out a sensitivity analysis assuming a 50% increase in
default probability for these loans and found that current credit
enhancement is able to accommodate such stresses.


All the transactions are fully backed by floating-rate loans.
Increases in interest rates leading to larger defaults and
associated losses than Fitch's expectations could result in
downgrades of the notes.


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


Fitch has checked the consistency and plausibility of the
information it has received about the performance of the asset
pools and the transactions. 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 pools ahead of the transactions'
initial closing. The subsequent performance of the transactions
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.

Fitch has taken the following ratings:

Great Hall Mortgages No. 1 plc (Series 2006-1)

Class A2a (XS0276086393) affirmed at 'AAAsf'; Outlook Stable
Class A2b (XS0276092797) affirmed at 'AAAsf'; Outlook Stable
Class Ba (XS0276086989) affirmed at 'AAAsf'; Outlook Stable
Class Bb (XS0276093332) affirmed at 'AAAsf'; Outlook Stable
Class Ca (XS0276087524) upgraded to 'AA-sf' from 'Asf'; Outlook
Class Cb (XS0276093928) upgraded to 'AA-sf' from 'Asf'; Outlook
Class Da (XS0276088506) affirmed at 'BBBsf'; Outlook Stable
Class Db (XS0276095030) affirmed at 'BBBsf'; Outlook Stable
Class Ea (XS0276089223) affirmed at 'BBsf'; Outlook Stable

Great Hall Mortgages No. 1 plc (Series 2007-1)

Class A2a (XS0288626525) affirmed at 'AAAsf'; Outlook Stable
Class A2b (XS0288627507) affirmed at 'AAAsf'; Outlook Stable
Class Ba (XS0288628224) affirmed at 'AAsf'; Outlook Stable
Class Bb (XS0288628810) affirmed at 'AAsf'; Outlook Stable
Class Ca (XS0288629545) affirmed at 'A-sf'; Outlook Stable
Class Cb (XS0288630121) affirmed at 'A-sf'; Outlook Stable
Class Da (XS0288630394) affirmed at 'BBsf'; Outlook Stable
Class Db (XS0288630550) affirmed at 'BBsf'; Outlook Stable
Class Ea (XS0288630808) affirmed at 'Bsf'; Outlook Stable

Great Hall Mortgages No. 1 plc (Series 2007-2)

Class Aa (XS0308354504) affirmed at 'AAAsf'; Outlook Stable
Class Ab (XS0308354843) affirmed at 'AAAsf'; Outlook Stable.
Class Ac (XS0308462141) affirmed at 'AAAsf'; Outlook Stable
Class Ba (XS0308356970) affirmed at 'Asf'; Outlook Stable
Class Ca (XS0308357358) upgraded to 'BBBsf' from 'BB+sf', Outlook
Class Cb (XS0308355733) upgraded to 'BBBsf' from 'BB+sf', Outlook
Class Da (XS0308357788) upgraded to 'BBsf' from 'Bsf', Outlook
Class Db (XS0308356111) upgraded to 'BBsf' from 'Bsf', Outlook
Class Ea (XS0308357861) upgraded to 'Bsf' from 'CCCsf', Outlook
Class Eb (XS0308356467) upgraded to 'Bsf' from 'CCCsf', Outlook

INFINIS ENERGY: Moody's Puts 'Ba3' CFR on Review for Downgrade
Moody's Investors Service placed on review for downgrade the Ba3
corporate family rating (CFR) of Infinis Energy Plc, reflecting
the weaker outlook for the company's credit profile following the
recent decision by the UK government to remove the exemption for
renewable power generators from the Climate Change Levy (CCL)

"Our decision to place Infinis's ratings on review for downgrade
reflects our expectation that the group's leverage could remain
higher for longer in the context of a soft power price
environment and following the negative consequences for the
earnings of renewable power generators of the recent Summer
Budget" said Matthew Huxham, a Moody's Assistant Vice
President -- Analyst and lead analyst for Infinis.  "Furthermore,
equity and credit interests may not be aligned given the
company's public strategy focused on real dividend growth and
capital expenditure".

At the same time, the rating agency also placed under review for
downgrade the Ba2-PD probability of default rating (PDR) and the
Ba3 rating on the GBP350 million senior notes due 2019 issued by
the group's landfill gas generation business, Infinis Plc.


