TCREUR_Public/151008.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

                           E U R O P E

          Thursday, October 8, 2015, Vol. 16, No. 199

                            Headlines

A U S T R I A

KOMMUNALKREDIT AUSTRIA: Moody's Withdraws Ratings Over Reorg.


D E N M A R K

ANDELSKASSEN JAK: Financial Stability Takes Over Operations


F R A N C E

AUTODIS GROUP: S&P Puts 'B+' LT CCR on CreditWatch Negative


G E R M A N Y

PUREN GERMANY: Files For Insolvency
ROYAL IMTECH: Zech Acquires German Unit


L U X E M B O U R G

GSC EUROPEAN II: Moody's Hikes Rating on 2 Tranches to Caa1


N E T H E R L A N D S

EA PARTNERS: Fitch Assigns 'B-' Rating to 6.87% Notes Due 2020
JUBILEE CDO VI: Moody's Hikes EUR17MM Class E Notes Rating to Ba3


P O R T U G A L

PORTUGAL: Fitch Says Vote Means Policy Continuity but Some Risks
PORTUGAL TELECOM: Moody's Lowers Unsecured Debt Rating to B1


R U S S I A

BANK OTKRITIE: Fitch Keeps 'BB-' LT Counterparty Credit Ratings
MOSCOW UNITED: Fitch Affirms 'BB+' LT Issuer Default Rating
T2 RTK: Fitch Affirms 'B+' Long-Term Issuer Default Rating
URAL BANK: S&P Affirms 'B-/C' Counterparty Credit Ratings


S L O V E N I A

KD GROUP: Fitch Affirms 'BB' Issuer Default Rating


S E R B I A

PIVARA NIS: Commercial Court Wants Operations Halted


S P A I N

ENAITINERE SAU: S&P Assigns 'BB-' Preliminary Long-Term CCR
ENAITINERE SAU: Fitch Assigns 'BB-(EXP)' Rating to 2025 Notes
IBERCAJA BANCO: Fitch Affirms 'BB+' LT Counterparty Credit Rating


U K R A I N E

KONTRAKT PJSC: Declared Insolvent by National Bank of Ukraine
KYIV: S&P Cuts LT Local Currency Issuer Credit Rating to 'SD'
UKRAINE: Bond Default Triggers Credit-Default Swap Payouts
UKRAINE: Fitch Cuts Long-Term Foreign Currency IDR to 'RD'
UKRGAZPROMBANK: NBU Can't Commence Liquidation, Court Rules

UNISON STANDARD: NBU Declares Bank Insolvent


U N I T E D   K I N G D O M

ALUTARIUS LTD: Insolvency Service Bans Two Directors
AVOCA CLO XV: S&P Assigns B-(sf) Rating to Class F Debt
GRAINGER PLC: S&P Hikes GBP275MM Notes' Rating From 'BB+'
MEEHANCOMBS LP: Shuts Down After European Investments Sour


                            *********



=============
A U S T R I A
=============


KOMMUNALKREDIT AUSTRIA: Moody's Withdraws Ratings Over Reorg.
-------------------------------------------------------------
Moody's Investors Service has withdrawn the Ba3 long-term senior
unsecured debt and deposit ratings of Kommunalkredit Austria AG
(KA). Moreover, Moody's Investors Service has withdrawn the b3
baseline credit assessment and the Caa1 subordinate debt ratings.
In addition, the rating agency has withdrawn all Not Prime short-
term ratings as well as the counterparty risk assessment (CRA) of
Ba2(cr)/Not-Prime(cr). All long-term ratings as well as the BCA
and the long-term CRA were under review with uncertain direction
at the time of rating withdrawal.

RATINGS RATIONALE

Moody's has withdrawn the ratings and the BCA following the bank's
announcement of a comprehensive corporate reorganization on
September 25, 2015. As part of the reorganization, some of KA's
debt instruments were transferred to the newly incorporated and
private equity owned entity Kommunalkredit Austria AG (KA New,
unrated) and the remainder was assumed by government-owned KA
Finanz AG (KF, unrated). Consequently, KA ceased to exist.

Moody's has withdrawn the ratings because it believes it has
insufficient or otherwise inadequate information to support the
maintenance of the ratings.

THE FOLLOWING RATINGS AND RATING INPUTS WERE WITHDRAWN AT THE
CURRENT RATING LEVEL

Kommunalkredit Austria AG:

- Ba3 long-term bank deposit ratings, under review direction
   uncertain

- Ba3 long-term senior unsecured debt ratings, under review
   direction uncertain

- (P)Ba3 senior unsecured program ratings, under review
   direction uncertain

- Not-Prime short-term deposit ratings

- (P)Not-Prime other short term ratings

- Caa1 subordinated debt ratings, under review direction
   uncertain

- (P)Caa1 subordinated program ratings, under review direction
   uncertain

- b3 Baseline Credit Assessment and adjusted Baseline Credit
   Assessment, under review direction uncertain

- Ba2(cr) long-term Counterparty Risk Assessment, under review
   direction uncertain

- Not-Prime(cr) short-term Counterparty Risk Assessment



=============
D E N M A R K
=============


ANDELSKASSEN JAK: Financial Stability Takes Over Operations
-----------------------------------------------------------
Christian Wienberg at Bloomberg News reports that Financial
Stability, the Danish government unit for handling failed lenders,
says it's taking over regional unlisted bank Andelskassen J.A.K.
Slagelse.

According to Bloomberg, Financial Stability said the bank wasn't
able to raise capital needed to continue operations.



===========
F R A N C E
===========


AUTODIS GROUP: S&P Puts 'B+' LT CCR on CreditWatch Negative
-----------------------------------------------------------
Standard & Poor's Ratings Services said that it had placed its
'B+' long-term corporate credit rating on French auto parts
distributor Autodis Group SAS on CreditWatch with negative
implications.

"At the same time, we placed our 'B+' issue rating on Autodis'
senior secured notes and our 'BB-' issue rating on the super
senior revolving credit facility (RCF) on CreditWatch negative.
The recovery rating on the senior secured notes is unchanged at
'4', reflecting our expectation of recovery at the lower half of
the 30%-50% range in the event of a default. The recovery rating
on the RCF is unchanged at '2', reflecting our expectation of
recovery in the higher half of the 70%-90% range."

The CreditWatch placement follows the company's announcement on
Sept. 29, 2015, of its likely sale to Bain Capital. The
transaction is currently being discussed by Autodis' shareholders,
Towerbrook Capital Partner and Investcorp, and Bain Capital, and
is subject to anti-trust approval. Towerbrook and Investcorp
became shareholders in Autodis in 2009 and 2006 respectively, and
control 63% and 18% of its equity. "In our view, the proposed
transaction will lead to higher debt on the company's balance
sheet because we expect it to be funded mainly through new debt.
We think the resulting weakening of leverage metrics may not be
commensurate with our current assessment of Autodis' financial
risk profile or the rating."

"We currently view Autodis's financial risk profile as
"aggressive." Our view is supported by the group's credit metrics,
including Standard & Poor's-adjusted debt to EBITDA of 4.3x and
adjusted funds from operations (FFO) to debt of 15.5% at the end
of 2014. That said, we also factor in the shareholders' and
management's commitment to restrain from further debt increases
after a EUR60 million bond tap in the second quarter of 2015. As a
result, if the company were to incur more debt and its leverage
ratio were to deteriorate beyond 5.0x, without near-term prospects
for improvement, we would likely revise our assessment of the
financial risk profile down to "highly leveraged." In addition, we
would review the new owner's financial policy and the implications
it may have for the company's credit strength."

"If Autodis' financial risk profile were to weaken to "highly
leveraged," we would likely lower the long-term rating by one or
two notches, depending on our view of the comparative strength of
its financial profile and other offsetting factors".

"We continue to view Autodis' business risk profile as "weak." In
the first half of 2015, Autodis demonstrated healthy top-line
growth of 7%, supported by positive development across its key
segments, reflected in a higher reported operating profit of
EUR28.2 million versus EUR15.8 million a year ago. In addition,
the group benefitted from the contribution of ACR Holding, which
it acquired in April 2014."

"We expect to resolve the CreditWatch once the debt financing has
been determined and the company has started finalizing the sale,
which we expect before the end of this year. We might lower the
ratings by one or two notches if we were to revise our assessment
of Autodis' financial risk profile to "highly leveraged" from
"aggressive."



=============
G E R M A N Y
=============


PUREN GERMANY: Files For Insolvency
-----------------------------------
ch-aviation reports that Puren Germany GmbH, the Chinese firm
which acquired ownership of Flughafen Lubeck GmbH in July last
year, has filed for insolvency.

According to the report, the airport said in a statement that
despite the filing, it is continuing to provide Wizz Air (W6,
Budapest) and its passengers with full operations.

Owned by Chinese investment firm PuRen Group, Puren Germany had
planned to develop Lubeck into a hub using start-up carrier PuRen
Airlines (Lubeck) as a catalyst. However, the recent turmoil in
China's markets coupled with the country's slowdown has severely
affected its cashflow resulting in the cancellation of the
project, ch-aviation says.

ch-aviation recalls that this is the second time in the space of
16 months that the airport has been forced into insolvency as
previous owner Egyptian businessman, Mohamad Rady Amar, through
his logistics and project management firm 3Y Logistic und
Projektbetreuung GmbH, did so in April last year.


ROYAL IMTECH: Zech Acquires German Unit
---------------------------------------
Reuters reports that German construction group Zech has agreed to
buy the German unit of Imtech, two months after Dutch engineering
services company filed for insolvency, the administrator Peter
Borchardt said on October 7.

Zech's offer prevailed over four other bids, Peter Borchardt told
Reuters.

Imtech Germany filed for insolvency on Aug. 6, and the parent
company followed suit a week later, capping a long slide that
began in 2013 after accounting irregularities were uncovered at
its Polish and German operations.

Imtech Germany accounted for about a fifth, or EUR860 million
($966 million), of Imtech's sales, Reuters notes.

Reuters relates that Mr. Borchardt said Zech would keep 2,300 of
the roughly 2,800 remaining core staff of Imtech Germany and to
continue ongoing projects such as work at Berlin's new
international airport.

Royal Imtech N.V. is a European technical solutions provider in
the fields of electrical and mechanical solutions and automation.
With around 22,000 employees working in seven divisions, Imtech
achieves annual revenue of approx. EUR4 billion.  Imtech holds
attractive positions in the buildings and industrial markets in
the Netherlands, Belgium, Luxembourg, Germany (Insolvency),
Austria, Eastern Europe, Sweden, Norway, Finland, UK, Ireland and
Spain, as well as in the European market for traffic & infra and
in the global marine market.

Royal Imtech N.V. related that, upon the request of
administrators, the Rotterdam District Court has declared it
bankrupt ('failliet') as of August 13, 2015.  In addition, Imtech
Capital B.V., Imtech B.V. and Imtech Group B.V. also have been
declared bankrupt as of August 13, 2015.  The administrators
during the suspension of payments have been appointed as trustees
in bankruptcy.  Royal Imtech N.V. was granted suspension of
payments ('surseance van betaling') on August 11, 2015.



===================
L U X E M B O U R G
===================


GSC EUROPEAN II: Moody's Hikes Rating on 2 Tranches to Caa1
-----------------------------------------------------------
Moody's Investors Service has upgraded the ratings on the
following notes issued by GSC European CDO II S.A.:

  EUR16.5M (Current Balance: EUR9,273,986.86) Class C1 Floating
  Rate Notes, Upgraded to Aaa (sf); previously on Dec 4, 2014
  Upgraded to Aa1 (sf)

  EUR11M (Current Balance: EUR6,182,657.91) Class C2 Fixed Rate
  Notes, Upgraded to Aaa (sf); previously on Dec 4, 2014 Upgraded
  to Aa1 (sf)

  EUR16M Class D1 Floating Rate Notes, Upgraded to Baa1 (sf);
  previously on Dec 4, 2014 Upgraded to Ba1 (sf)

  EUR2M Class D2 Floating Rate Notes, Upgraded to Baa1 (sf);
  previously on Dec 4, 2014 Upgraded to Ba1 (sf)

  EUR4M (Current Balance: EUR5,224,811.11) Class E1 Floating Rate
  Notes, Upgraded to Caa1 (sf); previously on Dec 4, 2014
  Upgraded to Caa3 (sf)

  EUR7.5M (Current Balance: EUR11,026,715.47) Class E2 Fixed Rate
  Notes, Upgraded to Caa1 (sf); previously on Dec 4, 2014
  Upgraded to Caa3 (sf)

Moody's also affirmed the rating on the following notes issued by
GSC European CDO II S.A.:

  EUR10M Combination Y Notes, Affirmed Caa3 (sf); previously on
  Dec 4, 2014 Upgraded to Caa3 (sf)

GSC European CDO II S.A., issued in June 2005, is a collateralized
loan obligation ("CLO") backed by a portfolio of mostly high yield
European loans. It is predominantly composed of senior secured
loans. The portfolio is managed by GSCP (NJ), L.P. The
transaction's reinvestment period ended in July 2010.

RATINGS RATIONALE

The rating upgrades of the Notes are primarily a result of the
redemption of the senior Notes and subsequent increases of the
overcollateralization ratios (the "OC ratios") of the Classes C
and D Notes. Moody's notes that the Classes A and B Notes have
redeemed in full and the Class C Notes have redeemed by
approximately EUR12.0 million (or 44% of their original balance).
As a result of the deleveraging the OC ratios of the Classes C and
D Notes have increased significantly. According to the August 2015
trustee report, the Classes C, D and E OC ratios are 267.03%,
123.37%, and 91.81% respectively compared to levels just prior to
the payment date in July 2015 of 157.33%, 112.45% and 95.12%. The
OC ratio of Class E is below 100% because of a haircut on the
amount of assets rated Caa.

The rating of the combination notes addresses the repayment of the
rated balance on or before the legal final maturity. The rated
balance at any time is equal to the principal amount of the
combination notes on the issue date minus the sum of all payments
made from the issue date to such date, of either interest or
principal. The rated balance will not necessarily correspond to
the outstanding notional amount reported by the trustee.

