TCREUR_Public/151021.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

                           E U R O P E

         Wednesday, October 21, 2015, Vol. 16, No. 208

                            Headlines

F R A N C E

ELIOR SA: Fitch Affirms 'BB-' Long-term Issuer Default Rating


G R E E C E

GREECE: International Creditors to Decide on Bail-Out Tranche


I R E L A N D

ADAGIO III CLO: S&P Raises Rating on Class E Notes to B+
DEPFA BANK: S&P Affirms 'BB' Rating on Sr. Subordinated Debt


K A Z A K H S T A N

KAZKOMMERTS-POLICY: S&P Lowers CCR to 'B', Off CreditWatch Neg.


L U X E M B O U R G

PACIFIC DRILLING: Moody's Lowers CFR to Caa2, Outlook Negative


N E T H E R L A N D S

ST. PAUL'S III: Fitch Affirms 'B-sf' Rating on Class F Debt
VIVAT NV: S&P Affirms 'D' Ratings on 2 Subordinated Debt Issues


P O L A N D

TVN SA: Moody's Raises Corp. Family Rating to Ba2, Outlook Stable


R U S S I A

B&N BANK: S&P Lowers Counterparty Credit Ratings to 'B-/C'
EURASIA DRILLING: S&P Puts 'BB+' CCR on CreditWatch Negative
GELENDZHIK-BANK: Bank of Russia Halts Provisional Administration
GUBERNSKAYA LLC: Bank of Russia Suspends Insurance License
INVESTTRADEBANK PJSC: DIA to Oversee Bankruptcy Measures

KOMI REPUBLIC: Fitch Affirms 'BB/B' IDRs, Outlook Negative
PROBUSINESSBANK JSC: Bank of Russia Provides Update on Probe
RUSSIAN INSURANCE: Bank of Russia Revokes Insurance Licenses
TAMBOV REGION: Fitch Affirms 'BB +' LT Issuer Default Rating
URALSIB BANK: Fitch Cuts Long-Term FC Issuer Default Rating to B-

YAROSLAVL REGION: Fitch Affirms 'BB' LT Issuer Default Rating


S W E D E N

BRAVIDA HOLDING: Moody's Raises CFR to Ba3, Outlook Stable
BRAVIDA HOLDING: S&P Puts 'B' CCR on CreditWatch Positive


S W I T Z E R L A N D

SCHMOLZ + BICKENBACH: S&P Affirms B+ CCR, Outlook Negative


U K R A I N E

UKRAINE: S&P Raises Sovereign Ratings to 'B-/B', Outlook Stable


U N I T E D   K I N G D O M

HASTINGS INSURANCE: Moody's Raises Sr. Secured Debt Rating to Ba3
HIGHER EDUCATION: Moody's Cuts Rating on Cl. A3 & A4 Notes to B3
NORTHERN ROCK: Picks Cerberus as Preferred Bidder for Mortgages
TATA STEEL: To Cut 2,000 Jobs at Two UK Plants
* Fitch Says UK Bank Ring-Fence Won't Cause Material Rating Gaps


X X X X X X X X

* Muted Growth for Europe's B2B Cos. Likely in 2016, Moody's Says


                            *********


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


ELIOR SA: Fitch Affirms 'BB-' Long-term Issuer Default Rating
-------------------------------------------------------------
Fitch Ratings has affirmed France-based food service company
Elior SA's Long-term Issuer Default Rating (IDR) at 'BB-'. The
ratings of Elior's senior secured credit facilities and Elior
Finance & Co. SCA's EUR350 million senior secured notes have been
downgraded to 'BB' from 'BB+', to align them Fitch's existing
recovery ratings methodology. The Outlook on the Long-term IDR is
changed to Positive from Stable.

"The ratings continue to reflect Elior's large scale, broad
product offering, strong customer and business diversification,
and the high barriers to entry inherent in the catering sector,
where there is a long-term secular trend toward outsourced
foodservices. The Positive Outlook is based on our expectation
that Elior will generate improved EBITDA and maintain steady
profit margins driven by organic growth, particularly in the
fast-growing US transport concessions business, and bolt-on
acquisitions in 2015 and 2016. The rating is however constrained
by the still relatively high leverage, despite the 2014 IPO."

"Following its IPO, shareholder dividends will keep FCF
generation fairly weak in 2015 and de-leveraging moderate. We
expect Fitch-adjusted funds from operations (FFO) gross leverage
to reduce moderately to between 4.7x and 4.8x by end-2017,
compared with 5.4x at end-2014. We expect interest cover metrics,
measured as FFO fixed charge cover, to exceed 3.0x over the
rating horizon, which would be strong relative to 'BB' -rated
business services focusing on catering and facilities
management," Fitch said.

The instrument ratings have been recalibrated further to the
publication of the 'Recovery Ratings and Notching Criteria for
Non-Financial Corporate Issuers' report published in June 2015.
Under this methodology Fitch expects superior recovery prospects
for senior creditors in case of default resulting in a senior
secured rating of 'BB' one notch higher from the IDR.

KEY RATING DRIVERS

Solid Trading

"We expect a stable and solid operating performance in 2015 and
2016 due to both organic growth and some bolt-on acquisitions.
This will be combined with a drive to terminate low-margin
contracts and sell non-core activities. Hence we believe EBITDA
margins should remain between 8.2% and 8.7% during 2015-2017, in
line with sector peers such as Compass Group Plc (A-/Stable) and
Sodexo SA (BBB+/Stable)."

US Concessions Key Drivers

The group's main focus in 2015 and 2016 will be on the growing US
airport and turnpikes concessions markets. Elior is a major
player in these sectors and should benefit from its dual
strengths in quality food service and cost optimization to
increase its market presence at US airports.

Slowly Improving Credit Metrics

"Following the leverage reduction further to the IPO in 2014, we
estimate Fitch-adjusted FFO gross leverage at 4.9x for the
financial year to September 2015 versus 5.1x at FYE14 post-IPO.
We expect leverage to remain below 5.0x thereafter, despite
developing concessions in the US requiring capex and expected
dividend payments post IPO. The pace and funding of future
acquisitions will also determine the deleveraging trajectory and
hence the resolution of the positive outlook over the next 12-18
months," Fitch said.

Balanced Business Profile

The ratings continue to reflect Elior's balanced business profile
resulting from its broad product offering, strong customer and
business diversification, impressive retention rates and high
barriers to entry. The group possesses several company-specific
traits akin to low investment- grade business services companies
such as a broad range of services and customer diversification,
as well as a high proportion of contracted revenues and low
renewal risk.

Weak FCF Generation

Elior's asset-light nature and low capital intensity should allow
it to convert operating profits into positive cash flow before
debt service, while interest costs will be materially lower
further to the IPO. However, the group has announced a dividend
policy of a minimum of 40% of net income. As a result Fitch
expects FCF to be mildly positive (around or below 1% of sales)
during the next three years. This will limit de-leveraging and
improvements to financial flexibility.

Diversified Profit Drivers

"Elior's contract catering and support services' segment
(representing 73% of FY14 group EBITDA) is a key anchor for the
ratings. We expect profitability under these contracts to remain
steady in a low inflationary environment, while retaining any
productivity improvements. We also expect concession activities,
accounting for 27% of group EBITDA, to remain structurally more
profitable, albeit more capital-intensive, than contract catering
over the next two years," Fitch said.

Geographic Concentration

"While Elior's closest peers Compass Group PLC and Sodexo SA have
greater exposure both in revenue and profit margin terms to
currently difficult emerging markets, despite their long-term
growth fundamentals, in our view Elior's rating is constraint by
its exposure to an anaemic and only slowly recovering French and
Southern European markets. However we acknowledge the
opportunities for Elior to exploit further outsourcing in both
the public and private sectors, in Europe and US," Fitch said.

KEY ASSUMPTIONS

Fitch's expectations are based on the agency's internally
produced, conservative rating case forecasts. They do not
represent the forecasts of rated issuers individually or in
aggregate.

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

-- Moderate single-digit organic revenue growth and bolt-on
    acquisitions with turnover of around EUR300 million p.a.;

-- Steady group operating margin and EBITDA improvement in both
    contract and concessions catering sectors;

-- FCF margin (post dividends) of around (or just below) 1% of
    sales from 2016;

-- Capex of between EUR190m and EUR200m in the next three years;

-- Dividends of up to 40% of net income;

-- Average annual acquisition spending of EUR100m

RATING SENSITIVITIES

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

-- Additional business diversification, by segment and/or
    geography, leading to improved revenues and operating profits

-- Further deleveraging resulting in FFO adjusted gross leverage
    below 4.5x on a sustained basis

-- FFO fixed charge coverage above 3.0x (FY14: 2.0x) on a
    sustained basis

-- FCF (post dividends) of at least 1% of sales on a sustained
    basis (FY14: 0.8%)

Future developments that could lead, individually or
collectively, to a return to a Stable Outlook include:

-- Evidence that underlying businesses are performing below
    expectations and/or increases in cost base leading to
    weakness in revenue growth and EBIT or FFO margin down to
    around 5.0%

-- FFO adjusted gross leverage increase above 5.0x on a
    sustained basis
-- FFO fixed charge coverage below 2.7x on a sustained basis


LIQUIDITY

Unrestricted cash of EUR161 million at FYE14 (as defined by
Fitch), together with access to around EUR520 million of undrawn
revolving credit facilities post-IPO, is sufficient to address
business needs and moderate debt repayments for 2015 and 2016 of
around EUR300 million.



===========
G R E E C E
===========


GREECE: International Creditors to Decide on Bail-Out Tranche
-------------------------------------------------------------
Mehreen Khan at The Telegraph reports that Greece's international
creditors arrived in Athens on Tuesday, Oct. 20, for the first
time in two months to decide on whether to release the latest
tranche of bail-out cash to the struggling economy.

According to The Telegraph, representatives of the "Quartet" --
made up of the European Commissions, European Central Bank,
European Stability Mechanism and International Monetary Fund --
will carry out their latest assessment of the government's
progress on implementing reforms needed to unlock the rescue
money.

The newly elected government of prime minister Alexis Tsipras has
managed to pass a raft of "prior action" bills through parliament
in a bid to satisfy lenders requirements, The Telegraph relates.
They include imposing penalties on early retirement and
introducing a property tax, The Telegraph notes.

Under the terms of its third EUR86 billion bail-out, the Syriza-
led government will have to jump over a number of hurdles to
qualify for new rounds of rescue cash, The Telegraph relays.

In total, Athens will have to satisfy at least 48 "milestones" to
successfully complete this first bail-out review, The Telegraph
says.

Should creditors deem the current measures sufficient, a EUR2
billion tranche of bail-out funds could be released as soon as
Monday, Oct. 26, The Telegraph discloses.

The inspectors, who will meet with government officials, are due
to complete their assessment by the end of the week, The
Telegraph states.

                    Bank Recapitalization

In the coming weeks, the government will also be required to pass
a law on bank recapitalization, The Telegraph relates.  The
European Central Bank is currently assessing the capital
shortfalls of Greece's four main banks who have suffered from
record levels of deposit flight, The Telegraph relays.

This process of "stress-testing" and recapitalization is due to
complete by the end of year, The Telegraph says, citing ECB's
Daniele Nouy.  Total recapitalization needs are estimated to be
below EUR20 billion, The Telegraph notes.



=============
I R E L A N D
=============


ADAGIO III CLO: S&P Raises Rating on Class E Notes to B+
--------------------------------------------------------
Standard & Poor's Ratings Services raised its credit ratings on
Adagio III CLO PLC's class C, D, and E notes.  At the same time,
S&P has affirmed its ratings on the class A1A, A1B, A2, A3, and B
notes.

The rating actions follow S&P's analysis of the transaction using
data from the trustee report dated Aug. 28, 2015, and the
application of S&P's relevant criteria.

Since S&P's previous review on June 16, 2014, the transaction has
continued to pay down the senior notes (the class A1A, A2, and A3
notes) from scheduled principal proceeds after the reinvestment
period that ended in September 2013.  As a result, S&P has
observed an increase in credit enhancement for all classes of
notes.

S&P conducted its cash flow analysis to determine the break-even
default rate (BDR) for each rated class of notes at each rating
level.  The BDR represents S&P's estimate of the maximum level of
gross defaults, based on its stress assumptions, that a tranche
can withstand and still fully pay interest and principal to the
noteholders.

S&P used the collateral amount that it considers to be performing
and the weighted-average recovery rates calculated in line with
our updated criteria for rating corporate cash flow
collateralized debt obligations (CDOs).

Upon publishing S&P's updated corporate CDO criteria, it placed
those ratings that could potentially be affected "under criteria
observation".  Following S&P's review of this transaction, its
ratings that could potentially be affected by the criteria are no
longer under criteria observation.

The results of S&P's analysis show that the available credit
enhancement for the class A1A, A1B, A2, A3, and B notes is
commensurate with its currently assigned ratings.  S&P has
therefore affirmed its ratings on these classes of notes.

S&P's analysis also indicates that the available credit
enhancement for the class C, D, and E notes is commensurate with
higher ratings than those previously assigned.  S&P has therefore
raised its ratings on these classes of notes.

Adagio III CLO is a cash flow collateralized loan obligation
(CLO) transaction managed by AXA Investment Managers Paris S.A.
It is backed by a portfolio of loans to primarily speculative-
grade corporate firms.  The transaction closed in August 2006 and
its reinvestment period ended in September 2013.