The rating review was prompted by the announcement by the UK
Chancellor of the Exchequer, George Osborne, in the Summer Budget
of July 8, 2015 of government's intention to remove the exemption
of Renewable Source Energy from the CCL, a tax on energy use.
Moody's expects that this policy decision will be implemented
from August 2015, when the Finance Bill used to enact decisions
set out in the Budget is likely to be passed into law.  Moody's
considers the change to be credit negative for all renewable
electricity generators, as discussed in the recent publication
"UK's Removal of Exemption from Energy Levy is Credit Negative
for Renewable Generators".

Following implementation of the change, renewable electricity
generators including Infinis will lose the ability to sell Levy
Exemption Certificates (LECs) to energy users, which will result
in the loss of around GBP5 per megawatt hour (MWh) generated.
The rating agency considers that the loss of future earnings from
the sale of LECs compounds the weakening impact of lower power
prices on Infinis's credit profile.  Approximately one half of
Infinis's revenues are earned from the "brown" power price and
while the company's contracting strategy provides it with short-
term protection against volatility in the power price, Moody's
expects that it will not protect the company against a
persistently soft power price environment.  The agency expects
that the UK power price will remain low through 2020 with year
average wholesale electricity prices of GBP42-46/MWh if gas
prices remain stable, as discussed in the recent publication "In
Britain, Falling Demand and New Capacity Will Squeeze Coal and

Moody's considers positively the company's strategy to invest in
onshore wind assets, which will reduce its reliance on a
declining landfill gas resource.  However, the UK government has
brought forward the commissioning deadline for new onshore wind
projects to be eligible for the Renewables Obligation support
scheme.  This caused the company to accelerate its debt-funded
investment program, compounding the short-term impact on leverage
of the expected fall in earnings.


Moody's rating review will focus on the ability and willingness
of the group's management to take action which would mitigate the
impact of reduced earnings on the group's credit profile.

The rating agency will endeavor to conclude the review within the
next 60 to 90 days.


The rating could be confirmed if Moody's concludes that Infinis's
management will take sufficient steps to offset the impact on its
credit profile of weaker future earnings and maintain credit
quality at a level commensurate with the current rating with
gearing of the Infinis Energy Plc group measured by debt to
EBITDA likely peaking around 5.0x in 2017.

Conversely, the rating could be downgraded if such measures were
not taken or if further regulatory changes were to occur in the
meantime that would further erode the group's future earnings
base, although the rating agency's base assumption is that this
will not happen.  Provided that no further negative regulatory
changes occur during the period of the rating review, Moody's
expects any downgrade as a result of the review to be limited to
one notch.

The principal methodology used in these ratings was Unregulated
Utilities and Unregulated Power Companies published in October
2014. Other methodologies used include Loss Given Default for
Speculative-Grade Non-Financial Companies in the U.S., Canada and
EMEA published in June 2009.

LADBROKES PLC: Fitch Affirms 'BB' Long-term Issuer Default Rating
Fitch Ratings has revised UK gaming group Ladbrokes Plc's
(Ladbrokes) Outlook to Negative from Stable. The ratings have
been affirmed at Long-term Issuer Default Rating (IDR) at 'BB',
Short-term IDR at 'B' and senior unsecured rating at 'BB'.

The change in the Outlook reflects continuing poor trading
performance, particularly in its UK retail division (evidenced by
weak 1Q15 results) where key structural challenges remain. The
examinership of the Irish operations also adds uncertainty to the
group's current trading profile. Fitch expects this trend to
continue through 2015 and push the return to positive cash flow
generation further back to 2016. This will likely put the 'BB'
rating sensitivities under pressure for the next two years.

Ladbrokes recently announced a possible merger with Gala Group
Plc (B/Stable Outlook), but until there are further developments
Fitch will continue to rate Ladbrokes on a stand-alone basis.
Fitch will review its ratings and/or Outlook in the event of
possible capital structure enhancements and cash protection
measures should the merger not take place.


Trough Expected for 2015

"We expect the group's EBIT margin to fall to 7.4% at 2015 from
11.9% in 2014 as the group continues to face intense competition,
regulatory pressure and increasing taxes, before improving to
10.5% by 2017. The expected improvement will be driven by a
stabilization in over the counter gross win in UK retail and
steady growth in machine revenues."

Trading was mixed for 2014 with Ladbroke's divisions impacted by
significant sector-wide one-off loss on Boxing Day and poor
operating performance in Ireland. Its digital business showed
encouraging signs of stabilization following steep declines in
2013 when the group transferred its platform over to Playtech.