The key model inputs Moody's uses in its analysis, such as par,
weighted average rating factor, diversity score and the weighted
average recovery rate, are based on its published methodology and
could differ from the trustee's reported numbers. In its base
case, Moody's analyzed the underlying collateral pool as having a
performing par and principal proceeds balance of EUR58.4 million,
a weighted average default probability of 32.89% (consistent with
a WARF of 5278), a weighted average recovery rate upon default of
45.49% for a Aaa liability target rating, a diversity score of 11
and a weighted average spread of 3.66%.

The default probability derives from the credit quality of the
collateral pool and Moody's expectation of the remaining life of
the collateral pool. The estimated average recovery rate on future
defaults is based primarily on the seniority of the assets in the
collateral pool. In each case, historical and market performance
and a collateral manager's latitude to trade collateral are also
relevant factors. Moody's incorporates these default and recovery
characteristics of the collateral pool into its cash flow model
analysis, subjecting them to stresses as a function of the target
rating of each CLO liability it is analyzing.

Methodology Underlying the Rating Action:

The principal methodology used in these ratings was "Moody's
Global Approach to Rating Collateralized Loan Obligations"
published in September 2015.

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

In addition to the base-case analysis, Moody's conducted
sensitivity analyses on the key parameters for the rated notes,
for which it lowered the weighted average recovery rate by 5
percentage points; the model generated outputs that were within
one notch of the base-case results.

This transaction is subject to a high level of macroeconomic
uncertainty, which could negatively affect the ratings on the
note, in light of uncertainty about credit conditions in the
general economy. CLO notes' performance may also be impacted
either positively or negatively by 1) the manager's investment
strategy and behavior and 2) divergence in the legal
interpretation of CDO documentation by different transactional
parties because of embedded ambiguities.

  * Portfolio amortization: The main source of uncertainty in this
transaction is the pace of amortization of the underlying
portfolio, which can vary significantly depending on market
conditions and have a significant impact on the notes' ratings.
Amortization could accelerate as a consequence of high loan
prepayment levels or collateral sales by the collateral manager or
be delayed by an increase in loan amend-and-extend restructurings.
Fast amortization would usually benefit the ratings of the notes
beginning with the notes having the highest prepayment priority.

  * Around 65.48% of the collateral pool consists of debt
obligations whose credit quality Moody's has assessed by using
credit estimates. As part of its base case, Moody's has stressed
large concentrations of single obligors bearing a credit estimate
as described in "Updated Approach to the Usage of Credit Estimates
in Rated Transactions", published in October 2009 and available at
http://www.moodys.com/viewresearchdoc.aspx?docid=PBC_120461

  * Recovery of defaulted assets: Market value fluctuations in
trustee-reported defaulted assets and those Moody's assumes have
defaulted can result in volatility in the deal's over-
collateralization levels. Further, the timing of recoveries and
the manager's decision whether to work out or sell defaulted
assets can also result in additional uncertainty. Moody's analyzed
defaulted recoveries assuming the lower of the market price or the
recovery rate to account for potential volatility in market
prices. Recoveries higher than Moody's expectations would have a
positive impact on the notes' ratings.

  * Long-dated assets: The presence of assets that mature beyond
the CLO's legal maturity date exposes the deal to liquidation risk
on those assets. Moody's assumes that, at transaction maturity,
the liquidation value of such an asset will depend on the nature
of the asset as well as the extent to which the asset's maturity
lags that of the liabilities. Liquidation values higher than
Moody's expectations would have a positive impact on the notes'
ratings.

In addition to the quantitative factors that Moody's explicitly
modelled, qualitative factors are part of the rating committee's
considerations. These qualitative factors include the structural
protections in the transaction, its recent performance given the
market environment, the legal environment, specific documentation
features, the collateral manager's track record and the potential
for selection bias in the portfolio. All information available to
rating committees, including macroeconomic forecasts, input from
other Moody's analytical groups, market factors, and judgments
regarding the nature and severity of credit stress on the
transactions, can influence the final rating decision.



=====================
N E T H E R L A N D S
=====================


EA PARTNERS: Fitch Assigns 'B-' Rating to 6.87% Notes Due 2020
--------------------------------------------------------------
Fitch Ratings has assigned EA Partners I B.V.'s USD700 million
6.875% notes due 2020 a final senior secured rating of 'B-' with a
Stable Outlook. The Recovery Rating is 'RR4'.

EA Partners I B.V. is to on-lend the proceeds from the notes'
issue to respective obligors (defined as debt obligations). These
notes are secured over assets that represent senior unsecured
claims to the respective obligors. The rating reflects our view of
the credit profiles of the obligors and is constrained at 'B-' by
obligors of the weakest credit quality. EA Partners I B.V. is a
private company with limited liability established solely for the
purpose of this transaction, and whose sole shareholder is a
foundation.

KEY RATING DRIVERS

Unsecured Claims

The proceeds from the notes' issue represent separate debt
obligations of seven obligors, including Etihad Airways PJSC
(USD132 million or 18.85% of total), Air Berlin PLC (USD132
million), Jet Airways (India) Limited (USD113 million equivalent),
Alitalia Societa Aerea Italiana S.p.A. (USD132 million), Air
SERBIA, a.d. Belgrade (USD56.5 million), Air Seychelles Limited
(USD21.5 million) and Etihad Airport Services LLC (USD113
million). On-lending of proceeds from this transaction's secured
notes creates back-to-back senior unsecured claims upon the
relevant obligors, which rank behind each obligor's other prior-
ranking, including secured debt.

Weakest Obligor Credit

The rating of the notes reflects our view of the creditworthiness,
and the senior unsecured ranking, of the obligors including our
assessment of their links with their respective parents.

Given the transaction's recourse to each obligor on a several
basis, the rating is constrained at the 'B-' level by obligors of
the weakest credit quality. This is due to the sole cash flow for
the service and repayment of the notes being the individual cash
flow streams from the obligors under their respective loans.
Failure of any obligor to make interest or principal payments
under its respective debt obligation, which remains uncured
following the re-marketing of the respective debt obligation
and/or through the liquidity pool, may lead to an event of default
under the notes and their acceleration. This transaction's
noteholders are thus exposed to the underlying creditworthiness of
each individual obligor.

Obligors' Credit Quality Varies

In addition to Etihad Airways, the other obligors are either
Etihad Airways' subsidiaries (eg Etihad Airport Services) or its
equity airline partners (eg Air Berlin, Air Serbia, Air
Seychelles, Alitalia, Jet Airways). These and its other equity
airline partners are key to Etihad's growth strategy, which aims
at establishing a global network with competitive operational
scale and diversity.

The credit quality of the obligors varies substantially -- from
that of Etihad Airways (A/Stable) whose rating incorporates
strategic, operational and, to a lesser extent, legal ties with
its sole shareholder Abu Dhabi (AA/Stable), to that of obligors
with the weakest credit quality -- which has constrained the
notes' rating. While the obligors with the weakest profiles also
benefit from the shareholder support of their minority parent,
Etihad Airways, their standalone profiles remain weak largely due
to weak credit metrics.

Liquidity Pool

The transaction contains a liquidity pool, its only cross-
collateralized feature (excluding its ratchet account component,
which is not cross-collateralized), which is available to service
the interest or principal on the notes, if an obligor fails to pay
an interest or principal on its respective debt obligation when
due.

Fitch estimates that the amount of the liquidity pool, including
additional deposits, is sufficient to cover around nine months of
interest payments under the notes. It also represents 12 months of
interest payments for all obligors, except for the stronger Etihad
Airways and Etihad Airport Services. If over 25% of the initial
deposits, which account for most of the liquidity pool, is drawn
to cure a default of an obligor to pay interest on its debt
obligation, this may trigger the re-marketing of the respective
debt obligation. Contractually, the liquidity pool does not have
to be replenished if it is used to service the notes.

Cross Default

The notes do not have a cross-default provision, which means that
a default by one obligor under its debt obligation does not
constitute an event of default under other debt obligations
incurred under this transaction by other obligors. However, events
of default under each debt obligation include a customary cross-
default provision which states that a failure by the respective
'obligor or any of its material subsidiaries to pay any of its own
financial indebtedness when due' will lead to an event of default
under the debt obligations of this obligor but not of any other
obligor other than in the case of Etihad Airways and Etihad
Airport Services as described below.

Theoretically, upon an uncured event of default by one of the
weakest entities, after use of the liquidity pool and no take-up
under the re-marketing mechanism, the notes are in default and can
be accelerated. Noteholders would look to non-defaulted entities
to meet their obligations under this transaction but any shortfall
resulting from the defaulted entity would not be an obligation of
these other transaction parties.

Etihad Airport Services is considered a material subsidiary of
Etihad Airways under this transaction's documentation. Therefore,
an uncured failure by Etihad Airport Services to make payments
under this transaction's debt obligation will constitute an event
of default under Etihad Airways' debt obligation under this
transaction. Etihad Airways or any other non-defaulting obligor
may also provide support to other obligors by purchasing their
debt obligations through the 're-marketing event', if it takes
place upon default of another obligor on its payments under the
debt obligation. However, this can be exercised at Etihad Airways'
or any other non-defaulting obligor's discretion and is not an
obligation under this transaction.

This lack of legal obligation to support other entities underpins
this transaction's rating approach based on the credit profile of
the weakest obligors rather than on the stronger entities
supporting the weakest.

Foundation-Owned Issuer

The issuer is a private company with limited liability
incorporated under the laws of the Netherlands and has no
authorized share capital. Stichting EA Partners I, a foundation
incorporated under the laws of the Netherlands, is the sole
shareholder of the issuer. The issuer was established for the
purpose of the issue of the notes and lending of the notes'
proceeds to the seven obligors. Stichting has contributed
additional equity to the issuer of EUR2 million, which was in turn
provided by Air Berlin.

Proceeds for Refinancing and Capex

The purpose of the transaction is to provide a financing platform
to the airline, cargo and ground services businesses that are part
of Etihad's partner network. Air Berlin and Air Seychelles plan to
use the proceeds of their debt obligations mostly for refinancing
purposes whereas Etihad Airways, Etihad Airport Services, Air
Serbia, Jet Airways and Alitalia intend to use the proceeds mainly
to finance capex and/or working capital and for other general
corporate purposes.

FX Risk

The debt obligation of Jet Airways is denominated in Indian rupee
while the debt obligations of other obligors and the notes are
denominated in USD. FX risk is expected to be mitigated through a
hedge transaction that the issuer is to enter into with ADS
Securities LLC, an Abu Dhabi-based brokerage company.

Average Recovery Prospect

"We assess the recovery (given default) prospect of the notes as
average (31%-50%, 'RR4') based on the average of our assessment of
the recovery prospects of the obligors and their respective
country caps. Recovery prospects can be supported by successful
re-marketing of performing debt obligations at higher than par."

KEY ASSUMPTIONS

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

-- The proceeds from the notes' issue are on-lent to seven
    obligors.

-- This transaction's notes are secured over assets that
    represent senior unsecured claims to respective obligors.

-- The notes do not have a cross-default provision.

RATING SENSITIVITIES

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

-- The improvement of the credit quality of the obligors with
    the weakest credit profiles

-- Improvement of the recovery prospects for the senior
    unsecured creditors of the obligors of the weakest credit
    quality, unless there are limitations due to country-specific
    treatment of Recovery Ratings.

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

-- The deterioration of the credit quality of the obligors with
    the weakest credit profiles

-- Worsening of the recovery prospects to below-average for the
    senior unsecured creditors of the obligors of the weakest
    credit quality.


JUBILEE CDO VI: Moody's Hikes EUR17MM Class E Notes Rating to Ba3
-----------------------------------------------------------------
Moody's Investors Service has upgraded the ratings on the
following notes issued by Jubilee CDO VI B.V.:

  EUR27M Class C Senior Secured Deferrable Floating Rate Notes
  due 2022, Upgraded to Aa2 (sf); previously on Dec 9, 2014
  Upgraded to A1 (sf)

  EUR21M Class D Senior Secured Deferrable Floating Rate Notes
  due 2022, Upgraded to Baa1 (sf); previously on Dec 9, 2014
  Upgraded to Baa2 (sf)

  EUR17M Class E Senior Secured Deferrable Floating Rate Notes
  due 2022, Upgraded to Ba3 (sf); previously on Dec 9, 2014
  Upgraded to B1 (sf)

  EUR3.15M Class Q Combination Notes due 2022, Upgraded to A1
  (sf); previously on Dec 9, 2014 Upgraded to A2 (sf)

Moody's also affirmed the ratings on the following notes issued by
Jubilee CDO VI B.V.:

  EUR100M (Current Balance: EUR3,827,659.03) Class A1-a Senior
  Secured Floating Rate Notes due 2022, Affirmed Aaa (sf);
  previously on Dec 9, 2014 Affirmed Aaa (sf)

  EUR25M Class A1-b Senior Secured Floating Rate Notes due 2022,
  Affirmed Aaa (sf); previously on Dec 9, 2014 Affirmed Aaa (sf)

  EUR112.5M (Current Balance: EUR16,327,659.03) Class A2-a Senior
  Secured Floating Rate Notes due 2022, Affirmed Aaa (sf);
  previously on Dec 9, 2014 Affirmed Aaa (sf)

  EUR12.5M Class A2-b Senior Secured Floating Rate Notes due
  2022, Affirmed Aaa (sf); previously on Dec 9, 2014 Affirmed
  Aaa (sf)

  EUR13M (Current Balance: EUR2,998,076.54) Class A3 Senior
  Secured Floating Rate Notes due 2022, Affirmed Aaa (sf);
  previously on Dec 9, 2014 Affirmed Aaa (sf)

  EUR32M Class B Senior Secured Floating Rate Notes due 2022,
  Affirmed Aaa (sf); previously on Dec 9, 2014 Upgraded to Aaa
  (sf)

Jubilee CDO VI, issued in August 2006, is a collateralized loan
obligation ("CLO") backed by a portfolio of mostly high yield
European loans. It is predominantly composed of senior secured
loans. The portfolio is managed by Alcentra Limited. The
transaction's reinvestment period ended in September 2012.

RATINGS RATIONALE

The rating upgrades of the Notes are primarily a result of the
partial redemption of the senior Notes and subsequent increases of
the overcollateralization ratios (the "OC ratios") of all the
Classes of Notes. Moody's notes that the Class A has redeemed by
approximately EUR202.3 million (or 77% of its original balance).
As a result of the deleveraging the OC ratios of all the Classes
Notes have increased. According to the September 2015 trustee
report, the Classes A/B,C, D and E OC ratios are 162.54%, 136.28%,
121.07% and 111.04% respectively compared to levels just prior to
the payment date in March 2015 of 148.77%, 127.88%, 115.29% and
106.78%. Moody's expects the OC ratios to have improved further in
the next trustee report following the payment date in September
2015.