RATINGS LIST

Adagio III CLO PLC
EUR575.242 mil, US$5 mil senior and subordinated deferrable
floating-rate
notes
                                  Rating
Class             Identifier      To                  From
A1A               00534PAA7       AAA (sf)            AAA (sf)
A1B               00534PAG4       AA+ (sf)            AA+ (sf)
A2                00534PAB5       AA+ (sf)            AA+ (sf)
A3                00534PAH2       AA+ (sf)            AA+ (sf)
B                 00534PAC3       AA- (sf)            AA- (sf)
C                 00534PAD1       A- (sf)             BBB+ (sf)
D                 00534PAE9       BB (sf)             B+ (sf)
E                 00534PAF6       B+ (sf)             CCC+ (sf)


DEPFA BANK: S&P Affirms 'BB' Rating on Sr. Subordinated Debt
------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its long- and short-
term issuer credit ratings on Ireland-based, Germany-owned Depfa
Bank PLC at 'A-/A-2'.  The outlook is stable.

S&P also affirmed the 'A-/A-2' ratings on DEPFA's core
subsidiaries Depfa ACS Bank, Depfa Pfandbrief Bank International
S.A., and Depfa Public Finance Bank.  The outlook on these
entities is stable.

At the same time, S&P affirmed its 'BB' issue ratings on DEPFA's
nondeferrable senior subordinated debt and S&P's 'D' issue rating
on Depfa's preferred stock.

S&P subsequently withdrew the ratings on Depfa Public Finance
Bank and on DEPFA's preferred stock issues.

The affirmation reflects S&P's view that the wind-down of DEPFA
is proceeding in line with its expectations, following the
transfer of ownership to FMS Wertmanagement (FMSW).  It also
reflects S&P's continued expectation of the high likelihood of
extraordinary support from the German government to DEPFA in case
of need.

S&P continues to assess DEPFA's unsupported group credit profile
(GCP) at 'bbb-'.  This assessment includes the support that
Germany already provided to DEPFA through capital injections and
asset transfers.  S&P also takes into account ongoing government
support, because it cannot segregate benefits deriving from
government ownership.

DEPFA remains very well capitalized in S&P's view, with a
Standard & Poor's risk-adjusted capital ratio of 25% at year-end
2014. Although S&P expects that the bank will remain loss-making
for the foreseeable future, under its base case S&P now sees this
level of capitalization as likely to be sustained in the next two
years.  As a result, S&P has reassessed its view of DEPFA's
capital and earnings to "very strong" from "strong."

That said, S&P continues to see material tail risks owing to
DEPFA's concentrated credit exposures.  Although these are not in
S&P's base case, these may result in strong fluctuations in the
loan impairment charge and could harm the bank's capitalization.
S&P therefore revised its assessment of the bank's risk position
to "weak" from "moderate," an assessment that S&P also considers
to be merited in a comparison of DEPFA with peers facing similar
economic risks.  Overall, when S&P views the capital and earnings
and risk positions together, the assessment remains neutral.  In
other words, S&P thinks that, even allowing for some downside
risks, DEPFA should remain comfortably capitalized through the
wind-down process.

DEPFA is based in Ireland, but S&P continues to see the German
government as a more likely source of support than Ireland's in
the event of stress, due to Germany's indirect 100% ownership of
DEPFA via FMSW, and its strong commitment and track record of
support.  The long-term counterparty credit rating is three
notches higher than the unsupported GCP, reflecting S&P's view
that DEPFA is as a government-related entity (GRE), and S&P
believes there is a "high" likelihood of timely and sufficient
extraordinary support from the German government to the DEPFA
group if needed.

Despite the reduced predictability of German government support
for systemically important commercial banks, S&P expects Germany
to remain highly supportive of DEPFA, to the benefit of its
senior creditors.  This reflects S&P's view that, even though
DEPFA is a commercial bank subject to the EU's Bank Recovery And
Resolution Directive, the directive does not appear to restrict a
government in its capacity as an existing shareholder to grant
support in a going-concern situation.

S&P regards Depfa ACS Bank and Depfa Pfandbrief Bank
International as "core" subsidiaries of DEPFA.  Both subsidiaries
are fully integrated in DEPFA group.  These banks are integral
parts of the business and are subject to the groupwide orderly
wind-down.  S&P assumes that there is a high likelihood that
these subsidiaries would receive extraordinary support from the
German government if necessary, through DEPFA.  As such, S&P
equalizes ratings on these core subsidiaries with the 'a-'
supported GCP of DEPFA.

S&P's outlook on DEPFA is stable.  This reflects S&P's view that
DEPFA will remain the orderly wind-down unit within FMSW and will
continue to benefit from the strong commitment of the German
government until the wind-down is completed.  However, S&P notes
that Germany has no obligation to support DEPFA directly, in
contrast to its obligation to support FMSW.  S&P also cannot
exclude a privatization of DEPFA in the longer term, but it
currently regards the probability of such a development to be
negligible.

S&P might lower the ratings on DEPFA in the next two years if the
bank's unsupported GCP deteriorates, for example if sizable
losses caused a sharp fall in the bank's capitalization or if the
likelihood of government support were to diminish.

A positive rating action would require either an improvement of
the bank's unsupported GCP or a strengthening of Germany's
commitment to the bank.  However, rating upside is remote in the
next two years, given S&P's expectation that DEPFA will be wound
down, along with the high level of ongoing and extraordinary
government support factored into the ratings.



===================
K A Z A K H S T A N
===================


KAZKOMMERTS-POLICY: S&P Lowers CCR to 'B', Off CreditWatch Neg.
---------------------------------------------------------------
Standard & Poor's Ratings Services lowered to 'B' from 'B+' its
long-term counterparty credit and financial strength rating on
Kazakhstan-based Insurance Co. Kazkommerts-Policy JSC.  At the
same time, S&P lowered the Kazakhstan national scale rating to
'kzBB' from 'kzBBB-'.

At the same time, S&P removed the ratings from CreditWatch with
negative implication, where they had been placed on Oct. 20,
2014. The outlook is negative.

The downgrade follows the rating action on the parent,
Kazkommertsbank JSC.  S&P anticipates that nonperforming loans
(NPLs) that originated before the 2008 financial crisis will
strain KKB's capitalization over the next 12-18 months, making it
very weak by S&P's measures.  As part of KKB's acquisition of BTA
Bank, some assets were subsequently transferred to KKB from BTA
and others were transferred to BTA from KKB.  This has further
complicated an already difficult situation for KKB.

S&P considers that Kazkommerts-Policy remains a strategically
important subsidiary of KKB but do not factor any explicit
support from the parent into S&P's ratings, because KKB's stand-
alone credit profile (SACP) is lower than that of its subsidiary.

S&P considers the insurance company to be insulated from KKB and
rate it one notch higher than its parent.  This is because the
regulatory framework provides some protection for the insurer in
the event of adverse intervention from KKB.  The regulatory
framework also includes constant oversight from the National Bank
of the Republic of Kazakhstan.

The negative outlook mirrors that on the bank because S&P
considers that KKB's weaker financial profile still has a
negative impact on the insurance company.

S&P anticipates that, over the next 12-18 months, Kazkommerts-
Policy will be able to maintain its top-10 position in the Kazakh
insurance market, based on net premium written.  S&P also expects
it to preserve its capital adequacy at least at the moderately
strong level after consolidation with BTA Insurance.

S&P could lower the rating if it saw evidence that Kazkommerts-
Policy's competitive position had deteriorated, for example, if
it experienced a loss of premium income, its underwriting
performance deteriorated, its average asset quality deteriorated
to a weak level, or its dividend payments significantly eroded
the company's financial flexibility and capital adequacy.

S&P considers an upgrade to be unlikely over the next 12-18
months.  However if S&P revised the outlook on the parent to
stable, it would likely revise the outlook on the insurance
company if all other rating factors were unchanged.



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


PACIFIC DRILLING: Moody's Lowers CFR to Caa2, Outlook Negative
--------------------------------------------------------------
Moody's Investors Service downgraded Pacific Drilling S.A.'s
(PacDrilling) Corporate Family Rating to Caa2 from B3 and
Probability of Default Rating to Caa2-PD from B3-PD.  Moody's
also downgraded the company's senior secured term loan B and the
5.375% senior secured notes to Caa2 from B3 as well as Pacific
Drilling V Ltd.'s (PDC5) 7.25% senior secured notes to Caa3 from
Caa1.  The Speculative Grade Liquidity (SGL) affirmed at SGL-4
and the rating outlook is negative.  This action concludes the
ratings review that was initiated on Aug. 24, 2015.

"The ratings downgrade was driven by our view that there are no
material signs of improving contract coverage and utilization
rates for Pacific Drilling's rigs through 2017.  The negative
outlook reflects the need to conclude the covenant amendment
process underway with lenders to avoid a covenant breach in early
to mid-2016," said Sreedhar Kona, Moody's Senior Analyst.
"Additionally, the company's liquidity would continue to be
stressed even if the discussions regarding the rig under
construction are concluded favorably for Pacific Drilling."

A complete list of rating actions:

Downgrades:

Issuer: Pacific Drilling S.A.

  Corporate Family Rating, Downgraded to Caa2 from B3

  Probability of Default Rating, Downgraded to Caa2-PD from B3-PD

  Senior Secured Term Loan B (Foreign Currency) due June 3, 2018,
   (US$733 million outstanding), Downgraded to Caa2, LGD4 from
   B3, LGD3

  US$750 million 5.375% Senior Secured Notes (Foreign Currency)
  due June 1, 2020, Downgraded to Caa2, LGD4 from B3, LGD3

Issuer: Pacific Drilling V Ltd.

  US$500 million 7.25% Backed Senior Secured Notes (Foreign
   Currency) due December 1, 2017, Downgraded to Caa3, LGD4 from
   Caa1, LGD4

Affirmations:

  Speculative Grade Liquidity Rating, Affirmed SGL-4

Outlook Actions:

Issuer: Pacific Drilling S.A.

  Outlook, Negative

Issuer: Pacific Drilling V Ltd.
  Outlook, Negative

RATINGS RATIONALE

The downgrade of the CFR to Caa2 was driven by the contracting
risk, projected increase in financial leverage, and small fleet
of operating ultra-deepwater drillships.  Contract coverage for
2016 and 2017 remains weak with only three of the seven
drillships fully contracted through at least January 2017.
Despite new cost saving measures, the company's credit metrics
will deteriorate materially through 2017, given the low
likelihood of recovery in the offshore drilling rig market at
least until mid-2017.

PacDrilling's modest backlog of US$1.7 billion is meaningfully
smaller than peers rated B3 or higher and the backlog has high
geographic concentration risk with drillships operating only in
West Africa and the US Gulf of Mexico.  Although, drillships in
operation are currently under contract with large, investment
grade operators, ratings are constrained by the extremely high
revenue exposure to a single operator, Chevron Corporation
(Chevron, Aa1 stable).  Ratings incorporate the value of the
seven high specification drillships and the company's good, but
limited, operating track record.  The ratings also consider the
potential for open market purchases of rated debt as the
instruments are trading at steep discounts to face value.

The company will need to conclude its covenant relief
negotiations as the possibility of breaching the net debt/EBITDA
covenant under the senior secured credit facility due 2019 (SSCF)
in early to mid-2016 is extremely high.  If the discussions
regarding the rig under construction (Pacific Zonda) are not
concluded in a manner that would relieve PacDrilling's obligation
to make the large final payment due upon delivery, the company's
liquidity stress will be elevated.

The US$750 million 5.375% senior secured notes due 2020 and the
term loan B due 2018 (US$733 million outstanding) at PacDrilling
are rated Caa2, in line with the CFR.  The debt benefits from a
first lien on four rigs, three of which are operating, as well as
a security interest in the equity of its subsidiary that owns
these four drillships.  PacDrilling's equity interest in three of
the other four drillships is structurally subordinated to US$1.4
billion of debt that is at the subsidiary level.  The US$499
million 7.25% senior secured notes due 2017 at Pacific Drilling V
Ltd (PDC5) are rated Caa3, one notch lower than the debt at
PacDrilling to reflect its first lien against a single drillship
as well as PacDrilling's unsecured guarantee that is subordinated
to the senior secured creditors at PacDrilling.  The Caa2-PD
Probability of Default Rating (PDR) reflects our expectations of
an average family recovery in a distressed scenario.

PacDrilling's SGL-4 rating indicates weak liquidity profile
through 2016.  The drop in earnings will require the company to
seek covenant relief as the likelihood of breaching the net
debt/EBITDA covenant under the senior secured credit facility due
2019 (SSCF) is high.

The negative outlook reflects the possible covenant breach under
the SSCF's credit agreement and potential for material open
market purchases of rated debt at steep discounts to face value.
The outlook also reflects the uncertainty associated with the
Pacific Zonda discussions that could severely stress the
company's liquidity.

PacDrilling's ratings could be downgraded if the company fails to
get covenant relief.  An extended downtime for any of the four
drillships expected to operate in 2016 or any sizable open market
purchases at steep discounts to face value could lead to a
downgrade.  These issues would also apply to the rating of PDC5's
debt as the lack of diversification at PDC5 translates into
increased reliance on the unsecured guarantee from the parent.

The outlook could be changed to stable if the company manages to
negotiate covenant relief from lenders and resolves the Pacific
Zonda situation in a manner that does not require PacDrilling to
make the final payment for Pacific Zonda anytime through year end
2017.  Ratings are unlikely to be upgraded through 2016 but
longer term, the ratings could be upgraded if PacDrilling
improves its contract coverage to result in a debt to EBITDA
ratio of 6.0x or less on a sustained basis with adequate
liquidity.