Leverage and Cashflow Weakened
Free cash flow (FCF) and leverage weakened in 2014 due to lower
profits and continued shareholder-friendly pay-outs. As
management has announced its intention to maintain the level of
dividends, Fitch expects FCF to be negative in 2015 before
returning to positive territory (around 2% of sales) by 2017.
Funds from operations (FFO) adjusted net leverage will also peak
at around 4.8x in 2015 before declining to 3.6x by 2017. If
achieved, such cash flow generation and leverage would remain
compatible with the 'BB' rating.

UK Retail Still Recovering

Operating profit at the UK retail division fell 10.9% in 2014 due
to sector-wide Boxing Day losses, increased taxes and the
introduction of new responsible gaming regulation. Fitch expects
the introduction of new machines to translate into modestly
higher machine profits; however, this will be offset by rising
taxes, increasing regulation and fierce competition. As a result,
the division's EBIT margin is likely to fall to around 12% in
2015 before improving steadily thereafter. Fitch forecasts
specifically exclude high roller contribution to EBIT, which came
to GBP14 million in 2014 (2013: GBP6 million) and provides a
positive contingency for the group.

Structural Shift to Online Betting

The UK gaming sector is a mature industry which is undergoing a
structural shift towards more online betting, where Ladbrokes is
currently behind its peers. On-going investment in product
innovation and marketing is of paramount importance to maintain
leading positions. Fitch believes that successful operators will
be adept at providing new and innovative products to online
customers, which is a key long-term growth area. The recently
appointed Ladbrokes CEO has a strong background in digital
gaming, which should help chart the group's future direction.

Execution Risk Remains

Ladbrokes is making sound progress in its transformation to a
digital platform, and we consider execution risk to remain
moderate. The group is. however, still transferring its desktop
functionality over to Mobenga (Playtech), which has recently
taken over its mobile offering.

Digital Performance Lagging Peers

Ladbrokes' digital performance lagged its peers in 2014,
generating just 18% of total net revenue behind Paddy Power (55%)
and William Hill (32%). Digital was also the poorest performer in
the group, with EBIT margins falling to just 6.5% in 2014 from
37% in 2010, due to loss of market share following the transfer
of its platform to Playtech. Fitch expects Digital to remain
challenged and conservatively forecast a slight decline in profit
following a poor 1Q15 performance in sportsbook with heavy
competition. However, Fitch expects Digital to see a small
increase from 2016 onwards, as product and customer relationship
management (CRM) improvements start to take effect.

Drive to Reduce Costs

Given the tough UK gaming environment, management has begun to
reduce the size and costs in the UK betting estate, closing 89
underperforming shops in 2014 and a further 60 shops in 2015.
Given the UK-wide presence of the estate, Fitch does not expect
revenue to be materially affected as the rating agency expects
punters to be able to use other Ladbrokes shops close by.

Poor European performance

Overall contribution from its European retail division has been
declining y-o-y, with Ireland particularly suffering falling
volumes despite a slowly recovering economy. The division
represented 9% of group EBIT in 2014. Fitch expects continued
subdued performance with margins remaining unchanged as the
recent examinership of its Irish division is a constraint on
profit growth in 2015.

Increasing Regulation and Taxes

The rise in machine games tax to 25% from 20% and the
introduction of a new point of consumption tax has eroded margins
in the UK as we had expected. In our view it is likely that the
government's focus on regulation and increased taxes will
continue, albeit on a manageable basis.


-- Group revenue to fall 4% to GBP1,128 million in 2015, weighed
    down by tighter regulation, increased taxes and intense
    competition, tempered by a more competitive online offering.

-- EBITDA margin to fall to 14% in 2015 from 18.5% in 2014 as
    the group adjusts to the rise in machine games duty. EBITDA
    margin to rise to 17% by 2017.

-- New point of consumption tax at around GBP30 million pa.

-- Capex at 5.8% of sales (2014: 5.1%).

-- Flat dividend payout.