The rating of the combination notes addresses the repayment of the
rated balance on or before the legal final maturity. The rated
balance at any time is equal to the principal amount of the
combination notes on the issue date minus the sum of all payments
made from the issue date to such date, of either interest or
principal. The rated balance will not necessarily correspond to
the outstanding notional amount reported by the trustee.

The key model inputs Moody's uses in its analysis, such as par,
weighted average rating factor, diversity score and the weighted
average recovery rate, are based on its published methodology and
could differ from the trustee's reported numbers. In its base
case, Moody's analyzed the underlying collateral pool as having a
performing par and principal proceeds balance of EUR183.1 million,
a weighted average default probability of 24.35% (consistent with
a WARF of 3349), a weighted average recovery rate upon default of
46.33% for a Aaa liability target rating, a diversity score of 20
and a weighted average spread of 3.70%.

The default probability derives from the credit quality of the
collateral pool and Moody's expectation of the remaining life of
the collateral pool. The estimated average recovery rate on future
defaults is based primarily on the seniority of the assets in the
collateral pool. In each case, historical and market performance
and a collateral manager's latitude to trade collateral are also
relevant factors. Moody's incorporates these default and recovery
characteristics of the collateral pool into its cash flow model
analysis, subjecting them to stresses as a function of the target
rating of each CLO liability it is analyzing.

Methodology Underlying the Rating Action:

The principal methodology used in these ratings was "Moody's
Global Approach to Rating Collateralized Loan Obligations"
published in September 2015.

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

In addition to the base-case analysis, Moody's conducted
sensitivity analyses on the key parameters for the rated notes,
for which it lowered the weighted average recovery rate by 5
percentage points; the model generated outputs that were within
one notch of the base-case results.

This transaction is subject to a high level of macroeconomic
uncertainty, which could negatively affect the ratings on the
note, in light of uncertainty about credit conditions in the
general economy. CLO notes' performance may also be impacted
either positively or negatively by 1) the manager's investment
strategy and behavior and 2) divergence in the legal
interpretation of CDO documentation by different transactional
parties because of embedded ambiguities.

  * Portfolio amortization: The main source of uncertainty in this
transaction is the pace of amortization of the underlying
portfolio, which can vary significantly depending on market
conditions and have a significant impact on the notes' ratings.
Amortization could accelerate as a consequence of high loan
prepayment levels or collateral sales by the collateral manager or
be delayed by an increase in loan amend-and-extend restructurings.
Fast amortization would usually benefit the ratings of the notes
beginning with the notes having the highest prepayment priority.

  * Recovery of defaulted assets: Market value fluctuations in
trustee-reported defaulted assets and those Moody's assumes have
defaulted can result in volatility in the deal's over-
collateralization levels. Further, the timing of recoveries and
the manager's decision whether to work out or sell defaulted
assets can also result in additional uncertainty. Moody's analyzed
defaulted recoveries assuming the lower of the market price or the
recovery rate to account for potential volatility in market
prices. Recoveries higher than Moody's expectations would have a
positive impact on the notes' ratings.

In addition to the quantitative factors that Moody's explicitly
modelled, qualitative factors are part of the rating committee's
considerations. These qualitative factors include the structural
protections in the transaction, its recent performance given the
market environment, the legal environment, specific documentation
features, the collateral manager's track record and the potential
for selection bias in the portfolio. All information available to
rating committees, including macroeconomic forecasts, input from
other Moody's analytical groups, market factors, and judgments
regarding the nature and severity of credit stress on the
transactions, can influence the final rating decision.



===============
P O R T U G A L
===============


PORTUGAL: Fitch Says Vote Means Policy Continuity but Some Risks
----------------------------------------------------------------
Fitch Ratings says the outcome of Portugal's general election
supports view that major policy changes are unlikely but political
instability could reduce fiscal consolidation and reform
implementation.

Prime Minister Pedro Passos Coelho's ruling centre-right coalition
won 104 seats in Sunday's poll, beating the opposition Socialist
party but losing its majority in the 230 seat Assembly (four seats
are still to be decided). Mr. Passos Coelho has offered to form a
minority government (the Socialists are unwilling to join forces
with more left-wing parties). This lessens the near-term political
uncertainty associated with drawn-out negotiations to form a
cohesive new government.

The common ground shared by the incumbent and main opposition
parties, and the absence of a strong anti-euro or populist anti-
austerity party, meant that we did not expect the election to lead
to major changes in fiscal and macroeconomic policy. The
mainstream centre-right and centre-left parties are committed to
fiscal prudence. Amendments to the budget-framework law that sets
out fiscal objectives should improve transparency and compliance.

Nevertheless, fiscal consolidation has slowed this year, and the
structural fiscal deficit is set to widen. Medium-term fiscal
challenges include making revenue collection more efficient and
reforming the entitlement system to fund the planned gradual
reversal of some spending cuts.

The 2016 budget and the year-end expiry of some revenue-raising
items may indicate the political scope for further fiscal measures
in the face of some consolidation fatigue. The medium-term fiscal
outlook depends on continued economic recovery as well as the
government's fiscal policy measures.

The advent of a minority government increases the risk that fiscal
consolidation and structural reforms stall due to political
disagreement. A minority government requires opposition support in
confidence votes and most of Portugal's previous minority
governments were unable to complete their terms. A weaker
government, conscious of the possibility of early elections, may
be cautious on implementing difficult or unpopular reforms that
would give investment and growth an additional boost (Portugal's
2011-2014 EU/IMF program saw numerous measures to improve
productivity and competitiveness).

"We affirmed Portugal's 'BB+'/Positive sovereign rating in
September, reflecting the economy's gradual rebalancing."


PORTUGAL TELECOM: Moody's Lowers Unsecured Debt Rating to B1
------------------------------------------------------------
Moody's Investors Service has downgraded the ratings on unsecured
debt at Oi S.A. to B1 and three specific note issuances that
benefit from a subsidiary guarantee form Telemar Norte Leste S.A.
to Ba3. The outlook for all ratings remain negative.

At the same time, Moody's America Latina has downgraded Oi's
corporate family ratings ("CFR") to Ba3/A3.br. As part of this
rating action, Moody's has also downgraded the ratings on
unsecured debt at Oi to B1/Baa3.br, one notch below the corporate
family rating due to their junior position in the capital
structure. The company has significant indebtedness at subsidiary
holding companies, which have a priority claim on the majority of
operating cash flows.

Moody's Investors Service has also downgraded unsecured debt at
Portugal Telecom International Finance, BV ("PTIF") to B1, also
one notch below the CFR. Moody's believes that these notes are are
pari passu to unsecured debt at to the parent and guarantor, Oi.

Moody's Investors Service has downgraded three specific note
issuances at Oi which benefit from a subsidiary guarantee from
Telemar to Ba3. These three issuances, the 5.5% USD notes due
2020, the 9.5% USD notes due 2019 and the 5.125% EUR notes due
2017 were originally issued by Telemar but transferred to Oi.
Moody's believes that the Telemar guarantee is sufficient to
differentiate the creditworthiness of these issuances versus other
unsecured obligations of Oi.

RATINGS RATIONALE

Ratings downgraded:

Issuer: Oi S.A.

$684 million GLOBAL BONDS due 2017: to Ba3 from Ba1

$142 million GLOBAL BONDS due 2019: to Ba3 from Ba1

$1,787 million GLOBAL BONDS due 2020: to Ba3 from Ba1

$281 million GLOBAL BONDS due 2016: to B1 from Ba2

$1,500 million GLOBAL NOTES due 2022: to B1 from Ba2

Issuer: Portugal Telecom International Finance B.V.

BACKED Senior Unsecured MTN: to (P) B1 from (P) Ba2

$617 million GTD EURO MTNS due 2016: to B1 from Ba2

$284 million GTD EURO MTNS due 2017: to B1 from Ba2

$434 million GTD GLOBAL MTNS due 2017: to B1 from Ba2

$56 million GTD EURO MTNS due 2018: to B1 from Ba2

$56 million GTD FLT RT EURO MTNS due 2019: to B1 from Ba2

$853 million GTD EURO MTNS due 2019: to B1 from Ba2

$1,137 million GTD EURO MTNS due 2020: to B1 from Ba2

$568 million GTD EURO MTNS due 2025: to B1 from Ba2

The outlook for all ratings is negative

The downgrade was based on the company's persistently increasing
leverage and cash consumption, reducing financial flexibility and
leading to credit metrics that no longer commensurate with a Ba1
rating. Moody's believes that despite the company's cost cutting
and efficiency efforts, its business will face further margin
deterioration from an unfavorable product mix shift to pay TV and
broadband and the price pressure inherent in its targeted value
segment, especially during the ongoing economic slowdown in
Brazil. Further reductions in capital spending may result in
future operational and competitive challenges.

Oi's Ba3 corporate family rating reflects its scale, geographic
diversity, broad asset base, wide network coverage and strong
margins. These strengths are offset by the company's challenges to
upgrade its network in Brazil to meet shifting consumer demand,
the highly competitive market in the country, the margin pressure
it faces from an unfavorable product mix shift and the company's
limited financial flexibility given its large debt burden and
challenging momentum for funding through capital markets. Moody's
forecasts Oi's adjusted leverage will approach 5.5x at year-end
2015, and expects it to continue to consume cash through 2017.

Oi's recent sale of Portugal Telecom's assets increased the
company's cash position, but at the same time kept the company's
total debt outstanding and interest burden high. Although
decreasing due to the company's cost cutting and efficiency
efforts, cash burn is still high and we believe it may influence
Oi's decision to reduce network investments that would negatively
impact their competitive position in the near future. Oi's main
competitors, Telefonica Brasil S.A. (Baa2 stable) and America
Movil S.A.B. de C.V. (A2 stable), remain well capitalized and are
investing heavily in Brazil for growth, both organically, with
CAPEX and on spectrum, and through M&A.

Oi has an adequate liquidity to meet its obligations over the next
12 to 18 months. On the other hand we forecast that the company
will continue to consume cash through 2017, excluding any
potential spectrum purchases. Oi had BRL16.6 billion in cash at
the end of June 2015 plus access to approximately BRL3.0 billion
in committed credit facilities and upcoming maturities in the
order of BRL3.6 billion until the end of 2015, BRL10.8 billion in
2016, and BRL8.6 billion in 2017. CAPEX is high at around
BRL5.0 billion per year and the company is not expected to
generate positive free cash flow at least until 2018, reinforcing
its dependency on the capital markets to extend debt maturities.

Moody's rates unsecured debt at Oi S.A. B1/Baa3.br, one notch
below the corporate family rating due to its junior position in
the company's capital structure.

Oi's negative outlook reflects its challenges to reduce leverage
while still consuming cash in an adverse economic scenario that
will affect the company's top line, margins and CAPEX investments.

Moody's could lower Oi's ratings further if leverage remains above
5.0x (Moody's adjusted) for an extended period or if the company
is not on a clear trajectory to reduce cash burn.

Although not anticipated in the near term Oi's ratings could be
upgraded if leverage is sustained comfortably below 3.75x (Moody's
adjusted) and the company produces sustained positive free cash
flow. In addition, an upgrade would be predicated upon the
company's willingness and ability to continue investing (both
network CAPEX and spectrum acquisition) at a level which will
improve its competitive position. Alternatively, Moody's could
consider an upgrade if the company's asset-light strategy is
successful in retaining market share and result in EBITDA growth
such that it meets the financial metrics above. Any M&A activity,
equity issuance or capital injection that is considered to be a
positive credit event, will not necessarily result in positive
rating action until its execution.

The principal methodology used in these ratings was Global
Telecommunications Industry published in December 2010.



===========
R U S S I A
===========


BANK OTKRITIE: Fitch Keeps 'BB-' LT Counterparty Credit Ratings
---------------------------------------------------------------
Standard & Poor's Ratings Services maintained its CreditWatch with
negative implications on its 'BB-' long-term counterparty credit
ratings and its 'ruAA-' Russia national scale ratings on Russia-
based Bank Otkritie Financial Co. (Bank OFC).

The ratings were initially put on CreditWatch on Feb. 27, 2015.

"At the same time, we affirmed our 'B' short-term rating on the
bank."

"The CreditWatch reflects our view of the uncertainties Bank OFC
continues to face regarding the integration of recently rescued
TRUST Bank into the Otkritie Holding group."

"We understand that the Russian Central Bank (CBR) and the Deposit
Insurance Agency (DIA) have yet to finalize the rehabilitation
plan for TRUST Bank and that the bank's integration into the group
has yet to be defined. In particular, we understand from public
comments that the merger of TRUST Bank with the retail arm of Bank
OFC, Khanty-Mansiysk Bank Otkritie, is a possibility. This could
represent a significant strategic change from the group's growth
strategy prior to involvement in the financial rehabilitation of
TRUST Bank. We believe such a strategic shift could have a
significant impact on Bank OFC, depending on the details of the
integration plan."

"Without clarity on these key issues, we currently have limited
visibility on Bank OFC's exposure to or insulation from the risks
of the rest of the Otkritie Holding group, in particular, those
related to TRUST Bank's financial."

"We aim to resolve the CreditWatch within the next three months
when the CBR, the DIA, and the Otkritie Holding group expect to
finalize the integration roadmap for TRUST Bank's financial
rehabilitation. At that time, we also expect to have a better
understanding of the potential impact of the integration process
and the consolidation of capital on Bank OFC and its parent,
Otkritie Holding."

"We could lower the ratings if we believe that Bank OFC's
consolidated risk position has worsened due to integration of
TRUST Bank or due to deterioration of operational conditions. We
could also lower the ratings if we believe that the group's
updated ownership structure and the structure of intragroup
exposures makes Bank OFC vulnerable to changes in credit quality
of other, less creditworthy entities within the group."

"We could affirm the ratings if we believe that the group's
structure and Russian regulations allow us to consider Bank OFC
immune to risks from the rest of the group, with regulators having
sufficient power to prevent the group from utilizing Bank OFC's
resources to support weaker parts of the group in times of
stress."