Headquartered in Luxembourg, Pacific Drilling S.A. (PacDrilling),
is a provider of ultra-deepwater drilling services to the oil and
gas industry.

The principal methodology used in these ratings was Global
Oilfield Services Industry Rating Methodology published in
December 2014.



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


ST. PAUL'S III: Fitch Affirms 'B-sf' Rating on Class F Debt
-----------------------------------------------------------
Fitch Ratings has affirmed all ratings of St. Paul's CLO III
Limited as follows:

EUR326.7 million class A affirmed at 'AAAsf'; Outlook Stable
EUR64.9 million class B affirmed at 'AAsf'; Outlook Stable
EUR32.4 million class C affirmed at 'Asf'; Outlook Stable
EUR26.4 million class D affirmed at 'BBBsf'; Outlook Stable
EUR33 million class E affirmed at 'BBsf'; Outlook Stable
EUR15.4 million class F affirmed at 'B-sf'; Outlook Stable
EUR57.7 million subordinated notes: not rated

St Paul's CLO III Limited is a cash flow collateralized loan
obligation. Net proceeds from the issue of the notes were used to
purchase a EUR549m portfolio of European leveraged loans and
bonds. The portfolio is managed by Intermediate Capital Managers
Limited, a wholly owned subsidiary of Intermediate Capital Group
PLC.

KEY RATING DRIVERS

The affirmation reflects the notes' sufficient available credit
enhancement to maintain the current ratings despite a declining
trend up to September 2015. Credit enhancement had decreased
across the capital structure since the transaction's closing in
December 2013, due to losses incurred from selling distressed and
defaulted assets.

The portfolio now comprises assets worth EUR539.5 million, around
EUR10 million below the target par amount. This is reflected in a
decline in credit enhancement for the class A notes to 39.6% from
40.5% at closing and 39.9% as of September 2014 and for the class
B notes to 27.6% from 28.7% and 27.9% as of September 2014. A
loss of 2% over a two-year period is well below Fitch's initial
expectation for the transaction. However, it is the largest loss
of a CLO post-crisis rated by Fitch.

The portfolio remains diversified and is passing all collateral
quality and portfolio profile tests. The largest industry remains
healthcare with 16.36%, up from 13.94% as of September 2014,
closely followed by business services with 14.32%, up from
13.12%. The largest country remains France with 18.24%, down from
20% as of September 2014, followed by Germany with 15.93%, down
from 16.52% and the Netherlands with 14.12%, down from 15.68%.

The underlying portfolio's rating distribution has shifted with
the 'CCC+' and below bucket up at 3% from 0%. This is also
reflected in the weighted average rating factor increasing to
34.2 from 32.6. The Fitch covenants for the portfolio have moved
since the last rating action in September 2014 to a maximum
weighted average rating factor of 35, from 34 and a minimum
weighted average recovery rate of 68.4, from 69.6%.

RATING SENSITIVITIES

As the loss rates for the current portfolio are below those
modelled for the stress portfolio, the sensitivities shown in the
new issue report still apply for this transaction.

DUE DILIGENCE USAGE

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

DATA ADEQUACY

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

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

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


VIVAT NV: S&P Affirms 'D' Ratings on 2 Subordinated Debt Issues
---------------------------------------------------------------
Standard & Poor's Ratings Services revised to negative from
developing the implications of its CreditWatch placement of the
'BBB+' long-term counterparty credit and financial strength
ratings on VIVAT N.V.'s operating subsidiaries, SRLEV N.V. and
REAAL Schadeverzekeringen N.V.

At the same time, S&P revised the CreditWatch placement on the
'BBB-' counterparty credit rating on the group's insurance
holding company, VIVAT N.V. (formerly part of the SNS REAAL
group), to negative from developing.

S&P also affirmed the 'D' ratings on SRLEV's two subordinated
debt issues.

S&P has held discussions with VIVAT's management team and
representatives of Anbang.  S&P also received further information
about how the Anbang group will manage its newly acquired
subsidiary.  As a result, S&P anticipates that Anbang will be
involved in both setting strategy and running VIVAT's operations.
S&P will therefore likely rate VIVAT and its operating
subsidiaries (together, the VIVAT group) as subsidiaries of the
Anbang group.  Given the information S&P has received, it do not
expect to insulate our ratings on VIVAT N.V. and its operating
subsidiaries from the creditworthiness of Anbang.  As such, based
on S&P's criteria, it is likely to consider its assessment of
Anbang's creditworthiness as a constraint to its rating on VIVAT.

S&P's initial analysis suggests that the Anbang group's overall
level of creditworthiness may be weaker than that of the VIVAT
group.  Anbang, a financial services group, was founded in 2004.
It has expanded rapidly in recent years through a series of
acquisitions around the globe.  S&P's preliminary view of
Anbang's creditworthiness largely stems from S&P's perception of
a weaker financial profile.

S&P therefore considers that there is at least a one-in-two
likelihood of lowering its ratings on VIVAT.

However, S&P's current views are based on limited available
information about the Anbang Group.  If S&P's initial views are
confirmed, the downside potential could be more than one notch.
Furthermore, if the level of information remains insufficient to
resolve the CreditWatch placement, S&P could suspend or withdraw
its ratings on VIVAT over the coming weeks.

SRLEV has two outstanding subordinated debt issues.  Interest on
these notes has not been paid since the group was nationalized in
January 2013.  The European Commission has lifted its ban on
coupon payments, but VIVAT has optionally deferred the payment of
coupons.  S&P understands a decision on the repayment of coupons
will be made following the injection of capital.  Under S&P's
imputed promises criteria, it rate the notes 'D'.  This will
remain the case until the coupons are paid.

S&P expects to resolve the CreditWatch placement within the next
90 days.  The resolution will depend on S&P's ability to assess
Anbang Group's creditworthiness.



===========
P O L A N D
===========


TVN SA: Moody's Raises Corp. Family Rating to Ba2, Outlook Stable
-----------------------------------------------------------------
Moody's Investors Service has upgraded TVN S.A.'s corporate
family rating and probability of default rating to Ba2 from B1
and Ba2-PD from Ba3-PD respectively.  Concurrently, Moody's has
upgraded the rating on TVN's 2018 and 2020 senior unsecured notes
issued by TVN Finance Corporation III AB to Ba2 from B1.  The
outlook on the ratings is stable.

The two notch upgrade reflects both (i) the new ownership
structure of TVN, which since October 2015, is 100% owned by
Scripps Networks Interactive, Inc. (Baa3 stable), an owner with a
strong credit profile and a clearly stated strategy of building
its international operations; and (ii) the announcement by TVN
that it would redeem its EUR117 million 2018 Senior Notes in full
as well as 10% of the EUR430 million outstanding under its 2020
Senior Notes on Nov. 16, using an unsecured intercompany loan
from Scripps Networks.

The rating on the 2018 notes will be withdrawn once the notes are
cancelled in November.

RATINGS RATIONALE

The Ba2 CFR reflects (1) assumptions of strong parental support,
both financially (as evidenced by Scripps funding the planned
notes redemption) and operationally through access to Scripps
programming content; (2) TVN's business profile as a leading
commercial broadcaster in Poland; (3) the positive trends in the
local advertising market observed in the last 12 months which led
to deleveraging and Moody's expectations that advertising growth
will persist in the coming 12-18 months, supported by a stable
Polish macro-economic landscape; and (4) TVN's strong liquidity
profile, which will improve even further following redemption of
the 2018 maturing notes.

The Ba2 CFR also reflects (1) the erosion of TVN's main channel's
audience share in H1 2015 which was only partially offset by an
increase in audience share of the company's thematic channels;
(2) the lack of leverage restrictions provided to TVN by a
generous incurrence based covenant under the bonds and the lack
of bank maintenance covenants; (3) the company's material
exposure to the cyclical advertising market; and (4) foreign
currency risk arising from a euro-denominated debt structure and
content purchases in both US dollar and euro.

The Ba2 rating on TVN's 2018 and 2020 senior notes -- in line
with the CFR -- reflects their unsecured position within the
group's capital structure as well as the upstream guarantees from
material subsidiaries these notes benefit from.  Moody's notes
that the incurrence covenants under both of the notes and the RCF
(a consolidated leverage ratio of 5.5x for the 2018 notes and a
coverage ratio of 2x for the 2020 notes and the RCF) as well as
the restricted basket allowance provide significant flexibility
in terms of allowable distributions.

What Could Change the Rating -- UP

Positive pressure on the ratings could develop should TVN's
existing rated debt benefit from more direct and explicit support
provided by Scripps Networks.  Absent further financial support,
positive pressure could develop should the Polish advertising
market continue to show enough positive momentum to allow TVN to
materially improve free cash flow generation and leverage to
sustainably decrease below 3x.

What Could Change the Rating -- DOWN

Negative pressure on the ratings could develop should the company
experience material declines in its audience or advertising
market shares leading to adjusted Debt/EBITDA (excluding
intercompany loans) increasing to above 4x on a sustainable
basis.

The principal methodology used in these ratings was Global
Broadcast and Advertising Related Industries published in May
2012.



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


B&N BANK: S&P Lowers Counterparty Credit Ratings to 'B-/C'
----------------------------------------------------------
Standard & Poor's Ratings Services lowered its long- and short-
term counterparty credit ratings on Russia-based B&N Bank PJSC to
'B-/C' from 'B/B'.  The Russia national scale rating on B&N Bank
was lowered to 'ruBBB-' from 'ruBBB+'.

The ratings were placed on CreditWatch with negative
implications.

B&N Bank's capitalization has come under increasing pressure over
the past year as a result of its highly aggressive acquisition
strategy, affecting its stand-alone credit profile (SACP) and
S&P's ratings on it.  B&N Bank's capital adequacy metrics, as
measured by S&P's risk-adjusted capital (RAC) ratio before
adjustments for concentration and diversification, dropped to a
very weak 1.6% on June 30, 2015; S&P had expected this ratio to
remain above 5%.

S&P anticipates that the bank is likely to gradually restore its
RAC ratio to a still-weak level of 3%-5% in the next 12-18 months
if it receives the planned capital injections and manages to
optimize its group structure.  However, it does not totally
remove our concern regarding the future solvency, because the
bank is operating in a very difficult economic environment in
Russia.

The CreditWatch placement reflects S&P's view of the substantial
uncertainties that the bank faces in relation to the integration
of the troubled ROST Bank, acquired last year under financial
rehabilitation procedures initiated by the Russian Central Bank
and the Deposit Insurance Agency.  S&P understands that the
government authorities have yet to finalize ROST Bank's
rehabilitation plan and the plan for its integration into B&N
group.

"We anticipate that B&N Bank will face very high integration
risks in the next 12-18 months as it proceeds to consolidate the
assets it has acquired.  Our base-case scenario assumes that the
level of B&N consolidated group's nonperforming loans (NPLs, more
than 90 days overdue) will be moderately above the sector
average, not exceeding 15% in the next two years, which remains
very high compared with global peers (B&N Bank's stand-alone NPLs
were at 5.4% on June 30, 2015).  This deteriorating quality of
assets, coupled with weak capitalization, heightens the risks for
the bank's financial profile.  The bank has a diversified funding
base, mostly comprising customer accounts, and sufficient
liquidity buffers.  Its net broad liquid assets cover its short-
term customer deposits by 39%, which compares favorably with
local peers," S&P said.

"We recognize that B&N Bank has grown in the past few years as it
was chosen by the regulator to facilitate financial
rehabilitation of a number of troubled banks and integrate them
thereafter. However, we do not currently classify the bank as
having moderate systemic importance.  We will monitor B&N Bank's
role in the Russian financial system as it proceeds with the
integration of the acquired banks and may reconsider our
classification of its systemic importance going forward.  That
said, before classifying the bank as moderately systemically
important, we would expect to see the government offering more
support to prevent the recurrence of last year's deterioration in
the bank's financial profile and rapid decline of its capital
buffers," S&P noted.

S&P aims to resolve the CreditWatch placement within the next
three months.  Over this timeframe, S&P expects to gain greater
clarity regarding the rehabilitation plan for ROST Bank and how
B&N Bank plans to integrate ROST Bank into the B&N group.  At
this stage, S&P do not expect to lower the rating by more than
one notch, but it recognizes that the situation regarding B&N
Bank's asset quality and funding could evolve rapidly, given the
current difficult operating environment for banks in Russia.

S&P could lower the ratings on B&N Bank if S&P believes that its
capitalization has sustainably weakened, that S&P's RAC ratio
will stay below 3% because of losses incurred while integrating
the troubled assets the group has acquired over the previous
year, and that capital injections will be insufficient to
compensate for the bank's highly aggressive asset growth.

S&P could affirm the ratings if it considered that the risks
emerging from the integration process are sufficiently offset by
capital injections from shareholders and that our RAC ratio will
stay comfortably above 3%.  To affirm the ratings, S&P would also
expect B&N Bank's loan portfolio quality to be in line with local
peers, with NPLs not exceeding 15% of total loans.  S&P would
also monitor how stable B&N Bank's liquidity is over the next few
months.


EURASIA DRILLING: S&P Puts 'BB+' CCR on CreditWatch Negative
------------------------------------------------------------
Standard & Poor's Ratings Services said that it placed on
CreditWatch with negative implications its 'BB+' long-term
corporate credit rating and 'ruAA+' Russia national scale rating
on Russia-based oilfield services company Eurasia Drilling Co.
(EDC).  At the same time, S&P affirmed the 'B' short-term
corporate credit rating.  S&P also placed its issue rating of
'BB+' on CreditWatch negative.