Future developments that could lead to a negative rating action

-- Further material deterioration in UK retail operating
    profits, adverse regulatory developments and no significant
    improvement in digital operating profits

-- FCF in negative territory

-- FFO adjusted net leverage rising towards 4.0x (2014: 3.8x) on
    a sustained basis due to continued weak trading, or for over
    12 to 18 months due to M&A activity

-- FFO fixed charge cover below 2.5x (2014: 2.7x)

Future developments that could lead to a stabilization of the
rating Outlook include:

-- Stable UK operating profits, stable or growing digital
    profits and no change in regulation or tax environment
    leading to at least neutral FCF (post dividends)

-- FFO adjusted net leverage below 3.5x on a sustained basis

-- FFO fixed charge cover above 2.5x

Although Fitch considers that the probability of an upgrade is
low in the foreseeable future, future developments that could
lead to positive rating action include:

-- Further strengthening of operations with an established
    competitive profile in online gaming, a stabilized UK retail
    business and lower reliance on the UK market

-- Positive FCF on a sustained basis

-- FFO adjusted net leverage sustainably below 3.0x

-- FFO fixed charge cover above 3.0x


At end-2014, Ladbrokes had GBP21 million of unrestricted cash on
balance sheet and access to GBP283 million of the group's GBP405
million bilateral facilities available. This is sufficient as
Ladbrokes does not face any meaningful debt redemptions in 2015.
The next major debt maturity is its GBP225 million bond due in
March 2017.

MEIF RENEWABLE: Moody's Affirms Ba2 CFR & Changes Outlook to Neg.
Moody's Investors Service affirmed the Ba2 corporate family
rating of MEIF Renewable Energy UK Plc, the Ba1-PD probability of
default rating (PDR) and the Ba2 rating on its GBP190 million
senior secured notes due 2020.  Concurrently, Moody's has changed
the outlook on all ratings to negative from stable.


The change in outlook was prompted primarily by the announcement
by the UK Chancellor of the Exchequer, George Osborne, in the
Summer Budget on July 8, 2015 of government's intention to remove
the exemption of Renewable Source Energy from the Climate Change
Levy (CCL), a tax on energy use.  Moody's expects that this
policy decision will be implemented from August 2015, when the
Finance Bill used to enact decisions set out the Budget is likely
to be passed into law.  Moody's considers the change to be credit
negative for all renewable power generators, as discussed in the
recent publication "UK's Removal of Exemption from Energy Levy is
Credit Negative for Renewable Power Generators".

Following the change, renewable electricity generators including
MEIF Renewable Energy UK will lose the ability to sell Levy
Exemption Certificates (LECs) to energy users, which will result
in the loss of around GBP5 per megawatt hour (MWh) generated.
The rating agency considers that the loss of future earnings from
the sale of LECs compounds the weakening impact of lower power
prices on MEIF Renewable Energy UK's credit profile, although the
company is relatively well protected against the soft power price
environment compared with peers, as it receives less than half of
its revenues from the "brown" price.  The agency expects that the
UK power price will remain low through 2020, with year average
wholesale electricity prices of GBP42-46/MWh if gas prices remain
stable, as discussed in the recent publication "In Britain,
Falling Demand and New Capacity Will Squeeze Coal and Gas".

The rating agency anticipates that the reduction in earnings will
delay deleveraging by the company and could therefore result in
higher refinancing risk at maturity of the senior secured notes,
although higher than previously anticipated leverage could also
result in lower payments to shareholders, depending on
management's financial policy.


The negative rating outlook reflects Moody's assessment of the
increased risk of MEIF Renewable Energy UK's key credit metrics
trending below the rating agency's guidance for the current
rating level towards the end of the life of the current bond
including funds from operations (FFO) to debt below 15% or
retained cash flow (RCF) to debt below 10%.  The outlook could
stabilize if it appeared likely that the company's headroom
against the above rating guidance would be sustained rather than
decline over the life of the notes.


As the outlook is negative, Moody's does not foresee upward
rating pressure arising in the next two years.

Conversely, downward rating pressure could arise if the group
were not to deleverage as anticipated and as the value of the
asset portfolio declines.  This could result from (1) a material
deterioration in the technical availability of the generation
portfolio or the landfill gas yield; (2) average wholesale power
prices falling further below Moody's estimated range between
GBP42-46/MWh to the end of the decade; (3) the payment of equity
distributions at a level inconsistent with the earnings trend of
the business; or (4) a further change to the renewable energy
support mechanism in the UK, which had a material impact on the
value of the support received.  In relation to the latter, a
reduction in the Carbon Price Support (CPS), technically a tax
rather than a renewable support mechanism levied on electricity
consumers, would also be credit negative as it would likely
result in a fall in the power price of c. GBP10/MWh.