MOSCOW UNITED: Fitch Affirms 'BB+' LT Issuer Default Rating
-----------------------------------------------------------
Fitch Ratings has affirmed PJSC Moscow United Electric Grid
Company's (MOESK) Long-term foreign currency Issuer Default Rating
(IDR) at 'BB+' with a Stable Outlook. A full list of rating
actions is available at the end of this commentary.

"The ratings reflect the company's solid business profile,
supported by a regulated electricity distribution business in the
fairly wealthy Moscow and Moscow region. Although tariff
uncertainty and elevated borrowing costs are weighing on MOESK's
financial metrics, we view the company's efforts to mitigate the
impact of the economic downturn, namely capex and cost-cutting,
sufficient for maintaining a financial profile commensurate with
the ratings. We expect that funds from operations (FFO) fixed
charge cover (net of connection fees) would remain under pressure
in 2016 and 2017 due to the impact of high interest rates in 2015,
but would return to levels compliant with our guideline of 3.25x
by 2018," Fitch said.

The company's ratings incorporate one-notch uplift for parental
support from its majority shareholder, PJSC Russian Grids, and
ultimately the state. The precedents of the state providing
capital injections for the benefit of Russian electricity
distribution companies underpins our view of the ultimate parent's
willingness to provide support if needed.

KEY RATING DRIVERS

High Tariff Uncertainty

Although formally long-term regulatory asset base (RAB) regulation
was introduced in 2011, and key regulatory parameters were set for
2012-2017, the RAB regulation for MOESK continues to be
implemented in a managed way. Tariff increases remain
unpredictable, particularly during macroeconomic instability. A
change in the regulatory body (the abolition of the Federal Tariff
Service and transfer of its decision-making powers to the Federal
Antimonopoly Service) adds to the uncertainty. Uncertainty over
tariff increases for 2016 and 2017 and that of the regulatory
framework post-2017 is one of the key rating risks for the
company.

Following a 4.9% average tariff increase in 2015, the company
expects 2016 tariff to be raised 7.5%, or roughly half of expected
consumer inflation. Tariff increases in 2017 and 2018 are expected
to be 7% and 6.2%. This is in line with the current Russian
Ministry of Economic Development's forecast. The final decision
regarding 2016 tariff increases will be made in 4Q15.

Regulatory Decisions Drive Financials

MOESK's financial profile is significantly impacted by tariff
decisions as nearly all of its revenues and around half of its
operating costs are regulated. Regulated costs include electricity
transmission services of Federal Grid Company (FGC UES, BBB-
/Negative), distribution services of local network companies and
purchases of electricity lost in the networks.

Regulated costs are paid out of the 'common pot' tariff received
by the company. Therefore the 'common pot' tariff increase alone
is not indicative of its impact on MOESK's financial position. For
example, a fairly modest average 'common pot' tariff increase of
2.8% in 2014 resulted in a much higher net tariff increase for
MOESK since local network companies received an increase of 0.6%
only. The pace of the regulated cost growth is therefore as
important as the tariff increase itself and there is a potential
for a negative mismatch.

Successful Cost-Cutting

In 2014 and 1H15, MOESK was successful at containing its
operational cost increases. Total controllable operating costs
(operating expenses excluding the cost of electricity
transmission, depreciation and amortization and fixed assets
impairments) went up just 3.7% in 2014 versus 2013, and decreased
0.5% in 1H15 versus 1H14. Consumer price inflation in 2014 and
1H15 was 11.4% and 9.4%, respectively. While the cost cutting
efforts of the last 18 months were successful, it may be difficult
to achieve similar results if high inflation persists. Meaningful
tariff increases, comparable with inflation, are therefore vital
in the context of healthy operating cash flow generation.

Geography Aids Volume Dynamics

Although the RAB regulatory framework is designed to capture
volume changes in tariff dynamics, we believe that MOESK is not
immune to volume risk during the economic downturn, when tariffs
are not managed in accordance with RAB framework. MOESK's
distribution volumes grew 1.1% in 2014 and 0.6% in 1H15, in spite
of Russia's GDP slowing to a 0.6% growth in 2014 and contracting
3.5% in 1H15. Volume is growing slowly rather than contracting,
reflecting the company's advantageous geographic location and
diversified customer base.

The company benefits from the geographical location of its
networks in growing Moscow and the Moscow region. Electricity
consumption on the territory of MOESK's operations grew 2%
annually in 2012-2014 versus broadly stable consumption in Russia
as a whole. A fairly high income per capita compared with the
Russian average supports consumer purchasing power and adds to the
resilience of distribution volumes.

Elevated Debt Cost

As Russian Central Bank's base rate remains elevated at 11% after
its increase in December 2014, MOESK's new bank and bond financing
has become considerably more expensive. In April 2015 the company
issued three-year rouble bonds with a one-year call option at
13.25%, which is significantly more expensive than rouble bonds or
loans raised in 2013 at 8%-9%. Given the company's fairly short
debt maturity profile, higher cost of debt would translate into
weaker interest cover in 2016-2017. Elevated cost of financing in
the longer term would be credit-negative.

Capex Flexibility Mitigates Cost Pressures

For 2015 MOESK has reduced its capex by RUB8bn or 17% to RUB40bn
(VAT-inclusive) to preserve its financial profile. Although such
measures are not planned for 2016, the company has flexibility in
its contingency plans. Fitch assumes that in the exceptional
circumstances of a tariff freeze or a prolonged period of high
interest rates MOESK would cut its investment by 10%-20%.

Solid Leverage, Stretched Fixed Charge Cover

Fitch expects the company's FFO adjusted gross leverage (net of
connection fees) to average 3.3x in 2015-2017, which is
comfortably within our guideline. FFO fixed charge cover (net of
connection fees), however, is expected to be slightly below our
guidance of 3.25x for negative rating action, at around 3.0x over
2015-2017. This is based on our conservative assumptions for
tariff growth and cost of new debt. Ultimately, FFO fixed charge
cover will largely depend on the Russian Central Bank's policy
rate. Should the policy rate remain in double-digits over the
medium term, we would target to reflect a step change in MOESK's
FFO fixed charge cover in the rating.

One-Notch Uplift for Parental Support

Fitch incorporates a one-notch uplift into MOESK's 'BB+' Long-term
IDR for implied parental support as we assess as moderately strong
the overall strategic, operational and, to a lesser extent, legal
ties between the company and its majority shareholder, JSC Russian
Grids and ultimately the Russian Federation (BBB-/Negative).

The relative strength of the strategic and operational ties is
underpinned by MOESK's near-monopoly position in electricity
distribution in Moscow (BBB-/Negative) and Moscow region
(BB+/Stable) and its sizeable contribution to the parent's EBITDA
(22% in 2014). Although the company has not received any tangible
financial support (eg equity contributions) in the past given its
solid financial profile, the track record of JSC Russian Grids in
providing capital injections to its other subsidiaries and
holdings demonstrates the parent's willingness to provide support
if needed.

KEY ASSUMPTIONS

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

- Average ('common pot') tariff increase of 5.8% per annum during
   2015-2018

- 7.1% average annual growth rate of operating expenses during
   2015-2018

- Distribution volumes growth of 1.1% CAGR over 2015-2018

- Average annual capex of RUB32.5bn (excluding VAT) in 2015-2018

- Average cost of new borrowings of 11.5% in 2015, 10% in 2016
    and 9% in 2017-2018

- Dividend pay-out at 30% of net profit

RATING SENSITIVITIES

Positive: Future developments that may, individually or
collectively, lead to positive rating action include:

- Improvement of the Russian regulatory framework for electricity
   distribution and track record of its stability and
   predictability.

- Evidence that the company can maintain FFO adjusted gross
   leverage (excluding connection fees) well below 3.0x and FFO
   fixed charge cover (excluding connection fees) above 4.5x on a
   sustained basis, which would be positive for the standalone
   rating.

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

- Significant deterioration of the credit metrics on a sustained
   basis (FFO adjusted gross leverage (excluding connection fees)
   above 4.0x and FFO fixed charge cover (excluding connection
   fees) below 3.25x) due to, for example, low tariff growth,
   insufficient to cover inflationary cost increases, or elevated
   borrowing costs, not compensated by capex cuts.

- Material adverse changes to the regulatory framework,
   especially from 2017 onwards.

- Weaker links with the parent and, ultimately, the state.

"We have tightened our FFO adjusted gross leverage (excluding
connection fees) sensitivity to 3.0x-4.0x from 3.5x-4.5x. This is
due to our assessment of an increased business risk because of
heightened regulatory uncertainty and adverse regulatory
developments of the last few years, including frequent amendments
of key RAB parameters and tariff increases below inflation level.
The tightening also reflects a reduction of the gap in business
risk between Russian electricity distributors and generators,"
Fitch said.

LIQUIDITY

MOESK's liquidity is satisfactory with RUB41.4bn of available long
term credit lines maturing in 2016-2021 and RUB1.7bn of cash and
cash equivalents at end-1H15 sufficient to cover short-term debt
maturities of RUB22.7bn and Fitch-expected negative free cash flow
of RUB8bn.

"The company's debt maturity profile is rather short with average
weighted maturity of portfolio of 2.5 years. This is due to the
concentration of debt maturities in 2015 and 2018 of RUB17.7bn and
RUB35.5bn, respectively, at end-1H15. We forecast MOESK to remain
free cash flow negative over 2015-2018 and expect the company to
rely on external funding for debt refinancing. We assess its FX
risk as low as both the company's debt and revenue are rouble-
denominated," Fitch said.

FULL LIST OF RATING ACTIONS

Long-term foreign currency IDR: affirmed at 'BB+'; Outlook Stable

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

Long-term local currency IDR: affirmed at 'BB+'; Outlook Stable

National Long-term Rating: affirmed at 'AA(rus)'; Outlook Stable

Local currency senior unsecured rating: affirmed at 'BB+'

National senior unsecured rating: affirmed at 'AA(rus)'


T2 RTK: Fitch Affirms 'B+' Long-Term Issuer Default Rating
----------------------------------------------------------
Fitch Ratings has affirmed LLC T2 RTK Holding's (T2R) Long-term
Issuer Default Rating (IDR) at 'B+' with a Stable Outlook.

The ratings reflect significant increase in capex and consequently
the pressure on free cash flow, resulting in limited leverage
headroom over the next two years. The company is undertaking an
ambitious expansion project rolling out operations in new regions
as well as upgrading its existing networks to 3G and 4G. T2R is a
successful discounter mobile operator in Russia with a lean and
efficient business model.

KEY RATING DRIVERS

3G/4G Development

T2R is actively building 3G and 4G networks and launching
operations in new regions, including Moscow, taking advantage of
its nationwide spectrum portfolio after the merger with
Rostelecom's mobile assets in 2014. As of end-October 2015 the
company has launched 3G/4G networks in 56 regions of Russia.

Modernization of networks should lead to increasing consumption of
data and translate into higher average revenue per user (ARPU).
The company's strong track record in launching operations in new
regions adds credibility to its plans. However, the large scale of
new geographic expansion, especially into the highly competitive
Moscow market, presents significant operating challenges and
execution risks, in our view.

Moscow Market

The upcoming launch of commercial operations in Moscow at end-
October 2015 is an important milestone in the company's
development. The Moscow mobile market had more than 40 million
subscribers and 216.4% penetration rate as of end-1H15 and is the
most lucrative region in Russia where mobile network operators
(MNOs) generate a large share of their EBITDA. The market has the
highest penetration of smartphones among Russian regions and ARPU
is notably higher in Moscow compared with the rest of Russia.

T2R's entry into Moscow will be challenging due to strong
competition, customers' high expectations for quality services and
fairly low brand recognition. The company has only 3G and 4G
networks in Moscow, which means that 2G-only handsets will not
supported. This will likely constrain subscriber acquisition as 2G
voice-only customers who are usually more sensitive to pricing and
thus more likely to switch to discounter operator will not be able
to use T2R.

High Leverage

The substantial investments will put pressure on free cash flows
and leverage in 2015-2017. We expect leverage to peak in 2015 and
gradually reduce in the following years driven by EBITDA growth
and falling capex. Reported net debt/EBITDA and funds from
operations (FFO) adjusted net leverage ratios are likely to be
higher than 3.5x and 4.5x, respectively, during the peak capex
years of 2015 and 2016.

EBITDA and FFO will be under pressure from substantial roll-out
development costs that cannot be capitalized under IFRS accounting
conventions. Fitch recognizes that analytically these may be
viewed as one-off exceptional expenses. New regions' development
will be synergetic for the existing operations, which Fitch views
as sustainable and generating stable cash flow. Temporary spikes
in leverage above the downgrade rating guidelines caused by rapid
development may be accommodated within the current ratings
provided that they are accompanied by positive operating trends,
substantial network coverage improvements and a return to normal
leverage levels within 24 months.

Forex Risk Addressed

T2R's exposure to foreign currency risks is mostly attributed to
capex. The company hedges forex-denominated capex on a regular
basis, limiting its exposure to increase in equipment prices
related to rouble devaluation. The purchases of equipment in large
amounts for the ongoing rollout of 3G/4G networks allow the
company to attain discounts from equipment vendors which partially
mitigates the impact of price increase for forex-denominated
network equipment.

MVNO with Rostelecom

Rostelecom plans to create a mobile virtual network operator
(MVNO) using T2R's mobile networks. Fitch believes that T2R will
benefit from this form of cooperation with the shareholder
operator as it will receive additional revenue from networks' rent
while the threat of intensifying competition is limited.
Rostelecom intends to offer mobile services only as part of its
bundled offerings, which include fixed telephony, internet and pay
TV.

Shareholder Funding

T2R's development program is financed predominantly by its
shareholding banks VTB and Bank Rossiya. Fitch understands from
the company that the shareholders fully support the company's
development ambitions and are ready to provide funding when
needed. More than 60% of company's debt consisted of loans from
VTB and Bank Rossiya as of end-2Q15.

KEY ASSUMPTIONS

-- Revenue growth in high-single/low-double digits in 2016-2018,
    driven by increasing mobile data usage and entry into the
    Moscow market

-- Underlying EBITDA margin (excluding development spend) at 32%
    in 2015 and 2016, increasing to 34% in 2017

-- Gradual increase of subscriber market share in Moscow to 10%
    in 2019 from an estimated 2.5% in 2016

-- Capital expenditure in line with the company's guidance of
    44% of revenues in 2015 and falling to 26%-28% in 2016-2018

-- No material M&A

-- No dividends paid

RATING SENSITIVITIES

Negative: Future developments that may result in negative rating
action:

-- Failure to reduce FFO-adjusted net leverage, on a sustained
    basis, to 4.5x by end-2017 (2014: 4.8x) which roughly
    corresponds to net debt/EBITDA of 3.5x (2014: 2.9x).