The CreditWatch placement reflects S&P's view that EDC's
potential share buyback could lead to deterioration of the
company's metrics and weaker liquidity.  S&P understands that
there is uncertainty regarding the financing of the transaction
and its potential impact on EDC's metrics.

EDC recently announced its intention to delist from the London
Stock Exchange (LSE) via a buyback of its free floating shares.
For that to happen, it will have to spend about $500 million,
according to S&P's estimates (based on the most recent offer
price of $11.75 per share).  The company plans to finance the
transactions with a mix of existing cash and new debt.

S&P estimates that the transaction, should it proceed, could
increase the company's leverage to above 2.0x, which is not
commensurate with the current 'BB+' rating level, in S&P's view.
S&P also sees a risk that it could put pressure on EDC's
liquidity, depending on the type and amount of debt raised.

S&P's current base case (before the transaction) assumes:

   -- A decrease in drilling volumes in 2015, partly offset by
      the increase in complexity (which is higher-priced).
      Drilling volumes are expected to grow modestly from 2016,
      following S&P's expectation of an oil price increase and
      taking into account the maturity of Russian fields, which
      require more extensive and complex drilling to at least
      maintain the current production level;

   -- EBITDA margin of above 25%; and

   -- No dividends for 2015, as recommended by management.

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

   -- Funds from operations to debt of 45%-50% in 2015 increasing
      to about 60% in 2016-2017;

   -- Debt to EBITDA comfortably below 2.0x; and

   -- Substantially lower capital expenditure of about
      $315 million in 2015-2016, mainly reflecting the positive
      impact of ruble depreciation.

The CreditWatch placement reflects S&P's view that it would
likely lower the ratings on EDC by one notch if the buyback
transaction proceeds as currently proposed.  Further ratings
pressure may arise from a deterioration in liquidity, for
example, if the company were to finance the transaction with
short-term debt or spend all its cash without refinancing its
near-term existing debt maturities.

S&P could affirm the current ratings if the company's buyout
offer will not be realized.


GELENDZHIK-BANK: Bank of Russia Halts Provisional Administration
----------------------------------------------------------------
Following the ruling of the Court of Arbitration of the Krasnodar
Territory, dated September 18, 2015, on recognizing insolvent
(bankrupt) credit institution public joint-stock company
Gelendzhik-bank (Bank of Russia registration No.790, date of
registration - November 14, 1990) and appointing a receiver in
compliance with Clause 3 of Article 18927 of the Federal Law "On
Insolvency (Bankruptcy)", the Bank of Russia took a decision
(Order No. OD-2767, dated October 14, 2015) to terminate from
October 15, 2015, the activity of the provisional administration
of the credit institution public joint-stock company Gelendzhik-
bank, appointed by Bank of Russia Order No. OD-1698, dated
July 17, 2015, "On the Appointment of the Provisional
Administration to Manage the Gelendzhik-Based Credit Institution
Public Joint-Stock Company Gelendzhik-bank or PJSC Gelendzhik-
bank (the Krasnodar Territory) Due to the Revocation of Its
banking Licence".


GUBERNSKAYA LLC: Bank of Russia Suspends Insurance License
----------------------------------------------------------
The Bank of Russia, by its Order No. OD-2780 dated October 15,
2015, suspended the insurance license of Regional Insurance
Company Gubernskaya, LLC.

The decision is taken due to the insurer's failure to execute a
Bank of Russia instruction, namely, due to its non-compliance
with the requirements of financial sustainability and solvency
with respect to securing insurance reserves and capital with
eligible assets.  The decision shall become effective on the date
of its publication in the Bank of Russia Bulletin.

Suspended license shall mean a prohibition on entering into new
insurance contracts and also on amending respective contracts
resulting in increase in the existing obligations.

The insurance agent shall accept applications on the occurrence
of insured events and perform obligations.


INVESTTRADEBANK PJSC: DIA to Oversee Bankruptcy Measures
--------------------------------------------------------
On October 14, 2015, the Bank of Russia approved amendments to
the plans for the participation of the state corporation Deposit
Insurance Agency in the bankruptcy prevention of PJSC
Investtradebank, VUZ Bank JSC, and JSC VOCBANK.

The Agency has held a tender for selecting investors to
participate in bankruptcy prevention measures designed for the
mentioned credit institutions.  The winning tenderers were banks,
which proposed the best financing schemes for financial
rehabilitation.

As a result of the tender, the following investors have been
selected: PJSC TCB BANK (for PJSC Investtradebank), PJSC UBRD
(for VUZ Bank JSC), and JSC TROIKA-D BANK (for JSC VOCBANK).

Bankruptcy prevention measures are aimed at bringing the activity
of problem banks in line with Bank of Russia requirements for the
financial sustainability of credit institutions.


KOMI REPUBLIC: Fitch Affirms 'BB/B' IDRs, Outlook Negative
----------------------------------------------------------
Fitch Ratings has revised Russian Republic of Komi's Outlook to
Negative from Stable and affirmed its Long-term foreign and local
currency Issuer Default Ratings (IDRs) at 'BB', National Long-
term rating at 'AA-(rus)' and Short-term foreign currency IDR at
'B'. Fitch has also affirmed the region's senior unsecured
domestic bonds' Long-term local currency rating at 'BB' and
National Long-term rating at 'AA-(rus)'. The revision of Outlook
reflects Fitch's expectation that the republic's current balance
will not be restored to surplus amid a persistently difficult
economic environment in Russia and will in turn lead to further
debt growth over the medium term.

KEY RATING DRIVERS The Outlook revision reflects the following
rating drivers and their relative weights: HIGH Fitch no longer
expects the republic to restore its current balance within the
next two years, which is likely to remain in negative territory
during this period (2014: -6%). Fitch expects tax revenue to
stagnate over the medium term amid the economic downturn. The
completion of major gas pipeline construction projects has had a
negative impact on personal income tax proceeds through lower
employment. Corporate income tax collection is also decelerating
due to a weakened economy, although for oil & gas companies this
is partly offset by the depreciation of the rouble as some of
their costs are based in local currency. Fitch forecasts Komi's
budget deficit to remain substantial, at above 10% of total
revenue in 2015-2017. This will likely increase debt to above 60%
of current revenue by end-2015 and possibly 75% by end-2017.
During 8M15 Komi's direct risk further increased to RUB34.6
billion from RUB28 billion at end-2014, following the issue of a
RUB5 billion bond (RUB11 billion registered). In Fitch's view
Komi's exposure to refinancing risk is exacerbated by volatile
interest rates in domestic markets. As of September 1, 2015, 56%
of direct risk is due in 2015-2016, which may put additional
stress on the republic's debt servicing over the medium term.
Immediate refinancing needs by end-2015 (RUB9.4 billion, or 27%
of direct risk) are covered by RUB8.4bn open credit lines and
RUB3 billion cash reserves accumulated by Komi as of September 1,
2015. Fitch expects the proportion of subsidised budget loans to
double by end-2015 to 23% of direct risk (2014: 11%), which Fitch
views positively. This is because budget loans have marginal 0.1%
interest rates and lead to reduced interest payments. Komi
contracted RUB10 billion budget loans for 8M15.

MEDIUM Komi has a strong economy and its gross regional product
per capita exceeded the national median by more than 2x in 2013.
The republic's economy is weighted towards the natural resources
sector, which exposes the region to commodity prices fluctuation
and potential changes in fiscal regulation. The top 10 taxpayers
contributed about 50% of the republic's consolidated tax revenue
in 2014. The list of major taxpayers includes PJSC LukOil (BBB-
/Negative/F3), PJSC Gazprom (BBB-/Negative/F3), and Rosneft.
Fitch forecasts the Russian economy to shrink 4% in 2015, due to
weak oil prices and sanctions imposed by the US and EU. Komi's
government forecasts the local economy to shrink 2.5% in 2015.

RATING SENSITIVITIES

Growth in direct risk to above 70% of current revenue, coupled
with negative operating balances on a sustained basis and a
reduced capacity to obtain affordable funding for its debt
refinancing needs, will lead to a downgrade.


PROBUSINESSBANK JSC: Bank of Russia Provides Update on Probe
------------------------------------------------------------
During the examination of financial standing of JSC JSCB
Probusinessbank, its provisional administration found out that
the management of this credit institution had carried out large-
scale transactions bearing the evidence of moving out the assets
from the bank.

For example, when placing the securities for storage in non-
resident depositories, the bank concealed from the supervision
authority the fact of their encumbrance and guarantees in favor
of those non-resident companies which had obligations before the
said depositaries as regards the funds received from them.  As a
result, in the wake of non-resident companies' failure to fulfill
their obligations the bank lost its rights to highly liquid
securities of a total balance value worth at least RUR12.2
billion.

Besides, the bank placed the funds worth RUR8.4 billion in the
securities (participation shares) that lacked market quotations,
rating and trading volume.

The examination also revealed that the bank's assets worth at
least RUR10.3 billion were represented with loans to several
shell companies and interbank loans which served as a security
for loans provided by counterparties and correspondent banks to
third parties.

Also, the correspondent credit institutions didn't confirm their
obligations before JSC JSCB Probusinessbank worth RUR3.4 billion.

Under these circumstances, on August 19, 2015, the Bank of Russia
filed an application to the Court of Arbitration of the city of
Moscow to recognize JSC JSCB Probusinessbank insolvent (bankrupt)
and initiate receivership.

The Bank of Russia submitted information on the financial
transactions bearing the evidence of criminal offence conducted
by the former management and owners of JSC JSCB Probusinessbank
to the Prosecutor General's Office of the Russian Federation, the
Russian Interior Ministry and the Investigative Committee of the
Russian Federation for consideration and procedural decision
making.


RUSSIAN INSURANCE: Bank of Russia Revokes Insurance Licenses
------------------------------------------------------------
The Bank of Russia, by its Order No. OD-2779 dated October 15,
2015, revoked the insurance and reinsurance licenses from the
public joint-stock insurance company Russian Insurance Centre.

This decision is taken due to the insurance agent's failure to
timely remove violations of the insurance legislation, which
resulted in suspension of the licenses (Bank of Russia Order No.
OD-2014, dated August 6, 2015, "On Suspending the Insurance and
Reinsurance Licences of Public Joint-stock Insurance Company
Russian Insurance Centre"), namely, the failure to duly meet Bank
of Russia instructions Nos. 53-3-1-1/1615 and 53-3-1-1/1897,
dated April 8, 2015, issued due to the failure to comply with
financial stability and solvency requirements in terms of backing
insurance reserves and equity with eligible assets.  The decision
becomes effective the day it is published in the Bank of Russia
Bulletin.

Due to the revocation of license, public joint-stock insurance
company Russian Insurance Centre is obliged:

   -- to take a decision on the termination of the insurance
      activity in accordance with Russian legislation;

   -- to meet its liabilities arising from insurance
      (reinsurance) contracts, including the payment of insurance
      benefits under insurance claims;

   -- to transfer liabilities taken under insurance (reinsurance)
      contracts, and/or to cancel these contracts.

The public joint-stock insurance company Russian Insurance Centre
shall inform the policy holders on the revocation of its license,
early termination of insurance (reinsurance) contracts and/or
transfer of liabilities taken under insurance contracts to
another insurer within a month after the decision on the
revocation of license becomes effective.


TAMBOV REGION: Fitch Affirms 'BB +' LT Issuer Default Rating
------------------------------------------------------------
Fitch Ratings has affirmed Russian Tambov Region's Long-term
foreign and local currency Issuer Default Ratings (IDRs) at 'BB+'
with Stable Outlooks, and its Short-term foreign currency IDR at
'B'. The agency has also affirmed the region's National Long-term
rating at 'AA(rus)' with a Stable Outlook. The affirmation
reflects Fitch's unchanged baseline scenario regarding Tambov's
stable budgetary performance, moderate direct risk and growing
economy amid a national economic downturn.

KEY RATING DRIVERS

The ratings reflect the region's solid operating performance,
high cash balance, moderate, albeit increasing, direct risk and
high refinancing pressure. The ratings also factor in the modest
size of the economy, resulting in reliance on transfers from the
federal budget. Fitch projects stable budgetary performance for
Tambov in 2015-2017 with an operating margin of 10% (2014: 10.5%)
and a deficit before debt variation of 5% of total revenue (2014:
5%). This will be supported by expansion of the region's tax base
and steady flow of transfers from the federal budget. Tax revenue
is likely to grow 5%-7% pa over the medium term due to the
development of the agricultural sector and processing industry.
Fitch projects Tambov's self-financing capacity will remain
strong in 2015-2017. About 80% of capex will be funded by the
region's current balance and capital transfers from the federal
government. A substantial part of the transfers is earmarked for
the agricultural sector to support domestic food production amid
a lasting embargo on imported food products. The remaining 20% of
capex will be funded by the region's cash balance and new
borrowings that will fuel modest growth of direct risk over the
medium term. Fitch expects the region's direct risk to remain
moderate at about 40% of current revenue (2014: 32%) in 2015-
2017. At September 1, 2015, direct risk amounted to RUB11.3
billion (end-2014: RUB10.3 billion) and comprised 63% bank loans
and 37% budget loans. The latter included a RUB2.6 billion short-
term treasury loan that will be refinanced by market debt by
year-end. As of 1 October 2015, 45% of its direct risk will
mature in 2015-2016 and another 50% is due in 2017-2018. Fitch
does not expect the region to have any difficulties in rolling
over its maturing debt with local banks. However, volatile
interest rates on the domestic market may put pressure on its
current margin over the medium term. As of October 1, 2015,
Tambov had a high RUB7.1 billion cash balance that Fitch views as
credit- positive. The region could use some of this liquidity to
refinance maturing direct risk. Tambov's economy has been growing
at a faster rate than the national economy, supported by
investments in the economy. During 2011-2014 the region's
cumulative growth was about 40% versus national growth of 10%.
Nevertheless, Tambov's wealth metrics remain modest, and its GRP
per capita was 83% of the national median in 2013. This has led
to a weaker tax capacity than its regional peers. Federal
transfers constitute a significant proportion of Tambov's budget,
averaging about 50% of operating revenue annually in 2010-2014,
which limits the region's revenue flexibility.