The methodologies used in these ratings were Unregulated
Utilities and Unregulated Power Companies published in October
2014, and Loss Given Default for Speculative-Grade Non-Financial
Companies in the U.S., Canada and EMEA published in June 2009.

MYSTIA BRIDAL: Brides-To-Be Express Fears as Shop Suddenly Shut
The Citizen reports that more brides-to-be have come forward
worried that their big day is in jeopardy after the sudden
closure of Mystia Bridal Botique, a wedding dress shop in

Mystia Bridal Boutique, in St Aldate Street, closed its doors
last month to the panic of numerous women whose nuptials are fast
approaching, the Citizen says.

The report relates that among them is Sophie Holder, 28, from
Abbeydale, who is due to tie the knot in Upton St Leonards on
July 24.

She's spent GBP1,500 on her dress and accessories from Mystia but
is now at a loss for what to do, says the Citizen.

According to the report, Cheltenham-based insolvency
practitioners Findlay James has been instructed to start winding
up the company's assets.

The Citizen relates that a spokesman said they have a list of
customers and creditors owed money, who can expect correspondence
on the next steps.

A spokesman for Mystia said there "was no other option" but to
wind up the company after "every last penny" was invested in the
business, the Citizen reports.

RELAY CARPETS: Director Gets 7-Year Directorship Ban
Victor Ronald Bilkey, a director of Relay Carpets UK Limited,
based in Benfleet, has been disqualified from acting as a company
director for seven years for failing to maintain proper records
for his company after giving an undertaking to the Secretary of
State for Business, Innovation and Skills.

The disqualification follows an investigation by the Insolvency
Service and means Mr. Bilkey may not be a director of a company
or be involved in the management of a company in any way for the
duration of his disqualification.

Relay Carpets UK Limited traded as flooring contractors. The
company became insolvent in November 2013 owing money to HMRC.
Solely for the purpose of the undertaking he did not dispute that
he did not maintain and/or preserve or deliver up to the
liquidator sufficient accounting records for the period of trade
of the company as he is required to do as a director.

Without proper accounting records for the company, it was not
possible to establish a number of matters, including:

  * the reasons for payments out of the company bank account,
    including cash withdrawals of GBP538,078, international
    payments of GBP25,000 and payments of GBP170,628 that
    appeared to be for personal benefit or to associated parties,

  * the true level of assets and liabilities (including tax
    liabilities) of the company

Commenting on the disqualification, Mark Bruce a Chief
Investigator with the Insolvency Service said:

"The period of disqualification contained in the undertaking
signed by Mr. Bilkey, sends a clear message to him and to other
company directors: If your company becomes insolvent and you have
failed to maintain proper records that explain sufficient all the
transactions of the business you run the risk of being removed
from the business environment."

SKELWITH LEISURE: Goes Into Liquidation on Cost of Legal Disputes
Harrogate Advertiser reports that Skelwith Leisure, the company
which owns Flaxby Golf course, has gone into liquidation, less
than a month after it started the application process to build an
entire new town on the site.

Skelwith Leisure, one of several Skelwith Group companies, has
gone into provisional liquidation, a company spokesman confirmed,
blaming the costs of a legal dispute over the ownership of the
land, according to Harrogate Advertiser.

The report notes that Skelwith Leisure is set to do battle with
the farming family who sold the land in 2008 at the High Court
next week after the Armstrong family became angry with the
changes to the masterplan, and a lack of building work to date.

A spokesperson for the Skelwith Group has insisted that both the
High Court hearing and the planning application for a new town,
complete with 2,213 homes shops, primary school, restaurants and
a doctors surgery, will go ahead, the report relates.

The spokesperson said: "Because of the pressure and resources
taken up with the litigation on the Flaxby Golf course site, one
Skelwith company, Skelwith Leisure, has gone into provisional
liquidation.  We are working with the liquidator to resolve
outstanding issues.  The current legal dispute and planning
process will continue," the report relates.

A provisional liquidator can be appointed by the court only after
a winding up petition has been presented and there is concern the
company's affairs won't be properly conducted before a court
order is imposed, the report discloses.

The main reason for appointing a provisional liquidator is to
preserve the company's assets.

The Flaxby resort was set to become the jewel in Yorkshire's
tourism crown when the Skelwith Group first proposed the
œ100million Country resort complete with 300-bed five star hotel
and a golf course the company boasted was good enough to host the
Ryder Cup when it opened in 2004, the report recalls.