-- Significant weakness in cash flow generation driven by
    operating underperformance and insufficient growth from the
    expansion program in Moscow and 3G/4G rollout in regions.

-- An evidence of weakening funding support from shareholding
    banks.

Positive: Future developments that may result in positive rating
action:

-- Successful operating development and leverage stabilizing at
    below 4x FFO adjusted net leverage and 3x net debt/EBITDA on a
    sustained basis.

LIQUIDITY

T2R's share of short-term debt, including capital leases, in total
debt was around RUB51 billion at end-2Q15. The major part of this
debt consists of loans from shareholding banks, which will likely
be refinanced by the same banks or extended. The refinancing of
RUB19 billion bonds with put option in the next 12 months with
loans from VTB and Bank Rossiya is also likely.

FULL LIST OF RATING ACTIONS

LLC T2 RTK Holding

  Long-term IDR: affirmed at 'B+', Outlook Stable

  National Long-term Rating: affirmed at 'A(rus)', Outlook Stable

  Bonds issued by OJSC Saint-Petersburg Telecom and recourse to
  T2R through an irrevocable undertaking: affirmed at
  'B+'/A(rus)'/Recovery Rating 'RR4'


URAL BANK: S&P Affirms 'B-/C' Counterparty Credit Ratings
---------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on Russia-
based Ural Bank for Reconstruction and Development (UBRD) to
negative from stable and affirmed its 'B-/C' long- and short-term
counterparty credit ratings on the bank.

At the same time, we lowered our Russia national scale rating on
the bank to 'ruBBB-' from 'ruBBB'.

"The rating action reflects our view that UBRD's creditworthiness
maybe under pressure in the next 12-18 months due to the
deteriorating loan portfolio quality and increasing single-name
concentration in the loan book. As of June 30, 2015, retail
loans -- mostly, unsecured consumer and express loans -- accounted
for 42% of the bank's total loan portfolio. Given that performance
of the retail portfolio has been poor since the end of 2013, we
consider this a significant risk. Despite some tightening of
underwriting criteria, we expect that the quality of the retail
loan book will continue weakening, resulting in new provisioning
expenses being high in 2014-2015."

"In the corporate loan book, top-20 borrowers accounted for 81% of
overall corporate loans (46% of total loans or 5.6x of total
adjusted capital on June 30, 2015). Thus, we assess concentration
risk as very high and higher than that of peer banks."  "We
believe that these high concentrations expose the bank to the risk
that a possible default of one or several of the bank's large
borrowers could significantly impair the bank's already thin
capital buffers."

"We note, however, that the deterioration of the bank's
concentration metrics was primarily driven by revaluation of
several large loans nominated in foreign currency."

"We will closely monitor UBRD's liquidity indicators going
forward. The bank's net broad liquid assets covered 16% of short-
term customer deposits as of June 30, 2015, up significantly from
only 2% at year-end 2014."

"We note that there is a significant gap between the capital
adequacy ratios under International Financial Reporting Standards,
our risk-adjusted capital (RAC) ratios, and capital adequacy
ratios under Russian Accounting Standards (RAS) in accordance with
the local regulations. In our view, there is a risk that capital
ratios under RAS might overestimate the bank's capital buffers and
not account properly for the bank's operating risks. At the same
time, we assume that the bank might benefit from shareholder
support in the form of additional capital, especially if there is
a risk of violating regulatory capital requirements. However,
given high uncertainty regarding the amount and timing of such
support, we do not incorporate it into our RAC forecasts."

"We acknowledge the bank's strong franchise and importance in the
Ural Federal District of Russia. The bank's share of retail
deposits in Sverdlovsk Oblast was 16% on Sept. 1, 2015. We also
expect that the bank's shareholder will continue providing
financial support to UBRD."

The negative outlook on UBRD reflects our view that the
deteriorating quality of the bank's loan portfolio and increasing
loan book concentrations may put pressure on its creditworthiness
in the next 12-18 months, hurting its already extremely thin
capital buffers.

"We could take a negative rating action in the next 12-18 months
if the quality of the bank's loan portfolio deteriorated
materially causing it to incur new loan-loss provisioning expenses
above the 7% of total loans per year that we currently assume in
our base-case scenario. In addition, we might also lower the
ratings if we saw a material deterioration in the bank's liquidity
position, as shown by a significant decrease in our net broad
liquid assets ratio. Furthermore, we could also consider a
downgrade if our economic outlook on Russia further weakened and
capital markets remained volatile, making operating conditions
even more difficult for Russian banks."

"We could revise the outlook on UBRD to stable if the bank
demonstrated significant improvement in its profit margins and
portfolio quality with nonperforming loans at less than 10% of
total loans. A positive rating action would also depend on system-
wide operating risks for Russian banks calming down. We consider a
positive rating action highly unlikely at this time."



===============
S L O V E N I A
===============


KD GROUP: Fitch Affirms 'BB' Issuer Default Rating
--------------------------------------------------
Fitch Ratings has affirmed Slovenian composite insurer Adriatic
Slovenica Zavarovalna druzba d.d.'s (Adriatic Slovenica) 'BBB-'
Insurer Financial Strength (IFS) rating and its holding company,
KD Group financna druzba, d.d.'s (KD Group) 'BB' Issuer Default
Rating (IDR). The Outlooks on both ratings are Stable.

KEY RATING DRIVERS

The ratings reflect KD Group's strong market position in the
Slovenian insurance and asset management market and its adequate
capitalization. However, the ratings are limited by the group's
high financial leverage, its historically weak profitability and
its fairly small size.

Fitch regards KD Group as having a small market position and
size/scale, based on global benchmarks, with gross written
premiums (GWP) of EUR302 million in 2014 (2013: EUR311 million),
total assets of EUR0.8 billion and shareholders' funds of EUR126
million at end-2014. Nevertheless, it is one of the largest
financial service providers in the Balkan region, with Adriatic
Slovenica being the second-largest insurer in Slovenia and the
group's asset management operations being number three in the
Slovenian mutual fund market by assets under management. Fitch
views this strong position in the local market as a rating
positive.

KD Group's high financial leverage of 42% at end-1H15 (2014: 47%;
2013: 51%) remains a negative rating driver. However, Fitch views
positively for the rating that the group has been reducing
leverage since 2008.

Fitch views KD Group's capitalization as "adequate" on a
consolidated basis as measured by the agency's Prism factor-based
capital model (Prism FBM). While Adriatic Slovenica reported a
strong regulatory solvency ratio of 176% on a Solvency I basis at
end-2014, KD Group's consolidated Prism FBM score is negatively
affected by a high amount of goodwill on its balance sheet, which
Fitch does not give credit for in its capital assessment. Fitch
expects Adriatic Slovenica's Solvency II coverage to be lower than
its Solvency I coverage.

KD Group reported net income of EUR4.7 million in 2014 and EUR6.6
million in 2013. This result followed losses between 2009 and
2012, driven by its underperforming bank business (which was
disposed of in 2012) and losses from other non-core corporate
affiliates affected by the financial crisis. Adriatic Slovenica
has been consistently profitable, reporting annual net income of
over EUR10 million for each of the past five years and an average
return on equity of 18%. Fitch expects KD Group to be profitable
in 2015, after reporting net income of EUR2 million in 1H15 (1H14:
EUR4.2 million).

KD Group is in the process of divesting most non-core assets to
focus on its core insurance and asset management businesses. Fitch
expects this action to improve the group's performance and
generate extra cash flow over the next three years.

KD Group entered into a long-term syndicated loan agreement with
five Slovenian banks in February 2015. Fitch views this agreement
as neutral to KD Group's and Adriatic Slovenica's ratings as the
loan proceeds of EUR67 million are fully used to refinance KD
Group's KDH1 and KDH2 bonds maturing in May and October 2015,
respectively. However, the agency views positively for the rating
that the loan agreement, which has a maturity of seven years,
increases the group's financial flexibility by extending the
duration of its financial liabilities and by removing the
refinancing risk of the two maturing bonds.

As around three quarters of the group's assets are held in
Slovenian investments and 94% of the group's revenue is in
Slovenia (BBB+/Stable), the group's performance is exposed to the
local economy. This exposure includes the risk of losses on its
EUR347 million of non-unit linked investments, as of end-2014, and
the risk of lapses on its EUR257 million of unit-linked
liabilities. For example, write-downs on Slovenian banks led to
investment losses of EUR16 million in 2013 and EUR2 million in
2014 for Adriatic Slovenica.

RATING SENSITIVITIES

KD Group's leverage improving to below 40% in combination with
stabilized profitability could lead to an upgrade.

The ratings could be downgraded if the group's consolidated
capital position weakens to a Prism FBM score of below "adequate"
for a sustained period.



===========
S E R B I A
===========


PIVARA NIS: Commercial Court Wants Operations Halted
----------------------------------------------------
SeeNews reports that a commercial court in the southern Serbian
city of Nis has again ordered Bulgarian investor Stefan Stefanov
to cease all operations at local brewer Pivara Nis.

In September, the commercial court in Nis put an administrator in
charge at Niska Pivara while it looks into a complaint filed
against the recent sale of the brewer to the Bulgarian buyer,
SeeNews recounts.

According to SeeNews, local news provider Juzne Vesti reported on
Oct. 6 that after a court of appeals in Belgrade overturned the
measure, it was again reinstated by the commercial court in Nis,
bringing all activities at the brewer -- including an ongoing
upgrade, to a halt.

In September, news agency Tanjug reported that in a letter sent to
high officials from the Serbian government and state and to the
local EU delegation, Mr. Stefanov says that in line with a ruling
of the commercial court, the brewery's assets have been entrusted
to an administrator while a complaint against its sale filed by
Belgrade-based firm Lus Investment is investigated, SeeNews
relays.

Niska Pivara had been undergoing bankruptcy proceedings since
August 2013, SeeNews notes.



=========
S P A I N
=========


ENAITINERE SAU: S&P Assigns 'BB-' Preliminary Long-Term CCR
-----------------------------------------------------------
Standard & Poor's Ratings Services said it has assigned its 'BB-'
preliminary long-term corporate credit rating to Enaitinere
S.A.U., an operator of toll road concessions in northern Spain.
The outlook is stable.

"At the same time, we have assigned a preliminary recovery rating
of '4' and a preliminary issue rating of 'BB-' to the proposed
senior secured bond in the amount of EUR300 million-EUR500 million
and the senior secured loan that Enaitinere plans to issue. Our
recovery expectations are in the higher half of the 30%-50% range.
Recovery and issue ratings are supported by the group's valuable
operating asset base, but constrained by the group's high leverage
and substantial prior-ranking financial debt at the operating
group level."

"The final ratings will depend on our receipt and satisfactory
review of all final transaction documentation. Accordingly, the
preliminary rating should not be construed as evidence of the
final rating. If Standard & Poor's does not receive final
documentation within a reasonable timeframe, or if final
documentation departs from materials reviewed, we reserve the
right to withdraw or revise our ratings. Potential changes
include, but are not limited to, size and conditions of the bond,
its maturity, financial and other covenants, security and ranking
and utilization of the bond proceeds."

"The rating reflects our view of the group's "strong" business
risk and "highly leveraged" financial risk profiles. We analyze
the Itinere group on a consolidated basis. The group consists of
three holding companies -- Enaitinere, ENA, and Participaciones
AP-1 -- and five operating companies -- Europistas, Audasa,
Aucalsa, Audenasa, and Autoestradas de Galicia. Enaitinere is
currently in the process of merging with Participaciones AP-1."

"Our assessment of Itinere Group business risk profile is
supported by: The mature nature of the group's assets in the
northern regions of Spain, which are economically stronger;
Relatively high and resilient traffic volumes. Average daily
traffic volumes were 82,246 vehicles in 2014; Lack of competing
routes. The hilly typography of the group's catchment areas
provides few convenient alternative routes; Dominant share of
light-vehicles traffic (approximately 87% of total traffic
volume). Such traffic tends to be less susceptible to economic
cycles. This was demonstrated during the 2007-2013 economic
downturn in Spain, during which traffic on the roads operated by
Itinere dropped by approximately 24%, while its peers recorded a
decrease of about 40%; Low operating costs, resulting in high and
stable profitability."

Itinere benefits from an experienced management team that has a
longstanding relationship with the concession grantors, Spain's
Ministry of Public Works and the Galician and Navarra Regional
Governments. The regulatory framework is transparent and
protective. It features a tariff mechanism that links the toll
evolution directly to the consumer price index (CPI), and has an
annual review effective on Jan. 1. The mechanism also includes
compensation when the awarding authorities request structural
adjustments to the concession or to the assets. The compensation
may be implemented through an adjustment in tariffs, extension of
the concession term, or other forms of subsidies. The average
remaining concession life of assets under Itinere's operations is
24 years, which is the longest among its peers.

"Our assessment of Itinere's financial risk profile reflects:
High leverage debt to EBITDA of 14.3x and funds from operations
(FFO) to debt of about 1.1% in 2014. Our base-case scenario
projects moderate deleveraging over 2015-2018. However, we
forecast that debt to EBITDA will increase again in 2019,
following the end of the AP-1 concession in November 2018. This
concession represents about 25% of the group's EBITDA."

"We anticipate negative free operating cash flow (FOCF) in 2016,
due to higher capital expenditure (capex) requirements. Our base-
case operating scenario assumes that: Traffic volumes on Itinere's
roads will continue to gradually recover from the reduced volumes
recorded in 2013 thanks to the improving Spanish economy. We
forecast 3.2% GDP growth in Spain in 2015, 2.7% in 2016, and 2.4%
in 2017. We expect the traffic volumes to outperform GDP growth,
as demonstrated in the past, resulting in growth of about 5% in
2015, approximately 4%-5% in 2016, declining to about 4% in 2017."

"Tolls are adjusted in line with the CPI. We project a CPI rate of
  -0.3% in 2015, 1.0% in 2016, and 1.3% in 2017. Maintenance capex
and other operating expenses will evolve in line with inflation."