RATING SENSITIVITIES

A continuous budget deficit leading to growth of direct risk
above 50% of current revenue, accompanied by high refinancing
pressure, would lead to negative rating action. An upgrade is
unlikely given the pressure on the sovereign's IDRs (BBB-
/Negative). However, direct risk declining towards 20% of current
revenue and an operating margin at above 15% on a sustained basis
accompanied by a Russian economic recovery, could lead to an
upgrade.


URALSIB BANK: Fitch Cuts Long-Term FC Issuer Default Rating to B-
-----------------------------------------------------------------
Fitch Ratings has downgraded Uralsib Bank's (UB) Long-term
foreign currency Issuer Default Rating (IDR) to 'B-' from 'B' and
Viability Rating (VR) to 'b-' from 'b', and placed the ratings on
Rating Watch Negative (RWN). Fitch has also downgraded UB's
wholly-owned subsidiary Uralsib Leasing Group's (ULG) Long-term
IDR to 'RD' (Restricted Default) from 'B'

KEY RATING DRIVERS -- UB'S IDRs, VR

The downgrade of UB's Long-term IDRs reflects both the downgrade
of its VR to 'b-' from 'b' and the downward revision of its
Support Rating Floor (SRF) to 'No Floor' from 'B'. The downgrade
of the VR is driven by a further weakening of the bank's capital
position, asset quality and profitability metrics. In Fitch's
view, it has become much more difficult for UB to achieve an
improvement in performance and capitalization and a meaningful
clean-up of its balance sheet from significant non-core/related-
party exposures due to a weaker operating environment.

The RWN on the ratings reflects Fitch's view of a significant
near-term risk of some form of resolution being imposed on the
bank, with the possibility that this could involve losses for
some senior creditors. This in turn reflects uncertainty
concerning the ongoing review of the bank by the regulatory
authorities.

UB's financial position and performance continued to weaken in
1H15 due to the more difficult operating environment. The bank's
net interest margin contracted to 2% of average earning assets in
1H15 from 6% in 2014, as funding costs rose to 8% from 5%. This
resulted in the pre-impairment loss widening to an annualized 4%
of average gross loans in 1H15 from 1% in 2014. Loan impairment
charges increased to an annualized 6% of gross loans in 1H15 from
2% in 2014 as non-performing loans (overdue by more than 90 days)
rose to 15% of total loans from 11% during the same period partly
due to portfolio contraction.

The resultant net loss consumed around a third of the bank's
Fitch Core Capital (FCC), which fell to 5% of risk-weighted
assets at end-1H15 from 8% at end-2014. UB's capital is further
undermined by its large non-core exposures, which are
significantly overvalued, in Fitch's view. These include: (i) an
indirectly-owned equity interest in an insurance company SG
Uralsib (SGU, 1.1x FCC at end-1H15); (ii) an indirectly owned
real-estate investment property (mostly land) (1x FCC); and (iii)
related-party exposures (0.5x FCC).

The shareholder made equity injections (mostly in the form of
interests in land owning companies) in July and August 2015,
totaling 1x end-1H15 FCC. However, the benefits are mitigated by
the high valuation of the contributed assets and by the boost
they have given to UB's already sizeable stock of non-core
assets.

UB's regulatory core Tier I and Tier I ratios of, respectively,
6.3% and 6.8% at end-3Q15 could reduce by around 2pp in January
2016 as a result of (i) an annual 20% deduction of investment in
SGU from UB's core Tier I capital; and (ii) an expected
reclassification of perpetual debt to Tier 2 capital from Tier 1.
In addition, potential extra provisions, as in 3Q15, may be
required on UB's standalone exposure to ULG (equal to 12% of Tier
1 capital at end-3Q15; exposure in the form of convertible
bonds). As a result, the bank faces the risk of breaching the
minimum ratios, in particular the 6% Tier I capital ratio, absent
of new capital contributions.

The bank's liquidity position is adequate with highly liquid
assets (cash, interbank placements and securities repo-able with
CBR), net of planned wholesale debt repayments until end-2015,
amounting to 20% of customer deposits at end-August 2015.
However, customer confidence is at risk from ongoing
deterioration of the bank's solvency, ULG's default and increased
regulatory scrutiny.

KEY RATING DRIVERS - UB'S SUPPORT RATING AND SUPPORT RATING FLOOR

The revision of the bank's Support Rating Floor to 'No Floor'
from 'B' and the downgrade of its Support Rating to '5' from '4'
reflect Fitch's view that state support, which would be
sufficient to avert losses for senior creditors, has become more
uncertain and cannot be relied upon. This reflects the absence of
any capital support for the bank to date, including under state
programs which other privately-owned banks have been able to
access, and the increased regulatory scrutiny of the bank.

KEY RATING DRIVERS AND RATING SENSITIVITIES - ULG

The downgrade of ULG's Long-term IDR to 'RD' from 'B', and its
Support Rating to '5' from '4', follows the company's default on
USD60 million of bank loans from a single counterparty and ULG's
ongoing negotiations on the restructuring of these obligations.

The downgrade of ULG's Long-term local-currency IDR to 'CCC' from
'B' reflects the company's weak standalone credit profile, and
that support from UB can no longer be relied upon, given the
default on the bank loans.

ULG has negative equity of RUB7 billion, which already includes
RUB6 billion of convertible local bonds held by UB as the
internal capital generation has been negative since 2010. Near-
term profitability prospects are further constrained by a narrow
net interest margin and an eroded franchise.

Although ULG had performing RUB5.5 billion operating leases at
end-3Q15, its RUB4 billion finance leases were of weak quality as
reflected by its NPLs and restructured exposures amounting to 41%
of total finance leasing portfolio at end-1H15.

At end-3Q15, ULG's rouble obligations amounted to RUB20 billion,
of which only RUB0.5 billion were reportedly owed to non-related
parties. As of the middle of October 2015 the company had no
foreign currency obligations to third parties aside of the
defaulted bank loans.

RATING SENSITIVITIES

IDRS, NATIONAL RATINGS AND SENIOR DEBT

UB's VR and IDRs could be downgraded, potentially by more than
one notch, should asset quality, capitalization and core
performance deteriorate further, or if other significant risks
arise as a result of the regulatory review. The bank's Support
Rating, and hence IDRs, could be upgraded in case of UB's
acquisition by a stronger institutional shareholder.

ULG's Long-term local-currency IDR could be downgraded to 'RD' if
ULG fails to meet its obligations under its outstanding RUB bond.
The Long-term foreign currency IDR could be upgraded upon
completion of the debt restructuring, once information is
available on ULG's post-restructuring financial profile; however,
the rating would likely be low unless there are considerable
improvements in the company's solvency.

The rating actions are as follows:

Uralsib Bank's ratings:

  Long term foreign currency IDR: downgraded to 'B-' from 'B';
  placed on Rating Watch Negative

  Short term foreign currency IDR: 'B'; placed on Rating Watch
  Negative

  Viability Rating: downgraded to 'b-' from 'b'; placed on Rating
  Watch Negative

  Support Rating: downgraded to '5' from '4'

  Support Rating Floor: revised to 'No Floor' from 'B'

Uralsib Leasing Group's ratings:

  Long term foreign currency IDR: downgraded to 'RD' from 'B'

  Short term foreign currency IDR: downgraded to 'RD' from 'B'

  Long term local currency IDR: downgraded to 'CCC' from 'B'

  Support Rating: downgraded to '5' from '4'


YAROSLAVL REGION: Fitch Affirms 'BB' LT Issuer Default Rating
-------------------------------------------------------------
Fitch Ratings affirmed the ratings of the Yaroslavl region of the
Russian Federation: the long-term Issuer Default Rating ("IDR")
in foreign and local currency 'BB', short-term foreign currency
IDR at "B" and national long-term rating 'AA- (rus)'. The outlook
on the long-term IDR and National Long-term rating -- "negative".
It is also confirmed by the ratings of senior unsecured notes
field, outstanding in the domestic market: long-term rating in
national currency at 'BB' and national long-term rating 'AA-
(rus)'.

The affirmation reflects Fitch's base case unchanged in relation
to the area of budgetary performance. "Negative" outlook reflects
the pressure on the current balance in the region in terms of
high interest rates and the weakening of the operating balance.

KEY RATING FACTORS

The ratings take into account the moderate direct risk of the
Yaroslavl region (direct debt plus other liabilities on the
classification of Fitch), and a weak institutional environment
for Russian sub-national entities.

In addition, the ratings reflect the slowdown in the national
economy, which puts pressure on the region's budgetary
performance. The agency expects to increase operating margin
region to 4% in 2015 from 0.6% in 2014, which will contribute to
limiting the growth in operating expenses and an increase in
current transfers from the federal government. Tax revenues in
the region is likely to grow by low rates and will be close to
the actual results for 2014 Fitch expects that the current
balance of the Yaroslavl region will once again be positive in
2015, but will remain at a level close to zero in the medium
term.

The growing share of the budget subsidized loans in the field of
debt structure is a mitigating factor in the context of high
interest rates in the domestic debt market. In 2014, the current
balance continued to deteriorate and reached negative 3.3% of
operating revenues, compared with negative 1.7% in 2013. The
reduction in capital expenditure and the strengthening of the
operational balance will help to reduce the budget deficit in the
medium term.

Fitch expects that the budget deficit before debt to fall to 6%
of total revenues in 2015 after a high average of 13% in 2013-
2014, and then to 4%-5% in 2016-2017.

Region plans to reach a balanced budget in 2016, which, according
to Fitch, is unlikely because of inflexible operating costs and a
slowing national economy. Fitch expects to increase the region's
direct risk to 65% of current revenue in the medium term (2014:
56% ). A positive factor is the change in the debt structure of
the region towards a higher proportion of the budget subsidized
loans. In 2015, Yaroslavl region received loans from the federal
budget in the amount of RUR6.8 billion for the replacement of the
debt market. Budgetary loans have an interest rate of 0.1% and
provided a three-year term.

According to our estimates, the share of budget loans in the debt
portfolio in the region will increase to 35% by the beginning of
2016 compared with 15% a year earlier. The needs of the Yaroslavl
region in refinancing in 2015 are close to zero.

At the same time, the 2016-2017's region will face pressure in
terms of refinancing, when he will have to pay 68% of the total
direct risk.

Yaroslavl region plans to re-enter the domestic market bonds in
2016 to refinance maturing liabilities. Yaroslavl region has a
diversified industrial economy and welfare measures at the level
of the median in the country.

The region's economy primarily relies on the various sectors of
the manufacturing industry that provides a broad tax base. In
2014, economic growth in the region was 1.3% compared to the
previous year, higher than the poor growth rate in the country at
0.6%.

The government expects to reduce the area of the regional economy
by 3.2% in 2015, which is close to the forecast of Fitch's
reduction in national GDP by 4%. Factors that may affect the
rating in the future Failure to restore the current balance to
positive values and a sharp increase in direct risk to more than
70% of operating revenues due to short-term debt may lead to a
downgrade.



===========
S W E D E N
===========


BRAVIDA HOLDING: Moody's Raises CFR to Ba3, Outlook Stable
----------------------------------------------------------
Moody's Investors Service has upgraded Bravida Holding AB's
corporate family rating to Ba3 from B1 and affirmed the B1-PD
probability of default rating.  The B1 rating of the outstanding
senior secured notes and the Ba1 rating of the super senior
revolving credit facility are unchanged on the expectation that
they will be refinanced.  The rating outlook is stable.

The rating action follows Bravida's successful initial public
offering (IPO) on Nasdaq Stockholm on October 16, 2015, based on
which Bain Capital has sold 35% of shares held in Bravida via
Bravissima Holding AB.  The free float can reach c.40% of shares
if the over-allotment option is exercised in full.  Based on the
starting offering price of SEK40 per share, Bravida' market
capitalization is c.SEK8 billion.

"The upgrade reflects that after the IPO Bravida's expected
leverage as measured by Moody's Adjusted Gross Debt-to-EBITDA
will trend to 3.2x in 2016, down from previously expected 3.6x.
Additionally, we expect Bravida to improve its EBITA-to-Interest
Expense ratio significantly above 3.0x and improve its RCF-to-Net
Debt ratio above 15% in the next 12-18 months post IPO.  Finally,
we expect Bravida to follow a more conservative financial policy
as the influence of the financial sponsor (Bain) will diminish
post IPO", says Andrey Bekasov, AVP and lead analyst for Bravida
at Moody's.  "The upgrade also reflects a simplification of
Bravida's capital structure since Bain, the current private
equity sponsor, will use some of the IPO proceeds to completely
repay the SEK1,710 million PIK toggle notes sitting above the
senior secured notes restricted group.  Although Moody's did not
include the PIK toggle notes in its leverage calculation, their
repayment reduces Bravida's interest expense burden and
eliminates the potential refinancing risk of these PIK toggle
notes", adds Andrey Bekasov.