Despite selling 158 rooms in the luxury hotel to investors,
including England's former cricket captain Michael Vaughan, work
on the hotel which was granted planning permission in 2010 ground
to a halt shortly after builders finished work on the GBP4
million roundabout near the A1 in 2014, the report relays.

In November 2014, the Skelwith group announced new plans to build
up to 2,500 houses on the 280 acre site, scrapping the golf
course which it said was not profitable, the report says.

The report discloses that the Armstrong family were unhappy with
the new masterplan and had grown frustrated with the seven year
wait for the GBP7million sale price of the land so in January
2015 they decided to sell the golf course to 'Flaxby Park', a
company owned by the Ward family.

In February, Skelwith secured an injunction blocking the sale
between the Armstrongs and the Wards, claiming the Armstrongs
undervalued the land in the sale to the Wards, citing GBP27.5
million as the actual value, based on the hope value of the
housing scheme, the report notes.

The case is expected to go to the High Court on July 27, the
report discloses.

This comes as Harrogate Borough Council starts a consultation
asking where the 6,346 homes the district needs to provide in the
next 20 years should be built, the report relays.   The idea of
building a new settlement in the A1 corridor has proved popular
in recent months with residents who don't want to see large scale
developments in Harrogate or Knaresborough, the report says.

Eleanor Hewitt, chair of a campaign group opposing the
development said she 'was not surprised' by Skelwith Group's
announcement, the report notes.

"There are just so many what ifs and maybes it is hard to know
what will happen there, we want developers who are concerned
about Knaresborough as a whole, not just people who going the
money like Skelwith were," the report quoted Ms. Hewitt as

* UK: Number of Food Suppliers in Financial Distress Up 54%
As the UK's largest supermarkets up their game in the race to win
back customers from the German discounters, their means of
slashing prices and delaying payments to suppliers means that the
food retail industry has never been tougher for the UK's smallest
food suppliers, independent grocers and farmers, warns business
recovery specialists Begbies Traynor.

According to Begbies Traynor's Red Flag Alert research for Q2
2015, which monitors the financial health of UK companies, the
UK's food retailers continue to experience rising "Significant"
financial distress, increasing 38% to 5,258 struggling businesses
over the past year (Q2 2014: 3,804), 97% of which (5092) are
SMEs.  However in reality the UK's food supply chain that keeps
these stores stocked is by far the biggest loser.

During Q2 2015, the UK Food and Beverage Manufacturers, which
include many of the food suppliers and farmers that supply the
major UK headquartered supermarkets, witnessed the highest year
on year increase in "Significant" distress of all sectors
monitored by the Red Flag research, rising 54%, with 1,622
companies now struggling to make ends meet; up from 1,052 at the
same stage last year.

Within this sector, 1,436 SME food suppliers are bearing the
brunt of the supermarkets' drastic turnaround strategies and the
new savage landscape in the UK retail food industry, representing
89% of all struggling companies within this sector.

Julie Palmer, Partner and retail expert at Begbies Traynor, said:
"With Tesco recently hailing the success of its Q1 performance
after four rounds of price cuts since January and even Waitrose
now joining the sector's discounting foray, clearly the novelty
of a bargain continues to resonate with consumers.  Unfortunately
the retail environment is set to become even bleaker for the UK's
small food suppliers who are facing the harsh reality that price
slashing is not just a short term pain but something that's here
to stay.

"The supermarkets have managed to successfully rebase their own
models by reducing product ranges, moving away from bulk-buy
offers and squeezing supplier margins still further, while
failing to clean up their act on late payments, taking more than
a month longer than agreed terms to settle debts with suppliers.
Some are even looking into launching their own food manufacturing
facilities to give them even tighter control over costs and the
ability to offer still more aggressive pricing -- signaling yet
another nightmare scenario on the horizon for the UK food supply

"While it's a welcome development that the Groceries Code
Adjudicator now has the power to fine supermarkets up to one
percent of their UK turnover if found to be in breach of the
Code, this is unfortunately unlikely to have a major positive
impact for the supply chain, as a recent sector study found that
almost one in five suppliers to the UK's 10 biggest retailers are
reluctant to raise any issues with the industry regulator for
fear of retribution from their largest source of income."


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
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Information contained herein is obtained from sources believed to
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members of the same firm for the term of the initial subscription
or balance thereof are US$25 each.  For subscription information,
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