Capex will be higher and in line with management assumptions for
2015-2017 due to the Audasa enlargement project.

No dividends. Enaitinere's current policy is to pay dividends only
when it reaches 8.0x net debt to EBITDA. Itinere Group as a whole
is not allowed to pay dividends to its shareholders during the
life of refinancing.

The group effective tax rate is 0% until 2026. "Based on these
assumptions, we arrive at the following credit measures:
EBITDA margins of between 80%-82% in the next three years.
Weighted-average debt to EBITDA of 12x-13x for 2015-2017.
Weighted-average funds from operations (FFO) to debt of 4%-5% for
2015-2017.Negative FOCF in 2016, turning neutral in 2017."

"If Enaitinere were to issue a lower amount than we have assumed
in our base-case scenario, this would not lead to a change in our
financial risk profile assessment. The outlook is stable,
reflecting our forecast that the group will maintain a "strong"
business risk profile. It also reflects our projection that
leverage will remain commensurate with a "highly leveraged"
financial risk profile, as weighted-average debt to EBITDA will
decline to between 12x-13x and weighted-average FFO to debt will
improve to about 4%-5% between 2015 and 2017. We anticipate that
leverage will increase again in 2019, following the end of the AP-
1 concession in November 2018."

"We could take a negative rating action if debt reduction is
slower than anticipated. This could result from lower-than-
expected revenues due to weaker traffic volume growth or higher
capex than we currently forecast. We could also lower the rating
if the group's liquidity tightened due to reduced availability of
funds. A change in financial policy, such as extraordinary
dividend payments, could also be detrimental to the rating. This
could result in the application of a negative financial policy
modifier, which would lower the rating by up to two notches."

"We currently see limited upside potential, as leverage is
substantially higher than the threshold required for an
"aggressive" financial risk profile, and therefore the group is
expected to remain "highly leveraged" over the rating horizon."

"We apply a negative comparable rating analysis modifier to
capture the very high level of leverage compared with rated
peers."


ENAITINERE SAU: Fitch Assigns 'BB-(EXP)' Rating to 2025 Notes
-------------------------------------------------------------
Fitch Ratings has assigned Enaitinere S.A.U.'s (SubHoldCo or
Enaitinere) up to EUR500 million senior secured notes due 2025 an
expected rating of 'BB-(EXP)'. The Outlook is Stable. The notes
will rank pari passu with Enaitinere's upcoming amortizing loan,
expected to be approximately EUR600 million.

The rating reflects the long remaining maturity of Enaitinere's
toll road concessions (24 years) as a key mitigating factor to the
high initial consolidated leverage of the ring-fenced perimeter
(capturing debt raised by Enaitinere and the operating companies,
OpCos), as measured by debt/EBITDA of approximately 12.0x.
Remaining concession life and leverage are best reflected in the
consolidated concession-life coverage ratios (CLCRs) under Fitch's
base (1.33x) and rating (1.23x) cases, which consider a stressed
interest rate environment pre and post maturity of the respective
bullet debt instruments.

The rating incorporates the notes' covenant package and cash flow
waterfall which address structural subordination of the debt at
the SubHoldCo level (approximately 45% of total consolidated
debt), the legal, operational, and strategic linkage between
SubHoldCo and OpCos, and exposure to refinancing risks.

The assignment of the final rating is contingent on the receipt of
final documents conforming to information already reviewed,
including bond and loan amounts, interest rates, amortization
schedules, and covenants. If key terms of the final issue are
significantly different to our assumptions, the final rating could
be revised accordingly.

KEY RATING DRIVERS

Long and Mature Concessions (Volume Risk - Midrange)

Enaitinere has control over five mature toll roads, with the most
recent concession awarded in 1995. Traffic has shown vulnerability
to economic downturns in the past, with 2013 Average Annual Daily
Traffic (AADT) 25% below the pre-crisis peak. However, the impact
of the downturn on the group's concessions was lower than on other
Spanish toll roads due to traffic profile characteristics (13%-15%
heavy), demographics of the Galicia region, low competition, and
the fairly resilient economy of the region compared with the rest
of Spain.

Cash flow is somewhat concentrated in the key toll road --
Autopistas del Atlantico, Concesionaria Espanola S.A. (AUDASA,
responsible for around 50% of revenues). Fitch expects traffic
volumes to continue to recover from crisis levels over the next
few years in line with a recovery of the Spanish economy. As of
end-August 2015, last 12-month traffic growth rates for individual
toll roads ranged between 2.6% and 6.2%.

Tariffs Adjusted by Inflation (Price Risk - Midrange)

Tariffs are automatically adjusted on an annual basis, linked to
Spanish CPI (although with a 12-month lag for central government
concessions). As such, the concessionaires have limited
flexibility to increase tariffs above inflation but are not
floored at zero per cent in case of negative inflation. There is a
long history of tariff readjustments without disputes.

Well Managed Capex Requirements (Infra Development & Renewal
Risk - Midrange)

AUDASA, the largest concession is undertaking a significant capex
project involving expansion of the road and construction of the
Rande bridge. The agreement with the grantor includes incremental
tariffs to achieve an internal rate of return (IRR) of 8% on a
total investment amount of up to EUR315 million. The independent
engineer's (IE) report indicates that the construction contract
has adequate room to allow for cost overruns. The other
concessions are mature and not
expected to require major capex works. The IE has provided
opinions on the budgets presented by Enaitinere and has deemed
overall amounts and scope of works to be adequate.

Subordinated Interest Payments (Debt Structure - Weaker)

Debt is issued by the SubHoldCo, Enaitinere. Three of the OpCos
carry outstanding debt, representing 55% of total consolidated
debt, which, although bullet and with no restrictive covenants,
have interest payments ranking senior to the interest and
principal payments at Enaitinere. In addition, there is the
potential for increased exposure to variable interest rates after
2018, when current hedging arrangements expire on the Enaitinere
loan, as well as refinancing risk at both the OpCos and SubHoldCo
level. Despite these weaknesses, the transaction benefits from
structural protections at the SubHoldCo level. These include
restrictions on dividend distributions to ultimate holding company
Itinere Infrastructuras S.A.U. (Itinere or HoldCo) unless the
target leverage of net debt/ EBITDA of less than 8.0x is met and
SubHoldCo's bank loan amortizes as per the target schedule. This
acts as a mitigating factor if traffic volumes deviate
from base case expectations, allowing for continued deleveraging,
while minimizing cash leakage to HoldCo.

Highly Leveraged Capital Structure

Enaitinere is expected to end 2015 with consolidated debt/EBITDA
and net debt/EBITDA of approximately 12.0x and 10.6x,
respectively. Fitch does not expect significant deleveraging to
occur from 2016-2020 under the rating case, particularly given the
expiration of the AP-1 EUROPISTAS concession in 2018.

Deleveraging occurs through the amortization of the pari-passu
loan with a syndicate of banks, as the rated bonds and OpCo debt
are bullet. At bond maturity in 2025, net debt / EBITDA is
expected to reach 7.8x in the Fitch base case (FBC) and 8.8x in
the Fitch rating case (FRC), highlighting refinance risk. CLCRs at
closing and at maturity are estimated at 1.23x and 1.29x
respectively in the FRC, reflecting the long remaining maturity of
the concessions.

Higher Leverage / Quality Assets versus Peers

Enaitinere benefits from longer concession maturities than similar
Fitch-rated peers. Nonetheless, the 'BB-' rating reflects the
SubHoldCo's corporate structure and its significantly higher
leverage, as measured by debt/EBITDA of 12.0x and FRC CLCR of
1.23x in 2015, in contrast to Milano Serravalle Milano Tangenziali
S.p.A. (BB+/Negative, net debt/EBITDA of 4.2x and CLCR 1.4x) and
Autostrada Brescia-Verona-Vicenza-Padova S.p.A. (BB+/Stable, net
debt/EBITDA of 3.1x and CLCR of 1.1x). While traffic performance
during the crisis can be compared to toll road operators such as
Brisa Concessao Rodoviaria S.A. (BBB/Stable) and Abertis
Infrastructuras S.A. (BBB+/Stable), they have lower leverage and a
stronger debt structure than Enaitinere.

RATING SENSITIVITIES

The transaction's leverage metrics are affected by the end of the
AP-1 Europistas concession in 2018. As such, net debt / EBITDA
ratios are expected to decline between 2016 and 2018, before
rising again in 2019.

The rating could be positively affected by improving operating
and/or financial performance, including a combination of traffic
and tariff growth rates, leading to net debt/EBITDA ratios below
10.5x in 2019, and consequently, to an expectation of net debt /
EBITDA below 8.0x at bond maturity in 2025.

The rating could be negatively affected by deteriorating operating
and/or financial performance, including a combination of traffic
and tariff growth rates, leading to net debt / EBITDA ratios above
12.5x in 2019, and consequently, to a an expectation of net debt /
EBITDA above 10.0x at maturity in 2025.

SUMMARY OF CREDIT

Enaitinere is a subholding vehicle created by Itinere to establish
a ring-fenced structure, isolating the assets and debt of the
ultimate HoldCo from those at Enaitinere and OpCos. Itinere is the
second-largest Spanish toll road operator by network length
(552.4km) and toll revenues (EUR268 million in 2014). The company
is responsible for five toll roads in Northern Spain, which
although mature, have an average remaining concession life of 24
years. Of the five toll road concessions, two have been granted by
Navarra and Galicia, respectively, and three have been granted by
the Central Government of
Spain.


IBERCAJA BANCO: Fitch Affirms 'BB+' LT Counterparty Credit Rating
-----------------------------------------------------------------
Standard & Poor's Ratings Services took the following rating
actions:

"We raised the long-term counterparty credit rating on Banco
Santander S.A. to 'A-' from 'BBB+', and upgraded its highly
strategic subsidiaries Santander Consumer Finance S.A. (SCF),
Santander Holdings USA, and Santander Bank NA to 'BBB+' from
'BBB'. We affirmed the short-term ratings on all the entities at
'A-2'. All the outlooks are stable."

"We raised the long-term counterparty credit ratings on Banco
Bilbao Vizcaya Argentaria S.A. (BBVA) and on its highly strategic
subsidiaries, BBVA Compass Bancshares and Compass Bank, to 'BBB+'
from 'BBB'. We affirmed the 'A-2' short-term ratings. All the
outlooks are stable. We affirmed our 'BBB/A-2' ratings on
Caixabank S.A. and Cecabank S.A. and our 'BB/B' ratings on
Ibercaja Banco S.A. The outlook on Caixabank and Cecabank remains
stable. The outlook on Ibercaja is still positive."

RATIONALE

"On Oct. 2, 2015, we raised our long-term sovereign credit rating
on Spain, reflecting our expectation that the country's strong,
balanced economic performance will benefit its public finances. We
now expect average GDP growth rates of 2.7% during 2015-2017, and
nominal GDP growth to reach 3.8% in 2015 and exceed 4% for the
next four years. We project that Spain's fiscal deficit will
continue to reduce, reaching 3.5% of GDP at end-2016, and its net
general government debt to peak at 90.7% of GDP."

"The strength of Spain's economic recovery and ongoing
improvements on the fiscal front further support our view that
economic risks in Spain are likely to ease, as we communicated
back in April 2015 when we assigned a positive trend to Spain's
banking sector economic risks. Our assessments of the economic and
industry risks that the Spanish banking industry faces have not
changed, however, following Spain's upgrade."

"Our upgrade of Spain to 'BBB+' leads us to raise our ratings on
the country's largest financial institutions: Banco Santander and
BBVA. Our ratings on both had previously been constrained by the
comparatively weaker creditworthiness of their home country.
Following the actions, our ratings on both banks reflect our view
of their stand-alone credit profiles (SACPs) of 'a-' and 'bbb+',
respectively."

"The upgrades have had positive implications for the ratings on
some of their subsidiaries, namely SCF and the U.S. operations of
both banks. In our view, these entities would now benefit from
stronger financial support from their parents if needed or, as is
the case for BBVA's U.S. operations, the parent's creditworthiness
no longer constrains our ratings on the subsidiaries."

"We also raised the issue ratings on the hybrid instruments issued
or guaranteed by both Santander and BBVA, as we derive the hybrid
ratings from the lowest of the SACP and issuer credit rating.
Until today's rating action, the issuer credit ratings on both
entities had been lower than the SACPs."

"Our long-term ratings on Santander are still one notch above the
long-term rating sovereign credit rating on Spain. This reflects
our view that there is an appreciable likelihood that Santander
would not default in the stress scenario that would likely
accompany a hypothetical default of the Spanish sovereign. In such
a scenario, we would expect Santander to face meaningful
impairments, which would erode most, but not all, of its capital
base."

"Regulatory forbearance, however, would be likely as it would be
challenging for the bank to comply with minimum regulatory capital
requirements. Similarly, we would expect Santander's Spanish
operations to suffer sizable outflows of liquidity, but consider
that the bank would be able to overcome liquidity pressures by
resorting to European Central Bank (ECB) funding."

"We affirmed the ratings on Ibercaja. This reflects our view that
although the bank could now benefit from potential extraordinary
government support following the sovereign's improved
creditworthiness, once Spain fully implements its resolution
regime by January 2016 the government's capacity to provide such
support without substantial burden-sharing by creditors will
likely be constrained."

"Our upgrade of Spain has also slightly changed the factors that
could influence the direction of our ratings on Caixabank and
Cecabank stated in our previous outlook statements on both banks.
Both outlooks remain stable, but, unlikely previously, Spain's
creditworthiness no longer prevents future upgrades."

"We did not include any other Spanish banks in this review as the
sovereign action did not by itself directly affect their ratings,
rating factors, and/or outlooks."

OUTLOOKS

SANTANDER S.A.

"The stable outlook on Santander reflects our stable outlook on
the long-term rating on Spain, as we consider it unlikely that we
would rate the bank two notches above the sovereign. This is
because we believe that, if the sovereign defaulted, Santander
would likely require regulatory forbearance on capital to continue
operating, as well as funding support from the ECB to meet its
obligations."

"On a stand-alone basis, we expect improving economic conditions
in Spain and the U.K., the two markets in which the bank runs its
largest operations, to support its performance and allow it to
accommodate potential earnings pressure and higher risks arising
from Latin America, particularly from Brazil. We therefore expect
the bank to maintain adequate capitalization, with its Standard &
Poor's risk-adjusted capital (RAC) ratio comfortably above 7% over
the next 12-18 months. We also believe that the group's asset
quality will continue performing better than banking industry
averages in the markets where it operates, in line with its track
record."