Moody's understands that Bravida has arranged new bank facilities
(with two Swedish banks) including a new SEK2,700 million term
loan and a new SEK1,300 million revolving credit facility (RCF).
Bravida will use the new term loan, partially the new RCF, and
partially its available cash to repay the outstanding SEK3,377
million equivalent senior secured notes on Oct. 22, 2015.
Moody's will withdraw the B1 rating of the outstanding notes upon
their expected redemption.  Moody's will also withdraw the Ba1
rating of the SEK550 million super senior RCF upon its expected
cancellation.

RATINGS RATIONALE

The Ba3 corporate family rating (CFR) assigned to Bravida
primarily reflects (i) the strong competition in the fragmented
multi-technical activities market in Scandinavia and the risk of
price pressure arising from the fragmented structure of the
industry; (ii) the company's limited geographical and product
diversification albeit improved after Bravida has entered a new
market in Finland via two acquisitions, with the majority of its
revenues generated in Sweden.

Positively, the Ba3 CFR assigned to Bravida factors in Bravida's
leading position in the Scandinavian multi-technical activities
market, supported by high brand recognition and a dense local
branch network.  Additionally, Bravida's vulnerability to
volatile demand patterns is to some extent mitigated by (i) the
high proportion of its total revenues that is driven by
renovation demand, which tends to be more stable than new
construction demand; (ii) around 50% of revenue being generated
by its service business, which also tends to be less volatile and
offers higher margins than its installation business; and (iii)
Bravida's diversified customer and contracts structure, with a
high proportion of repeat business.

Bravida's current debt structure currently comprises of SEK3,377
million equivalent Senior Secured Floating Rate Notes due
June 15, 2019, issued by Bravida Holding AB in two tranches of
EUR225 million and SEK1,300 million respectively, as well as a
SEK550 million super senior RCF expiring on March 15, 2019.  Post
IPO, the Notes and the RCF will be refinanced and Bravida's debt
structure will include a SEK2,700 million term loan and a
SEK1,300 million revolving credit facility.  The probability of
default rating (PDR) of B1-PD assumes a recovery rate of 65%
reflecting the future capital structure that contains only bank
debt.

Bravida's liquidity is good.  Post IPO, Bravida will have access
to SEK1,300 million RCF, of which c. SEK200 million will be
likely drawn by the end of 2015.  Moody's expects Bravida to have
good senior secured leverage covenant headroom under the new bank
facilities maturing in 2020.  Bravida's liquidity post IPO should
be sufficient to support its operations, although Moody's notes
significant intra-year fluctuations in internal cash generation.
This is due primarily to working capital seasonality (despite
structurally negative working capital), with January and February
being the strongest months for payments collections, and to a
smaller extent due to sales seasonality linked to public holidays
(leading to lower activity levels and less invoicing).  Despite a
dividend policy set at 50% of net income, Moody's expects Bravida
to continue generating positive free cash flow and maintain good
liquidity supported by its order backlog, market improvement in
Norway where a large (c.SEK280 million) new contract has been
recently signed, and a significantly lower coupon on the new bank
debt.

The stable outlook reflects Moody's expectation that Bravida will
be able to maintain stable operating margins, supporting steady
cash flow generation and gradual deleveraging.  The stable
outlook does not factor in any material debt-financed
acquisitions or dividends above the newly announced dividend
payout ratio target of 50% of net income.

WHAT COULD CHANGE THE RATING UP

Positive rating pressure could arise over time if Bravida
delevers its balance sheet leading to Moody's Adjusted Gross
Debt-to-EBITDA trending towards 2.5x.

WHAT COULD CHANGE THE RATING DOWN

Conversely, downward pressure might occur if Moody's Adjusted
Gross Debt-to-EBITDA remains above 3.5x.  Extra dividends and
large debt-financed acquisitions could also put downward pressure
on the ratings.

PRINCIPAL METHODOLOGIES

The principal methodology used in these ratings was Business and
Consumer Service Industry published in December 2014.

Headquartered in Stockholm, Sweden, Bravida Holding AB is a
leading independent multi-technical services provider in
Scandinavia.  In 2014, Bravida operated across 150 locations and
generated sales of SEK12 billion with 62% of sales in its
domestic market (Sweden) and the remaining sales split between
Norway (23%) and Denmark (15%).  Bravida's main activities
comprised the provision of electrical (44% of sales), heating and
plumbing (26%), heating/ventilation/air-conditioning (HVAC, 16%)
and other specialist services (4%).  Installation activities
(building and redevelopment) accounted for 53% of sales and
service (operation and maintenance) accounted for 47%.  In July
2012, private-equity company Bain Capital acquired Bravida from
private-equity company Triton, valuing the company at SEK6.2
billion implying c. 9.5 times to LTM Mar-12 PF Adjusted EBITDA.
Bravida made a successful initial public offering (IPO) on Nasdaq
Stockholm on 16 October 2015, based on which Bain Capital has
sold 35% of shares held in Bravida via Bravissima Holding AB.
The free float can reach c. 40% of shares if the over-allotment
option is exercised in full within 30 days post IPO.  Based on
the starting offering price of SEK40 per share, Bravida' market
capitalization is c. SEK8 billion.


BRAVIDA HOLDING: S&P Puts 'B' CCR on CreditWatch Positive
---------------------------------------------------------
Standard & Poor's Ratings Services said that it had placed its
'B' long-term corporate credit rating on Sweden-based
multitechnical services provider, Bravida Holding AB, on
CreditWatch with positive implications.

"At the same time, we affirmed the 'B' issue rating on Bravida
Holding's Swedish krona (SEK) 1.3 billion (about US$158 million)
senior secured notes due 2019 and the EUR225 million senior
secured notes due 2019.  The recovery rating on these notes
remains at '4', indicating S&P's recovery expectations in the
upper half of the 30%-50% range in the event of a payment
default. S&P has not placed the notes on CreditWatch positive
because they are expected to be redeemed upon completion of the
IPO.  S&P will revise its recovery assumptions when we have
further clarification on the group's future capital structure.

The CreditWatch placement follows Bravida Holding's successful
IPO and listing of its shares on the Stockholm Stock Exchange on
Friday Oct. 16, 2015.

S&P thinks it likely that Bravida will use the proceeds from the
IPO to repay in full the shareholder loan of about SEK875 and the
payment-in-kind (PIK) notes of SEK1.7 billion.  Furthermore,
following the successful IPO, the refinancing of the SEK3.3
billion senior secured notes by cheaper bank debt should be in
place in the coming days, and will reduce debt service costs and
help improve coverage ratios.  The new financing package will
include financial covenants, including leverage and interest
coverage, for which S&P anticipates adequate headroom.

This would result in a significant reduction in debt and a
decrease in interest expense, as well as an improved financial
risk assessment on the company.  Following the IPO, and pro forma
the potential repayment of the subordinated debt (PIK notes and
shareholder loan), S&P's expectation for adjusted debt to EBITDA
in 2015 will improve to about 3.5x from 6x-7x currently, and
S&P's expectation for funds from operation (FFO) to total
adjusted debt in 2015 would improve to around 15%-20% in 2015
compared with S&P's current forecast of about 7%-8%.  In
addition, S&P believes that FFO to cash interest would
significantly improve.

These leverage and coverage measures would be in line with an
"aggressive" financial risk assessment, in S&P's view, compared
with the current "highly leveraged" financial risk assessment.
Additionally, S&P anticipates that leverage measures in 2015
after the IPO will be in line with the 12% threshold for FFO to
total debt that S&P believes is in line with a one-notch higher
rating on Bravida ('B+').

However, if, after the capital structure is changed, S&P was to
forecast credit metrics on a weighted average basis--including
2016 and 2017--to be in line with a "significant" financial risk
profile, S&P could raise the rating on Bravida by more than one
notch.  This is even though the existing financial sponsor's
shareholding will not reduce to below 50% initially, although it
may relinquish control in the medium term.

It would also be conditional on S&P's firm belief that the
financial sponsor's share would reduce to less than 50% over the
medium term, and S&P's assessment of the financial policy as
clearly stipulating a level of leverage consistent with at least
a "significant" financial risk profile.  S&P could then reassess
its financial policy modifier to 'FS-4', which would result in a
"significant" financial risk profile.

S&P intends to resolve the CreditWatch placement following the
completion of Bravida's IPO.  S&P will assess the impact of any
debt reduction on Bravida's financial risk profile.  However, if
Bravida does not reduce debt as anticipated, S&P would review
both the CreditWatch placement and the ratings.



=====================
S W I T Z E R L A N D
=====================


SCHMOLZ + BICKENBACH: S&P Affirms B+ CCR, Outlook Negative
----------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on Swiss
specialty steel producer Schmolz + Bickenbach AG to negative from
stable.  At the same time, S&P affirmed its 'B+' long-term
corporate credit rating on the company.

S&P also affirmed its 'B+' issue rating on the EUR167 million
senior secured notes due 2019.  The recovery rating on these
notes is '4' indicating S&P's expectation of average recovery in
the lower half of the 30%-50% range.

The negative outlook signals S&P's expectations that Standard &
Poor's adjusted 2015 credit metrics for S+B are deviating
somewhat from S&P's forecasts, with debt to EBITDA at about 5.5x,
versus 4.0x previously.  This factors in the continued
challenging market environment, marked by low order intake and
demand, and prices for specialty steel, as well as raw materials,
including nickel, that have plummeted year-to-date.  Combined
with foreign exchange headwinds, this should translate into about
EUR160 million in reported EBITDA in 2015, in the low end of
company's guidance lowered on Oct. 13, 2015, to EUR160 million-
EUR180 million from EUR190 million-EUR230 million.  S&P could
lower its ratings if 2016 EBITDA does not improve toward EUR200
million and leverage remains above 4.5x.  A more conservative
investment policy in 2016 and tight working capital management
expectations could help to steer leverage back to levels
commensurate with the 'B+' rating.

"Our revised projection of about EUR160 million for 2015 EBITDA
factors in lower trading volumes than previously forecast, mostly
linked to S+B's disposal of distribution assets in Germany,
Austria, and The Netherlands (about 300 thousand tons), although
these generated only modest EBITDA.  But we also take into
account lower activity in the oil and gas fracking business in
North America following the decline in oil prices to date this
year. This is despite the company's efforts to reduce exposure to
the oil industry and develop new product applications.  Although
the auto market is holding up fairly well in Europe and North
America, we think declining nickel prices and macroeconomic
uncertainty, mainly because of China's growth prospects, will
continue taking a toll on S+B's order intake and full-year
profits, as customers postpone shipments and deplete current
inventories.  We nevertheless take into account that nickel and
scrap prices have already dropped significantly leading to one-
time inventory write-offs this year, hence are unlikely to have a
material further negative impact on EBITDA in 2016, in our view.
Similarly, we consider some foreign-exchange losses to be onetime
items in 2015 that should not impair 2016 performance.  Lastly,
S+B's cost-improvement program and efficiency gains should help
support EBITDA over the next few years, like in recent quarters.
We understand the company is rolling out best practices,
particularly on sourcing of raw materials.  We therefore expect
2016 EBITDA will be about EUR200 million," S&P said.

"We believe 2015 credit metrics will be weak for the rating,
pointing to adjusted debt to EBITDA at about 5.5x, whereas we
typically see 3.0x-4.5x through the cycle as commensurate with
our 'B+' rating.  We factor in EUR150 million in capital
expenditures (capex) in 2015, higher than our previous
assumption, following the company's acquisition in first-half
2015 of real estate and a slag disposal site and in Germany.
Lower raw materials and finished goods prices and strict
inventory management should lead to moderate working capital
inflow, in our view, in the second half of this year, at least
compensating for first-half outflows. Consequently, depending on
working capital performance, we think free operating cash flow
could be neutral to slightly negative at year-end 2015, after
interest and taxes.  The disposal proceeds for the distribution
assets, about EUR48 million to be received in the third quarter,
should help bring net debt down, although a marginal amount of
the proceeds is still under discussion.  For 2016, we expect more
moderate capex and continued working-capital improvements will
support positive free cash flow, which we see as a key driver for
the 'B+' rating.  Together with EBITDA improvement prospects, our
adjusted ratio of debt to EBITDA for 2016 should recover to below
5.0x, whereas we see 4.5x as commensurate with S+B's "aggressive"
financial risk profile under through-the-cycle conditions.  We
also take into account S+B's strong EBITDA interest coverage
ratios of 4.5x-5.0x," S&P noted.

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

   -- A nickel price of US$5/pound (lb) through the rest of 2015,
      and US$5.5/lb thereafter; a Brent price of US$50/bbl
      through the rest of 2015, and US$55/bbl in 2016.

   -- About 1.8 million tons of sold volumes in 2015, which is
      fairly flat like-for-like versus 2014's, and 2% volume
      growth in 2016.  Low single-digit decline in average
      selling prices in 2015, stabilizing by early 2016.

   -- EBITDA margin deterioration in 2015, mostly from lower
      volume demand, inventory write downs, and from onetime
      items, with some improvement in 2016 on cost savings.

   -- Capex of EUR150 million in 2015 and EUR100 million in 2016.

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

   -- About EUR160 million in EBITDA in 2015, and EUR200 million
      in 2016.

   -- Positive free operating cash flow in 2016.

   -- Adjusted debt to EBITDA at about 5.5x this year, recovering
      to 4.6x-4.8x in 2016.

The negative outlook reflects that S&P could downgrade S+B absent
a recovery in free cash flow generation and if debt to EBITDA
remained above 4.5x under the current weak industry conditions.

S&P could revise the outlook to stable if market fundamentals
sufficiently supported EBITDA recovery toward EUR200 million,
pushing free cash flow back into positive territory, and adjusted
debt to EBITDA recovered to 4.5x or below.  Adequate headroom
under the covenants is also a prerequisite for a stable outlook.



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


UKRAINE: S&P Raises Sovereign Ratings to 'B-/B', Outlook Stable
---------------------------------------------------------------
Standard & Poor's Ratings Services raised its long- and short-
term foreign currency sovereign credit ratings on Ukraine to
'B-/B' from 'SD/D' (selective default).  S&P also raised its
long- and short-term local currency sovereign credit ratings to
'B-/B' from 'CCC+/C'.  As a result, S&P expects, assuming
Ukraine's long-term foreign currency sovereign credit rating
remains at 'B-' and all other things being equal, to assign an
issue rating of 'B-' to newly issued bonds from Ukraine's
distressed debt exchange.  S&P's 'D' issue rating on the
country's bonds not tendered in the exchange remains unchanged.
The outlooks on the long-term foreign and local currency ratings
are stable.

As a "sovereign rating" (as defined in EU CRA Regulation
1060/2009 "EU CRA Regulation"), the ratings on Ukraine 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 the reasons for the deviation.  In Ukraine's case,
the deviation was prompted by the completion of what S&P
considers to be a distressed debt restructuring.  S&P's next
scheduled rating publication on the sovereign rating on Ukraine
is Dec. 11, 2015.

RATIONALE

The rating action follows the completion of Ukraine's distressed
debt exchange on Oct. 14, 2015.  On Distressed Debt
Restructuring," published Sept. 25, 2015).  The raising of the
ratings to 'B-' reflects the government's gradual implementation
of reforms that support fiscal, financial, and economic
stability, alongside improvement in some of Ukraine's external
indicators, including its increasing international reserves.
According to Ukraine's Ministry of Finance, all bondholder groups
passed an extraordinary resolution (requiring a two-thirds
majority) approving the proposed restructuring, with one
exception.  As a result of the debt exchange, Ukraine has
restructured about US$15 billion of foreign public debt, with a
20% reduction in principal.  This reduces Ukraine's gross
financing needs by US$8.5 billion in the next four years, with
equal reductions for the country's external financing needs.

S&P considers distressed exchanges as tantamount to default.
Under S&P's methodology, when a distressed exchange concludes it
raise the sovereign issuer credit rating to S&P's forward-looking
view of default risk if it believes that no further resolution of
the default will occur and the near-term ability of holdout
creditors to materially complicate the issuer's financing ability
is limited.  The Russian Federation (through its sovereign wealth
fund -- National Wealth Fund) was the principal creditor that did
not participate in the exchange.  The National Wealth Fund
reportedly holds a US$3 billion Eurobond due Dec. 20, 2015, that
S&P now rates 'D'.  The Ukrainian government included this bond
in its exchange offer, and S&P understands that Russia's National
Wealth Fund did not tender it.  S&P's rating action assumes one
of two treatments for this obligation:

   -- The Ukrainian government will pay the obligation out of its
      international reserves, because governments occasionally
      pay in full creditors who have not participated in an
      exchange offer to place the episode behind them; or

   -- The Ukrainian government will not pay the obligation, and
      will let it remain in default until another solution is
      found or the debt is repudiated.

If the second treatment occurs, S&P thinks the IMF will enact its
"lending into arrears" policy and continue to disburse under its
US$17.5 billion four-year exceptional access Extended Arrangement
program ending in 2018.  Most of the program finances the
Ukrainian budget, including Naftogaz investment projects, and
replenishes the National Bank of Ukraine's (NBU, the central
bank) international reserves.  In September, Sweden's Riksbank
also provided a US$500 million swap line in Swedish kroner to the
NBU for balance-of-payment support.

Talks are ongoing between the NBU and The People's Bank of China
to set up a swap line of Chinese yuan (CNY) 15 billion (US$2.4
billion).

S&P's rating and stable outlook on Ukraine factor in S&P's
assumption that the government will remain on course with the IMF
program so that it receives a further US$11 billion in
installments. The IMF has disbursed over one-third of the $17.5
billion, four-year Extended Fund Facility program so far.
Advances carry an average interest rate of 1.05% and cover most
of Ukraine's net government borrowing requirements through 2018,
now that commercial debt redemptions have been extended beyond
2018 as a consequence of the exchange.  The rest of Ukraine's
foreign currency commercial government debt is, however, less
inexpensive. The new U.S. dollar foreign law notes issued in the
exchange carry an interest rate of 7.75%.

S&P does not know the exact amount for Ukraine's untendered debt.
For this reason and because Ukraine's second-half 2015
performance could vary widely, S&P's forecast that the ratio of
gross general government debt to GDP will be just over 70% at
year-end 2015 remains tentative.  This estimate puts no value on
the GDP-linked securities issued as part of the exchange, as any
pay out on these hinges on a potential but not certain economic
recovery.

Assuming Ukraine stays on track with the IMF program, the
government's renewed ability to access external markets is
subject to many domestic and external uncertainties.

Following the 6.8% real GDP contraction in 2014, S&P believes
Ukraine's economy will likely shrink by about 15% in 2015,
reflecting low confidence and damaged financial stability.  S&P
thinks, however, that an improvement in security conditions will
likely fuel a potentially stronger economic recovery in 2016,
leading to some upside potential to S&P's 2% GDP growth
projection. During the third quarter of this year, the economy
posted modest positive growth on a quarterly seasonally adjusted
basis.

S&P expects support for state-owned national gas company Naftogaz
and banking-sector recapitalization costs to weigh on fiscal
balances, although the NBU will likely monetize a large part of
the fiscal impact.  The envisaged fiscal consolidation -- a
reduction in public-sector employment, freezing of pensions and
wages in nominal terms, and tariff hikes -- will weigh on growth,
as will the 25% year-to-date nominal depreciation of the
Ukrainian hryvnia against the dollar, which has passed through
into rising inflation.  Nevertheless, high inflation partly
reflects reforms the government has made: in particular,
increases to administered prices account for almost one half of
price rises this year, according to our projections.  The current
government is the first in two decades to cut subsidies on
household gas consumption, leading to the tripling of gas prices,
while introducing means testing for lower income consumers.  The
IMF program targets the elimination of the budgetary transfers to
gas supplier Naftogaz by the end of 2017.  In S&P's view, this
alone confirms the current government's seriousness about
restoring fiscal and economic stability.

With the debt exchange completed, public gross external financing
requirements are low -- at US$3.4 billion and just under US$4.0
billion in 2016 and 2017 respectively (about 4.5% of GDP for both
years, depending on exchange-rate developments), by S&P's
estimates. However, private gross external requirements,
including trade credit, deposits, and other short-term debt, over
the next several years remain very high -- at US$47.7 billion
(65% of GDP) and US$44.5 billion (52% of GDP) for 2016 and 2017,
respectively, by S&P's estimates.  Some of these obligations may
be met by selling hryvnia for foreign currency and some may not
be met, in S&P's opinion.  Both outcomes will weigh on reserves
and confidence.

Conditions in the financial sector appear precarious, with
confidence in the system strained.  Standard & Poor's classifies
Ukraine's banking sector in group '10' ('1' being the lowest
risk, and '10' the highest) under its Banking Industry Country
Risk Assessment (BICRA) methodology.  Foreign currency deposits
are still down over 20% this year, although they have started to
stabilize over the past few months.  The NBU estimates
recapitalization costs at Ukrainian hryvnia (UAH) 66 billion (4%
of GDP).

The NBU officially floated the hryvnia in February 2015, and now
a steep refinancing rate hike and strict currency controls are
propping it up.  These include a ban on foreign currency sales of
more than UAH3,000 to individuals and on foreign currency deposit
payouts of more than UAH20,000 (increased from UAH15,000 as of
September of this year), limits on currency purchases by banks
for their own account, a requirement that exporters sell 75% of
their foreign receipts for hryvnias, and stricter controls on
importers.

Although the IMF program, with its policy of lending into
arrears, gives S&P confidence in the near-term ability of the
Ukrainian government to meet its borrowing requirement as long as
it stays in the program, S&P thinks the government may face legal
challenges to external bond issuance when the program ends, if it
has not resolved any creditor disputes that may still persist.

OUTLOOK

The stable outlook assumes that over the next 12 months the
Ukrainian government will maintain access to its official
creditor support by pursuing needed reforms on the fiscal,
financial, and economic fronts.

S&P sees limited upside potential to the ratings on Ukraine in
the next 12 months.

Although not S&P's base case, downside risk to the ratings could
build if Ukraine didn't stay on track with the IMF program, if
its conflict with the Russian Federation deepened, or if S&P
concluded that a further debt exchange was inevitable.

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

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

                                         Rating
                                         To             From
Ukraine
Sovereign credit rating
  Foreign Currency                       B-/Stable/B   SD/--/D
  Local Currency                         B-/Stable/B
CCC+/Neg./C
  Ukraine National Scale                 uaBBB-/--/--  uaB+/--/--
Transfer & Convertibility Assessment    B-                CCC
Senior Unsecured
  Foreign Currency                       D                 D
  Foreign Currency                       B-                CC



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


HASTINGS INSURANCE: Moody's Raises Sr. Secured Debt Rating to Ba3
-----------------------------------------------------------------
Moody's Investors Service upgraded by two notches the senior
secured debt rating on Hastings Insurance Group (Finance) plc
(HIGF) to Ba3 and the insurance financial strength rating on
Advantage Insurance Company Limited (AIC), the Group's insurance
operating subsidiary, to Ba1.  All ratings have a stable outlook
and the rating action concludes the review initiated on Sept. 30,
2015.

This rating action follows the announcement on 12 October that
Hastings has completed an initial public offering (IPO) of the
ordinary shares of Hastings Group Holdings plc (HGH), the new
parent company of the Group, and the Group's subsequent
redemption of GBP106.6 million of its GBP266.5 million, 8% Senior
Secured Fixed Rate Notes due in 2020 on Oct. 16.

RATING RATIONALE

The two notch upgrade reflects the sustained material increase in
the equity base of both the Group and AIC following the IPO.
This increase in shareholders' equity and the partial debt
redemption materially reduce the Group's financial leverage,
calculated on a Moody's basis.  The upgrade also partially
reflects Hastings' enhanced business franchise and profitable
growth over the past two years, together with the expectation
that both the Group's bottom line and earnings coverage will
benefit from the planned refinancing.

On Oct. 12, Hastings announced the pricing of its IPO, which
involved the admission of a total of 657 million shares by HGH to
be listed on the London Stock Exchange.  The IPO price was set at
170 pence per share, indicating a market capitalization of the
Company at GBP1.12 billion.  The IPO will raise between GBP210
million and GBP231 million in total gross proceeds depending on
the number of over-allotment options that are exercised,
representing between 18.8% and 20.7% of the enlarged Group.

HGH has received GBP182 million of gross proceeds from the issue
of new shares.  These proceeds, together with the associated
capital restructuring, significantly increase the equity base of
the new Group, thereby materially improving Moody's view of
Hastings' capital adequacy, which was previously seen as a key
credit weakness.  Furthermore, Hastings will use a portion of the
net sale proceeds to boost the capital base of the underwriting
business given the anticipated continued business growth and
ahead of Solvency II implementation in 2016.  Therefore, AIC's
equity base will also be materially strengthened following the
IPO.

At YE2014 the Group's financial leverage, calculated on a Moody's
basis, stood at 88% and was therefore another key rating
constraint.  However, Hastings has used a portion of the IPO
proceeds to redeem GBP106.6 million of the Group's outstanding
Senior Secured Notes.  This reduction in debt together with the
IPO related equity increase has significantly reduced Hastings'
financial leverage on a Moody's basis, with Hastings' internal
net-debt-to-operating profit metric reducing from 3.2x as at H1
2015 to approximately 2.5x.  Moody's also views the IPO as credit
positive for financial flexibility, as it should improve the
Group's access to capital markets.

With regard to Hastings' franchise, Moody's notes that the Group
had a 5.5% share of the UK personal motor market as at
June 30, 2015, having grown customer policies at a compound rate
of 22.5% over the last three financial years to 1.88 million at
H1 2015. However, although the Group's franchise has
strengthened, Moody's believes it remains relatively weak
compared to the Group's largest peers in the UK personal
insurance market.

Commenting on profitability, Moody's notes that based on HIGF's
consolidated income statement, Hastings' top line growth
continued to translate into growth of reported earnings before
interest, depreciation and amortization, which on an adjusted
basis increased by 18% to GBP106.4 million in 2014.  Furthermore,
despite material interest expenses relating to the senior secured
notes, HIGF reported an overall bottom line profit amounting to
GBP 57.5 million for 2014, which equates to good 8% ROC,
calculated on a Moody's basis.

As per the Group's previous announcement on Sept. 15, over the
next three months Moody's expects that the Group's newly
committed GBP300 million credit facility will be used towards the
repayment of the remainder of the Senior Secured Fixed Rate Notes
(GBP159.9 million) and the entirety of the Senior Secured
Floating Rate Notes (GBP150.0 million).  As such, the Group's
bottom line and earnings coverage will likely benefit from lower
interest expenses.  Therefore, Moody's expects that, adjusting
for non-recurring IPO and early redemption charges, the Group
will continue to generate good ROCs above 6%.

WHAT COULD CHANGE THE RATING UP / DOWN

Moody's says Hastings' rating could be upgraded further if: (1)
Hastings continues to grow profitably, generating ROC
consistently above 8% on a consolidated Group basis; (2) AIC
maintains a Solvency II capital coverage ratio in excess of 150%;
(3) UK home insurance becomes a more meaningful contributor to
Hastings' net earned premiums and underwriting profits; and (4)
the Group's reliance on reinsurance is decreased.