"Although a positive rating action is unlikely at this point, it
could happen if we were to upgrade Spain and at the same time we
considered that the bank's stand-alone creditworthiness had
improved."

Conversely, a downgrade of Spain would trigger a similar action on
Santander.

"We could also lower the ratings if credit losses, and
particularly those from Brazil and other emerging market
subsidiaries, were to increase significantly above our current
expectations, materially impairing the bank's solvency levels."

BANCO BILBAO VIZCAYA ARGENTARIA S.A.

"The stable outlook reflects our expectation that all factors
driving our ratings are unlikely to change. We anticipate that
BBVA will continue developing its strong retail banking franchises
in the majority of countries in which it operates, with a focus on
strengthening profitability while preserving what we see as a
conservative strategy. We consider that the impact of the economic
slowdown in some emerging markets will be manageable."

"Following BBVA's acquisition of an additional stake in Turkish
bank Turkiye Garanti Bankasi AS (Garanti), and of Catalunya Banc
S.A. (Catalunya) in Spain, we do not envisage further meaningful
merger and acquisition activity. Instead, we expect the bank to
focus on integrating the aforementioned acquisitions."

"As economic conditions in Spain become more supportive, we expect
that BBVA's asset quality will improve and that the bank will
continue to outperform its peers. Lower credit provisions, cost
control, and steady earnings growth will support improving
profits. However, we anticipate an increase in the cash payout to
shareholders. We see the bank's RAC ratio gradually strengthening,
but hovering just below 7% for the next couple of years. Over the
medium term, we expect the bank's capacity to absorb losses in a
stress scenario to remain a rating strength, but we think it is
unlikely to drive future positive rating actions. We expect BBVA's
sound funding and liquidity profile to be preserved."

"Although our base-case scenario is for the ratings to remain
stable, we could consider an upgrade in a scenario of significant
easing of economic risks in the main markets where BBVA operates
(Spain, Mexico, the U.S., and Turkey) or if the bank substantially
improves its profitability and proves to be an outperformer in its
peer group. For an improvement in the bank's stand-alone
creditworthiness to translate into a higher rating, we would first
have to upgrade Spain. This is because, given BBVA's business
concentration in Spain, we would consider it unlikely that the
bank would continue honoring its obligations in a timely manner in
the hypothetical event of a Spanish sovereign default, and
therefore we would not rate the bank above the long-term sovereign
credit rating on Spain. Conversely, the ratings on BBVA could also
come under pressure if the bank's risk profile were to materially
deteriorate."

BBVA COMPASS BANCSHARES AND COMPASS BANK

"The stable outlook on U.S.-based BBVA Compass Bancshares (BBVA
Compass) and its main bank subsidiary, Compass Bank, reflects our
stable outlook on the parent, BBVA, and our expectation that BBVA
Compass' SACP will remain 'bbb+'."

BBVA Compass' rating is now the same as the parent rating, and its
SACP is equivalent to its parent's group credit profile (GCP) of
'bbb+'.

"We continue to view BBVA Compass as a highly strategic subsidiary
of BBVA. We typically set the rating for a highly strategic
subsidiary at one notch lower than the parent's GCP, unless -- as
is the case here -- the rating on the subsidiary is equal to or
higher than the parent's GCP."

"We could lower our ratings on BBVA Compass if we were to
downgrade the parent. We could also lower our ratings on BBVA
Compass by one notch to 'BBB' (one notch lower than the parent) if
we lower its SACP to 'bbb'. This could occur if we expect that the
company's risk profile and asset quality will worsen significantly
because of the effect of lower energy prices on the company's
energy loans and general lending in Texas. We estimate that BBVA
Compass' current energy-funded exposure is moderate at about 6% of
total loans, although total commitments are substantially higher
than funded amounts and could result in an exposure that pressures
the rating. Furthermore, over one-third of its loans are in Texas,
a market that relies heavily on the energy sector. As a partial
offset to this risk, the company's current financial position is
good as it enters into this uncertain period; in particular, the
company has relatively low nonperforming assets, steady earnings,
and solid capital ratios."

"We see the possibility of an upgrade of BBVA Compass as unlikely
as, all other things being equal, for that to happen the parent's
rating would have to be raised by two notches."

SANTANDER HOLDINGS U.S.A. Inc. AND SANTANDER BANK N.A.

The stable outlooks on Santander Holdings USA (SHUSA) and
Santander Bank N.A. mirror the stable outlook on the parent,
Santander.

"We continue to view SHUSA as a highly strategic subsidiary of
Santander, partly because of historical and expected capital
support. Therefore, we set SHUSA's ratings one notch below
Santander's GCP."

"SHUSA's SACP remains 'bbb-.' We lowered our SACP on SHUSA to
'bbb-' from 'bbb' in September 2015, reflecting the company's high
exposure to subprime lending through its majority-owned consumer
finance company, Santander Consumer USA Holdings."

"We expect that SHUSA's ratings direction will be tied to the
ratings on its parent (and will be one notch below the parent's
GCP), as long as we consider SHUSA a highly strategic subsidiary."

SANTANDER CONSUMER FINANCE S.A.

"The stable outlook on SCF reflects that on parent Banco
Santander. For as long as we consider SCF a "highly strategic"
subsidiary of Banco Santander, its ratings will remain one notch
below those on the parent and will move in tandem."

"An upgrade, which we consider unlikely at this point, would be
triggered by a similar action on the parent or by our revision of
the group status of SCF to "core." Conversely, we could lower the
ratings on SCF following a similar action on the parent, or if we
believe that the parent's commitment to SCF has weakened, leading
us to revise downward our view of the subsidiary's long-term
strategic importance for the Santander group."

IBERCAJA BANCO S.A.

"The positive outlook on Ibercaja Banco S.A. reflects the
possibility of an upgrade if the bank's capital position continues
improving and we see potential for its RAC ratio to remain
sustainably and comfortably above 4% over the next 12-18 months.
We believe that capital strengthening is more likely to result
from organic earnings generation -- on the back of a likely more-
supportive economic environment -- than from specific capital
initiatives."

"We understand that Ibercaja is continuing to explore potential
capital enhancing alternatives, including listing its shares in
conjunction with a potential capital increase. However, unlike
previously, we see those initiatives as less likely to materialize
in the short term."

"We could revise the outlook to stable if the bank proves unable
to strengthen its solvency, which we see as weak and structurally
constrained by its unlisted status and the limited financial
flexibility of its shareholders. This would occur if higher-than-
anticipated credit losses or loan growth limit Ibercaja's organic
capital generation in 2015 and 2016. We could also revise the
outlook to stable if the bank were to make additional acquisitions
of weaker players that could put pressure on its currently
stronger-than-peers' asset quality."

CAIXABANK S.A.

"Our stable outlook on CaixaBank indicates that, although we
expect the bank's business and financial profiles to gradually
benefit from Spain's more favorable economic environment,
improvements are unlikely to be material enough to warrant an
upgrade over the next 12-18 months."

"We anticipate that CaixaBank's profitability will gradually
strengthen, supported by higher revenues, cost-efficiency
measures, and lower credit impairments. As a result, we expect our
RAC ratio for CaixaBank to remain at a level consistent with our
"moderate" assessment at year-end 2016 (5%-7%). We also expect
CaixaBank to continue reducing its stock of problematic assets,
with nonperforming loans (NPLs) reaching 6%-7% of total loans by
2016. We expect CaixaBank to continue benefiting from comfortable
problematic assets coverage and to maintain a balanced funding
profile and comfortable liquidity."

"Although our base-case scenario is for the ratings to remain at
the current level, an upgrade could occur if the bank's capital
position strengthens more than we anticipate, with the RAC ratio
sustainably being above 7%. Conversely, the ratings could come
under pressure if the bank's capital position meaningfully
weakened or its risk profile no longer compared favorably with
that of domestic peers."

CECABANK S.A.

"The stable outlook on Cecabank reflects our expectation that its
solvency position will remain strong over the next 18-24 months
and that its use of central bank financing, if any, will be
limited. We also believe that Cecabank's business and
profitability prospects will remain resilient on the back of the
bank's recent diversification efforts."

"Although unlikely at this point, we could upgrade Cecabank if its
stand-alone creditworthiness further strengthened on the back of
improved capital or risk position. Conversely, we could lower our
ratings if Cecabank's business prospects deteriorated sharply or
if its risk appetite were to increase substantially, putting
pressure on the bank's currently strong capital.

RATINGS LIST

Upgraded; Affirmed             To               From

Banco Santander S.A.
Counterparty Credit Rating    A-/Stable/A-2    BBB+/Stable/A-2
Senior Unsecured(1)           A-               BBB+
Subordinated(1)               BBB              BBB-
Junior Subordinated(1)        BB+              BB
  Preferred Stock(1)           BB+              BB
  Preference Stock(1)          BB               BB-
Commercial Paper(1)           A-2              A-2

Santander Consumer Finance S.A.
Santander Holdings U.S.A Inc.
Santander Bank, N.A.
Counterparty Credit Rating    BBB+/Stable/A-2  BBB/Stable/A-2

Banco Bilbao Vizcaya Argentaria S.A.
Counterparty Credit Rating    BBB+/Stable/A-2   BBB/Stable/A-2
Senior Unsecured(2)           BBB+              BBB
  Subordinated(2)              BBB-              BB+
  Preferred Stock(2)           BB-               B+
Commercial Paper(2)           A-2               A-2

BBVA Compass Bancshares, Inc.
Compass Bank
Counterparty Credit Rating    BBB+/Stable/A-2   BBB/Stable/A-2

Ratings Affirmed

CaixaBank S.A.
Cecabank S.A.
Counterparty Credit Rating       BBB/Stable/A-2

Ibercaja Banco S.A.
Counterparty Credit Rating       BB/Positive/B

(1)Guaranteed by Banco Santander S.A.
(2)Guaranteed by Banco Bilbao Vizcaya Argentaria, S.A.

NB. This list does not include all ratings affected.



=============
U K R A I N E
=============


KONTRAKT PJSC: Declared Insolvent by National Bank of Ukraine
-------------------------------------------------------------
Interfax-Ukraine reports that the board of the National Bank of
Ukraine on Oct. 7 said it has placed public joint-stock company
bank Kontrakt on the list of insolvent banks under resolution No.
671 of October 6, 2015.

"Not enough liquidity, the non-settling of clients' payments and
systemic misrepresentation of the financial reports created
threats for depositors and the creditors of bank Kontrakt,"
Interfax-Ukraine quotes the NBU as saying.

The regulator, as cited by Interfax-Ukraine, said that in
September 2015, the NBU received claims from companies that their
payments have not been settled by the bank and a curator was
introduced to the bank to study the situation, and the curator
confirmed the large amount of unsettled clients' payments, while
the bank hid this information.

The bank started selling its assets to third parties without
actually receiving cash, which led to payments being postponed due
to the resale of securities, Interfax-Ukraine discloses.

According to Interfax-Ukraine, the regulator said that since the
curator was appointed neither the managers nor the owner of the
bank addressed the NBU on readjustment plans.

Founded in 1993, Bank Kontrakt ranked 82nd among 127 operating
banks as of July 1, 2015, in terms of total assets worth UAH740.1
million, according to the NBU.


KYIV: S&P Cuts LT Local Currency Issuer Credit Rating to 'SD'
-------------------------------------------------------------
Standard & Poor's Ratings Services lowered its long-term local
currency issuer credit rating on Kyiv to 'SD' from 'CC'.

"We also lowered our issue ratings on two local currency bonds to
'D' from 'CC'."

"At the same time, we affirmed our 'CC' long-term foreign currency
rating. The outlook on the foreign currency rating remains
negative."

As a "sovereign rating" (as defined in EU CRA Regulation 1060/2009
"EU CRA Regulation"), the ratings on the city of Kyiv are subject
to certain publication restrictions set out in Art 8a of the EU
CRA Regulation, including publication in accordance with a pre-
established calendar.

Under the EU CRA Regulation, deviations from the announced
calendar are allowed only in limited circumstances and must be
accompanied by a detailed explanation of thereasons for the
deviation. In Kyiv's case, the deviation was prompted by the
distressed debt restructuring of the city's local currency bonds.

RATIONALE

The downgrade follows Kyiv's rescheduling of its two domestic
bonds totaling Ukrainian hryvnia (UAH)4.163 billion (US$196
million): series H (UAH2.248 billion) and series G (UAH1.915
billion) due in October and December 2015. The city extended the
maturity dates by one year, after authorization by the central
government, and kept all other terms unchanged.

"Kyiv's domestic bond restructuring constitutes what we consider
to be a distressed debt restructuring. Under our criteria, we view
an exchange offer as tantamount to default under the following
conditions:

The offer implies the investor will receive less value than the
promise of the original securities; and

"We believe the offer is distressed, rather than purely
opportunistic.

"We consider that Kyiv's exchange offer satisfies these
conditions, even though investors may technically accept the offer
voluntarily, and irrespective of whether an event of default as
defined by the bond documentation occurs. In accordance with our
criteria, we have therefore lowered our local currency  credit
rating on Kyiv to 'SD' and the local currency issue ratings to
'D'. At the same time, we have affirmed the long-term foreign
currency issuer credit rating, as, although in our view a default
on the euro bond issues is a virtual certainty, the agreement has
not yet been reached and the maturity date hasn't passed."

"We continue to monitor Kyiv's individual credit characteristics."

"We view Ukraine's institutional framework as very volatile and
underfunded, which we believe continues to limit the city's very
weak budgetary flexibility. We also view the city's economy as
weak, although diversified. Moreover, we consider Kyiv to have a
weak budgetary performance, a high debt burden, and high
contingent liabilities. Our assessment also incorporates the
combination of our views on the city's weak liquidity and very
weak financial management."

OUTLOOK

"The outlook on the long-term foreign currency rating is negative,
reflecting our view that a default on Kyiv's euro bonds is
virtually inevitable."

"In accordance with our 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
decision."

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.

RATINGS LIST

                                Ratings
                                To              From
Kyiv (City of)
Issuer credit rating
  Foreign Currency              CC/Negative/--  CC/Negative/--
  Local Currency                SD/--/--        CC/Negative/--
Senior Unsecured
  Foreign Currency              CC              CC
  Local Currency                D               CC

Kyiv Finance PLC
Senior Unsecured
  Foreign Currency              CC              CC


UKRAINE: Bond Default Triggers Credit-Default Swap Payouts
----------------------------------------------------------
Marton Eder at Bloomberg News reports that Ukraine's failure to
redeem a bond maturing last month has triggered payouts on default
insurance, according to a committee of investors and credit-
default swaps traders.

Ukraine missed the repayment of US$500 million in bonds due
Sept. 23 by the end of a 10-day grace period, prompting a
so-called "failure-to-pay" credit event, Bloomberg relays, citing
a ruling by the published on International Swaps & Derivatives
Association its website.

According to Bloomberg, the announcement opens the way for the
settlement of about 2,500 credit-default swaps at an auction this
week, before a deadline for investors to vote on the country's
US$18 billion debt restructuring next week.

Settling the CDS contracts will allow some investors to
participate in Ukraine's debt restructuring agreed with a Franklin
Templeton led creditor group and set for a bondholder vote by mid-
October, Bloomberg notes.  The overhaul includes a 20% writedown
in principal to meet conditions for a US$17.5 billion
International Monetary Fund loan to help the war-ravaged economy
recover from a recession, Bloomberg discloses.

Ukraine had US$332 million in net default swaps on Sept. 25,
Bloomberg says, citing the Depository Trust & Clearing Corp.  That
compares with $396 million a week earlier, before the maturity of
contracts on Sept. 20, Bloomberg states.

ISDA has ruled that investors holding those contracts will be
eligible for insurance protection as Ukraine had announced the
moratorium on Sept. 19, Bloomberg relates.


UKRAINE: Fitch Cuts Long-Term Foreign Currency IDR to 'RD'
----------------------------------------------------------
Fitch Ratings has taken the following rating actions on Ukraine:

-- Long-term foreign currency IDR downgraded to 'RD' (Restricted
    Default) from 'C';

-- Long-term local currency IDR affirmed at 'CCC';

-- Short-term foreign currency IDR downgraded to 'RD' from 'C';

-- Senior unsecured foreign-currency issue ratings on all
    outstanding external issues affirmed at 'C';

-- Senior unsecured local-currency issue ratings affirmed at
    'CCC';

-- Senior unsecured foreign-currency issue ratings on all
    outstanding domestic issues affirmed at 'CCC';

-- Country Ceiling affirmed at 'CCC'.

KEY RATING DRIVERS

The 10-day grace period on Ukraine's USD500 million eurobond
maturing on September 23, 2015 has elapsed without payment being
made. Fitch therefore judges Ukraine to be in default on its
sovereign eurobond obligations.

On September 24, Ukraine launched the exchange offer for
approximately USD18 billion in direct and government-guaranteed
eurobonds. Fitch considers that this represents a Distressed Debt
Exchange (DDE) under its criteria that results in material losses
to bondholders and is being conducted to avoid default.

RATING SENSITIVITIES

Ukraine's ratings will be upgraded shortly after Fitch determines
that the exchange has been successful. The new rating will be
consistent with Ukraine's prospective credit profile and debt
structure. The Ministry of Finance has said that it plans to
conclude the exchange by 27 October.

KEY ASSUMPTIONS

Fitch assumes that the debt exchange offer announced on 24
September will be implemented.


UKRGAZPROMBANK: NBU Can't Commence Liquidation, Court Rules
-----------------------------------------------------------
Interfax-Ukraine reports that the business court of Kyiv has
banned the National Bank of Ukraine from liquidating
Ukrgazprombank.

"The Individuals' Deposit Guarantee Fund and National Bank of
Ukraine are banned from making the decision to liquidate public
joint-stock company Ukrgazprombank and/or revoke its banking
license," Interfax-Ukraine quotes the court ruling of Sept. 14
under a claim of Primestar Energy FZE (the United Arab Emirates)
as saying.

The Individuals' Deposit Guarantee Fund after an open tender among
qualified investors on Aug. 7 signed an agreement on the purchase
and sale of 100% of the shares in Ukrgazprombank with Primestar
Energy FZE, Interfax-Ukraine recounts.

The new owner was to restore the solvency of the bank within one
month from the signing of the agreement, Interfax-Ukraine says.
However, on Sept. 14, the NBU decided to remove the bank's license
and liquidate it, as the new shareholder has not capitalized the
bank in the term defined in the agreement, Interfax-Ukraine
relays.

Founded in 1996, Ukrgazprombank ranked 81st among 158 banks
operating in the country on January 1, 2015 by total assets (UAH
1.369 billion), according to the NBU.


UNISON STANDARD: NBU Declares Bank Insolvent
--------------------------------------------
The Board of the National Bank of Ukraine has adopted a decision
on declaring Unison standard bank PJSC insolvent. On Oct. 2, 2015,
Resolution No. 665 was issued by the Board of the National Bank of
Ukraine to this effect.

"One more bank with an opaque ownership structure has been put
into resolution. We have completed the banking system clean-up.
However, banks violating the banking laws and regulations and
performing suspicious operations should be withdrawn from the
market. We pay considerable attention to the transparency and
stability of the banking system, and we are set to clamp down on
violators of the banking laws," stressed Director of the Banking
Supervision Department Kateryna Rozhkova.

Unison standard bank PJSC was among the banks that have been
served a letter from the National Bank notifying it of its non-
transparent ownership structure and demanding it to bring it into
compliance with applicable laws or regulations. The opaque
ownership structure led the regulator to place the bank under
enhanced supervision.

In September 2015, the bank was declared a problem bank due to
growing information security risks.

Over the past few days, Unison standard bank PJSC has ramped up
cash transactions. Such operations could have deteriorated the
financial standing of the bank, and consequently put the security
of funds deposited by the bank depositors and other creditors at
stake.

In addition, in violation of a ban, Unison standard bank PJSC
began entering into agreements on comprehensive banking services
with individuals, which could have increased the burden on the
Deposit Guarantee Fund.

In view of the above, pursuant to paragraph 6 of part 1 of Article
76 of the Law of Ukraine On Banks and Banking, the National Bank
of Ukraine is obliged to declare the bank insolvent in case of a
failure by a problem bank to comply with the NBU's decision
(including that on the application of corrective
measures/sanctions).



===========================
U N I T E D   K I N G D O M
===========================


ALUTARIUS LTD: Insolvency Service Bans Two Directors
----------------------------------------------------
Ian Brett Coombes and Karen Jane Coombes -- both of Cheddar and
directors of care home companies Alutarius Ltd and Carepro Ltd --
have been given director disqualifications of 8 and 4 years,
respectively, for their roles in providing documents to
accountants detailing fictitious payments to HMRC.

Mr. and Mrs. Coombes' disqualifications follow an investigation by
the Insolvency Service into the companies Alutarius Ltd, which
managed and operated 8 care homes for the elderly and Carepro UK
Ltd which provided domiciliary care.

Ian Brett Coombes (49) gave an 8-year Directors Disqualification
Undertaking on Sept. 2, 2015, for providing documentation to the
company accountant for preparation of the end of year accounts
which recorded fictitious payments totalling GBP830,015 made to
HMRC.

Mr. Coombes also failed to meet statutory obligations that these
accounts were then audited and also that PAYE/NIC returns were
filed to HMRC. Furthermore, he caused another company to trade to
the detriment of HMRC resulting in a liability of GBP567,466 to
HMRC.

Karen Jane Coombes (45) gave a 4-year Directors Disqualification
Undertaking on Sept. 2, 2015, for her involvement.

David Brooks, Chief Investigator of the Insolvency Service,
commented:

"These disqualifications should demonstrate to company directors
that the Insolvency Service will investigate all forms of
misconduct, no matter how complicated the evidence or how long the
paper trail is.

"We will always look to remove from the business community those
directors who act below the standards expected of them."

The disqualifications mean that Mr. and Mrs. Coombes may not be
directors of a company or be involved in the management of a
company in any way for the duration of the disqualifications.

Alutarius Ltd was incorporated on Feb. 27, 2002. It was placed
into administration on Aug. 2, 2010.

Carepro UK Ltd was incorporated on Jan. 31, 2006. It was place
into administration on June 14, 2011.


AVOCA CLO XV: S&P Assigns B-(sf) Rating to Class F Debt
-------------------------------------------------------
Standard & Poor's Ratings Services assigned preliminary credit
ratings to Avoca CLO XV Ltd.'s floating and fixed-rate class A-1,
A-2, B-1, B-2, C, D, E, and F notes. At closing, Avoca
CLO XV will also issue two unrated subordinated classes of notes.

Avoca CLO XV is a European cash flow collateralized loan
obligation (CLO), securitizing a portfolio of primarily senior
secured euro-denominated leveraged loans and bonds issued by
European borrowers. KKR Credit Advisers
(Ireland) is the collateral manager.

Under the transaction documents, the rated notes will pay
quarterly interest unless there is a frequency switch event.
Following this, the notes will permanently switch to semiannual
payment. The portfolio's reinvestment period will end
approximately four years after closing, and the portfolio's
maximum weighted-average life will be eight years after closing.

"Our preliminary ratings reflect our assessment of the collateral
portfolio's credit quality, which has a weighted-average 'B+'
rating. We consider that the portfolio as of closing will be well-
diversified, primarily comprising broadly syndicated speculative-
grade senior secured term loans and senior secured bonds.

"Therefore, we have conducted our credit and cash flow analysis by
applying our criteria for corporate cash flow collateralized debt
obligations."

"In our cash flow analysis, we used the target par amount of
EUR500 million, the covenanted weighted-average spread (4.0%), the
covenanted weighted-average coupon (5.6%), and the covenanted
weighted-average recovery rates at each rating level. We applied
various cash flow stress scenarios, using four different default
patterns, in conjunction with different interest rate stress
scenarios for each liability rating category."

"In our analysis, we considered that the transaction documents'
replacement and remedy mechanisms adequately mitigate the
transaction's exposure to counterparty risk under our current
counterparty criteria. The Bank of New York Mellon, London Branch
is the bank account provider and custodian."

"Following the application of our nonsovereign ratings criteria,
we consider that the transaction's exposure to country risk is
sufficiently mitigated at the assigned preliminary rating levels.
This is because the concentration of the pool comprising assets in
countries rated lower than 'A-' will be limited to 10% of the
aggregate collateral balance."

The transaction's legal structure is expected to be bankruptcy-
remote, in accordance with our European legal criteria. The issuer
may further directly own issuer subsidiaries. These subsidiaries
are required to comply with our criteria (see "Methodology For
Analyzing Rating Confirmation Requests To Establish Subsidiary
Special-Purpose Entities in CDOs," published on Dec. 9, 2009).

"Following our analysis of the credit, cash flow, counterparty,
operational and legal risks, we believe our preliminary ratings
are commensurate with the available credit enhancement for each
class of notes."

RATINGS LIST

Avoca CLO XV Ltd.
EUR516.8 Million Senior Secured Floating- And Fixed-Rate Notes And
Subordinated Notes

Class                 Rating            Amount
                                      (mil. EUR)

A-1                   AAA (sf)            5.00
A-2                   AAA (sf)          291.20
B-1                   AA (sf)            10.00
B-2                   AA (sf)            49.40
C                     A (sf)             30.70
D                     BBB (sf)           27.10
E                     BB (sf)            34.00
F                     B- (sf)            16.30
M-1                   NR                 24.60
M-2                   NR                 28.50

NR--Not rated.


GRAINGER PLC: S&P Hikes GBP275MM Notes' Rating From 'BB+'
---------------------------------------------------------
Standard & Poor's Ratings Services said it had raised its issue
rating on real estate company Grainger PLC's existing GBP275
million senior secured notes, due 2020, to 'BBB-' from 'BB+'.  The
issue rating is now two notches above the corporate credit rating
on Grainger (BB/Stable/--).

"We revised the recovery rating on the debt to '1' from '2' to
reflect our expectations of higher recovery for noteholders at
default. We based these actions on our improved valuation of the
group's assets."

The senior secured notes have floating charges over all of the
properties and assets of the issuer and guarantors. Additionally,
there is a typical guarantor group coverage test for the bank debt
and the senior secured notes at 85% and 75%, respectively
(excluding non-recourse entities).  "We view the security and
guarantee package as comprehensive, and we acknowledge that it is
shared with M&G Investments' GBP100 million senior secured
facility."

"Under our hypothetical default scenario, we assume a default in
2020 that would be on the back of an economic downturn in the
U.K., which would pull house prices down and could severely reduce
the group's cash flow generation. Our stressed valuation comprises
the stressed value of the assets pledged as security for the bonds
as well as the discounted value of the equity in non-pledged
entities."

SIMULATED DEFAULT AND VALUATION ASSUMPTIONS
Year of default: 2020
Jurisdiction: U.K.

SIMPLIFIED WATERFALL
Gross assets value at default: GBP1,117 million
Administrative costs: GBP78 million
Net value available to creditors: GBP1,039 million

Priority claims: GBP1 million
Secured debt claims: GBP938 million*
-- Recovery expectation: 90%-100%
*All debt amounts include six months of prepetition interest.


MEEHANCOMBS LP: Shuts Down After European Investments Sour
----------------------------------------------------------
Jodi Xu Klein at Bloomberg News report that MeehanCombs LP, a
hedge fund that is less than three years old, is shutting down its
business after its European investments went sour.

President Eli Combs said the Stamford, Connecticut-based firm
focusing on stressed and distressed credits in the U.S. and
Europe, saw assets under management decline by about one-third
from a peak of US$300 million last year, Bloomberg relates.

The fund was down about 6% in 2014 and 7% this year, Bloomberg
discloses.

Mr. Combs, as cited by Bloomberg, said the fund, which was started
in March 2013, suffered from losses on corporate debt bets as a
slow economic recovery in Europe weighed on investments such as
banks.

The firm's management decided to shut down the business by the end
of this month after clients asked to redeem about half of their
capital in August, Bloomberg notes.


                            *********

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

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

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


                            *********


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

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

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

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

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

The TCR Europe subscription rate is US$775 per half-year,
delivered via e-mail.  Additional e-mail subscriptions for members
of the same firm for the term of the initial subscription or
balance thereof are US$25 each.  For subscription information,
contact Peter Chapman at 215-945-7000 or Nina Novak at
202-362-8552.


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