Conversely, factors that could lead to a downgrade include: (1) a
significant and sustained reduction in profitability, reflected
in combined ratios consistently above 100% and ROCs below 6%; or
(2) a material reduction in reinsurance capacity, affordability
or less favorable profit sharing arrangements.

These ratings were upgraded with a stable outlook:

  Hastings Insurance Group (Finance) plc - Senior Secured Fixed
   Rate Notes to Ba3 from B2

  Hastings Insurance Group (Finance) plc - Senior Secured
   Floating Rate Notes to Ba3 from B2

  Advantage Insurance Company Limited - insurance financial
   strength to Ba1 from Ba3

Hastings Insurance Group (HIG) was established in 2012, when
Hastings Insurance Group acquired the Advantage Group.  Prior to
this acquisition, AIC (formed in 2002, incorporated in Gibraltar)
and HISL (formed in 1997, incorporated in the UK) were related
parties owned indirectly by substantially the same shareholders.
HIG underwent a change in ownership on January 8, 2014 whereby
the former shareholders (being the management team that led the
MBO in 2009) sold a material portion of their stake in HIG to
private equity investor, Goldman Sachs Merchant Banking Division.
As part of this transaction, Hastings issued Senior Secured Notes
to external institutional investors through a new legal entity
Hastings Insurance Group (Finance) plc.

PRINCIPAL METHODOLOGY

The principal methodology used in these ratings was Global
Property and Casualty Insurers published in August 2014.


HIGHER EDUCATION: Moody's Cuts Rating on Cl. A3 & A4 Notes to B3
----------------------------------------------------------------
Moody's Investors Service has downgraded The Higher Education
Securitised Investments Series No. 1 PLC's (THESIS) class A3 and
A4 notes' ratings to B3 (sf) from Ba2 (sf), on review for
downgrade.  At the same time, Moody's affirmed the accrual
facility notes' A3 (sf) rating.  THESIS is a UK asset-backed
securities (ABS) transaction backed by student loans.

The downgrade reflects the worse-than-expected performance of the
collateral backing the affected notes.

The transaction is a static cash securitization of student loans
extended to obligors in the UK, which closed in March 1998.  The
loans were originated by The Student Loan Company ("SLC"), a UK
public sector organization established to provide loans and
grants to over one million students annually across the UK.

RATINGS RATIONALE

The downgrade reflect the worse-than-expected performance of the
collateral backing the affected notes, which resulted in a
decrease in the class A3 and A4 notes' credit enhancement.
Moody's has affirmed the accrual facility notes' rating, as the
tranche will benefit from an indemnity on the loans, given its
seniority in the structure.

WORSE THAN EXPECTED COLLATERAL PERFORMANCE

Defaulted loans (which overdue for more than 24 months) have
increased by GBP4.5 million between Aug 2014 and Aug 2015.  The
rise in defaulted loans has resulted in an increase in the
principal deficiency ledger to GBP58.5 million from GBP55.2
million, and reduced the class A3 and A4 notes' credit
enhancement to 5.47% from 7% over the same period.

Moody's considers the performance deterioration to be partially
linked to the fact that a higher portion of loans exited
deferment in April 2015 due to a lower deferment threshold (which
is -7.1% lower since April 2014).  A borrower may be entitled to
defer loan payments if their income is lower than the deferment
threshold, which is equal to 85% of the average full-time
earnings in the UK.

PROJECTION OF FUTURE LOSSES

Moody's projected future default on the outstanding portfolio by
assessing the proportion of loans leaving deferment each year.
In its analysis, the rating agency assumed that the future
deferment threshold would either stay stable or increase with the
average monthly salary in the UK.

Out of the loans that left deferment, Moody's estimated the
amount of loans that would benefit from the UK government's
cancelation indemnity, which covers loans outstanding for more
than 25 years. For the remaining part of the pool which is not
covered by this indemnity, Moody's assumed a default rate of 14%
on loans in repayment without arrears and 30% on loans in
repayment with arrears with a 30% recovery rate for both loan
type.

Loans that continue to be in deferment and satisfy the
aforementioned criteria will benefit from the indemnity.  As
such, these loans are unlikely to result in incremental losses to
the transaction, in Moody's view.

As a result of Moody's analysis, and given the class A3 and A4
notes' current 5.4% credit enhancement, Moody's has downgraded
the ratings on these tranches to B3 (sf) from Ba2 (sf), on review
for downgrade.

Moody's affirmed the A3 (sf) rating of the accrual facility
notes, the most senior tranche in the structure, given the
current 30% credit enhancement level and the fact that the notes
will benefit from the indemnity on the loans that will continue
to be deferred and on the repaying ones meeting the criteria of
age.

FACTORS THAT WOULD LEAD TO AN UPGRADE OR A DOWNGRADE OF THE
RATING:

Factors or circumstances that could lead to an upgrade of the
rating are (1) better-than-expected underlying collateral
performance, (2) deleveraging of the capital structure, (3)
improvement of the counterparties' credit quality, and (4)
stability or increase in the amount of loans in deferment.

Factors or circumstances that could lead to a downgrade of the
rating are (1) worse-than-expected underlying collateral
performance, (2) deterioration of the notes' available credit
enhancement, (3) deterioration of the counterparties' credit
quality, and (4) decrease in the amount of loans in deferment.

List of Affected Ratings:

Issuer: The Higher Education Securitised Investments Series No. 1
PLC (THESIS)

  GBP101.3 mil. A3 Notes, Downgraded to B3 (sf); previously on
   July 24, 2015, Ba2 (sf) Placed Under Review for Possible
   Downgrade

  GBP27.3 mil. A4 Notes, Downgraded to B3 (sf); previously on
   July 24, 2015, Ba2 (sf) Placed Under Review for Possible
   Downgrade

  Accrual Facility Note, Affirmed A3 (sf); previously on June 28,
   2011, Downgraded to A3 (sf)


NORTHERN ROCK: Picks Cerberus as Preferred Bidder for Mortgages
---------------------------------------------------------------
Alastair Marsh at Bloomberg News reports that Cerberus Capital
Management, with partner Morgan Stanley, was selected as the
preferred bidder for GBP11.7 billion (US$18 billion) of U.K.
mortgages from the failed Northern Rock Plc.

According to Bloomberg, four people with knowledge of the matter
said the U.S. private-equity firm was chosen in a sale overseen
by government-owned U.K. Asset Resolution Ltd.  The portfolio
comprises about 115,000 loans that were packaged into a
securitization vehicle called Granite, Bloomberg discloses.

The sale attracted interest from some of the biggest names in
global finance with investment banks seeking to earn fees from
providing financing to private equity buyers and by arranging
asset-backed bonds, Bloomberg notes.

Northern Rock funded almost GBP50 billion of U.K. mortgages
through Granite before being nationalized seven years ago,
Bloomberg recounts.  The Granite bonds crashed in value as the
bank succumbed to the first British bank run in 140 years,
Bloomberg relays.

                        About Northern Rock

Northern Rock was nationalized by the Government and taken into
public ownership in February 2008.  The organization was then
restructured on January 1, 2010 into two separate legal entities
-- Northern Rock plc and Northern Rock (Asset Management) plc
(NRAM) -- known as NRAM plc since 16th May 2014.  Northern Rock
plc was then sold in 2012 to Virgin Money.


TATA STEEL: To Cut 2,000 Jobs at Two UK Plants
----------------------------------------------
BBC News reports that Tata Steel has announced nearly 1,200 job
losses at its plants in Scunthorpe and Lanarkshire.

According to BBC, nine hundred jobs will be lost at the firm's
plant in Scunthorpe.  The remaining 270 jobs will go in Scotland,
BBC says.

The jobs going at Tata Steel are in part of a division that the
company failed to sell earlier this year, BBC discloses.

Buffeted by collapsing prices and the strong pound, Indian-owned
Tata has decided to cut back its UK operations, BBC relays.

Tata's steel plant in Scunthorpe, which employs 4,000 people, is
one of the largest in the UK, BBC states.

But two mills in Lanarkshire are also affected raising concerns
about the future of the industry in Scotland, according to BBC.

Business Secretary Sajid Javid told the House of Commons there
was "no straightforward solution to the complex global challenges
facing the steel industry", BBC relates.  But he added the
government had "no intention of standing by", BBC notes.

The business secretary, as cited by BBC, said the government had
already promised GBP80 million to help those affected by steel
plant closures and had set up a task force to look at how to help
the UK steel industry and its workers.

Tata Steel is the UK's biggest steel company.


* Fitch Says UK Bank Ring-Fence Won't Cause Material Rating Gaps
----------------------------------------------------------------
The Prudential Regulation Authority's (PRA) ring-fencing policy
proposals limit, but do not prevent, ring-fenced banks (RFB) to
lend to non-ring-fenced sister banks (NRFB) and impose no added
restrictions on dividend payments. This will allow some
fungibility of funding and capital within group companies.
Standalone Viability Ratings (VR) assigned to RFBs and NRFBs will
therefore remain interdependent, reducing rating gaps between
them, says Fitch Ratings.

"The PRA has sought to eliminate the use of intra-group
concessions across the ring-fence and now expects banks to apply
third-party credit discipline to such exposures. This will
improve analytical transparency which we view positively,".

"We envisage that UK banks subject to ring-fencing will adopt one
of two models depending on the relative size of their non-ring-
fenced activities, prior to the January 2019 deadline. Banks have
to submit their plans by January 2016, according to the PRA's
consultation paper published on October 15".

"VRs assigned to RFBs are likely to be constrained by limited
geographical and product diversification and, provided these
remain largely focused on UK retail and SME lending, we do not
expect to see much ratings differentiation between them. We
already indicated in our September 2014 comment, accessed by
clicking on the link below, that VRs for RFBs narrowly focused on
domestic retail and SME business are likely to be capped in the
'a' range."

The UK ring-fencing rules apply to banks with more than GBP25
billion of core deposits from SMEs and individuals. Most banks
affected by ring-fencing have very limited (if any) wholesale and
investment banking activities and therefore these groups will
adopt models dominated by RFBs. This will be the case for Lloyds
and RBS.

In these instances, the ability of the larger RFB to lend up to
25% of its regulatory capital to the smaller NRFB should be a
significant positive ratings factor for the NRFB's VR. This is
because the NRFB will be able to benefit from ordinary support
flowing from the larger RFB.

For groups whose non-retail, corporate and investment banking
business is significant, as is the case for Barclays and HSBC,
the importance of the NRFB within the restructured group is
likely to be significant, or even dominant. The RFB's ability to
fund its NRFB sister will likely be less material simply because
of the banks' relative sizes. Under this model, we believe that
management will seek to structure RFB and NRFB subsidiaries to
ensure these remain robust on a standalone basis, maintaining
strong and balanced funding and liquidity and meeting adequate
capitalization levels.

A clearer picture about the likely ratings outcome for RFBs and
NRFBs will emerge once further details of group restructuring are
available. Much will depend on exactly what activities are kept
in or out of the fence. Resolution strategies ('single point of
entry' or 'multiple point of entry'), depending in particular on
the volumes, form and source of 'loss absorbing' debt, will also
be relevant for ratings and will add a separate layer of
uncertainty to ratings within a UK banking group until more
clarity emerges.

But, as far as regulations are concerned, our opinion is that the
PRA proposals will not create a particularly 'high' fence,
reducing intra-group rating differentials. By preserving the
ability to share capital and funding across RFBs and NRFBs, the
PRA is demonstrating that it is keen for RFBs to continue to
enjoy the benefits of remaining part of broader banking groups.



===============
X X X X X X X X
===============


* Muted Growth for Europe's B2B Cos. Likely in 2016, Moody's Says
-----------------------------------------------------------------
European business-to-business (B2B) service companies' operating
performance will likely remain sluggish for a third consecutive
year in 2016, as the improving economic backdrop in the region
has yet to translate into a meaningful pick-up in activity for
most companies in the sector, says Moody's Investors Service in a
report published.

"Growth prospects for European B2B services companies are likely
to remain muted in 2016 on the back of the modest anticipated
fall in regional unemployment and limited euro area GDP growth,"
says Knut Slatten, a Moody's Analyst and author of the report.
"That said, opportunities for growth remain in certain countries
like Spain.  Despite the current slowdown, some emerging markets
will continue to exhibit strong growth-rates that will help
mitigate ongoing euro area headwinds.  Commodity-prices represent
only a small portion of input-costs and the recent fall in
commodity-prices will only have a modest impact on credit-quality
in the sector."

The uneven recovery across the euro area means that services
companies' Spanish operations will continue to outperform over
the next 12-18 months, as the country's GDP grows faster than the
euro area as a whole.  Human resources company Adecco S.A. (Baa1
stable), specialist cleaning company Elis S.A. (Ba2 stable) and
contract caterer Elior S.A. (Ba2 positive) all reported strong
growth in their Spanish/Iberian operations.

Emerging markets will remain a growth engine for European
services companies, despite the recent volatility in some of
these markets. Danish company ISS Global A/S (Baa2 stable)
recorded organic growth of 8% from emerging markets in the second
quarter, against 4.6% for the group as a whole, and these markets
now make up a quarter of the company's revenues compared with 18%
in 2010.

Most European services companies will benefit modestly from the
sharp fall in commodity prices experienced over the last 12
months because input costs such as electricity and fuel have
become cheaper.  However, Moody's does not expect cheaper
commodities to have a substantial impact on profit margins
because overall they represent only a small portion of companies'
costs.


                            *********

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

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

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


                            *********


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

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

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

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

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

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


                 * * * End of Transmission * * *